Sitting of 11 December 1996

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

Unfunded Pension Liabilities (European Union)
[Relevant document: The First Report from the Social Security Committee of Session 1996–97, on Unfunded Pension Liabilities in the European Union (HC 23).]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wells.]
9.34 am
Mr. Frank Field: I am grateful to you, Madam Speaker, for the opportunity that the House has of taking note of the report that the Select Committee on Social Security published a few weeks ago on unfunded pension liabilities in Europe.
Before I introduce the House to the ideas in the report, I shall make a few prefatory remarks. The first is that it is now clear that it is difficult for anyone to contribute to issues relating to Europe and expect a sensible response from some colleagues.
The report was made unanimously by the Select Committee, whose members comprise people who are sceptical about Europe and people who are pro-Europe. On this particular occasion—it is not always so—everyone came to the Committee wishing to strengthen the report rather than wreck or undermine it. It was published and issued to the House because we thought that this was a national issue in which we had an advantage over the rest of Europe, and we were motivated by a love of our country rather than by any more basic partisan motives stemming from being pro-Europe or anti-Europe.
Both those in the House who oppose Europe and those who are pro-Europe managed to seize on the report and talk about it when it was clear that neither faction had actually read it. That is a great pity, because I think that it is the shortest report that we have published.
We are aware that we move in dangerous times when we discuss dispassionately anything about Europe. But those were my motives in wishing to publish the report to the House. It was a natural feeling about one's affections for one's country; not wishing to see a real advantage be unnecessarily lost. We do not think that putting the interests of one's country first makes one a bad European. Some of us deeply resent those who argue that if one raises anything that is pro-British, one must be anti-European.
Dame Elaine Kellett-Bowman: Does the hon. Gentleman agree that, in years to come, British pensioners will be far and away the best protected
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pensioners in Europe, far ahead of the French and Germans, who are having such difficulty in funding their pensions?
Mr. Field: The Committee's approach was that, while one would expect the House to divide on party lines with regard to how well placed all British pensioners are, it is difficult to deny the fact that some British pensioners are now well placed because of the funded pension schemes that are in operation. We also took the view that, as other countries try to make adjustments so that their social security liabilities are ones that taxpayers will meet in future, people across Europe are taking to the streets to try to prevent their Governments making those adjustments.
I shall come to that in a moment, because one of our concerns is how our position may be adversely affected by Governments who cannot make the changes that they may need to make through the normal democratic process, because other ways are open to them if their electorate block them on the streets. I am grateful to the hon. Lady for that intervention.
This is not a report about funded pensions. It would be possible for the Select Committee—and we may wish to do this—to consider how a single currency could both advantageously and disadvantageously affect the extent of funded pension schemes in Britain. Yesterday evening, the National Association of Pension Funds issued a briefing on the issue to hon. Members. I am not, however, concerned with that in this debate, which is about Britain's peculiar position of having more funded pension liabilities than the whole of Europe put together.
I am glad to see the hon. Member for Stamford and Spalding (Mr. Davies). Given his facile comments about the Select Committee's report, I could not believe that he had read it.
Mr. Paul Flynn: I speak as someone who has read the report. Does my hon. Friend not believe that it is weakened by this statement in paragraph 10:
"The only sustainable long term solution is to build up the level of personal funded pensions"?
Is it not true that, uncharacteristically for my hon. Friend, the report seems to have been presented by a Committee with a closed mind?
Mr. Field: I suppose that, in one way, the Committee did have a closed mind, in that we did not believe that the politics of the 1970s, which my hon. Friend promotes, are sustainable. If I were considering the issue in the early 1970s, I would probably go down his road and say that we could introduce something such as the state earnings-related pension scheme, which could be sustainable. The plain fact is that we now have—certainly on the Government Benches and to some extent on the Labour Benches—agreement that that approach is not sustainable. It is a deceit, therefore, to say to the electorate that we can guarantee, via a state scheme, a pension level that clearly one and perhaps both major parties in the House do not believe is sustainable.
The only way in which we can guarantee the viability of such an approach and that it will not cheat future pensioners, is either to win every future election—and we have had some difficulty in winning the past four or so elections—or to abolish elections. Otherwise, there is no

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guarantee that a future Government will not undo what we might wish to have in a state earnings-related pension scheme.
When we compare like with like, we must be careful not to have a closed mind to attacking funded schemes because, as a result of action by Treasury Ministers, the pensions of people in SERPS have been halved and their pension expectations halved again. We did not have a closed mind, therefore, in suggesting that taking the state option is not a viable or sustainable possibility. We have a closed mind only to the extent that we do not believe that we should shut out what happened in the 1980s, when the consensus between the two parties for a state approach disappeared.
We further believe, with our closed mind, that the only way in which we can stop future Governments disrupting people's pension expectations is for those people to own their own capital, so that, if future Governments try that, they will be treated severely at the ballot box. In one way, therefore, my hon. Friend the Member for Newport, West (Mr. Flynn) is right. We have a closed mind. We have a closed mind to the state option, which the Committee does not believe is viable.
If we were having the debate in the early 1970s, I would probably be putting out the line that Barbara Castle and her cohorts then put out and continue to put out, although I now believe that to be dangerous nonsense.
Mr. Flynn: It is suggested not that SERPS should continue in its present form, but that it should be in a new form that will be independent and funded, which will invest some of its funds on the stock exchange, and where the money will be linked to the person paying in. I am sure that it is not beyond the wit of the next Government to devise a scheme that can survive possible Governments of a different colour. If we can sell the idea of SERPS as a good-value pension, it can continue and be unassailable to political change.
Mr. Field: My hon. Friend gives the game away because he says "funded". That is the very antithesis of what SERPS is—a pay-as-you-go scheme, where Governments of both parties have only too willingly pushed pension liabilities into the future for future taxpayers to meet. That is the reason why the report was published: to draw attention to the relative strength of the British position vis-à-vis Europe.
I am grateful to my hon. Friend for the line that he is beginning to take, but five years or more ago, there was not much support for my proposal to give people in the national insurance scheme stakeholder rights. I now believe that the debate has moved on so quickly that no one in his right mind thinks that it is safe to leave his pension funds with the state as guardian. We hear lots of talk about how dangerous it is, about Maxwell and so on, but the Maxwell theft pales into insignificance compared with what the Government have done to SERPS. They have halved it and halved it again. I am pleased therefore that my hon. Friend is talking about funded schemes; even in his constituency and even with his leadership on the issue, his electorate will not choose an option whereby we allow the Government to get their sticky fingers on our funds.
Mr. Andrew Rowe: The hon. Gentleman has, I am sure, been approached by Maurice Oldfield of
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the Pre Retirement Association, which, anxious about the unscrupulous selling of private pension schemes, has tried to evolve a system whereby, as in the National Savings system, there is some state involvement in the creation of such funded private schemes. Would the hon. Gentleman care to say anything about that?
Mr. Field: When I reintroduce a Bill for National Savings pension schemes run through the Post Office, I must approach the hon. Gentleman for a bi-partisan report on that. I do not claim that it is a new idea. Mr. Gladstone introduced the proposal, which some powerful insurance companies managed to destroy, so I do not underestimate the power of the market when it feels that it is challenged. What I am in a sense disappointed about in relation to the intervention of my hon. Friend the Member for Newport, West is that we could have agreed because, although we are talking about success here—the hon. Member for Lancaster (Dame E. Kellett-Bowman) raised the point that some pensioners are in an advantageous position—we have far too many very poor pensioners. Another Select Committee report will consider how one might deal with spreading the success that many pensioners experience to all pensioners. There I am in total agreement with my hon. Friend.
The nature of the report is simple. We have considered the extraordinary position that Great Britain is in, having more funded pension assets to meet future liabilities than the whole of Europe put together. We were concerned about how, within a new single currency arrangement, that position might be undermined. We found three possible ways in which that might occur.
First, if Governments find it difficult to balance their budgets to allow for adjustments, perhaps because of violence on the streets, they may seek to raise money by issuing bonds. We know perfectly well that Governments make those bonds more attractive by raising interest rates. Britain would not have to do that as we do not face the same unfunded liabilities as other countries, but we might be affected by higher interest rates abroad. Even if we did not join a single currency, the British economy would not be immune to the trend in interest rates elsewhere. It is not a simple matter. The single currency will affect us directly or indirectly.
Secondly, Governments can opt for what was historically considered to be the easy option. When they are faced with liabilities that they cannot meet, they can print money. We can assume that that will not happen through the new European central bank. However, the chairman of the Bundesbank has expressed his anxiety in that respect. He is fearful that when he has to share responsibility for issuing the currency affecting Germany with bankers from other countries who may take a different line on inflation—often for the simple reason that those countries have not suffered the same terrible history of inflation—the decisions will not be as strong as those taken by the Bundesbank to ensure that the currency is not devalued by printing money.
Thirdly, Britain may be asked to share the cost of other countries being less careful about meeting future pension liabilities. It was not mentioned in the report, so I mention it now. The European Community is not static. It is rightly an evolving organisation. It is quite possible that, in future, countries will acknowledge publicly what they have clearly acknowledged privately—that they have serious financial problems in meeting future pension

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liabilities—and declare it to be a new European issue that requires a European strategy. Although that would be good for many of our European colleagues, it would not be a sensible approach for Britain to take, as we might have to carry some of the costs.
Mr. Tim Rathbone: The hon. Gentleman has raised an important point. Does he accept that each member country of the European Union is protected from any requirement to meet the national debts of other countries? Britain or any other country, therefore, would be protected should another country experience the difficulties that he has just described.
Mr. Field: Article 104 of the Maastricht treaty covers that eventuality. My concern is that the convergence criteria for the single currency are inadequate. They take into account only the smallest part of public debt and exclude the largest part. As a result, Britain may end up in the extraordinary position of being the only country that could enter the single currency without having fiddled the balance sheet, but we are the most restive about it. The countries that are most keen to enter will be those that have not met even the limited convergence criteria on public debt and have behind the scenes significant public debt that does not come into the present equation. The third and most controversial recommendation of the Select Committee relates directly to the point that the hon. Gentleman made.
Before concluding, let me draw attention to two reports that have been published since the Select Committee report. The first is the briefing by the Institute of Directors on unfunded pension liability. One of the headings in that report is, "The unfunded pensions fudge". It expresses the opinion that we should not consider joining a single currency until we have examined more comprehensively the problem of public debt.
The other report—which one would not expect to be particularly sympathetic to the Select Committee report—is that produced by the Kingsdown Enquiry, which examines all aspects of the single currency much more comprehensively. I draw the attention of the House to the section on pensions and the comments of Professor John Kay. He makes a powerful case for joining a single currency and submits that monetary union would produce not only lower inflation, but more stable inflation rates.
The Select Committee does not attempt to suggest that our report should be the basis of any decision as to whether Britain enters a single currency, but says that it should be part of the debate as to what is in the national interest. Let me quote Professor John Kay. After he had set out the advantages of the single currency,
"The main risk that he saw in monetary union was that the very large government budget liabilities of unfunded state pensions schemes in other European countries could turn out to be a time bomb that would put the stability of the whole system under strain."
The Select Committee made precisely the same point. Given all the fuss that we made, hon. Members might find our conclusion inadequate.
Our conclusion was threefold. First, we recommended that the Government should publish the relevant information in the Red Book, so that we could look comprehensively at our unfunded public sector pension liabilities. Secondly, we recommended that the Government should propose to the Council of Ministers that other countries should publish similar accounts.
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Our third and most controversial recommendation relates to the comments made by the hon. Member for Lewes (Mr. Rathbone). We drew attention to article 104c of the Maastricht treaty and asked whether it would apply if countries' unfunded pension liabilities were destabilising any future single currency. Although I consider that to be a controversial recommendation, it merely asked whether we would be protected by the Maastricht treaty.
I am sorry that I have spent so long introducing a short report. That is partly because of the interest expressed by my hon. Friend the Member for Newport, West and because of our commitments in respect of the poorest pensioners in Britain and how to enable them to share the prosperity enjoyed by an increasing number of pensioners. That prosperity results from our funded pension scheme. I am sure that the House joins me in wishing to spread that success to all pensioners. However, that is not the basis of our report. The Select Committee will be producing a report on that subject, but we find it sensible to limit ourselves to manageable topics rather than taking the whole world as our canvas.
The Select Committee has made a limited contribution to an important debate about whether Britain should enter a single currency. Despite the Chancellor of the Exchequer's enthusiasm immediately to reply to our report by way of a planted question, we know that the Secretary of State for Social Security will reply before the House rises for the Christmas recess. We look forward to hearing the comments of our colleagues, the line taken by my hon. Friend the Member for Southampton, lichen (Mr. Denham) and the Minister's reply to the debate.
9.59 am
Mr. David Shaw: I thank the hon. Member for Birkenhead (Mr. Field) not only for introducing the subject but for its prominence due to the way in which the Select Committee has approached its work under his chairmanship.
I first raised the issue in a written question in 1991 because I began to sense that serious liabilities in Europe were not being included in national accounts; they were being left out. I asked the Treasury not only about unfunded pension liabilities but about the effect of French nuclear reactor decommissioning costs and liabilities which might be incurred in the repair, maintenance and rebuilding of public buildings throughout Europe.
To my way of thinking as an accountant, those categories represent three of the largest potential liabilities of any set of nation states that is contemplating a single currency and—possibly—ultimately putting national accounts together in one form, however loose or tight that form may be, under single currency arrangements. The liabilities could be truly horrendous. The French nuclear reactor decommissioning costs are estimated to be £200 billion. No one has thought how that will be dealt with in the next century when such costs come on line and no one, so far as I am aware, has made any estimate of capital building, repair and maintenance cost liabilities in Europe.
The Treasury considered the question that I asked in 1991 a little eccentric, and did not have any detailed information on the issues. I did not receive a full reply with detailed figures and estimates and it has been very difficult since then to get some figures that the House

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could discuss. In the intervening period, I was pleased that the matter was taken on board elsewhere and that estimates of liabilities were produced by the Organisation for Economic Co-operation and Development, the International Monetary Fund and ABP, the Dutch pensions fund. Some quite respectable organisations in the City are also now producing estimates. Although they range widely because they concern some very broad figures that can change in certain circumstances, a pattern is beginning to emerge.
I drew the pattern to the attention of the House on 5 June at column 573 and I am pleased that, as a result, the hon. Member for Birkenhead ensured that the Social Security Committee investigated the matter. Other members of the Committee and I also visited Brussels to talk to European Commissioners. That was especially significant because we found that the European Commission was about as advanced in its answers in 1996 as the Treasury was to the same questions in 1991. The European Commission was not very advanced in its consideration of the issue and did not welcome the fact that we were asking a series of questions. In many ways, it seemed to prefer not to be asked questions and wanted decisions to be left to the European Commissioners.
Dame Elaine Kellett-Bowman: Does my hon. Friend agree that so often when we are trying to lead the way into uncharted and difficult waters, we are castigated as being the awkward squad, when in fact we are taking a lead and trying to get Europe to behave in very much better ways, such as on pensions, as the hon. Member for Birkenhead (Mr. Field) said?
Mr. Shaw: My hon. Friend is correct. Here we are trying to get a discussion out in the open and trying to show that, as in British democracy, the issue can be tackled in open public debate. Yet the emphasis elsewhere in Europe seems to be on not having open discussion and debate as the British do. In Europe they seem to want to close the discussion down and quietly sort it out in due course if they can, but the horrendous nature of the liabilities makes that impossible. The fundamental point is that just because the liabilities are called unfunded pension liabilities does not mean that they will not become real cash liabilities at some stage in the future. They may not be real cash liabilities tomorrow, but in a few years' time they may be, and by the turn of the millennium they certainly will be.
The IMF has made some substantial estimates. I do not want to quote large chunks of its May 1996 world economic outlook, but I shall refer to one or two relevant passages. For example, it says:
"Future generations of workers will face either much higher tax burdens to maintain such levels of transfers or sharply reduced benefits levels … For the German pension plan's net asset position in 2050 to be the same as the initial net asset position in 1995, for instance, a sustainable contribution rate of 13.7 per cent. will be required each year. Assuming average contribution rates remain unchanged at just 10.3 per cent. of GDP over this period, Germany would appear to face a contribution gap of 3.4 per cent. of GDP."
My hon. Friends will realise the significance of such a gap, given that one of the Maastricht criteria requires member states' annual deficits to be within 3 per cent. of gross domestic product. One item alone—pension liabilities—could blow the German budget right through one of the Maastricht criteria from 2000 or 2004 onwards.
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The IMF report goes on to say:
"Countries such as Japan, Germany and France, however, face contribution gaps of nearly 3.5 per cent. of GDP a year. To avoid a further build up of pension debt over the next 55 years, these countries need either to permanently increase social security tax collections by roughly 3.5 per cent. of GDP or scale back benefits by a similar amount or implement a combination of tax increases and pay-out reductions of this magnitude. In countries like France, and especially Italy, where retirement often takes place at a relatively early age, raising the retirement age to 67 could completely close large contribution gaps".
In France, however, the recent French lorry drivers' blockade was settled not by raising the retirement age to 67 but by lowering it to 55. The French are under social pressures that are causing them to move in the opposite direction from that suggested by the IMF and every sensible economist in the world.
I have made some back-of-an-envelope calculations on what unfunded pension liabilities might mean in pounds. Countries such as France, Germany and Italy might face liabilities in excess of 100 per cent. of their gross domestic product and the total liability in Europe could be as high as £10,000 billion. That is an enormous liability to contemplate. The fact that it is not shown in any of the accounts that have been drawn up for the next two years in order to decide whether countries meet the Maastricht criteria represents one of the biggest fudges ever concerning the single currency. It is horrendous to contemplate such a large item being left out of national accounts and nobody having a sensible debate on it other than in the United Kingdom Parliament.
What does the liability represent? It represents past politicians' promises and weaknesses in countries such as France, Germany and Italy during the 1960s, 1970s and to a certain extent the 1980s. It would appear that even in 1996 France is still making decisions and giving people benefits that will not have to be paid for a few years, but when they are, someone will have to meet the cheque. Many hon. Members' concern is that Britain could end up meeting that cheque despite what the Maastricht treaty says. I shall return to that.
It is worrying that, having established how serious the liabilities are, the European Commission does not seem to want to get to grips with them and there appears never to have been a discussion about their impact either at the Economic and Finance Council or in the European Council. In my view, it should be taken up not only by Finance Ministers throughout Europe, but by Prime Ministers and leaders throughout Europe.
The pension position will have an enormous effect on the international competitiveness of Europe. Throughout the 1980s, we in the United Kingdom had the highest proportion of pensioners of the major economies in Europe. We had to pay for those pensioners through raising higher taxes than we might otherwise have raised on British industry, business and individuals. In the next couple of years, France will have a higher proportion of pensioners than we have and, in the next decade, Germany will have a higher proportion. Because of those countries' pay-as-you-go schemes for pensioners and because they have no substantive pension funds, they will have to raise extra taxes from industry or business or individuals to meet that pensions liability or will have to undergo enormous social change that, so far, they have shown they do not want to undergo. The consequence will be that, in the next 10 years, British industry and business will have

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a unique competitive position in relation to pension liabilities compared with France, Germany and Italy. We should not do anything to damage the opportunities that will result from that competitive position.
Article 104—the so-called no-bail-out clause—is, as was mentioned earlier, relevant and important. Article 104b states:
"A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project."
In other words, there is a let-out in article 104b, because a member state has only to come up with a specific project, such as dealing with member states' unfunded pension liabilities, and immediately article 104b would not apply. The Europeans have already got a let-out which could mean that if we joined a single currency, we might have to meet their pension liabilities.
It is also inconceivable that even if article 104b were watertight—even if the no-bail-out clause were absolutely copper-bottomed—it would be applied in practice. If Germany or France or Italy started to get into severe financial difficulties as a result of past pension commitments, it is inconceivable that the European Commission would not organise some bail-out. That is like saying that Washington would not organise a bail-out of California, if California were in enormous difficulties. We cannot suddenly say to Germany, France or Italy, "Sorry you are in difficulties, but although you are a member state of the European Union we are going to have nothing to do with you." We would have to get involved. We would have no choice but to get involved whether we were inside a single currency or outside and that is the danger that we must face. Those countries will have enormous problems as their pension liabilities come due for payment in the next decade and we, in some way, will find ourselves involved in trying to sort it out.
In conclusion, I emphasise that the figures involved are very large. The liabilities are real. They may not exist today, although we have already seen the strains in the French social security system that have resulted in strikes and demonstrations on the streets in France.
Mr. Rowe: My hon. Friend is a member of the Select Committee on Social Security and he is right to point out the fact that nowhere else in Europe appears to take the matter seriously. Will he consider consulting his colleagues on the Select Committee about whether it would be possible for it to host some kind of European seminar at a level that would have an impact on the entire debate?
Mr. Shaw: My hon. Friend is correct. That would be sensible and we have discussed it in the Select Committee. We would like to invite people from member states' Parliaments to London, because we think we have a unique piece of research. We have the benefit of the City of London and an increasing number of people in the country are aware of the subject. We wish to contemplate running a seminar and my hon. Friend has raised an interesting point.
The liabilities are real money liabilities and they will have to be paid in real cash amounts to pensioners in Germany, France, Italy and other countries in the
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European Union in due course. That time is not far away. Within the next decade, the liabilities will start to build up and, by about 2010, France, Germany and Italy will be paying out a much higher level of pensions each year than they pay out currently. We do not want to become involved in meeting that liability. We have good pension funds, as my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) pointed out earlier. We have a solid pension base with around the same total that everyone else in Europe put together has. We have some £600 billion of pension funds to protect our pensioners. Some of those pension funds are invested abroad, and some are even invested in the far east, so in many cases we will have the benefit of the young workers of the far east paying our pensions in the next 50 years. The aging populations of Germany, France and Italy, however, will not have pension funds invested elsewhere in the world. We are in a strong position and fortunately will not have to make the painful decisions that those countries will have to make. They have those painful decisions ahead of them, but they are not even having a debate about how they will meet those liabilities.
10.15 am
Sir Russell Johnston: In a way, the only surprising aspect of the Select Committee's report, which caused a considerable stooshie, is that it has come late to the subject. The hon. Member for Dover (Mr. Shaw) remarked in his speech that he raised the matter in 1991 and my noble friend Lord Taverne was the rapporteur for the Federal Trust on a pamphlet entitled "The Pension Time Bomb in Europe" two years ago. So this is not a new issue. It is also true, despite the rather harsh approach of the hon. Member for Dover, that the Governments in Germany, Italy and France are endeavouring, albeit slowly, to address the problem and have been for some years. I start on that basis.
The connection between the Select Committee's report and economic and monetary union hit the headlines with the suggestion that somehow we would end up paying for the lot, which was underlined by the hon. Member for Dover. The Chairman of the Select Committee, the hon. Member for Birkenhead (Mr. Field), was his normal patient and cautious self—not great characteristics of the hon. Member for Dover. I have no pretensions whatever to being a expert in the complex world of pensions and I am far too prudent to contemplate crossing swords with the Chairman of the Select Committee, because that would be foolish of me. I admire what he does and I read, in so far as I am able to understand them, the articles that he writes. I endeavour to do my best. All I can do is to call witnesses.
Fortunately—or perhaps unfortunately, but certainly usefully—there was a debate on this issue on 20 November in the other place. It was introduced by my noble friend Lord Taverne and it was an interesting debate. I am sure that hon. Members have read the report. Contributions were made, for example, by Lord Taverne himself, of course; by Lord Ezra, the former chairman of the National Coal Board; by Lord Barnett, the former Labour Treasury Minister; by Baroness Ramsay of Cartvale, who was a distinguished diplomat in her time and also a foreign affairs adviser to the late John Smith; and by the Government Minister, Lord Mackay of Ardbrecknish. All said the same thing and rested their case on article 104b of the Maastricht treaty.

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The hon. Member for Dover put a good argument when he said that if California were going bust, it could not be ignored in Washington. I take that point, but there is a difference to draw. I shall not keep the House long, but I want to approach the issue in two ways.
The European Commission has been referred to at length. It so happens that I have in my hand, hot from the press, a press release issued by the Commission this morning. It is not particularly long and the Commission clearly intended to make a contribution to the debate, so hon. Members may be interested to hear what it says. It refers to the claim in the Select Committee report
"that UK taxpayers could face increased bills to meet the pension fund liabilities of other EU member states. This was a serious misrepresentation of the intentions of the European Union."
Miss Kate Hoey: Most of us, if not all of us, have not seen the press release. Does the hon. Gentleman have a special hotline to the European Commission?
Sir Russell Johnston: Would that I had. A kindly person brought the press release to me in an envelope while I was sitting innocently here minding my own business.
The press release continues:
"It is written in the Treaty on European Union (Article 104b) that Member States will not be responsible for each other's liabilities in EMU. There will be no common fiscal policy, so the UK could not be called upon, under a single currency, to pay for the possible profligacy of any other country."
Mr. David Shaw: Will the hon. Gentleman give way on that point?
Sir Russell Johnston: If the hon. Gentleman does not mind, it would be easier if I finished quoting the press release. It is not very long. I will certainly give way after that. It continues:
"Nor is there any possibility of this issue having an effect on interest rates. If a Member State borrowed heavily to fund its pension liabilities, thereby forcing a rise in European interest rates, it could be faced with heavy fines."
That refers to the stability pact. It continues:
"This is because all Member States which participate in Stage III of EMU will be required to keep their public sector deficits at less than 3 per cent. of GDP. This will put a clear limit on the total amount of borrowing permissible by governments. It is this commitment to avoid excessive deficits which will be underpinned by the Stability Pact to be further discussed in Dublin. The Pact is intended to act as a form of mutual self-discipline backed by heavy fines. European governments are increasingly aware of the future problems they may face unless pension funding arrangements are addressed. That is why, regardless of the Maastricht Treaty and the moves towards EMU, many European governments have embarked on strenuous efforts to overhaul their public finances."
Mr. Shaw: Does the hon. Gentleman concede that, as a minimum, the issue puts into question the ability of Governments to come within their annual deficit requirement of 3 per cent. under the Maastricht criteria? Does he also accept that paragraph 1 of article 104b ends with the words:
"without prejudice to mutual financial guarantees for the joint execution of a specific project"?
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A specific project could be to share out Europe's pension liabilities.
Sir Russell Johnston: It is difficult for me to interpret the phrase, "a specific project", but I should have thought that pensions were more than a specific project; it is a massive area of policy. The words, "a specific project" suggest something of manageable size rather than the enormous problem that we are facing.
Mr. Bill Walker rose—
Sir Russell Johnston: Before I give way to the hon. Gentleman, I should like to add that we all know that we are talking not about present debt but about projected debt if we are operating on the basis of pay-as-you-go. Unless the Germans, the Italians and the French reform their systems in the meantime, 10 years hence they will be faced with an unbearable amount of money to pay. The hon. Member for Dover and the Chairman of the Select Committee have properly asked whether the Governments of those countries have the guts and the political determination to take such action in the face of undoubted unrest. There is nothing extraordinary about people protesting if their benefits are cut. I hope that the Governments will take action, but there is no certainty about it. So far as I can tell from all the evidence, including that from the Commission, the fear expressed by the Select Committee is not accepted by the European Union.
Mr. Walker: I thank the hon. Gentleman for his usual courtesy in giving way. Does he accept that the article that has been referred to is a fact of life? It exists and has been agreed. The hon. Gentleman is proposing something that has not yet been agreed in defence of his position. We can address only the known—not hopes and aspirations, but reality.
Sir Russell Johnston: In European matters, it is always difficult to separate the reality from the aspiration in the simple way that the hon. Gentleman has just done. There is always an element of aspiration. The social chapter, about which some hon. Members get so furious, is composed largely of aspiration rather than reality. However, I must not lead myself away in that direction.
There is nothing further that I wish to say. What I had intended to say in conclusion I have already said in response to the hon. Member for Dover. There is a very big and real problem. It can be solved, but it will be hard. People are entitled to question whether the necessary political rigour exists. The problem is certainly fully recognised. As we know, considerable efforts are already in train in Germany and, notably, in Italy.
Mr. John Butcher: I am grateful to the hon. Gentleman for giving way because I know that he is about to conclude. I should like to ask him about political will, set against what is currently asserted perhaps by some public relations person at the Commission. A huge row is going on between France and Germany on the extent of the rigour to apply on the convergence criteria and the pact. The French want a political approach with majority voting in the bank, while the Germans want a mechanical approach that would be totally impartial and utterly ruthless. They are falling out

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over that central issue. How can a press release from the Commission make any assertion in those circumstances? I suspect that we are being expected to base an argument on the word of a junior official. This House, more than any other institution in Europe, should not depend on such arguments.
Sir Russell Johnston: If I attempted to answer all the issues raised by the hon. Gentleman, I should delay the House far too long. I shall say only that to describe the on-going discussion between France and Germany, which progressed the other day in Nuremberg, as a "huge row" is typical of the way in which our European debates are conducted. With respect to the hon. Gentleman, I am aware that others want in and I will terminate.
10.28 am
Mr. Quentin Davies: One of the great values of parliamentary debate is that it provides us with a wonderful opportunity to expose nonsense for what it is. In that spirit, I greatly welcome this morning's debate.
As the prospects of monetary union and of our being a part of it advance, it is only natural, given the strong emotions that exist on the subject, that its opponents should clutch at ever weaker straws. We have today a very weak straw indeed. I do not in any way resile from, or apologise for, the comments that I have made on the Select Committee report, which I have seen. I hope that, by the time I have sat down, the hon. Member for Birkenhead (Mr. Field) and other colleagues will understand why I held it to be entirely justified to make those remarks.
It is true that the level of unfunded pension liabilities on the continent—except in Holland—is higher than the level of unfunded pension liabilities in this country in the national insurance scheme and in public sector superannuation schemes. That is perfectly true—there is no question about that. I am happy to acknowledge also that nothing could be more disastrous than any suggestion that anybody should borrow now to pay pensions. On the whole, the pension debate in this country and on the continent has proceeded on the basis of a potential choice between funding pension liabilities and pay-as-you-go schemes. The idea that one might borrow to pay current pensions introduces an entirely third model—one that is horrific in its financial irresponsibility.
The third option is not to fund nor to pay as you go, but to disfund—to accumulate continuing financial liabilities to meet current pensions so that one places a bigger burden on future generations to pay back the money that one is paying out in pensions now plus interest, plus future pensions. Clearly, that is a horrific scenario. The only thing is that no one has ever suggested it, for precisely the reasons that I have set out. This is a windmill at which some colleagues are choosing to tilt in the best Cervantean tradition—it is an enemy that does not exist. The windmill might look like a fearsome animal advancing on us, but it does not exist. It is a figment of the imagination of some colleagues in the House.
Mr. David Shaw: Surely the report from the IMF, which has been prepared by IMF staff, is not a figment of anyone's imagination. There have been numerous reports, including reports from the OECD and that on the Dutch
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pension fund. A lot of people outside accept that this is not "nonsense", as my hon. Friend puts it, but a real situation that we must face. All three major parties in the House seem to accept that, and it is only my hon. Friend who seems to disagree.
Mr. Davies: I am sorry to have to inflict this on the House, but I must briefly recapitulate what I have said. There are two perfectly responsible and classic methods of approaching the payment of pensions. One is the pay-as-you-go system, the other is funding—or placing certain amounts of money aside from current income and investing those moneys in assets that are expected to yield a future return in the hope that that future return will meet pensions when they need to be paid. That is perfectly clear, and the argument in this country ever since Lloyd George at the beginning of the century, and on the continent since Bismarck, has been between those two systems.
What has been suggested this morning is that there might be a third system, under which we do neither of those things but simply borrow money and accumulate debt when we need to pay pensions. That is not saving for future pension liabilities—it is dissaving—and there is no question but that it would have horrific economic consequences. However, it is such a mad idea that no one has seriously suggested it. Nor do I believe for a moment that anyone would, or needs to, suggest it.
Another element of unreality in the picture that has been painted this morning is that, although it is true that there have been, and remain, substantial unfunded pension liabilities on the continent, that has in fact been the case for many years. It has been the case in all of the countries of the present EU since 1945 and, in many of them, for longer. It is also true that, for a long time, very little was done to match actuarially the potential liabilities of the pension schemes on the continent to the power of the economy to generate the resources to do so. If we had had this debate 10 years ago, it would have been a good deal more pertinent than having it today.
I have listened in vain for any speaker this morning to mention that the past few years have been characterised by the unfunded pension liabilities on the continent being reduced by a reduction in the benefit system. Germany has increased the pensionable age from 65 to 67, but no one has mentioned that. Anyone who knows the first thing about pensions knows that increasing the retirement age by two years has an enormous actuarial effect on the solvency of the scheme. It is odd that that salient fact has not come up. No one has mentioned that, in the past few months, Belgium has followed suit. It is also odd, and perhaps significant, that this has not come up in the debate this morning. No one has mentioned that Italy, after—naturally and understandably—tremendous political controversy for several years, has completely got rid of the scala mobile, the indexation of Italian pensions. Again, no one who knows the first thing about pensions would dispute for a second that removing indexation has an enormous and positive effect on the actuarial solvency of any scheme. It is funny that that salient fact has never come up either.
Paris is not far away and, when Eurostar is working—I believe that it is again—colleagues can go there in less than three hours. I am going there tonight, although not unfortunately by Eurostar. Does the House know what our colleagues in the Assemblée Nationale have been

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discussing in the past few months? Has anyone in the Chamber bothered to find out? They have been introducing a funded pension scheme in France. It is odd that we are talking about this subject, but that that fact has not been mentioned. Of course, that scheme will help meet only future liabilities, but the point is that we are getting ourselves steamed up into great excitement, despondency and alarm and we are trying to generate a great sense of panic that this appalling thing, monetary union, will come upon us and destroy human life as we know it on the planet and that one of the effects that it will have is that no one will be able to meet their pension liabilities, but without actually confronting the facts before us.
We fail to notice that, in so far as there has been a problem with unfunded liabilities on the continent, it has existed for a long time. It is curious that no one in the Chamber thought to mention that this morning. The last few years have been characterised by a systematic, effective and—I think—courageous attempt on the part of our continental neighbours to address the problem. No one who has taken part in this debate has wanted to give them credit for that.
Mr. Frank Field rose—
Mr. Davies: Perhaps the hon. Member for Birkenhead, having been prompted by me, will now do so.
Mr. Field: One hopes that a large number of people will be watching this debate elsewhere. In looking at the nature of the speeches from hon. Members of all parties, they will have noticed that the only person who has got steamed up about anything has been the hon. Member for Stamford and Spalding (Mr. Davies). The longer he goes on, the more he will be convincing people outside that there is a large problem—even if people are rather late in the day in coming to it. Some of them, who may have a little expertise, will know that the plans to which the hon. Gentleman has referred are merely proposals and have yet to be passed by the countries' Parliaments.
Mr. Davies: I am reassured and even more confident in the line that I have been taking in the debate by the fact that the hon. Gentleman, to whom I was delighted to give way, chose to make disparaging remarks about my style, and did not in any way challenge the substance of what I have been saying.
There is a further element of unreality about the debate. We have heard this morning from my hon. Friend the Member for Dover (Mr. Shaw), who is an hon. Friend in every sense of the term. He is a very old friend of mine, and I am pleased to be sitting beside him this morning. He quoted article 104b of the Maastricht treaty, which I shall quote again. It says:
"The Community shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project."
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Even if anyone had ever suggested—which absolutely nobody has—that either the Union or any individual member state should be responsible for another member state's pension liabilities, that possibility would be excluded by the article. My hon. Friend the Member for Dover said that there was a let-out in the reference to
"the joint execution of a specific project"
but he cannot be that naive; he has been in business for many years and knows about such things. The fact is that the reference is to infrastructural projects for which individual member states have given specific guarantees; for example, if a bridge were to be built across the Rhine, public sector authorities on either side might agree to guarantee the financing.
When article 104b was drafted, it had to take account of the fact that member states would clearly be liable for specific guarantees that they had given for specific projects but, quite apart from the fact that pensions are not a project, it is absolutely clear that no such guarantees have ever been, or ever could be, given for other member states' pension liabilities. To suggest otherwise was a piece of special pleading that went rather further than the normal parliamentary licence that we allow ourselves when highly controversial matters are under discussion.
A further element of unreality in the debate was the suggestion that the convergence criteria in the Maastricht treaty are somehow wanting because they do not encompass the pension liabilities that exist in various member states. Evidently, I must take two minutes of the House's time to explain to certain hon. Members why the fiscal convergence criteria are included as criteria for monetary union.
If a member state were to default on its financial liabilities—if, for example the British Government defaulted on a gilt issue or the German Government on a Bund issue—that would clearly trigger a systemic financial crisis, because many investors, both private and, more especially, institutional, such as banks and insurance companies, hold that debt. If the debt had to be written off, those institutions would have to write off a portion of their capital and that would greatly reduce demand in the economy as a whole, producing a recessionary crisis. That is what is known as a systemic financial crisis.
A default by the various pension funds on the continent of Europe would not trigger a systemic financial crisis, because they have not issued any such debt. Nobody outside this wonderful House of Commons of ours has ever dreamt up the possibility of going down the road of pension schemes paying out their pensions by raising current debt in the markets. There is therefore no reason to protect ourselves from such an eventuality in the criteria for monetary union.
What would those pension funds do if they could not pay their pensions? They have two choices. [Interruption.] I can see that the hon. Member for Vauxhall (Miss Hoey) does not like being told all these things. I am well aware of her strong emotions on the subject and that she thought that she had found a wonderful way of torpedoing monetary union, but I have to tell her that it will not work.
Miss Hoey: Look at the time.
Mr. Davies: I am afraid that I have every intention of finishing my speech.
Pension funds that could not meet their liabilities could either increase their contributions or cut their benefits. In the past few years, they have chosen the sensible way of substantially cutting their benefits. If there is any problem, it is less of a problem than it was a few years ago when, curiously, we heard nothing from the Euro-sceptics on the matter.
I cannot sit down without raising the most fundamental point about pensions, which was not raised either in our debate this morning or in the Select Committee's report: any pensions scheme, whether funded or not, involves a wager on the future. If one funds a pensions scheme, one accumulates financial assets or claims, equities, bonds and so forth. If the issuers of those bonds or the firms in which one holds an interest through the equity do not perform and generate a return and cannot service their debt or pay dividends, it does not matter how much the scheme is funded or what the actuarial surplus is, because the real resources will not be there in the future to meet the expectations of the pensioners.
Both pay-as-you-go and funding involve a wager on the future. The only reason known to economics for preferring funding is, so the theory goes, that it will involve an increase in the savings ratio, because of the money that is set aside from current income against future liabilities, and that that will provide the possibility for greater investment, which will enhance the economy's capacity to generate more resources, so output and the wherewithal to meet the real resource claims of pensioners will be increased.
That is a fine argument, and I happen to accept it, but it is based on certain assumptions about the return on investment and the efficiency of markets. Most importantly, it is based on the assumption that the compulsory savings levied from the population in enforced pension contributions—which I believe are a good idea—will involve an additional savings effort out of current income and will not simply displace savings that would otherwise have been made elsewhere. If savings are simply displaced, there will be no increase in the aggregate savings ratio as a result of funding pensions.
All the countries that we have been talking about—most notably, France, Germany, Belgium and Italy—have much higher savings ratios than we do at present, even though they have a lesser element of funding in their pensions. Therefore, considering the real economic backing for future pensions, one could legitimately draw the conclusion that the unfunded pensioners in those countries are better assured of getting a real return from their pensions than the funded pensioners in this country, where the savings ratio is, sadly, a great deal less.
I am sorry, and quite surprised, to have had to remind the House of a few elementary economic principles. I had to do so not because I am sure that hon. Members are genuinely ignorant of such matters or have set out in bad faith to exclude material facts and arguments from their presentation of the case this morning—I would never accuse any colleague of doing that—but because of the strong emotions, which I respect and entirely sympathise with, that are generated by the prospects of monetary
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union and those, I fear, have the capacity to distort the judgment of even the most intelligent, well-informed and well-intentioned people.
10.48 am
Mr. John Denham: There is insufficient time to respond in detail to the arguments that have been made, so I shall make only a few brief points. My hon. Friend the Member for Birkenhead (Mr. Field), the Chairman of the Select Committee on Social Security, said that there had been a number of misconceptions about his report, but the debate has made it clear that many issues are involved.
The debate is in part about United Kingdom pensions policy, in part about European pensions policy, in part about monetary union, in part about the alleged conspiracy of perfidious foreigners to steal our pension funds, tax our citizens and do numerous other unspeakable things in the name of the European Union, and in part about funded and unfunded schemes.
It would be wrong to draw the conclusion from the report that the United Kingdom is in a strong position overall on pensions. It is true that our unfunded liabilities for pay-as-you-go pensions are less and that that gives us advantages. It is equally clear that our citizens cannot, in general, look forward to high standards of pensions, and not necessarily to standards comparable with those of other European countries. In cutting the state pay-as-you-go element, the Government have failed to ensure that people can build up adequate funded schemes.
The hon. Member for Stamford and Spalding (Mr. Davies) was right to say that all pension schemes are pay-as-you-go at the moment of delivery, whether the payments are made from funded schemes or from taxation. In the United Kingdom, the cost of future pensions will be reduced by the simple expedient of giving people inadequate pensions, and not through any other means. I and my party advocate moving towards funded pensions.
Paragraph 12 of the Social Security Select Committee report suggests that changing demographic structures will require
"a substantial increase in national resources devoted to the pension system, unless further cuts were made in pension benefit levels and entitlement."
However, that applies to a funded system equally as well as to an unfunded one. An aging population means that a funded system must enable people to have a greater call on the resources of a future society. It would be a mistake to believe that we have resolved that problem.
The European elements of the report are important. The crux of the Select Committee's argument is that, in some way, the British taxpayer will end up paying for unfunded pension liabilities. It is clear that many European countries will have to make some adjustment because of demographic changes. Countries may have to raise taxes and contributions, cut benefits and raise retirement ages; they may have to introduce, over time, new elements into the funding of their schemes; they may have to use a combination of all those measures. Many hon. Members have contended that none of those options is possible, that it is impossible for our partner countries in the European Union to adjust to demographic changes, and that the UK will inevitably end up bearing the consequences. I do not share the Select Committee's pessimism.

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First, I am not convinced that adjustment to change is impossible in other European countries. It is undoubtedly difficult, but I do not believe that it is impossible. The level of sustainable payments into pension systems varies enormously in Europe, according to different histories, political choices and cultural patterns. Levels of contribution that seem unsustainable to us have historically been sustained for many years in other European countries without great difficulty. Adjustment to change, although by no means easy, is not impossible.
Secondly, I am not convinced that there are not safeguards in the Maastricht treaty and in the current economic and monetary union negotiations, especially the stability pact, to prevent the burden of an unwillingness to change in Europe being passed to the United Kingdom. Thirdly, it is a bit rich for some representatives of such a fiscally imprudent Government, who have doubled public debt in the six years since the Prime Minister came into office, to lecture other European countries on their alleged fiscal imprudence. That does not sit well with the factual record of the past six years.
Finally, and this point is recognised in the Select Committee report, although buried in it, there is the mistaken assumption that isolation from monetary union isolates us from the consequences of integrated monetary markets in Europe and of the actions of other European countries. That is an illusion. It is the integration of markets that may bring across knock-on effects, not the monetary union process itself.
This debate has been an hors d'oeuvre to the two-day debate that starts this afternoon. The Select Committee has done us a favour in raising the issue but, as hon. Members will have gathered, I do not entirely share the pessimism of its conclusions.
10.53 am
The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): The Select Committee's report is more than an appetiser; it is an important contribution to the debate about unfunded pension liabilities in the European Union. We have had a good debate, which was opened with his customary panache by the hon. Member for Birkenhead (Mr. Field). There were thought-provoking speeches by my hon. Friends the Members for Dover (Mr. Shaw) and for Stamford and Spalding (Mr. Davies), and excellent interventions from my hon. Friends the Members for North Tayside (Mr. Walker), for Lancaster (Dame E. Kellett-Bowman), and for Coventry, South-West (Mr. Butcher). The hon. Members for Inverness, Nairn and Lochaber (Sir R. Johnston) and for Southampton, Itchen (Mr. Denham) also spoke.
The issue of huge and increasing pension liabilities, especially unfunded or pay-as-you-go liabilities, is serious. In the 1940s, when the retirement age for men in Britain was fixed at 65, life expectancy for men was 63; today it is 74 and set to rise to 78 by 2030. The population over state pension age is set to rise from 10 million to 14 million in 2030. Those changes are mirrored, to a greater or lesser extent, across Europe.
In 1979, the Government had to consider the long-term sustainability of the British system and decided to develop a strategy which was affordable, yet met the expectations
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of people in retirement. The key to that has been encouraging individuals to make greater provision for themselves by introducing greater flexibility and choice for those choosing a pension. We allowed people to contract out of the state earnings-related pension scheme in different ways. We introduced personal pensions and have made a series of changes in the Pensions Act 1995. The effect has been that two thirds of employees have opted out of SERPS; more than 20 million people have rights in occupational schemes and more than 5 million hold appropriate personal pensions.
We also took steps, as has been mentioned, to make pensions more affordable. Taken together, those steps have defused the effect of the demographic time bomb in Britain. The result is that we have £600 billion invested in private pension funds on behalf of present and future British pensioners. That is not only more than in any other European Union country but more than in all the other member states put together. That means that we can face the future without imposing a huge tax burden on our economy and that our economy is strengthened by an immense injection of savings and more investment. That point was well made by my hon. Friend the Member for Dover.
The Organisation for Economic Co-operation and Development report, which was mentioned by my hon. Friend the Member for Dover, estimated that the net present value of the liabilities of unfunded pension schemes in France is 98 per cent. of GDP; 113 per cent. in Italy; and 139 per cent. in Germany. In Britain, it is only 19 per cent. My hon. Friend also mentioned the International Monetary Fund report, which suggests that countries such as Germany and France would either have to raise social security tax collections or reduce pension liabilities by about 3.5 per cent. of GDP a year—a huge task. We are better placed than our European partners. Although I acknowledge, as my hon. Friend the Member for Stamford and Spalding said, that our European partners are beginning to heed our example and that several countries, such as France, Italy Portugal and Spain, are beginning to encourage private pensions to supplement pay-as-you-go, much more needs to be done.
There have been suggestions in this debate and elsewhere that in the event of our joining economic and monetary union, the UK might have to pay for other member states' pensions, directly or indirectly, through higher interest rates or higher inflation. There is no question of the Government agreeing to pay other countries' unfunded pensions. We have no intention of using the assets that we have so carefully built up over many years to bail out other countries that have been slower to recognise what will happen and take the necessary action. There will be no common pensions policy under this Government, but I cannot give the same assurance if, heaven forbid, the Labour party were to come to power. The Labour leader has said that he would go along with whatever was pressed by other member states to avoid ever being isolated in Europe. The Select Committee may be right to say that we would face such pressures. The importance of avoiding any extension of majority voting and of maintaining our veto is immense.
Mr. Denis MacShane: It says here.
Mr. Heald: It does say that here, but the hon. Gentleman will be pleased to learn that I wrote it.

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My right hon. and learned Friend the Chancellor of the Exchequer has said that we shall be bolstered in our determination to resist any pressures to help finance other countries' unfunded pensions liabilities by articles 104b and 104c of the Maastricht treaty. The no-bail-out clause and the excessive deficit rules will make a difference in helping us to deter members of a euro zone from funding pension liabilities through excessive borrowing. The real protection that Britain and its pension scheme members have for the future is a Government determined to stand up for British interests and ensure that what we have built is not destroyed by others. So member states across Europe which face the difficulties of crystallisation of pension liabilities will have to deal with them by raising taxes, raising contribution rates, reducing the value of pension entitlements or cutting other spending programmes.
I welcome the attention—
Mr. Deputy Speaker (Mr. Michael Morris): Order. We now move to the next debate.

World Trade and the Environment
[Relevant documents: The Fourth Report from the Environment Committee of Session 1995–96, on World Trade and the Environment (HC 149-1), and the Government's response thereto (Cm 3445).]
11 am
Mr. Andrew F. Bennett: I am pleased to have the chance to debate briefly the report of the Environment Select Committee on world trade and the environment. It is appropriate that we should debate this subject this week because the conference on world trade is taking place in Singapore. I thank my colleagues on the Committee for all their work on the inquiry. I thank our specialist advisers, James Cameron and Steve Woolcock, the Clerks, who always worked extremely hard, and our specialist assistant, Caroline Hand, who gave us a great deal of help in marshalling the material for the report.
I shall briefly set the scene. Put perhaps rather crudely, there are two views about world trade. One is that the more trade there is and the fewer tariff restrictions exist, on the whole the world gets richer and, as it does so, gains the will and the resources to tackle environmental problems and issues. The alternative view is that the world has such acute environmental problems that if trade goes on expanding, it will make the situation worse and worse, and that environmentally the world is heading for disaster. Those are two crude exaggerations of the position and the truth lies somewhere in between. It was part of our inquiry to find out exactly where the truth lies in the balance between environmental and trade issues.
All good Select Committee reports are dependent to a large extent on the quality of the evidence submitted. I was delighted with the quality of the evidence that we received. To most of us who were aware of their campaigning roles, it was no surprise that the evidence from Oxfam, the World Wide Fund for Nature and Friends of the Earth put the environmental concerns very strongly. I was particularly grateful to the Brazilian ambassador and politicians in Singapore, Malaysia and Thailand for expressing their concerns. In this short debate, I do not want to set out the way in which they set out their concerns because they did it politely and courteously. I shall summarise crudely what they said and the point that is continually put by people in the less-developed world. I am not quoting them. I am giving the general view that comes from those countries.
Britain, Europe, Japan, the United States and the other developed countries have raided the world's carbon stores. They have burnt masses of coal, oil and natural gas. They are still wasting energy and releasing a great deal of carbon dioxide into the atmosphere which is contributing to global warming. They have polluted vast areas of coniferous forests with acid rain. They have felled most of the world's temperate hardwoods. They have expelled large amounts of chlorofluorocarbons into the atmosphere and dumped a great deal of horrendous waste into lakes, rivers and seas. They have hunted many animals such as wolves and wild boar into extinction in some countries. Partly as a result of all that, the developed countries now enjoy a high standard of living. Now those countries are trying, under the guise of environmental protection, to stop emerging nations catching up.
I oversimplify, but it is important in understanding issues about trade and the environment that we understand how strongly people in the developing world feel that we

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have wasted much of the world's inheritance. We may have achieved higher standards of living as a result of it, but we are now trying to stop them doing the very same things.
The World Trade Organisation conference in Singapore is firmly committed to cutting down the barriers to trade. A strong group of people is campaigning there to make sure that the conference is not diverted into any other areas. The developing countries in particular but others too are keen that it should concentrate on removing trade barriers and not on anything else. Other people rightly say that free trade is perfectly all right, but we must consider employment issues, including the employment of child labour, and issues of cruelty, particularly the trapping of animals for furs, and we must consider the economic balance of power between the developed and the underdeveloped countries. As we say in our report and as Oxfam, Friends of the Earth and other people are saying, world trade must take into account environmental issues.
Our report goes on to examine, rather uncomfortably, the fact that the WTO, through the general agreement on tariffs and trade, has developed into a pretty powerful organisation, but the environmental organisations that have been established within the world are much weaker and cannot have the same input into discussions. I shall not go into that in great detail, but we should like to see a more effective input of environmental issues into world trade mechanisms for taking policy forward and for resolving disputes.
The next issue considered in the report is sustainable development. We set out, mainly by illustrations, some of the difficult issues around how far it was a good idea for a country such as Bangladesh to produce large numbers of frogs' legs for the European and American market; how far prawns, shrimps and exotic vegetables could be grown in the third world and flown to Europe and the United States; and how far that trade made those countries richer or undermined their traditional farming methods.
The next issue that I wish to highlight is the relationship between the multilateral environmental agreements and trade. Such agreements include the Montreal protocol on phasing out entirely from the world the use of CFCs that damage the ozone layer. Of all the agreements worldwide, the Montreal protocol is probably working better than most, although many people suggest that there is still an illegal trade in CFCs and probably some manufacture in eastern Europe. I ask the Minister to comment on that.
The Convention on International Trade in Endangered Species of wild flora and fauna appears to have some good aims, but we have some reservations about how easily it is enforced. We were lucky enough to go out to Heathrow and see the convention being effectively enforced on behalf of the British Government. One or two holidaymakers were caught who had gone to exotic places in the world and brought back souvenirs, not understanding how much damage they were doing. I hope that we can do more to warn tourists before they go abroad. The way in which containers are shuttled around the world means that if we are to make CITES work, there will have to be more inspection and sampling of containers. The Basle convention on hazardous waste is a good convention. The developed countries should not dump their hazardous waste on less-developed countries, but there needs to be some refinement of the process. In
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particular, there are concerns about whether scrap metal should come within the convention and whether developing countries can buy scrap metal from developed countries.
If those three agreements are working reasonably well, we have to look at how to develop new ones. An issue that always causes me concern is domestically prohibited goods. If something cannot be sold in Britain, it is totally wrong that it can be exported. A long time ago, when I visited one of the drug companies, I was horrified to see that two lines of drugs were being produced—one for sale in Britain and the other for sale in other parts of the world where quality control was not quite so stringent. We have to have an agreement on goods that cannot be sold in this country being sold to other countries and the sooner that is covered by a proper convention, the better.
I turn now to the question of a forestry convention. All environmental groups are, rightly, concerned about the way in which the rain forests and especially the best woods within them are disappearing. As I pointed out earlier, our record on forest destruction is not good. Everyone has to do their part if we are to persuade others to look after their forests—to manage them instead of simply felling them. I want a new agreement on sustainable forestry and, again, the sooner the better.
We must make sure that the commitments relating to biodiversity that emerged from the Rio conference are made to work. There is a trade-off between biodiversity and intellectual property rights and it is important that we get that right. The issue must be developed further.
On the question of eco-labelling, some of the people the Committee met outside the United Kingdom and one or two of those who gave evidence in the United Kingdom argued vigorously that eco-labelling is really a tariff barrier in disguise and that the developed world is using eco-labelling of various sorts to keep third-world goods out. I am an enthusiastic supporter of eco-labelling—when they are purchasing a product, the general public should know whether it is environmentally appropriate.
I do understand, however, the feelings expressed by paper producers about the fact that the requirement for tissues—especially toilet tissues—under the present eco-labelling scheme involves the use of a considerable amount of recycled paper. In western Europe, it is relatively easy to obtain large amounts of newspaper and other material to recycle; however, paper producers in Canada, Brazil or other countries that specialise in paper manufacturing might not have access to such a large supply of paper for recycling. It is not environmentally beneficial for producers in those countries to have to buy up waste paper from Europe and elsewhere and transport it to their production plants, simply so as to meet eco-labelling requirements for a certain proportion of recycled material.
I am also concerned that some third-world countries might find that the cost of getting their products through the eco-labelling certification process will make it difficult for them to enter overseas markets. That is why it is important that the European eco-labelling system works so as to ensure that there is only one accreditation system covering the whole European market, instead of having different labels in every country.
In addition, the eco-labelling system should increasingly become a worldwide one. In Thailand, we learnt of discussions in progress on developing their own

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eco-labelling system. Although I hope that that would be along the best environmental lines, some of those discussions revealed that the Thais knew that eco-labelling might have trade implications and offer them an opportunity to protect their own trade.
I do not wish to take too long, because I know that other hon. Members on the Select Committee want to speak. I am also pleased to see hon. Members who are not on the Select Committee here today. I ask the Government to give us an update on the conference in Singapore. I fear that environmental issues have sunk low on the agenda, but I hope that the Minister can reassure me that that position will improve.
I press Ministers on the question of accreditation in respect of forestry. In our report, we said that we thought that the Forest Stewardship Council was a good way forward. If we are to persuade other countries—especially underdeveloped countries and countries with tropical hardwoods—to sign up to the council, we have no excuse for not trying to comply ourselves. The reluctance of the Government and the Forestry Commission to get involved in the scheme disappointed me and I hope that the Minister will be able to tell us that the Government's attitude to involvement is now more positive. I realise that it is a non-governmental scheme and I recognise all the arguments that a governmental scheme would be better, but there is no such governmental scheme. It is clear that many of Britain's do-it-yourself shops will sign up to it, so it would be a pity if the Forestry Commission and British timber products were put at a disadvantage.
In addition, will the Minister tell us what the Government are doing about domestically prohibited goods; give us an update on the Montreal and Basle conventions and on CITES; and tell us what progress is being made on eco-labelling and on making sure that it is based on sound environmental principles and does not become an alternative to tariff barriers? Finally, will he give us an update on the Government's real commitment to ensure that we do not pump more CO2 into the atmosphere? I know that the Government say that we are doing well, but it is important that the other developed countries make a considerable contribution as well.
I hope that we can have a constructive debate on this issue. I greatly enjoyed the inquiry and I shall listen to the debate this morning with considerable interest.
11.16 am
Mr. Roy Thomason: Like some of my colleagues—or, dare I suggest, all of them—I approached the inquiry by the Select Committee on the Environment with some preconceptions. First, I believed that trade is necessarily advantageous to all nations. History teaches us that a country goes through a period of prosperity when it is active in trade. The like applies to regions and, presumably, to the world as a whole. It follows that, if greater prosperity is to be generated, trade should be encouraged; and that nothing should be done to interfere with that, because that prosperity will trickle down from countries that generate wealth to poorer nations, just as, in individual countries, wealth trickles down from those who generate it to the poorest people.
Some Opposition Members have argued that wealth generation should be restricted because it benefits those who create it to a proportionately greater extent. That is now a rejected tenet, but antagonism to wealth creation
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still lurks within the Labour party. The fact is that the poor cannot be helped unless there are those who are able to give assistance. Of course, I do not deny that the state has a role in helping to protect the weakest members of society, but it is undeniable that the generation of wealth leads to improved prosperity for all.
It follows that, by the development of trade, the same can occur internationally: trade brings prosperity and wealth. Inevitably, that will not fall evenly, but the generation of international wealth will lead to a more prosperous world and help poorer countries. Much prosperity for some nations leads to benefit for all through demand for raw materials, the use of tourist facilities and, above all, industrial development. Those processes can be helped by encouraging the distribution of overseas aid, but it cannot be expected that such aid will be given at a level that would weaken the strong—that would be self-defeating. The development of world trade is, therefore, desirable in providing improving world living standards. It is also clear that living standards in less-developed countries improve dramatically with industrialisation, which is invariably trade related.
It is always comfortable to have one's prejudices confirmed and I believe that the Select Committee's inquiry confirmed the views that I have just expressed. Environmental considerations must remain important—indeed, of the essence of responsible development—even to the extent of sometimes shaping the form of world trade, but never preventing it, for to do so would be a breach of our responsibility to less-developed countries and to deny them opportunities to better the lives of their people.
My second concern—a nagging doubt—was that, in a complex commercial world where the negotiating position of less-developed countries, and companies based within them, was inevitably weaker than those of the developed world, opportunities for exploitation existed and were sometimes taken.
Mrs. Helen Jackson: I am sorry that I cannot stay for the whole debate as I have a meeting with Ministers. Does the hon. Gentleman agree that one of the issues that makes a difference in recognising whether environmental impact is sufficiently taken on board in trading regulations is the openness and availability of better researched information on environmental impact? A strand that ran throughout the investigation was the need for better environmental information on the range of projects, developments and movements taking place worldwide.
Mr. Thomason: The hon. Lady is right. There is clearly a lack of information in some less-developed countries, but that is an inevitable product of development advancement. Obviously, less-developed countries do not have the calibration equipment to measure properly air and water quality. It follows that testing mechanisms are not therefore available properly to compare the quality of their environment with that of the developed world. That, however, must be seen in perspective as part of the development process.
As I was saying, I was concerned about exploitation, by which I do not mean trying deliberately to trap a poorer country in that status indefinitely, for few in our present world would sustain such a position for long, but simply

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utilising weaker regulatory powers that must exist in such less-developed countries. That follows the points made by the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) about equipment for testing and proper research. Improvements in standards might be discouraged to improve profit margins.
I am glad to say that our inquiry has led me to conclude that my fears were almost entirely, but not quite completely, groundless. Fast development in a country that may have little regulatory provision is often haphazard, uncontrolled and damaging. Sometimes it is the product of deliberate exploitation but more often, I suspect, it simply arises from the need to provide opportunities for those who previously had little. It is as much a product of a nation's internal pressures as of pressures from outside. What seems to happen is that factories are constructed with little regard to the protection of water or air quality; transport infrastructure is disregarded, with all the environmental consequences that flow from that; and the prospect of factory sites becoming contaminated is not even weighed in the balance.
Development opportunities will give a community the chance to fill empty stomachs—the environment can wait when people are starving. It was apparent to us, however, that that stage does not last long. A less-developed nation's people will soon appreciate that the quality of their life is suffering. As they move towards relatively better prosperity and, above all, education, an interest in the environment develops. It is a slow process, but it happens. The pressures often are as much external as internal, which is why the production of the Select Committee's report and the work of many international organisations and of our own and many other Governments is essential if environmental responsibility is to be encouraged to grow.
I also thought that companies might seek to take advantage of less-developed nations. There is some evidence that that takes place, but British companies can be proud of their position. We found that they generally take an extremely responsible attitude to development of plant overseas. Naturally, they must comply with local law, subject to its capacity to be enforced, but when that local law is of a lower standard than ours, they usually do much more than that. We heard and saw evidence that British companies create plant of as high a standard as they would expect to be built in this country, and operate it at standards that compare with those in the United Kingdom and other parts of the developed world. New plant in the less-developed world is often built to the latest standards, which may even be in advance of plant being operated in the developed world.
We hear too often criticism of British companies as alleged exploiters. Although there may be occasional exceptions, all our evidence showed that this is simply not the case. We should be proud of the work that British-based companies are undertaking throughout the world.
It is clear that the Government must give a higher priority to international environmental issues. That is not a criticism of what has been undertaken to date but a statement of what must be the objective for the future. If our Government, who generally have an extremely good environmental record, do not seek to lead the world,
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others cannot follow. The negotiations in Singapore, as well as past and future international discussions on trade, are the responsibility of the Department of Trade and Industry. That Department must, however, reflect the policies of the Department of the Environment in pursuing environmental objectives. This is a case where the seamless robe of government must be seen to be operating without flaw.
We must remind our alleged partners in the European Union, the United States, developed countries within the Commonwealth and others that the development of good environmental practices is not a hindrance to trade but a benefit. Ultimately, the degeneration of the environment leads to decay, as sure as cancer spreads through a body. To create long-terns prosperity and improve quality of life globally, we need good environmental conditions. Just as a healthy human body can develop better if it lives in clean conditions, so the world community will be able to flourish if it is in environmentally good form.
I do not seek to argue that we should over-regulate—perish the thought, for that could kill business. However, seeking to achieve reasonable environmental objectives throughout the world should be a fundamental aim of Government policy. I am glad that the Government broadly accept that position. I am concerned, however, that issues of employment law may divert attention from environmental aspects. Of course, certain aspects of employment law may be appropriate to be considered at international level, but the environment takes greater priority in the natural order of advancement of the less-developed countries and we should respect their agendas.
Nor should we forget that a deteriorating quality of life in one corner of our planet has a direct impact on ourselves. No country or continent can lock itself away from the rest of the world. What happens thousands of miles away affects the air that we breathe, the food that we eat and the oceans that lap our shores. The international environmental agenda must be ours; it is not just for someone else.
It has been a privilege to serve on the Environment Select Committee during this Parliament and, in particular, to be involved with the preparation of the report, which should be a significant contribution to developing the Government's position and continuing our nation's call for improved environmental standards without attacking the creation of wealth and the generation of new industry.
11.28 am
Mr. Matthew Taylor: In recent years, the interaction between trade and environment protection has generated much debate but little consensus. Yet, in theory at least, the international community is committed to both trade liberalisation and environmentally sustainable development. In principle, the pursuit of both objectives might be entirely compatible. Trade allows countries to specialise in the production of goods and services in which they are most efficient, and to maximise the return from the given use of resources, which is a movement in the direction of environmental sustainability. Furthermore, trade liberalisation can encourage the spread of environmentally friendly technology.
However, trade can also—and arguably often does—harm the environment. The benefits of lower costs through lower environmental standards go to the

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producer. The disbenefits of the environmental pollution that results fall on the entire community, and increasingly that means the global community. In other words, competitive trade can encourage producers to ignore the wider environmental costs of what they do, to maximise their own price competitiveness at the cost of everyone else.
A country that has accepted more stringent environmental controls may well find that it is undermined by competition from other countries with laxer standards and hence lower production costs. In practice, most of the evidence submitted to the Select Committee suggests that that has not happened. Higher environmental standards have been offset by the gains from greater efficiency. However, there is no doubt that Governments and industries have often resisted higher environmental standards for fear of losing competitiveness, or for fear of businesses relocating abroad to places demanding lower standards.
International market prices do not reflect the environmental costs of cutting down forests, polluting waterways, eroding soils and overfishing. We have international rules against selling products at less than they cost to produce, but environmental dumping may be rewarded in the global market economy.
To some people, such concerns still seem remote, but the environmental threats are real and, for many communities, so are the economic threats. My constituency is no exception. In the St. Austell area, for example, we have the largest site of opencast mining in Europe—not for coal, but for china clay. Thousands of clay jobs have been lost, partly through new technology and partly through increasing competition in recent years. In the clay area, there is understandably constant pressure for higher environmental standards to protect residents from dust, to protect traditional village communities from tipping coming too close and to protect what remains of the traditional landscape, flora and fauna.
Much has already been achieved in the area, to the credit of the county council and the clay companies, chiefly English China Clays, but the industry continues to warn that tougher standards could threaten its future and its competitiveness. The remaining 4,000 jobs in the industry in my community are under review again and more may be lost as new china clay deposits come on stream in Brazil. There, companies do not have to operate around existing villages—those can be swept away, if they exist at all—nor do they have to restore and revegetate the landscape after tipping waste on to it.
The fear in St. Austell is that the choice may be between protecting our environment but losing our jobs as the local industry becomes uncompetitive, and maintaining competitiveness, with the loss of our environment. I hope that it will not come to that, but in one of the poorest communities in Britain, the fear is real.
The conflict between the desire to protect the environment and the urge to increase trade will not go away. On the contrary, the combination of the growth in trade and the accumulating evidence of global environmental degradation seems likely to lead to more, and more serious, conflicts.
The World Trade Organisation committee on trade and the environment is an important first step to relieving those pressures, by incorporating environmental considerations into international trade policy, but the fear
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is that it is unbalanced in favour of trade. This week's WTO summit is the first opportunity to resolve those tensions. The purpose of our report was to influence the British and European position.
In response to our report, the Government said that they would accept many of the Committee's conclusions and recommendations, although they rejected some. There are times when I am not sure that the Select Committee went far enough. I urge the Government to reconsider their position on those issues.
My most serious concern relates to trade measures based on process and production methods. Recent general agreement on tariffs and trade panel decisions have differentiated between the environmental impact of products and the environmental impact of how they are produced—process and production methods. Countries are permitted to take trade measures—import bans, for example—against products that are harmful to the importing country's environment, so long as the same product is treated equally, whether it is produced by domestic or overseas producers. GATT panels, however, have ruled that such action is not permitted on the basis of process and production methods.
The logic of that decision is that process and production methods are highly country-specific. The same process may cause different environmental damage in different countries, depending on such factors as population density. Yet where the effects of pollution are international, such a differentiation is hard to justify. Carbon dioxide released in Asia, for example, causes just as much global warming as carbon dioxide emitted in Europe.
It is probably true that most of the serious pollution problems that we are facing arise from production processes, not the resulting products. An example is the use of energy in industry and agriculture. To combat such problems, important and effective multilateral agreements have been introduced on topics such as chlorofluorocarbons. When applied to world trade, however, such agreements are under constant threat of being undermined by current WTO rules.
Mr. Peter Bottomley: Does the hon. Gentleman agree that under the present WTO arrangements, a ban on fur from leg-hold traps, which Britain rightly imposed in 1954, would be considered an infringement of trade? Clearly, the product—fur—does no harm, but the way in which it was obtained was immensely painful to the animals.
Mr. Taylor: The same answer applies to global environmental issues as to animal rights and related issues. I shall briefly touch on that later, although the Select Committee came to the view that it was not immediate to our inquiries.
The hon. Gentleman's question demonstrates why it is vital that every opportunity is taken at Singapore to amend current WTO rules, so that we can discriminate against imported products on the basis of the way in which they are produced, through multilateral environmental agreements. Indeed, I would go further: where a threat is immediate and clear, such as the loss of an important species, we might need to allow unilateral action, under tightly specified circumstances. Nevertheless, global environmental problems are clearly best tackled through

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the negotiation of multilateral environmental agreements. International action is preferable to unilateral action, not least because it is more effective.
The issue becomes still more important in the context of the current negotiations on the framework convention on climate change, which are supposed to agree a control protocol by the end of next year. It is highly likely that such a protocol will contain trade measures, as they worked so well in the case of the Montreal protocol on ozone-depleting substances.
In that case, parties to the climate change protocol could be required to refuse to trade with non-signatories to the agreement, or at least to refuse to trade in products containing or made by processes that released such gases. As that could potentially include any product made with fossil fuels, it would provide a powerful incentive for countries to sign the climate change protocol.
If a climate change protocol contains measures allowing trade sanctions against non-signatories, it is essential that they do not become subject to challenge in the WTO, or the protocol is unlikely to be effective. It was fear of sanctions, not just growing environmental good will, that led so many to sign up to the Montreal protocol.
The hon. Member for Eltham (Mr. Bottomley) was correct to point out that animal welfare was a related issue. It is my view and that of the Committee that it should be given separate consideration by the WTO. I urge the Government to reconsider the decision not to accept that recommendation.
Many animal welfare issues entail processes—how an animal is caught, rather than what is caught. A presumption of compatibility must be firmly established between the WTO and multilateral agreements on animal welfare standards. At the same time, the topics of animal protection and welfare should be introduced into the remit of the WTO committee on trade and the environment, providing an international forum in which to discuss them further.
The WTO committee on trade and the environment is reporting to the ministerial conference this week. As I am sure the Minister is aware, the report contains almost no conclusions whatever—simply the statement that more work needs to be done. Discussions in the committee have been notably unconstructive, and it is questionable whether anything will be achieved in such a forum.
I believe that the underlying problem is that the committee is composed primarily of trade negotiators, rather than negotiators from environmental departments. The UK and the EC are among the few exceptions. As long as discussions on trade and the environment are carried out solely within a trade forum, it is unlikely that any conclusions favourable to the environment will be reached.
I hope that the Minister now accepts that a new trade round is needed, and that the environment should be one of the subjects of those negotiations. That would allow environmental protection measures to be discussed alongside trade liberalisation. That is likely to be the only way in which we can make progress, although Government support for the concept of an international panel of experts on trade and the environment,
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as proposed by the World Wide Fund for Nature, would be a positive step. I am disappointed that the Government have so far refused to take part, although other Governments have supported the proposal.
Even in the United Kingdom, environmental considerations are not always given the merit that they deserve. Let me reiterate the Select Committee's view that environmental policy objectives are not being taken fully into account in international negotiations. Trade negotiations this week are being led by the Department of Trade and Industry. The paper produced jointly by the DTI and the Foreign and Commonwealth Office, dealing with free trade and foreign policy, makes only one mention of the environment, and the Government have clearly still not placed it among their priorities for Singapore. I hope that the Minister will assure us today that environmental considerations will be a priority for British Ministers this week, as neither what the Secretary of State for the Environment said when he appeared before the Committee nor the Government's response to its report was adequate in that regard.
Perhaps the greatest block to progress, however, is the understandable fear in the developing world that environmental pressure from the developed world is simply a back-door block to competition. That fear must be recognised, and Britain has a special part to play in the overcoming of it, in two ways. First, we must understand that we have built much of our present wealth by committing enormous environmental destruction in the past. If we are to expect the developing world to behave differently, we must use some of that wealth to provide the aid that will help it to develop, and use more environmentally sustainable alternative technology. We must also remember that the 20 per cent. of the world's population in the developed world currently use 80 per cent. of the world's resources. We must accept an equally disproportionate part in reversing that excessive destruction.
In a world that is increasingly threatened by environmental degradation, we desperately need new rules and institutions to govern international trade. The Government have a chance this week to take the lead; I believe that, with our European partners, we have a real opportunity to do so, but I fear that that opportunity may yet be missed. I urge the Government not to allow that to happen. I hope that, at the end of this week, we may be able to say that Europe, and Britain in particular, has genuinely played a part in the taking of the next step.
11.41 am
Sir Irvine Patnick: To cover the report on world trade and the environment, together with the Government's response, and to distil it and make it understandable, would demand the services of a contemporary author: John Grisham springs immediately to mind. I approach the subject not only under the Whip's stricture, but suffering from the main handicap—shortage of time. There is also the need to allow others to speak, and to make the subject interesting, compressing my speech into a reasonable time while also expressing my own views.
I pay tribute to the many witnesses who appeared before the Select Committee, and to the people in foreign countries who not only answered searching questions but gave their unsolicited opinions in such a pithy manner.

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I thank all those involved in the Committee's deliberations, including the Chairman, whose views are well documented. He carried out his duty with his normal detached objectivity, and his rod of iron was replaced at times—not frequently enough—with a fleeting look of disapproval which was as effective, if not more so.
I also pay tribute, and express my gratitude, to my hon. Friend the Member for Bromsgrove (Mr. Thomason), who spent so much time on the detail of the Committee. I have admired his knowledge and the way in which he operates for a long time. He mentally kicks me under the table, as it were, to tell me, "This is the way in which we should be going, not the way in which you want to go."
Mr. Tony Banks: The hon. Gentleman needs kicking.
Sir Irvine Patnick: The hon. Gentleman is a great artisan of kicking.
I have endeavoured to break my speech into various sections. How, for instance, can Governments create a competitive advantage? During the Committee's visit to Singapore, Thailand and Malaysia, we were informed that some of the actions taken by developed countries were unhelpful to their area. The comment that sticks in my memory concerned hardwoods. The people there asked, in no uncertain manner—the way in which they asked the question, and the expression on their faces, gave it even more weight—why, now that the United Kingdom and parts of Europe had used their hardwoods, we should stop them from changing their economy by cutting down their trees because, by our standards, it was unacceptable. That is a pertinent question.
The removal of subsidies and other protectionist measures detailed in the general agreement on tariffs and trade has an escape clause in article XX(b), which allows countries to opt out of its obligation—or, in a nutshell, provides an exception
"necessary to protect human, animal or plant life or health."
When GATT was created, environmental protection was not high on the "things to do" list; nor, indeed, were many countries giving it the consideration that it deserved. Thankfully, countries now do, and the United Kingdom's first-ever audit of the environment—"This Common Inheritance"—and its yearly updates have focused on that important subject. But GATT is not the catch-all that many would have us believe; rather, it is one lever of a wider machinery, including CITES, the Convention on International Trade in Endangered Species—which regulates the wildlife trade—the Montreal protocol, which deals with substances that deplete the ozone layer, the Basle convention, which deals with the management of hazardous waste, and proposals from the European Community. All that information is now freely and readily available, so I need not spell it out in great detail.
Encouraging the spread of clean and efficient technology was one of the key issues during our visit to Singapore, where multinational companies operate to the highest European or United States standards—they do so wherever in the world the companies are situated. I was delighted to discover that. Know-how technology has also been exported, and, indeed, some British companies are developing models of co-operation that are attractive to developing companies overseas. Many of those countries constitute possible substantial markets both now and in the future.
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What those countries need is a good education system which produces a good reservoir of talent—which, in turn, produces good backgrounds in science, mathematics and technology. Many developing countries are not advanced enough in their education and training to take on and develop full industries of their own, acting instead as assembly plants for foreign countries. I pay tribute to British Aerospace, Rolls-Royce, Ford and, indeed, the university of Sheffield, which are prepared to develop and support companies and help them to plan for education and research, providing the expertise that is required. Such work is a valuable export for the United Kingdom, and we are all the beneficiaries.
Economic growth can lead to increased pollution, which is a major concern. We heard from several witnesses about that. One of the things that we noticed on our overseas travels was the fact that some trades created environmental problems. Again, some British-based companies were out there dealing with the problems created by pollution, including British water companies.
In their response, the Government picked up the points that we had made about the removal of trade restrictions and its environmental impact. In 1999, the Government will attempt to address those points in the next round of the World Trade Organisation negotiations, and I welcome that.
Many factors impact on environmental protection, one of which is competitiveness. Many companies in Britain adopt voluntary measures to improve environmental protection. Eco-labelling and purchasing policies both help the environment. If I have discovered anything, it is that it is hard to find eco-labelling when one is out shopping. People are more concerned with price, availability, quality, service and usability than with eco-labelling, and that problem should be addressed. It can place foreign manufacturers at an economic crossroads, and put the environment at a disadvantage.
Countries that do not help to protect the environment can certainly produce cheaper goods, but at the expense of the environment, and they may help to create more eco-dumping and pollution havens. I know that that concerns the WTO and the World Business Council for Sustainable Development, but I nevertheless agree with the Government and with principle 12 of the Rio declaration. I therefore urge the Government to continue to encourage industry to adopt good environmental management, and to participate in the EC eco-management and auditing scheme. I commend the Government for their clear commitment to that, as outlined in the third competition White Paper. I welcome the agreements on the vital role of the International Standard organisation.
Throughout the world, security and stability enable markets to function smoothly. As we discovered during our visits, supporting business is the largest single activity of our diplomatic posts abroad. I must pay tribute to the dedication, professionalism and commitment of the employees of British firms who were available to discuss their products at trade delegations. I was privileged to meet some of them at an exhibition in Malaysia. They are a credit not only to their companies but to this country, and we should be aware of their efforts on behalf of Britain's exports.
Many people draw attention to traffic congestion in the United Kingdom. They should see the traffic in Bangkok—if they want to see a gridlock, that is the place

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to go. We had a police escort, but it did not help at all. Bangkok insists that it is capable of solving its traffic problems through road pricing and taxation, but I think that this is a case of, "Watch this space."
In an interview, I was once asked what was the most evocative smell that I remembered. I replied that it was that of a joiner's shop. It is possible to-or at least I was able to—differentiate between the smell of oak, pine and other timbers. Like the smell of newly cut grass, such smells stay with one.
In March this year, we visited a major DIY store—B and Q—in Wandsworth. I was impressed by the way in which the store had taken to sourcing its materials, especially timber. It outlined the aims of the Forest Stewardship Council, which sets standards for sustainability. The work done to encourage villagers in some countries to manage and log timber themselves was a most interesting aspect highlighted during our visit.
As ever, when I see timber toilet seats, I recollect being told that the shape of the toilet seat was determined by the shape of the bowler hat of the foreman in charge of the joiner's shop. That was before my time, but the story lingers that the hat determined the inner dimensions of the seat.
To continue my flashback, when I was a building contractor, we used to take out the old high-flush toilets, washbowls and cast-iron baths. On the occasions when we did not take out the bath—it was heavy—we used to panel it in and replace the brass taps with chrome ones. Sometimes we simply replaced the toilet seat with a plastic one and put hardboard flush on beautifully panelled doors. The construction industry has now gone full circle—wooden toilet seats are back, the old-style baths are now worth a fortune and brass taps are being fitted again. The final turn of the wheel means that it is possible to buy a plastic door panelling kit to attach to flush doors and make them look like panelled doors. As they say in the trade, we have seen it all before.
Many factors affect trade and the environment. Some people may disagree with me, but I believe that awareness of the environment is now a fact of life. That is to be welcomed and worked on, and I contend that the Environment Committee's report entitled "World Trade and the Environment", together with the Government's response to it, have moved the debate on. They are documents that future generations will turn to in years to come.
11.52 am
Mr. Tony Banks: I found the speech of the hon. Member for Sheffield, Hallam (Sir I. Patnick) most moving, especially his eloquent tribute to Thomas Crapper. I pay tribute to all that the hon. Gentleman did in his early days to cover up any reminder of what that honourable gentleman did.
If the hon. Gentleman thought that Bangkok's traffic was bad, we must have been in Bangkok last night when some idiot jammed his lorry in the Blackwall tunnel, causing hundreds of thousands of Londoners to be inconvenienced to such an extent that some spent three hours or more blocked in the tunnel. I should not like to think that we are going to bring that aspect of Bangkok over here.
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The hon. Member for Bromsgrove (Mr. Thomason) is wrong—there is no antagonism to wealth creation on Labour Benches, certainly not under new Labour. However, we are opposed to wealth creation based on the gross exploitation of either human or animal resources. It would be crazy if we, as politicians, did not want individuals and communities to prosper, but we think that individuals, communities and countries will prosper that much better if they operate in a framework of concern for the environment. That, after all, is what the excellent report of the Select Committee on the Environment is all about. The hon. Gentleman's accusations do not bear critical examination.
I want to talk briefly about paragraph 170 of the Select Committee's report, the one part that deals with the Convention on International Trade in Endangered Species. Before the hon. Member for Eltham (Mr. Bottomley) left the Chamber to go to a meeting, he requested that I move into my restrained mode if I was going to talk about animals. He and I work closely on animal welfare issues, but he knows—I think that the whole House knows—that I find it very difficult to be restrained when talking about the exploitation of animal resources.
The gross exploitation of animal resources is appalling. Everywhere we look, we can find evidence of the gross inhumanity that human beings exhibit towards other creatures on the planet. I accept that much of it is done illegally, but much is still done in the pursuit of legal trade.
We have seen the Chinese keeping bears in appalling conditions and tapping bile from them because they think that it has medicinal properties. People stockpile rhino horn because they think that it is an aphrodisiac. In Yemen, rhino horn is used to create dagger handles, but it is also imported into this country. Customs and Excise recently seized a large number of rhino horns and I pay tribute to that work in trying to enforce CITES regulations. I know that many Conservatives feel as strongly as I do that the Government should give extra resources to Customs and Excise, to enable it better to enforce those regulations and stamp out the appalling trade in endangered species.
When the Minister replies, will he say a little more about the Government's response to the Select Committee's report in relation to illegal trade? Paragraph 20 of the Government's response states:
"The Department of the Environment is holding a seminar in October 1996 to identify practical ways to improve enforcement efforts in the UK."
Regrettably, I did not hear much about that seminar, and it would be helpful if the Minister told us a little more about it.
A report appeared in The Guardian yesterday following the publication by the World Conservation Monitoring Centre of its red list. The list comprises animals that are now endangered. The research, based on an assessment of the 5,205 species and undertaken by a network of more than 500 scientists worldwide, revealed that 25 per cent. of mammals, 25 per cent. of reptiles, 25 per cent. of amphibians and 34 per cent. of fish are threatened with extinction. That should concern us all.
It is all very well talking about the rights of fishermen and arguing with partners inside and outside the European Union about fishing regulations, but if fishermen are

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allowed to fish stocks to extinction, they are not only doing themselves out of a job, but destroying the ecology of the sea.
The hon. Member for Hallam mentioned the problem with hardwood in Thailand. The rain forests are of course under great pressure. Some less-developed countries are asking why they should not supply markets in northern Europe and north America with the hardwood that we need and why we should be restricting their ability to develop their economies.
We have to accept that argument, but we must acknowledge that rain forests belong to the planet as a whole. If the rain forests go, we go—it is as simple as that. It will be a long way down the road. It will not be us sitting in the Chamber. But eventually we shall drive ourselves to extinction by driving other species to extinction, because we are all interrelated.
Therefore, we should tell those countries that we shall put money and resources where our liberal consciences are. We should give them the resources to enable them to avoid over-exploiting resources that belong not just to them but to the planet. If they belong to the planet, all the countries on the planet must take responsibility for preserving those resources. We cannot expect single countries to do that on their own, particularly if they are in the less-developed part of the world economy.
Another problem which concerns a number of us and on which another report was issued last week is the booming trade threatening the world shark population. Sharks may not be the most attractive creatures in the minds of many of us, although to me they are a damned sight more attractive than the average Member of Parliament, but that is the way it goes.
Shark species are being exploited to such an extent that certain shark populations are reaching the edge of extinction. That is extraordinarily worrying and it should worry all of us. The trouble is that, in many cases, sharks are not listed as an endangered species and so are not protected. The trade is not regulated. It is appalling. For example, there is a big demand for shark fin soup. Hong Kong is one of the main areas where the demand flourishes, and it extends into China and throughout south-east Asia. One knows from evidence of shark fishing in Japan that the shark is taken out of the water, its fins are cut off and then it is thrown back into the sea. A shark has to keep swimming in order to live and without its fins it cannot and it dies a horrible, lingering death.
Such exploitation makes me extraordinarily angry, because it shows no concern for other life forms. It is at that point that I lose all sympathy with and sentiment for human beings. I may go a little further than most people, but I just hope that I am around when that asteroid crashes into the earth and wipes out all life forms, as happened 65 million years ago. I would like to raise my glass of champagne to the asteroid as it comes in. Nature will then be able to start again and come up with a species that is somewhat better than human beings at living in harmony with the other creatures on this planet. Unless we do that, we shall take many species to the point of extinction and beyond. That would be a calamity not just for those species but for all of us who are left. Every time one species is extinguished, we are all diminished by that act.
Unregulated trade, trade which has no concern for animal resources, is not the sort of trade that I, and I suspect other hon. Members, or Britain want. We want
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trade and prosperity, but it must be in sympathy with other life forms, particularly the animal life forms with which we are privileged to share the planet.
12.2 pm
Ms Joan Ruddock: It is a great pleasure to follow my hon. Friend the Member for Newham, North-West (Mr. Banks), with his enormous enthusiasm for the threatened species of the planet.
The debate is welcomed by the Opposition. It is an issue that Labour has taken seriously for a considerable time.
Sir Irvine Patnick: New Labour.
Ms Ruddock: New Labour, old Labour, every Labour—we have always taken the issue seriously. Labour's trade and environment protection team published a joint paper two years ago, "Trade and the Environment", and Labour's policies were further developed in our environment document "In Trust for Tomorrow" and the more recent foreign policy document "A Fresh Start for Britain".
We have no doubt that trade and the environment are inextricably interlinked and that many developing nations have suffered severe environmental degradation as a result of inappropriate development and trade.
The Select Committee's report, on which I congratulate particularly my hon. Friend the Member for Denton and Reddish (Mr. Bennett) and all his colleagues, is complex and tackles the difficult issues with some clarity and depth. Labour agrees with much of the report. It has 24 recommendations and conclusions which I cannot possibly address in the short time available to me. However, it is particularly timely, as other hon. Members have said, because of the Singapore conference.
I refer first to the role of the United Kingdom Government. The Select Committee expressed concern that UK delegations are failing fully to reflect the Government's declared environmental policy objectives, and recommended that the Department of the Environment increase its input into international trading negotiations.
The failure fully to reflect and implement the UK's environmental policy is a problem not just encountered in international gatherings. It is a problem to which I have referred at the Dispatch Box on numerous occasions, and one to which I referred in our debate on sustainable development last week. The Government do not take the environment sufficiently seriously and have certainly not integrated it into all aspects of their policies.
I am glad to say that the Government's response to the Select Committee's report acknowledges that there is scope for improvement. But on the environment, as in areas of domestic policy, the Government find themselves facing both ways. The Department of Trade and Industry is wholly committed to free trade and we may assume that that has been its stance in Singapore but, specifically on page 27 of the document "Free Trade and Foreign Policy: a Global Vision", the Government say:
"A liberalised trade policy and a high level of protection of the environment should be mutually supporting in contributing to sustainable development."
May I ask the Minister to say what precisely that means, particularly in the context of the World Trade Organisation conference? What input has the Department

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of the Environment had into the Singapore meeting? What environmental issues has the UK put on the agenda, and what progress is deemed to be being made in respect of sustainable development at that conference?
The Labour party supports the Select Committee's view that the relationship between multilateral environmental agreements and the rules of the general agreement on tariffs and trade must be clarified. What are the UK Government doing in Singapore to resolve that vital issue?
The Select Committee highlighted the European Commission's proposals to amend article XX of GATT to make it clear that trade measures within MEAs are allowable under GATT. In particular, the Royal Society for the Protection of Birds, with its concern for biodiversity, believes that that change is essential. The Government's response to the Select Committee's report shows that they are prepared to support that, but we ask the Minister today specifically to undertake that the UK Government will actively pursue that proposed change within the EU.
We were somewhat surprised by the Government's reluctance to support the international panel of experts that the World Wide Fund for Nature is trying to establish. That project is already supported by five Governments and the European Commission. Will the Minister tell the House today whether the Government, as the Select Committee recommends, are willing to discuss the matter further with the World Wide Fund for Nature? Labour endorses that and believes the proposal to be worth while.
I further endorse the request that has already been made to the Minister on the Forest Stewardship Council. Labour again supports the Select Committee's position and urges the Government to think again and to accept that that is the only scheme in existence at present which has support, so there is no excuse for the UK not to join in something that could have valuable international implications.
All hon. Members would agree that Britain is a trading nation. Our export performance is crucial to our overall economic success. We export a higher proportion of GDP than Japan, Germany or the United States. Britain's most important market is the EU, although one might not think so judging by the behaviour of half the Government. The single market is the world's largest economy, accounting for more than one third of global trade. As such, we have a major responsibility to ensure that we do not seek all the benefits of trade while foisting all the costs of environmental damage on developing nations.
We believe that trade can benefit the environment, both through economic growth and through encouraging the use of clean technology. It is vital that developing nations have access to modern clean technology so that the environmental destruction that is associated with past industrialisation in the north can be avoided. The interest of companies in patents to protect their investments in new technologies must be balanced by reasonable arrangements for developing countries to have access to technology transfer.
Labour is committed to a system of international trade that is open, fair and sustainable and thus raises the standards of developed and developing countries alike, but countries will open their economies to trade only if
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they can be assured of reciprocal action by others. That is why international trade must be based on agreement and be policed by a system of international regulation.
Labour welcomed the conclusion of the Uruguay round of the general agreement on tariffs and trade and the creation of the World Trade Organisation, but we believe that more reform is still necessary, in particular to ensure that the benefits of free trade are generated in a fair and sustainable way. Thus a Labour Government will seek to amend GATT to make it clear that signatories have a right to protect natural resources and that that should refer not only to resources within the jurisdiction of the acting state, but to the "global commons".
Labour will also extend free trade agreements to include services and intellectual property rights. We will ensure that international environmental agreements are made exempt from challenge under the World Trade Organisation, including the Montreal protocol, the Basle convention, the Convention on International Trade in Endangered Species and the biodiversity and climate conventions. We endorse what my hon. Friend the Member for Denton and Reddish said on forestry conventions.
It is crucial that Britain plays a leading part in international efforts to create a stable international macro-economy that supports trade, employment and international stability. We hope that progress might be made on those issues in Singapore, but, like other Members today, we feel that there is not much evidence of that happening.
The WTO is not the only international body that must deal with the vital issues of trade and the environment. The United Nations too must have an enhanced role in co-ordinating international economic, social and environment policy. Labour will press for a greater role for the UN Environment Programme and for the Commission on Sustainable Development in the promotion of sustainable economic policies among UN member states.
The issues of trade and the environment are inextricably linked with those of aid and development. The protection of the global environment cannot be postponed until developing countries grow rich. Nor can it be achieved by keeping developing countries poor. Clearly, aid has a critical role in bringing about sustainable development. Labour in government will urge other institutions, including the World bank, to lend increasingly to agriculture, particularly to small-scale farming, and to integrate environmental sustainability into all aspects of the bank's work. We will report regularly to Parliament on the work of the World bank and of the International Monetary Fund and on the UK's role.
Under Labour, aid programmes will be audited for environmental impact and underpinned by a commitment to environmental sustainability. In Europe, Labour will work for greater consistency between European Union aid, trade, agriculture and economic reform policies and improvements to EU aid development programmes in relation to the environment.
There is no doubt that internationally agreed standards should be a floor for environmental protection and not a ceiling, although states must remain free to adopt higher standards if their populations demand it or if their environments are particularly vulnerable.

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This has been an excellent debate, for which we would all have wished for more time. There has been much agreement both with the report and with the sentiments that many of us have expressed from personal experience, but what really matters is action. The Minister has asked that I allow him a little more time because he wants to make some statements. I hope that he will respond to our concern on the Singapore conference and give a specific response to our questions.
12.14 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): This has been a good debate with some interesting speeches. I welcome the contribution from the hon. Member for Denton and Reddish (Mr. Bennett), who set the scene well. He knows that the Government welcome the work of his Select Committee in highlighting the often difficult and complex issue of trade and the environment. He gave an expert view on the various multilateral environmental agreements and the issues that concern his Committee. In the time available, I will endeavour to answer the specific points that he and others have raised.
The hon. Member for Denton and Reddish raised generally the subject of the three important multilateral environmental agreements: the Basle convention, the Montreal protocol and CITES. It is important to improve the operation of each of those agreements, which each cover issues of great global importance.
The hon. Member for Newham, North-West (Mr. Banks) asked in particular about the operation of CITES. He mentioned the seminar in October, which was organised by my Department, on combating environmental crime. The agencies that took part in the conference included the Environment Agency, the police and Customs and Excise, which are involved with the enforcement of wildlife law. The conference's aim was to bring those agencies together and to improve the practical enforcement of environmental law, and for the agencies to share their different and important experiences. It was a worthwhile conference and we hope to build on its work.
The hon. Member for Newham, North-West generously referred to some of the recent successes in enforcing wildlife law, particularly in seizing illegal goods such as rhino horns. Such goods cause great offence to many right-thinking members of the public, who hate the idea of those goods being traded to the disadvantage and possible extinction of species elsewhere in the world. I join him in what he said about that.
The hon. Member for Denton and Reddish also raised the subject of eco-labelling. He knows that we fully support the European Union eco-labelling scheme and the EU's efforts to argue for an effective World Trade Organisation regime that promotes full transparency in the development and operation of voluntary eco-labelling schemes, based on a life cycle approach.
My hon. Friend the Member for Sheffield, Hallam (Sir I. Patnick) mentioned that it is difficult sometimes to find goods with eco-labels on them. Certain types of washing machine have an eco-label. We want more such goods in the shops so that consumers can contribute to the environment by making environmental decisions.
On the Forest Stewardship Council accreditation scheme, we are interested in sustainable forestry. The hon. Member for Denton and Reddish will know that we have
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set out our plans for sustainable forestry and in particular the forestry standard. The Forestry Commission is carrying out consultation on a draft national standard. It is discussing differences between the United Kingdom forestry standard and the council's scheme. The hon. Gentleman will know from the evidence given to his Committee that some aspects of the scheme's criteria need investigation. No doubt the Forestry Commission will discuss those aspects with the council and it is right that those discussions should take place.
Mr. Bennett: Will the Minister give way?
Mr. Clappison: Very briefly. I have much ground to cover.
Mr. Bennett: Does the Minister agree that it is important to establish a worldwide standard and that matters cannot be left to individual countries?
Mr. Clappison: There is certainly a logic behind worldwide efforts to maintain sustainable forestry. Britain has played its part in those efforts by entering into a number of European and global agreements. The hon. Member for Lewisham, Deptford (Ms Ruddock) will be aware of the important part that we played in promoting forestry at the Rio summit.
The hon. Member for Penton and Reddish also referred to domestically prohibited goods. He will know that several separate agreements are in place or under negotiation requiring the identification of specific categories of goods. The World Trade Organisation committee on trade and the environment is producing a database that will cover existing agreements, but it will be necessary to return to the subject in future.
Before turning to Singapore, which has been the subject of a great deal of interest during the debate, I should like to address other specific matters that have been raised during the debate.
My hon. Friend the Member for Bromsgrove (Mr. Thomason) made an excellent and well-informed speech that reflected his role in the Select Committee. He was absolutely right to draw attention to the benefits of trade for developing countries and the way in which trade can spread high environmental standards. He drew attention to the high standards in United Kingdom companies which were borne out by the evidence given to the Select Committee and rightly concluded that we should be proud of their efforts on the international scene. The United Kingdom has a good environmental record both in Government and industry. My hon. Friend drew attention to the need to set a continuing high standard in future. We cannot be complacent. We have achieved a great deal and we must look forward to further challenges and further achievements by industry and Government.
The hon. Member for Truro (Mr. Taylor) made an interesting speech in which he used the situation affecting china clay in his constituency as an example of the difference between process-based environmental rules and product-based trade rules. It is an interesting subject. In our response to the Select Committee report and our earlier evidence to it, we recognised that there is sometimes tension between those two sets of rules which have developed against different backgrounds.

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Let me reiterate what we told the Select Committee. We consider that it would be helpful to explore the potential difficulties caused by different approaches and to examine the scope for solutions that, while avoiding undermining the multilateral trading system, could minimise the risk of conflict between the two systems.
Mr. Matthew Taylor: I hope that the Minister will be able to let us know whether any progress has been made at Singapore. All members of the Select Committee would like to know what is happening out there.
Mr. Clappison: Before I mention Singapore, let me turn to an important subject that was raised by my hon. Friend the Member for Eltham (Mr. Bottomley) in his intervention about animal welfare. I know that my hon. Friend had to keep another appointment. He does not need me to say what a keen advocate he is of animal welfare, as indeed is the hon. Member for Newham, North-West.
My hon. Friend the Member for Eltham raised the important subject of the leg-hold trap. He would be the first to understand that it would not be entirely desirable for me to speculate on the legal position of the World Trade Organisation rules in that respect. However, I certainly join him in recognising that leg-hold traps are cruel. The Government have long recognised that they are a cruel way of trapping animals and we have been working hard with our fellow European Union countries to uphold the original EU regulation that set out to ban leg-hold traps. We have been trying to keep the European Union steady to that aim. The House will be aware of recent developments, but our overriding aim is to uphold that regulation and minimise the cruelty to animals caused by leg-hold traps.
The hon. Member for Newham, North-West proposed bringing animal welfare into World Trade Organisation rules. He spoke with a strength of feeling on the subject that is widely shared among the public. He will realise that we have to work with other countries and we need more of an international consensus about animal welfare and trade rules. I entirely agreed with the hon. Gentleman when he said that we are all diminished when we lose other species. That is the thinking behind our contribution towards the Convention on International Trade in Endangered Species, our biodiversity plans and what we are doing to help other countries protect their biodiversity. I am sure that we all agree that it is an important subject.
My hon. Friend the Member for Hallam made an interesting speech drawing upon personal experience. He rightly highlighted the high standards set by British companies and observed that British-based companies are often involved in cleaning up pollution abroad. He drew attention to the role of water companies since privatisation in assisting other countries to deal with their pollution problems. I agree whole-heartedly with what he said about British business men who work overseas helping other countries and promoting our export efforts. He rightly paid tribute to their magnificent professionalism and their important role globally.
I have been asked about Singapore, which is of great interest to the entire House. The Singapore meeting is a useful opportunity to consolidate the work of the World Trade Organisation committee on trade and the
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environment. The committee has proposed a report on its work so far. I hope that we shall agree that the committee should continue its work.
I agree with hon. Members that it is disappointing that the committee was unable to agree on the need to clarify World Trade Organisation rules on trade measures taken under multilateral environmental agreements, but we look forward to continuing that work after Singapore.
I shall address the speech by the hon. Member for Deptford in a moment, but she should bear in mind the fact that we need to work internationally to reach agreements with developing countries and other developed nations. I am not sure whether some of her comments took account of that need.
I was asked what we consider to be important for the future. There are some important topics for the World Trade Organisation to explore as part of its further work. We have identified six topics as the focus of major international efforts in the near future.
First, we consider multilateral environmental agreements to be the most effective response to trans-boundary and global environment problems. We support the efforts of the European Union to clarify the relationship between trade measures in multilateral environmental agreements and GATT. If the hon. Lady is trying to suggest that there is some doubt about that, she is wrong.
Secondly, environmental policies based on processes represent an important task for the future. Thirdly, we support further examination of environmental effects. We should like to see more analysis by the World Trade Organisation of the potential environmental effects of trade proposals as they are developed. Fourthly, in respect of spreading environmental principles, there needs to be a better understanding among those concerned with trade policy of the principles and concepts underlying environmental laws and policy. Fifthly, market access for the least developed countries was of particular interest to the Select Committee.
Ms Ruddock rose—
Mr. Clappison: I shall not give way to the hon. Lady at this stage. I read with interest what the Select Committee said about the need to give assistance to developing countries to be represented and to make their own contributions.
Sixthly, we held a seminar on combating illegal trade in endangered species, chlorofluorocarbons and hazardous waste.
Ms Ruddock rose—
Mr. Clappison: Before the hon. Lady gets too carried away, I would draw her attention—
Ms Ruddock: I should like some answers.
Mr. Clappison: I have given the hon. Lady and the House many answers in a short time.
Ms Ruddock: What about Singapore?
Mr. Clappison: On Singapore, I have identified what we believe are the important subjects for the future.

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The hon. Lady would do well to listen to what we have done so far. We have contributed $40 million to the multilateral fund of the Montreal protocol that was set up to meet agreed incremental costs to developing countries. That is achievement, not just talk. We recently agreed a further $29 million funding for the next three years of multilateral fund operations. Having committed £130 million so far, the United Kingdom is the fifth largest donor to the global environment facility—a project that helps developing countries and other countries in transition to meet their obligations under the biodiversity convention and the climate change convention.
The hon. Member for Deptford mentioned Singapore and made a number of false points in her speech. At the beginning, she seemed to be attacking free trade; she went through a little doubt in the middle; and, by the end, she was saying how important free trade is. The Government are in no doubt. We realise that at the Singapore meeting it is important to talk about trade and the taking down and keeping down of unnecessary trade barriers, from which historically this country has benefited so much. Free trade also has the capacity to benefit developing countries in future. There is no equivocation on the Government Benches; we support free trade.
The Government set a high premium on environmental protection, as the hon. Member for Deptford knows. We have achieved a great deal, which is there for all to see in our policies and our commitment to sustainable development. If she is interested in that, she would do well, as I told her last week, to look at her party's manifesto, which does not mention sustainable development, let alone free trade and the environment. Her contributions last week and today—
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. We must move to the next debate.

Prison Estate (Isle of Wight)
12.30 pm
Mr. Barry Field: I should like to put two points on the record. First, I thank Madam Speaker through you, Mr. Deputy Speaker, for granting me this debate. Secondly, a jaundiced view is currently going round that somehow the art of debate, and its effectiveness in the Chamber, has lost some of its currency over recent years. However, the effect of securing a previous Adjournment debate on behalf of my constituents about a constituency problem—this debate also concerns a constituency problem—was remarkable, and with the help of the Isle of Wight council officers, we got a result. I therefore hope that no one will ever say, certainly in my hearing, that Parliament's effectiveness has been reduced over the years.
When I entered the House in 1987, I was told that the very best way to get on was to want for nothing. I had a check list of matters concerning the Isle of Wight that was slightly longer than a supermarket till printout, and gradually I have managed to put ticks beside the items. I am sure that the Minister, my hon. Friend the Member for Maidstone (Miss Widdecombe), who I am delighted will be replying to the debate, will be pleased to know that the subject of the debate is just about the last major problem that I inherited on being elected. I hope that the debate, which concerns the case of the residents of the prison residential estates of Albany, Camp Hill and Parkhurst, will lubricate a solution for my constituents, not hinder it.
In May 1984, the Home Office requested that the Isle of Wight county council adopt the prison estate roads on the Albany, Parkhurst and Camp Hill residential estates. Residents were subsequently asked by the Home Office in January 1985 for £131 a household towards road maintenance, but very few paid and those who did were refunded. Following a decision to sell prison officers their homes and the implementation of the "Fresh Start" policy, a number of serious problems arose.
The problems were brought to my attention in July 1988 when the island was accepted as a water metering trial area. I was alerted to the fact that residents paid their water bills directly to the prisons and not the water company. Even more curiously, the governors of the three island prisons debited the residents for their water consumption. I wrote to the Home Office about that and the adoption of the estate roads. Southern Water considered that the water supply pipes on the estates were not up to standard. A reply from the then Minister on 27 October 1988 stated that there was no question of the water supply pipes being renewed or adopted by the Home Office.
Following a meeting that I had at the Home Office on 8 November 1988 with the then Minister and his advisers, the Home Office wrote to Southern Water on 20 December 1988 to request that water meters be installed in prison estate properties. Agreement was reached with Southern Water and the Home Office in March 1989 for a new water mains supply and pipes, which was concluded in June 1989 and cost all the estates nearly £200,000. The amount covered the total cost of the new mains and one half of the cost of connections to individual properties. I must make it clear that the other half was met by the Department of the Environment under

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the water metering trial areas financing scheme. I took up the matter again in September 1989, when each household was asked to contribute £250. On 7 June 1991, a letter from the then Home Office Minister stated:
"I can confirm that the Home Office has paid for the work in connection with water metering and installation of pipes."
On 21 August 1991, the then Home Office Minister wrote to me about the cleansing, maintenance and weed growth on the roads and footpaths. That letter stated:
"Unfortunately, it has become increasingly difficult to find suitable inmates and resources"
to undertake maintenance work on roads, verges and payments. Hitherto, prisoners had formed work gangs to maintain estate roads and the general environment. Surely the letter is a clear admission of the Home Office's liability for the roads.
Another letter from the Home Office on 18 January 1993 said:
"The Head of Works has been concerned about the condition of street lighting."
Three years later, no action has been taken on a system that is by now well over 20 years old. That letter is surely another clear admission of the Home Office's liability.
Recently, the No. 30 bus service was withdrawn because the Home Office refused to allow a double-decker through the estate due to the Home Office's three-tonne limit on estate roads, yet prison vehicles way in excess of three tonnes regularly use the roads. Are my constituents to become responsible for the damage that will be caused by the weight of those vehicles on the roads if they are to assume liability as the Home Office has requested? Surely the fact that the Home Office has imposed its own weight limit is another tangible sign of liability and one that cannot be transferred to the residents.
In 1991, the residents sought a legal opinion. At the time, Mr. Attwater was the chief estates officer for the Home Office. The legal opinion stated:
"Continuing with legal points, it was suggested by Mr. Attwater"
at a meeting with the residents
"that the Residents in fact own the roads as there was a presumption in law (according to him) that a private highway was owned by adjoining landowners up to the middle of such highway. He stated that this was the view of the Treasury Solicitor."
The advice to the residents was that the solicitor did not accept that interpretation for one minute. The solicitor said:
"There may well be such a presumption but it can be easily rebutted by other evidence. In the first place, each householder is given a right of way over all the roads and footpaths without any reservation for the particular piece of highway in front of his land. Secondly, the Conveyances (which are modern), make no provision for such a statement in the Conveyance, which one would expect. Thirdly, if there was such a provision, either expressed or intended, one would have expected the Home Office to have reserved a right in all Conveyances to use the roads and footpaths.
The Home Office does not do this for the simple reason that it is not necessary. Undoubtedly, the Home Office has retained ownership of the roads in question."
He goes on to address some other points.
"Quite apart from all this, it would appear that the Home Office spent £13,000.00 on the roads a few years ago, and then called for a contribution from residents."
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As I have already said, that contribution was in fact not paid by the majority of the residents and those who did had the money refunded. He continues:
"This will be quite incredible if the Home Office was now found not to be the owner of the roads after all."
He addresses the point about the street lighting:
"it seems that by mistake, provision for this was not put into the Conveyances. The Home Office has paid for street lighting ever since. Again, this would be an incredible thing to do if the Home Office was no longer the owner of the roads in which the street lighting is placed."
I reach a number of conclusions. The first is that a conditioned precedent was established when the Home Office, which at first refused responsibility for the supply of water to the residents, subsequently admitted that liability by paying for the installation of pipes to a standard that made them available for adoption by the water company. That is what the residents are asking for in respect of the street lighting and the roads. My second conclusion is that, by demanding money for the maintenance of the roads more than 10 years ago and then refunding the money, the Home Office has again admitted its liability for the maintenance of those estate roads.
The legal opinion that the residents obtained will be of considerable interest to my hon. Friend the Minister. When I became the Member of Parliament, I had a queue of prison officers in my constituency surgery each week who came to complain about the delays in the conveyancing of their homes by the Treasury Solicitor. As a result of my intervention, the Treasury Solicitor's services were dropped by one of my hon. Friend's predecessors and a local solicitor—on the mainland, I hasten to add—was appointed to take over the work. One of the first comments made by that solicitor was that the properties should not have been conveyed without a proper estate management committee having been set up. By that time, it was too late and, despite a real attempt by that solicitor's firm to sort out what is a mess, to put it politely, it was not able to do so.
My third point for my hon. Friend is that I hope that she will not rely on the Treasury Solicitor for advice on the matter because her Department has already dropped that source. The Home Office itself has sought and appointed outside advisers. Further, the legal opinion obtained by the residents happens to have been written by a solicitor whose advice is so treasured by the Home Office that it has subsequently confirmed his appointment as Her Majesty's coroner for the Isle of Wight, so I know that my hon. Friend the Minister would not wish to call into doubt the advice that he gave the residents.
My fourth point is about the reduction in the extent of Crown immunity, on which I and my hon. Friend the Minister have campaigned for some years and which is making progress as a result of the Gracious Speech. One of the points that the coroner for the Isle of Wight rightly made when he was a local solicitor in his advice to the residents is that Crown immunity is involved in the problem. I believe that that has receded into the distance and the Crown can no longer hide behind that immunity. By its actions and to some extent its defaults, it has admitted liability in its entirety.
I have one final point to ask my hon. Friend the Minister as a matter of detail which has not come out in correspondence. If the Home Office seriously maintains that there is an apportionment between the residents and

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the Home Office, how many hundredth is the Home Office claiming that it owns compared with the residents? I understand the Home Office's situation, but the dwellings were not sold at a price that recognised the liability and the Department cannot hope to visit the sins of the Treasury Solicitor on the residents of the isle of Wight—at least, not so long as I am the Member of Parliament.
In conclusion, I wish to place on record the considerable help and assistance that I have received from Richard Tilt, the Director General of the Prison Service, and his staff, and from Felix Hetherington and his staff at the Isle of Wight county council. I tried to find a solution in a land swap between the two parties that would be of such value as to make the debate unnecessary. I come to the House not as a first resort, but as a last resort and I hope that—as a result of the debate and the good will that exists on the Isle of Wight for the prisons and that exists between the Home Office and the Isle of Wight county council and as a result of my hon. Friend the Minister's intervention—when we ring out the old and ring in the new, we shall find a solution to one of the final problems that has sat on my desk for too long.
12.45 pm
The Minister of State, Home Office (Miss Ann Widdecombe): I congratulate my hon. Friend the Member for Isle of Wight (Mr. Field) on obtaining the debate and also on the tireless way in which he represents the interests of his constituency. I do not know whether to be more sad or relieved that this is his last remaining problem, because that would deprive us of his ready eloquence. I feel like saying that I hope that he will find other problems, but I do not quite mean that and I am sure that he will continue to represent his constituency with all the vigour that he has shown in the past. If, as I have good reason to suspect, my hon. Friend is not satisfied with my response, I am willing to meet him, with my officials, to see whether we can make any further progress or obtain any further clarification. I may also say that my hon. Friend has shown a consistent interest in prison issues in general, for which I am extremely grateful—most of the time.
Since 1989, as part of the discounted sales scheme, the Prison Service has sold off some 90 per cent. of its housing on the former staff residential estates of Albany, Camp Hill and Parkhurst. Since then, as my hon. Friend pointed out, residents have complained that roads and services on the estates have not been maintained, and have argued that the Prison Service should retain responsibility for their maintenance.
During the past year, the Prison Service has made considerable efforts to resolve the difficulties. Prison Service officials have met representatives of the local residents associations on a number of occasions, and the Director General of the Prison Service met my hon. Friend on 18 March. On that occasion, my hon. Friend acknowledged that the difficulties experienced by the residents were complex, and suggested that the Prison Service arrange for the Isle of Wight council to adopt all liabilities on the estates, in exchange for the release of Prison Service land to the council.
We agreed to explore that possibility, and Prison Service officials met Isle of Wight council officials on 22 March to discuss my hon. Friend's proposal.
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However, on 29 June, the Isle of Wight council rejected the proposal, stating that it felt that it would be taking on liabilities and responsibilities far in excess of the value of the land offered. Prison Service officials met again with Isle of Wight officials on 21 October, when it was agreed that there was no quick and acceptable solution to improving the roads and services on the estate. While the council was prepared to assist with any improvements, it said that it was unable to provide capital funding for any maintenance work.
In an attempt to resolve the impasse, the Prison Service subsequently agreed that the Isle of Wight council should commission a feasibility study to establish the scope and cost of the maintenance work needed to bring the roads and services on the Albany estate to an acceptable standard for adoption by the council. While agreeing, in principle, to undertake any maintenance work, the council requested that the Prison Service should provide capital funding in advance that would then be recouped from the residents. On 29 November, the Isle of Wight council advised the Prison Service that the cost of upgrading the roads on the Albany estate would be in the region of £215,000. The Prison Service is currently considering how that work might be taken forward.
However, it would be wrong for the Prison Service to retain a responsibility for the maintenance of services to those properties. The conveyance documents—which I have been shown by the Prison Service—under which sales of the houses were arranged clearly set out the position on maintaining the roads and services applying to the properties. Although they did not include the estate roads, the conveyances for houses on the Camp Hill estate stated that there would be an obligation on the new owners to contribute to the cost of maintaining roads, footpaths, sewers, drains, water courses, gutters and electric street lighting. The conveyances for houses on the Albany estate included the transfer of ownership of the roads and made it clear that the new owners would have responsibility for maintenance, repair and removal of sewers, drains, water courses, gutters and street lighting. The conveyances for houses on the Parkhurst estate included a mixture of those conditions.
The conveyances provided for the new owners to contribute to the cost of any maintenance and improvement work. Each resident who accepted the terms of the discount sales scheme should have sought appropriate legal advice before accepting the conveyancing terms.
An independent firm of chartered surveyors, Gerald Eve, has confirmed the Prison Service's view about the terms of conveyance of the properties. Government property lawyers have confirmed that the Prison Service has no legal obligation to carry out maintenance and repairs to roads and services for the properties.
The Prison Service now owns only a small number of properties on the estates. It cannot continue to invest in those private estates from moneys voted by Parliament for the maintenance of operational prison establishments. The residents have therefore been given notice that they will be required to pay for the maintenance of roads and services in accordance with the terms of sale of their properties.
It is clear that responsibility for maintenance costs lies with the residents. That is set out in the terms of conveyance of the properties. The Prison Service has

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attempted to resolve some of the difficulties and will consider future proposals, but it is under no legal obligation to carry out maintenance work. In future it will carry out work only after consulting local residents and obtaining their agreement that they will fund such work.
Mr. Barry Field: I am pleased to hear my hon. Friend say that. The residents were told that if they did not get themselves organised to continue the street lighting, it would be turned off. That seems a pretty brutal arrangement, particularly in a community in which the two parties co-exist so well.
Miss Widdecombe: The conveyance made clear where the responsibility for street lighting lay. It would not be proper for the Prison Service to take responsibility for the lighting. It is right that local residents should adopt the responsibilities clearly shown in their conveyances. The Prison Service will, of course, continue to repair and maintain the access roads to the prisons.
I do not wish to dismiss the issue, but the legal position is clear. The Prison Service and I remain willing to consider any proposals that the residents, the council or my hon. Friend may wish to submit. In that spirit of co-operation, I hope that we shall be able to resolve this complex issue.
12.53 pm
Sitting suspended.
On resuming—
1 pm
Mr. Don Dixon: On a point of order, Mr. Deputy Speaker. I was greatly involved in the discussions on the Jopling recommendations and the Adjournment debates on Wednesday mornings. At no time during those discussions was it stated that, if a Minister was not on the Front Bench when the previous debate finished, the debate could not begin. However, I think that it was stated that, if the hon. Member with the next debate was in his place, it could go ahead, and that there should be no suspension of the House because the Minister was not in his place. Has there been a change since the Jopling recommendations?
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): As far as I am aware, there has been no change. This is a 1 o'clock debate. If the hon. Member and the Minister are present and the previous debate ends early, it has been the practice that the next debate can begin. But there is no obligation on a Member or a Minister to be here before the allocated time. This debate was scheduled for 1 o'clock. The Minister was not present, so it could not go ahead.

Cyprus
1.1 pm
Mr. Tom Cox: At the start of this debate, I acknowledge the presence of the mayor of Famagusta, Mr. Andreas Pouyouros, and the deputy mayor of Famagusta, Mrs. Sophie Photidis, who have travelled from Cyprus to hear this debate. Earlier this morning, they presented a petition to the Prime Minister at 10 Downing street, calling for the return of Famagusta.
Famagusta was one of the loveliest towns in Cyprus before the Turkish invasion in 1974. Now, it is a ghost town. Yet, time and time again, its return has been promised by Mr. Denktash. However, its rightful owners still await the return of their town, lands and property. I hope that today the message of this House will be clear and loud—Famagusta is Greek Cypriot; it is not and never will be Turkish. When I, the people of Famagusta and hon. Members talk about the return of Famagusta, we talk about the total return of that town to its lawful owners.
This debate takes place a matter of days before the visit to Cyprus of the Foreign Secretary, and I warmly welcome that visit. It has certainly taken a long time to get a senior Foreign Minister to visit Cyprus to discuss solely the affairs of Cyprus. I will listen with great interest to the comments of the Minister of State today about that visit.
The Foreign Secretary's visit has been clouded by his remarks on the application by Cyprus for membership of the European Union, which were highly inappropriate before such a visit. We now hear more and more that a settlement is needed first. All of us in this House who are involved in Cypriot affairs wish for a settlement, and we have campaigned for many years for an honourable settlement that protects the rights and security of Turkish Cypriots just as much as Greek Cypriots.
The record of the Republic of Cyprus since the 1974 invasion in trying to work for a settlement for the benefit of Greek and Turkish Cypriots shows that there can be no doubt about its commitment. But it is totally unacceptable to Cyprus and to many hon. Members of all parties for obstacles now to be put up to Cyprus's membership of the EU. Sadly, the Foreign Secretary is playing into the hands of Mr. Denktash and his Turkish supporters by giving them yet more encouragement to delay—as they have been doing, in the view of many of us, since 1974—their obligation to work for an honourable settlement.
The case for Cyprus and its application for membership of the EU should be considered on merit and nothing else. Turkey and Mr. Denktash must be told repeatedly—I hope that we will hear the Foreign Secretary say this during his visit—that Turkey has no veto on Cyprus's application to become a member state of the EU. Discussions of the tragedy of Cyprus have gone on since the invasion of 1974, involving countless people—many of them very honourable—who have worked for a settlement, so we know what the issues are.
Much of the country is occupied, and in referring to Famagusta, I must add that I and my colleagues are equally committed to the return of Morphou and Kyrenia. We want all the occupied areas of Cyprus, and all the land and property that has been stolen, returned to the rightful owners.

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Listening to the debate today are British and Cypriot trade unionists, and I pay the warmest tribute to George Wright, the Welsh secretary of the Transport and General Workers Union, and to his colleague, Jim Hancocks. To their credit, they have brought together Greek and Turkish trade unionists to discuss their future and their country. I hope that we will listen to these men and women, whose home is in Cyprus and who come from a whole range of professions. They say that they want a free Cyprus where they can live and work together, and our duty is to support them.
Surely, after 22 years of the occupation of a Commonwealth country for which we are one of the guarantor powers, we have a duty to start working for a free and united Cyprus. The message of the House and this debate must be very clear. When we talk of one Cyprus, we talk of the Republic of Cyprus where Greek and Turkish Cypriots will live, work and prosper together.
I have deliberately shortened my speech because other hon. Members may wish to speak: I acknowledge the presence in the Chamber of my hon. Friends the Members for Knowsley, South (Mr. O'Hara), for Hornsey and Wood Green (Mrs. Roche), And for Ogmore (Sir R. Powell), my right hon. Friend the Member for Jarrow (Mr. Dixon) and my hon. Friend the Member for Mansfield (Mr. Meale), and the hon. Members for Hendon, South (Mr. Marshall) and for Edmonton (Dr. Twinn), the last of whom, I know, hopes to catch your eye, Mr. Deputy Speaker.
1.9 pm
Dr. Ian Twinn: I gladly declare an interest, having been a guest of the city of Morphou and of the House of Representatives in Nicosia this summer. I congratulate the hon. Member for Tooting (Mr. Cox) on securing this debate while the citizens and the mayor of Morphou are in the Palace. I hope that some people outside the House will hear what we have to say.
Famagusta, Morphou and the north of Cyprus have been occupied for 22 years, which is far too long. British parliamentarians have a responsibility, as the representatives of a guarantor power, to bring back peace to Cyprus, so that both communities can live together again.
I congratulate my right hon. and learned Friend the Foreign Secretary on grasping the Cyprus nettle and agreeing to go there to meet both Mr. Clerides and Mr. Denktash. A solution can be found only if both sides talk together. The history of Cyprus is full of minefields for any politician who visits, and it will not be easy to find a solution, but in my heart I know that a solution is possible and that good will can prevail. I hope that the good work that Her Majesty's Government are doing will bring that forward.
The House may be surprised to learn that I, too, am a trade unionist, and that I greatly welcome the work that trade unions are doing to bring both sides together in Cyprus. We need more dialogue between Cypriot citizens of both communities. The more citizens talk together and realise their common inheritance, as well as their close links to either Turkey or Greece, the more understanding there will be.
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I hope that my hon. Friend the Minister will confirm that it is Government policy to work hard for a settlement in Cyprus, and that, regardless of the political will or lack of it on either side, the entry of Cyprus cannot be vetoed by a recalcitrant partner to the negotiations. I say that to my friends who are Greek Cypriots. There has to be a positive will, such as has been shown over the past 22 years by the Government of Cyprus. I hope and believe that that will continue, and if it does not start on the other side, we shall have to devise a means of securing the entry of the rest of Cyprus, and the rest of the Cypriots, into Europe.
1.11 pm
Mr. Edward O'Hara: I congratulate my hon. Friend the Member for Tooting (Mr. Cox), and join him in welcoming to our debate the esteemed Andreas Haralambou Pouyouros, the mayor of Famagusta, and his able deputy, Sophie Photidis.
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. The hon. Gentleman must not refer to people in the Gallery.
Mr. O'Hara: I welcome other representatives of the Greek Cypriot community and trade unionists from the Transport and General Workers Union, who have come to support us.
I remind the House of the numerous occasions on which the resettlement of Famagusta has been proposed at a high level. The British-American-Canadian framework of 1978 said:
"In order to promote an atmosphere of good will and to resolve pressing humanitarian problems, the Varosha (Famagusta) area shall be resettled under UN auspices".
In his 1978 report, the Secretary-General of the United Nations said:
"The status of Famagusta which obviously should not be kept in its present empty and decaying condition, may provide an opportunity … Since Famagusta is situated in the immediate vicinity of the buffer zone".
The Secretary-General went on to propose the resettlement of Famagusta by its former inhabitants under UN auspices.
In 1979, a high-level agreement between the then President Kyprianou and Mr. Denktash said:
"Priority will be given to reaching agreement on the resettlement of Famagusta under UN auspices simultaneously with the beginning of the consideration"
of other matters. Security Council resolution 550 of 1984
"considers attempts to settle any part of Famagusta by people other than its inhabitants as inadmissible and calls for the transfer of this area to the administration of the United Nations".
Mr. John Marshall: Does the hon. Gentleman agree that it is chilling to go up to the border and see the lights in Famagusta in houses that belong to Greek Cypriots but are being inhabited by settlers from Anatolia? Is that not a complete disgrace?
Mr. O'Hara: The hon. Gentleman makes my point for me. Famagusta is largely occupied by people who have no entitlement to be there. That should cease.

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I conclude with some words from a poem by Dr. Kyriakos Hadjiyoannou:

"Eternal city

Paradise on earth

of the scent of lemon blossoms,

of the golden sands

and the sapphire sea,

from the depths of my heart,

in my pain

from afar,

I greet you."

May it not in the future be from afar that the citizens of Famagusta must greet their beautiful town.
1.15 pm
The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): I thank the hon. Member for Tooting (Mr. Cox) for this latest opportunity to discuss the situation in Cyprus. I join him in welcoming the mayor of Famagusta and others to the country and to the House.
This is a regular event, and it reflects the importance of Cyprus to the House and to Britain. However, I am saddened by the familiarity of so much of the ground that we cover in these debates. That is a reflection not on the eloquence of hon. Members of all parties, either today or in previous debates, but on the regularity with which, year in, year out, we have heard a familiar and painful tale, of suffering and injustice, tension and mistrust, intransigence and missed opportunity—in short, a tale of failure.
To anyone in Cyprus, in the House or anywhere else, who is weary of the effort to find a solution to the problem, my message today is simple: this is a time—perhaps the time—for vigilance. We must be alert to the dangers of the situation as it stands today and to the opportunity that exists to shape a settlement before it becomes even more difficult.
We have seen far too much of the dangers already this year. The events of one hot week in August were a sickening reminder of what the United Nations Security Council means when it repeats that the status quo is unacceptable. The year just ending will be remembered in Cyprus for those and other senseless and unnecessary killings and as a year in which the ratchet of arms purchases and reinforcements on both sides clicked remorselessly round.
If 1996 is marked down as a year of danger, can 1997 come to be seen as a year of opportunity grasped? We in the Government cannot answer that question by ourselves, but we can and will recognise both our duty and our capacity to contribute to an answer. We will continue to support with action and energy all friends of a viable and lasting solution in Cyprus.
Why should 1997 be a year of progress? Does it truly offer better prospects for settlement than other years? Hon. Members will have heard about enough windows of opportunity to glaze a crystal palace, but so far those windows have all remained stubbornly shut. I should not be surprised to hear murmurs of cynicism if I were to speak of yet another, as our hopes have been raised only to be dashed on a great many occasions.
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Our disappointment on those occasions has been great, but the real losers have been the people of Cyprus. Over the past 30 years, they have been expelled from their homes and prevented from travelling freely in their country, and their children have grown up knowing only a land divided.
Today's debate is well timed. Next week, my right hon. and learned Friend the Foreign Secretary will visit Cyprus. That will be the first such visit by a British Foreign Secretary since Cyprus gained independence in 1960. His visit is an expression of his deeply held personal commitment to helping to overcome at long last the tragic division of the island, and reflects the Government's determination to support the United Nations Secretary-General by using our best endeavours to make 1997 a year of real progress in Cyprus.
Our long-standing friendship with Cyprus, our close cultural and economic ties, and Britain's status as a guarantor power ensure our continuing interest in settlement. We owe it to the Cypriots of both communities to strive whole-heartedly for a solution that will allow all Cypriots to live peaceably together.
Much has happened since our previous Adjournment debate on Cyprus in March this year. As the House knows, Britain has intensified its efforts to help find a solution. In May, my right hon. and learned Friend the Foreign Secretary appointed Sir David Hannay as his special representative for Cyprus. As he reminded the House on 25 October, that did not signal a separate British initiative; rather, we consider it vital for Britain, the United States and the European Union actively to support the United Nations. All countries with an interest in promoting a safe, prosperous future for Cyprus must work closely and constructively together if we are to succeed in the search for a settlement.

Sir David Hannay has made three visits to the island, during which he probed positions on both sides and tried to identify areas of possible flexibility. My right hon. and learned Friend the Foreign Secretary will take a similar approach during his visit. We believe that the basis for a political settlement is already on the table. That is the result of hard, painstaking work over many years under the leadership of the United Nations, which has pursued the international commitment to Cyprus with great tenacity.
How can we once again talk of a window of opportunity? It is because of the opportunity that has been created by the prospect of the island's accession to the European Union. I mentioned the importance of that in my remarks in the debate on 6 March. As I said then, we regard the prospect of accession as a positive stimulus to an intensive search for a lasting settlement.
In that sense, the decision of the Foreign Affairs Council on 6 March 1995 that accession negotiations with Cyprus should be opened six months after the end of the intergovernmental conference was an important milestone. It emphasised that accession should benefit both communities and mandated the Commission to develop contacts with the Turkish Cypriots to discover that community's detailed concerns about EU membership and to examine how they could be met.
Several EU emissaries have visited the island to discuss those matters, most recently the representative of the EU presidency, Ambassador Heaslip, and a member of the Commission, Mr. Serge Abou. It is clear that all Cypriots

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have much to gain from EU membership. That in turn should give them a strong incentive to find a mutually acceptable settlement, which would, we believe, bring European Union accession within easy reach. Membership offers not only the opportunity of the internal market and other material benefits but would give the Turkish Cypriot community in particular an acknowledged status in the wider world.
That is the 1997 window of opportunity; it means that each community has much to play for between now and the opening of accession negotiations, perhaps in early 1998, and that both are likely to be confronted by hard decisions. It is important that we underestimate neither the opportunity nor the difficulties.
The hon. Member for Tooting mentioned that, on 27 November, my right hon. and learned Friend the Foreign Secretary answered questions in the House on Cyprus. Some hon. Members have expressed concern that the accession of Cyprus to the EU could not go ahead unless a settlement was in place. That is not a question for the British Government alone, but it may be useful if I set out clearly an objective assessment.
The accession of Cyprus to the European Union would be far easier if it involved both communities on the island, and took place after a settlement was achieved. Any other path to accession could only be much more difficult and complex. For example, how could a Government whose writ did not in practice extend over the whole island give firm assurances that they could fulfil the EU acquis on, say, freedom of movement over the whole island?
I invite hon. Members to weigh my words carefully. I stress that they do not, as some in both Britain and Cyprus have claimed, give Turkish Cypriots a veto over the settlement. That is emphatically not the Government's position; there can be no question of that. We welcome with hope and enthusiasm the prospect of Cyprus joining the European Union. We are determined to do what we can to help Cyprus along the path to joining it, but it would be neither honest nor helpful to ignore the difficulties that may lie ahead.
The economic benefits are clear. The single market would stimulate foreign investment in the north; the restoration of international links would pave the way for a boost to the tourist sector; and northern Cyprus would be eligible for significant cohesion payments.
It is essential that we ensure that the wider Turkish Cypriot community understands the solid advantages of membership. However, I must admit that, although many Turkish Cypriot business men understand the advantages of European Union accession, Turkish Cypriot leaders do not yet appear to be convinced that the prospect of EU membership is a passport to a brighter future for their community. As the House knows, EU accession remains controversial in their eyes.
Mr. Denktash and other leading Turkish Cypriots continue to argue that the application for membership of the Cyprus Government in 1990 was illegal, having been made without the involvement of Turkish Cypriots. They fear that, once Cyprus was in the Union, it would be impossible to defend vital Turkish Cypriot community
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interests, and that European Union law could be used to overturn controversial safeguards designed to protect them, even if they had been previously entrenched in a settlement. Most of all, they fear erosion of their relationship with Turkey, and of the security guarantee in article IV of the 1960 treaty of guarantee, if it were held to be incompatible with EU membership.
We and the Commission believe that those fears are unfounded. We are confident that, once a federal, bizonal, bicommunal settlement has been reached that offers safeguards to both communities along the lines envisaged by the international community, it would be possible for the EU to enshrine and safeguard such a settlement in the terms of accession.
I do not wish to make any of that sound easy. For example, an arms race is in full swing on the island. There is a greater density of modern weapons and men under arms in Cyprus than in almost anywhere else in the world. That is an expression of the deep insecurity felt by its people.
However, there can be no doubt that current security arrangements give each side a sense of security only at the expense of the other. Turkish troops in the north make Greek Cypriots feel insecure, and the increasingly sophisticated armaments in the south and the defence pact with Greece alarm Turkish Cypriots. The UN is urgently working on proposals for unmanning and unloading along the ceasefire lines. The United States has proposed arrangements for a ban on overflights by Greek and Turkish military aircraft. We strongly support those initiatives. All hon. Members, after this year's events, will understand their undoubted benefits.
Security is the most important issue that divides the two sides. There will be no settlement unless both are fully satisfied about it. It will also be the essential element in ensuring that the political settlement lasts, and that, once in place, it cannot be undermined by extremist elements on either side. How might progress on security be achieved? President Clerides recently suggested some ideas for progressive demilitarisation and the presence of an international military force. Combined with the security guarantees devised at the time of Cyprus's independence, to which the Turkish Cypriots attach such importance, they could yet offer a way forward.
If the security concerns of both communities can be addressed, it should not be impossible to find solutions to other difficulties. For example, it is not yet clear how the political equality of the two communities will be expressed in the new constitution; how much territory currently occupied by Turkish Cypriots will be returned to the Greek Cypriot administration; or—this is an issue that has come up in the House before—how those who became refugees in 1974 will be compensated. Those are all matters on which much remains to be done, and about which hard decisions will have to be made.
When my right hon. and learned Friend makes his historic visit to Cyprus next week—the first since 1960—he will discuss all those issues when he meets President Clerides and Mr. Denktash. His aim will be to help them find ways in which divides can be bridged and a secure and prosperous future for Cyprus assured. That is an aim that I hope every hon. Member can support.

Haemophiliacs (Compensation)
1.29 pm
Mr. John Marshall: The issue that we are now to discuss has been raised on a number of occasions, and has secured widespread support across both main political parties. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) has been a doughty supporter of this cause, as indeed have the hon. Members for Leeds, East (Mr. Mudie) and for Wallasey (Ms Eagle). I have also been supported by my right hon. Friends the Members for Wealden (Sir G. Johnson Smith) and for Worthing (Sir T. Higgins) and my hon. Friend the Member for Exeter (Sir J. Hannam).
This is not the first time that I have raised the problem of haemophiliacs in the House. Indeed, the first time was in an Adjournment debate in October 1990. In parenthesis, I pay tribute to the tolerance, broad-mindedness and compassion of my right hon. Friend the Member for Chelsea (Sir N. Scott). At that time, I was his parliamentary private secretary, and the Whips' Office was not terribly amused at the thought of a PPS raising an issue that was not exactly complimentary of Government policy, but my right hon. Friend treated me, as all who know him would expect, with compassion, and I think that he had more than a mite of support for my cause.
My Adjournment debate was followed only a few weeks later by the Government's decision to compensate all haemophiliacs infected with human immunodeficiency virus. There are three reasons why I am still taking up the cause. First, it seems to me fundamentally wrong that individuals who suffer as a result of treatment given on the national health service should be ignored by society. If treatment creates a problem, exacerbates a situation or causes premature death or economic suffering, we as a society cannot, like the Pharisees of old, walk on the other side of the road, indifferent to the suffering that has been created.
Secondly, I once tutored a haemophiliac, and became well aware of the difficulties that haemophiliacs face. My student, who lived in Dunoon, suffered from internal bleeding. For a whole academic year, he was unable to make the journey from Dunoon to Glasgow university, so he attended not one lecture. He had to make do with a number of tutorials which I went down to Dunoon to give. As a result of not attending lectures, he came out second in the year. That showed how valuable lectures were, or it may have shown, as I tried to convince my friends with mixed success, how valuable my tuition was. Here was an individual facing great hardship and suffering, yet he worked hard to ensure that he passed his examinations, and made a positive contribution to society.
Thirdly, one of my constituents is Rev. Alan Tanner, chairman of the Haemophilia Society. He is much admired in Hendon and elsewhere for the courage that he has shown and his cheerfulness in the face of adversity. He is a good witness to his faith. The work of the Haemophilia Society is universally admired for what it does for a relatively small number of people in the United Kingdom.
Today is a happy coincidence. When Madam Speaker drew the numbers out of the ballot, she did not know that, later this afternoon the right hon. Member for Wythenshawe and I would hand in a petition at No. 10 Downing street which would demonstrate the depth of
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feeling among not only Members of Parliament and haemophiliacs but others who had a social conscience and recognised the need to improve the position of haemophiliacs infected with hepatitis C.
In addition, this afternoon there will be a lobby of Parliament by those who feel strongly about the matter. So it is a happy coincidence that we are having this debate today, and we ought to thank Madam Speaker for being clever enough to draw my number. As I have had three Adjournment debates this Session, perhaps I ought to buy a ticket for the national lottery this weekend.
The origin of the problem goes back to the 1970s, when there was a failure to screen imported blood products. My view is that that demonstrated negligence on the part of the Department of Health. It was known at that time that, in the United States, blood donors were paid for giving blood. Those who feel so hard up that they give pints of blood for money include drug addicts and others whose blood may well be infected. The Department of Health must have known of those risks.
In the 1960s or early 1970s, the Institute of Economic Affairs produced a pamphlet entitled "Paying for Blood". Those who reviewed that pamphlet in the serious press made the point that, in the United States, where people paid for blood, infected blood was given.
So we are discussing the issue in the 1990s because there was some negligence and complacency in the 1970s. If my right hon. Friend the Member for Wealden were here, he would make the point that, at the beginning of the 1980s, he and his wife made visits to the United States. His wife is a distinguished general practitioner. She heard expressed then some of the concerns about the safety of certain blood products. In 1986, heat treatment was introduced to end the risk of contaminated blood products in the United Kingdom. We can therefore rejoice that a similar disaster will not happen in future, but we must face the consequences of the indecision of the 1970s.
The justification for giving assistance to haemophiliacs with HIV was that they faced a suspended sentence of death. Indeed, many died fairly quickly of full-blown acquired immune deficiency syndrome. Others have lingered on, and, such are the advances in medical science, some may do so for many years to come. All who have lived have done so not knowing how long they would live. Many found it difficult to get a job, and certainly difficult to get a mortgage. Of course, in the case of hepatitis C, there is a difference, but it is only of degree.
Some of those infected with hepatitis C have already died. Others will die prematurely. There has been no official estimate. Indeed, in answer to a recent parliamentary question, the Department of Health admitted that it had made no estimate of the number of those infected with hepatitis C who would die in the next five years. In the absence of an official estimate, I give my hon. Friend the Minister my estimate. At least 700 will die prematurely. For many others, the quality of life will deteriorate dramatically, and they will suffer severe physical and economic hardship. Of the 3,000 or so infected, only about 600 will make a full recovery.
It is true that those with hepatitis C do not suffer the prejudice that is associated with HIV. Those who attended a meeting in No. 1 Parliament street, as I know the right hon. Member for Wythenshawe did, listened to the victims and their families. The hardship they suffer is very

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real indeed. The hardship is physical. There was a driver there who said that he had managed to drive a lorry despite suffering haemophilia, but that the additional pain associated with hepatitis C meant that he could no longer do so. He suffered the indignity of losing his job, as well as the physical pain of his illness.
Victims lose self-respect when they lose their job. They feel that they ought to be the breadwinner, but they know that they can no longer be so. For all of them there is physical pain, emotional pain and hardship. Already more than 60 have died.
There is one particular family whose experience encapsulates the problem in its entirety. In that family, three brothers have died: two were haemophiliacs infected with HIV and one was a haemophiliac infected with hepatitis C. How can we say to the mother that it was right and proper that her two sons who were infected with HIV should be the subject of compensation, but that, in the case of her son who was infected with hepatitis C, not a penny should be paid in compensation?
One would need the intellectual casuistry of a Treasury mandarin to justify such an action. To say that one death is worthy of compensation, but that another is worth nothing at all is heartless and intellectually barren. It is not only grieving relatives who find the differential unacceptable and immoral—more than 270 Members of Parliament have signed early-day motion 4, asking for compensation to be paid. The vast bulk of decent people find the differential unacceptable.
Of course, we welcome the fact that the Department of Health is funding treatment to try to improve victims' quality of life. I also welcome the research into haemophilia that is taking place at the Royal Free hospital, which helps to give hope that, in future, haemophilia will cease to be the scourge that it has been, and that it will be eradicated.
When my hon. Friend the Minister was asked earlier this year whether he would provide help, he argued that the Department of Health budget should be used for patient care. Everyone accepts that the Secretary of State and his Ministers should try to protect the Department of Health budget—indeed, I congratulate my right hon. Friend the Secretary of State on his success in so doing—but the argument that help should be denied because the health budget must be protected is intellectually threadbare and immoral.
We all know that, when the Macfarlane Trust was set up, for which measure our right hon. Friend the Leader of the House was responsible, no one said that the money would have to come out of the Department of Health's budget. There is a thing called the contingency fund that can be used to bail out Departments in such circumstances; when, in 1990, compensation was paid to haemophiliacs with HIV, the contingency fund bailed out the Department of Health—the money did not come out of the Department's budget. My right hon. Friend the Chief Secretary should remember that, because he was the Secretary of State for Health at that time.
The Haemophilia Society has, in a statesmanlike way, recognised the Treasury's problems, and said that its immediate priority is the creation of a hardship fund to help the relatives of those who have died, and those who are too ill to work. The cost of such a fund would be somewhere about £12 million to £15 million. That is a small price to pay to ensure that hardship is relieved—it
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is a mere bagatelle in the totality of Government expenditure. We can all think of ways in which Government money is wasted, and anyone who says that that small sum cannot be found cannot be looking very hard.
Thereafter, we have to look to the future. There would be merit in setting up an inquiry to hear what outside experts say about the number of people who will die and the extent of the hardship created. The inquiry could also look into the possibility of doing more to help those who have been so unfortunate as to receive what was thought at the time to be a good treatment—one that would improve their life expectancy and give them a better quality of life—which has instead destroyed their quality of life and, in many cases, reduced their life expectancy and caused great economic hardship. That we should refuse to give assistance to a small group of people who are suffering through no fault of their own is not to the honour of this country, and it is not moral.
1.44 pm
Mr. Alfred Morris: I was glad to learn that the hon. Member for Hendon, South (Mr. Marshall) had secured this timely debate, and I most warmly endorse his moving plea.
Sadly, more than 60 of the victims of the tragedy have already gone to their graves with a deep sense of injustice. The achievement of elementary justice for some very needful people is at the heart of our campaign, which, as the hon. Member said, is now supported by more than 270 Members of Parliament of all parties. Our campaign is also about morality. The Government accepted their moral responsibility in the case of HIV infection in the course of national health service treatment. They now have the same responsibility in the hepatitis C cases.
It is morally wrong to deny the victims of this appalling further tragedy in the haemophilia community the modest help they seek. What is morally wrong ought no longer to be tolerated in Britain. There is ample parliamentary time available. The Government's legislative programme is gossamer thin, and, given the nod by Ministers, I am sure that the House would approve within an hour the help we seek.
1.45 pm
The Parliamentary Under-Secretary of State for Health (Mr. John Horam): It is almost exactly a year since we had a similar debate on this subject. At that time, it was the hon. Member for Leeds, East (Mr. Mudie) who was successful in the ballot. Today, it is my hon. Friend the Member for Hendon, South (Mr. Marshall) who has initiated the debate. That is entirely appropriate. Not only is his constituent Rev. Alan Tanner the chairman of the Haemophilia Society, whose work in this field we all applaud, but my hon. Friend has himself taken a continuing interest in the plight of those patients with haemophilia who were inadvertently infected with hepatitis C through blood products, before those products began to be heat-treated in 1985.
I was interested to learn that my hon. Friend's first Adjournment debate on this subject was as long ago as October 1990, which must be some sort of record. He stated his case today not only movingly, as the right hon. Member for Manchester, Wythenshawe (Mr. Morris) said, but extremely eloquently. I answered a related question

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from my hon Friend only two weeks ago; he is also a sponsor of early-day motion 4, which was tabled this Session; and I am also aware of early-day motion 9, which was tabled last month.
Health Ministers have had the opportunity twice this year to meet with my hon Friend to discuss these issues. The discussions which I have had with my hon Friend and with representatives of the Haemophilia Society have brought home to me very clearly the plight of those who find themselves infected with hepatitis C, in addition to suffering from haemophilia. Nobody could fail to sympathise with the distress of people who, already suffering from one disorder, have found that the treatment for that disorder has given them another.
That is especially true because factor 8 transformed the lives of many people with haemophilia—we should not forget that it greatly increased their life expectancy and improved their quality of life. It was undoubtedly the best treatment available for people with haemophilia in the light of medical knowledge at the time. However, medical procedures rarely come without risk, and those are not always known about or capable of being guarded against in time.
Factor 8, at the time at which the people we are talking about were infected, was made from human plasma and, for the most part, it still is. We have a very safe blood supply, thanks to the voluntary basis of the scheme—that contrasts with the scheme in America, to which my hon. Friend referred—and because of the screening and other safety measures that are in place. I am glad to say that UK blood remains among the safest in the world.
Sir Geoffrey Johnson Smith: Will my hon. Friend clear up a point about factor 8? In a previous debate, I asked about factor 8 treatment. None of us is a medical scientist, but I believe that there is a genetically manufactured form of factor 8, called, I think, recombinant factor 8. Am I right in saying that it could help to prevent further infection?
Mr. Horam: In answer to my right hon. Friend, whose interest in this area I also acknowledge, it is for clinicians to decide whether to use the plasma-based factor 8 or recombinant factor 8. I should stress that, although recombinant factor 8 has some advantages, it is not without disadvantages. For example, it can encourage the development of inhibitors, a problem that has been encountered by some of those who have used recombinant factor 8. So neither is without a small element of risk.
My right hon. Friend will recall that recombinant factor 8 uses plasma-derived albumin as a stabiliser, and therefore is not entirely free of problems. Nothing is totally risk-free, and it must be for clinicians to decide which of the two, given also their relative cost, is best to use.
May I return to the issue of blood and blood products? All reasonable steps are taken to ensure their safety, including the careful questioning of donors to exclude those likely to represent a risk of transmitting infection, and the testing of donations for hepatitis B and C, HIV 1 and 2, and syphilis. Pools of plasma from which blood products are to be made are tested again, and, wherever it is possible, as it is with factor 8, undergo manufacturing
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processes to remove or inactivate viruses. Also, all batches of blood products are separately tested for viral markers of infection by the independent National Institute for Biological Standards Control.
The safety of blood and blood products is kept under regular review by the expert Advisory Committee on the Microbiological Safety of Blood and Tissues for Transplantation, which advises Health Ministers.
Not all the current safety measures that I have mentioned were available at the time that we are discussing today. That was a long time ago—before blood products began to be heat-treated in 1985 to destroy viruses. I stress that factor 8, which has been treated to destroy viruses, has an excellent safety record.
Nor was there at the time a test available for detecting hepatitis C in blood donations. Such testing was introduced in 1991 as soon as reliable tests first became available. The people we are discussing today therefore received the best treatment available at the time.
My hon. Friend the Member for Hendon, South mentioned numbers. Let me remind the House of the number of people we are talking about. It is thought that some 4,000 people with haemophilia may have been infected with hepatitis C through blood products before heat treatment of those products was introduced. Of those, about 1,000 were, sadly, also infected with HIV, and have received payments under the HIV-haemophilia scheme. In addition, possibly a further 3,000 people who are still alive, who had blood transfusions before September 1991 and who have been infected with hepatitis C as a result, are likely to be identified by the look-back exercise that is in progress.
It has been suggested in this debate that there have been more than 50 deaths of haemophiliacs from liver disease so far. We have no reason to dispute that figure. However, many people infected with hepatitis C may enjoy a long period without any symptoms appearing. Some 50 per cent. of sufferers may progress to chronic hepatitis with varying degrees of good and ill health. Some 20 per cent. of infected patients may develop cirrhosis, a progressive destruction of the liver, which may take 20 to 30 years. Fortunately, the majority of those years will be trouble-free in terms of health.
Since last year's debate, I have studied the final version of a report from the Haemophilia Society on the plight of the people we are discussing today, and in March I met representatives of the society to discuss it. The meeting covered a range of issues concerning haemophiliacs infected with hepatitis C, and I outlined the action that the Government are taking, including research and support for voluntary organisations working in that field.
The Haemophilia Society subsequently wrote to me in June asking for the Government to set up a trust fund to make payments to those infected who were in financial need, and their dependants, and also to make payments to each person who had been infected. As my hon. Friend stressed, that is similar to the help previously given to those infected with HIV.
I took time to consider these proposals carefully before replying to the Haemophilia Society in October. Most hon. Members will by now be aware that I did not accept the society's proposals for payments for those infected with hepatitis C, but I stressed that I remained open to further arguments. I also outlined the support that we are giving to work with those infected, and to research in this area.

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I should mention that the society understandably prefers that the financial assistance that it requested should not be described as "compensation"—particularly as it does not consider the NHS to have been negligent in this matter. However, my reasons for not agreeing to provide the help requested hold good, however we describe the financial help sought.
First, we do not accept—I disagree with my hon. Friend on this—that the NHS has been negligent. As I said, the Haemophilia Society has confirmed that it does not dispute that point. Tragic though it may be that the treatment designed to help those infected patients should have harmed them, there can be no question but that they received the best treatment available at the time. That treatment was essential for their survival. There was no alternative. We take the view that compensation is appropriate only where there has been negligence.
If we were to provide payment on the basis of non-negligent harm, that would very quickly develop into a general no-fault compensation scheme, which would be both unworkable and unfair. That point was considered in relation to the settlement of HIV cases. On that occasion, we were convinced by the very special nature of the disease, by public reaction to it, and by arguments that it would not lead to further similar claims for compensation.
We are not convinced that hepatitis C falls into the same special category. We need to remember that, at the time of the HIV settlement, it was believed that HIV would lead speedily to death and that some haemophiliacs infected with HIV, especially children, were subject to some appalling examples of ostracism. We now know rather more about the effects of HIV, and there is a much greater public understanding of how relatively limited are the ways in which it can be passed on. We are all grateful for that.
Secondly, as my hon. Friend said, all the proposals for payment schemes involve the expenditure of substantial sums of public money. I have considered a wide range of options for such schemes—I really have done that—including the possibility of a scheme limited to those who go on to develop cirrhosis only. But they all have significant costs. As a Health Minister, I have a duty to consider the effect of such a sizeable sum on other heath service expenditure. That duty has led me to conclude that funds that are available to the NHS, from whatever source, are best used in direct patient care.
It has been suggested—it was reiterated today by my hon. Friend—that there should be funding compensation sources other than from the national health service budget. Naturally, I am sympathetic to that suggestion. Given their knowledge of how the Government work, right hon. and hon. Members who have spoken in this debate will understand that those matters are not within the compass
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of my duties as Health Minister, and they must look to other Ministers to put their case, particularly as regards the contingency fund, which my hon. Friend the Member for Hendon, South mentioned. It has also been suggested that money from the national lottery might be used in this case. Again, that matter can be pursued independently through the national lottery.
In its letter to me in June, the Haemophilia Society suggested a need for progress in a number of areas of work on hepatitis C, such as the treatment and care of those infected, research and public education. I want to help the society in supporting its work in that area.
A key priority must be to improve our understanding of the disease. We have made an additional £1 million available to aid research into hepatitis C, its natural history, transmission and prevalence. Although primarily geared to improving the understanding of the disease, any developments will be important to co-sufferers of haemophilia.
One of the best ways to improve still further the treatments available is to establish the relative effectiveness of new treatments such as alpha interferon. Local purchasers can then make informed decisions on using resources for the most effective treatments available for both haemophilia and hepatitis C. The standing group on health technology has identified the evaluation of the use of alpha interferon in the treatment of hepatitis C as a priority for the NHS. That work is being taken forward as speedily as possible by the National Coordinating Centre for Health Technology.
We have also been providing assistance to the Haemophilia Society in the form of grants from a Department of Health scheme for voluntary organisations, which includes a grant for a project concerned with the needs of those with haemophilia, who have also been infected with hepatitis C. I made it made clear to the society that we shall welcome proposals from it to provide continuing support to haemophiliacs infected with hepatitis C, as part of the society's on-going activities.
I regard this as a useful and practical approach, which would draw on the valuable findings of the research that the society is already undertaking. This is an area where resources can be directly targeted to provide practical help in such forms as advice and information. It will thereby improve services to infected haemophiliacs. I have assured the society that I shall take a positive view of any application for further assistance from the Department under our section 64 scheme to take this matter forward.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  EDUCATION AND EMPLOYMENT

    Employment Statistics
    Mr. Foulkes: To ask the Secretary of State for Education and Employment what assessment she has made of the role played in the formulation of her Department's policy by (a) the figures for those unemployed and claiming benefit and (b) the labour force survey. [7051]
    The Minister of State, Department for Education and Employment (Mr. Eric Forth): Both statistics are valuable and confirm that the Government's policies are working.
    Mr. Foulkes: I am almost speechless after that reply. The Minister must surely admit that the labour force survey shows that one household in five contains an unemployed person. The New Cumnock survey showed that the real level of unemployment is double the published figure. The Minister must therefore admit that the published figure is entirely bogus, as it shows only the number of people entitled to claim benefit. After 32 fiddles by the Government, that is a false and inaccurate figure.
    Mr. Forth: Presumably the hon. Gentleman is a fan of the International Labour Organisation. If he were not, he would be unusual on the Labour Benches. I assume that most Labour Members admire the ILO and all its doings—a view that I do not necessarily share. As the labour force survey—the approved ILO method of establishing who is out of work—closely mirrors our own claimant count, I am astonished at the hon. Gentleman's outburst. Our claimant count shows just over 2 million people out of work. The labour force survey shows a similar number. According to our figures, the percentage of unemployment is seven point something; according to the labour force survey it is 8.1. By any measure, the two sets of figures show broadly the same absolute level and broadly the same downward trend in unemployment. If the hon. Gentleman is criticising the claimant count, he is also, by implication, criticising the ILO. He had better take that up with his colleagues.
    Mr. Devlin: Can my hon. Friend tell me what proportion of the working-age population is currently in work, and how that compares with comparable countries in the European Union?
    Mr. Forth: My hon. Friend makes a good point. The United Kingdom has one of the highest proportions of people of working age in employment. That is because we have traditionally provided and continue to provide people with the maximum opportunity to be employed. If Labour Members believe, as they occasionally imply, that a European model is to be admired and emulated, I invite them to consider the fact that in most European countries not only is the percentage of unemployment higher, but the proportion of the work force who are employed is much lower than in the UK. We gain on every score.

    Nursery Vouchers
    Mr. Heppell: To ask the Secretary of State for Education and Employment if she will estimate how many play groups have gone out of business as a result of the nursery voucher scheme. [7052]
    The Secretary of State for Education and Employment (Mrs. Gillian Shephard): I expect the number of pre-schools in the nursery voucher scheme to fluctuate, as they open and close for a variety of reasons.
    Mr. Heppell: Will the Secretary of State acknowledge that, far from broadening parental choice, the voucher scheme has led to the closure of nurseries and play groups in both the voluntary and the private sector. Does that not erode the choice available to parents?
    Mrs. Shephard: The hon. Gentleman should understand the position. A number of pre-schools have left the scheme, but that is because of the cyclical nature of admissions to school. The number of four-year-olds drops in the autumn term because many schools have long-established policies of admitting children at the start of the year in which they turn five. Therefore, there will be fewer parents of four-year-olds looking for places for their children in voluntary and private provision in the autumn term. Pre-schools and others are used to that pattern. I am surprised that the hon. Gentleman is surprised.
    Mr. Riddick: Is my right hon. Friend aware that one of the reasons why play groups face some problems in the pilot areas is that the legal limit for the pupil-teacher ratio is lower in private play groups than in those funded by local education authorities? Is she aware that the chief inspector of schools told the Select Committee last week that he considered it important to have a level playing field and to ensure that parents were given genuine freedom to choose? Will my right hon. Friend examine the position?
    Mrs. Shephard: Schools should certainly think carefully before taking large numbers of young four-year-olds into reception classes, but the type of service that they provide for that age group will be scrutinised carefully in the course of the Office for Standards in Education inspections.
    Ms Estelle Morris: Will the Secretary of State confirm that £56 million was cut from the nursery voucher scheme in the Budget, and that her Department's explanation is that it changed its mind about the number of four-year-olds in the population? If that is the case, rather than giving up £56 million from the Budget, why does the right hon. Lady not use the money to extend nursery education to the 56 per cent. of three-year-olds who are currently denied it?
    Mrs. Shephard: There will be a place for every four-year-old whose parents want one, over time. We have been entirely consistent about that guarantee. I remind the hon. Lady and her hon. Friends that as recently as November the hon. Member for Liverpool, Walton (Mr. Kilfoyle) said that under Labour three-year-olds

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    would be guaranteed places—only to have that denied by the financial fiasco of Labour's costings, which was revealed a few days later.

    Unemployment
    Mr. Fabricant: To ask the Secretary of State for Education and Employment what assessment she has made of the report of the International Labour Organisation concerning levels of unemployment; and if she will make a statement. [7053]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice): We welcome the fact that the ILO agrees that the United Kingdom is the only major industrialised country with falling unemployment, and that our job assistance and advice service is working well.
    Mr. Fabricant: Is it not ironic that the Labour party has been saying for years that we have been lying about the fall in our unemployment figures, but the ILO has now vindicated what we have been saying for the past few years? Has not the Organisation for Economic Co-operation and Development also been saying that this is because the social chapter has been creating unemployment in Europe? Does that perhaps explain why today's Daily Mail says that the Leader of the Opposition is now going to ditch the social chapter?
    Mr. Paice: I am sure that my hon. Friend is not alone in being interested in that article. [Interruption.] I am sure that others are interested—not least the hon. Member for Sheffield, Brightside (Mr. Blunkett), who has just said from a sedentary position that even he was interested. That just shows that, yet again, he is not being consulted on these matters. If it is indeed true that the Leader of the Opposition intends to ditch his commitment to the social chapter, that just proves yet again that he is prepared to change his mind on any issue in his desperate search for power.
    Mr. MacShane: May I tear the Minister away from the Daily Mail and its fantasies? He has praised the ILO report. Will he now tell the House that the British Government, who founded the ILO, will abide by its conventions and implement its recommendations in all regards?
    Mr. Paice: We judge each case on its merits.
    Mr. Tredinnick: Does my hon. Friend agree that the best possible Christmas present for my Leicestershire constituents is the news that unemployment is down to under 3 per cent. and the number of vacancies has risen by nearly 100 in a year? Does that not vindicate not only the policy of my right hon. Friend the Prime Minister, but the labour force survey and its recent findings?
    Mr. Paice: I am sure that my hon. Friend knows best what it is right for his constituents to receive for Christmas, not just this year but next year and in the years ahead. When he talks to his constituents, he will doubtless bear it in mind that the United Kingdom—with no social chapter and no minimum wage—has more people in work and fewer out of work than any of the other major European countries.
    Mr. Hain: Why does the Minister not come clean and admit that the unemployment figures hide the
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    Government's shameful jobs record? Is he aware that his ministerial colleague the Economic Secretary admitted that since 1979, when the Tories came to power, Britain has fallen to 17th in the international jobs league, far behind all our major competitor countries? For millions of people, employment in Britain is now poor, nasty, brutish and short. The nation is haunted by job insecurity and even if Conservative Members will not admit that, they will find it out for themselves at the next general election.
    Mr. Paice: The hon. Gentleman forgot one thing—the fact that 768,000 extra jobs have been created since the last recession.
    Mr. Congdon: Is it not good news that the unemployment rate in this country has fallen by more than 900,000 since its peak, in sharp contrast to the higher and increasing unemployment rates among our major competitors such as France and Germany? Does that not clearly show the dinosaurs in the Opposition that it would be absolutely crazy for this country to introduce socialist measures such as the minimum wage and the social chapter?
    Mr. Paice: My hon. Friend is entirely right. Every survey and study shows that Britain's unemployment record is an example to the rest of Europe. Countries that are not at the top of the jobs league and European business men also realise that our labour market is the best.

    Pupil Exclusions
    Mr. Soley: To ask the Secretary of State for Education and Employment what new proposals she has on returning excluded pupils to full-time education. [7054]
    Mrs. Gillian Shephard: The Education Bill will require local education authorities to publish a full statement of their arrangements for pupils with behavioural problems.
    Mr. Soley: Will the Secretary of State give a careful and considered response to the report prepared by the university of Plymouth for the Economic and Social Research Council which shows that something like 60 per cent. of excluded children have a history of neglect, abuse or violence at home? Does she agree with the all-party group on parenting matters, who believe that there is a serious need for the Government to co-ordinate a response to such problems across Departments and between Government Departments and local authorities?
    Mrs. Shephard: I have not yet seen the report that the hon. Gentleman mentions and about which he had the courtesy to forewarn me. He will know that once the Education Bill is enacted, we shall be issuing detailed guidance to local education authorities on the implementation of the new behaviour support plans. For the first time, there will be a requirement for proper co-ordination between schools, local education authorities and social services. We are also looking to see how else we can promote good practice in joint working between education and social services in that sphere.
    On the second part of the hon. Gentleman's question, with the Department of Health we are considering options to help collaboration through a number of pilot projects so

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    as to spread any lessons that might be learnt. The hon. Gentleman is right that there needs to be more collaboration between agencies for some of these children.
    Mr. Pawsey: The hon. Member for Hammersmith (Mr. Soley) has raised a very interesting matter. Many hon. Members will agree that far too many youngsters are now being excluded from schools. Does my right hon. Friend the Secretary of State agree that exclusions result in those children who would benefit most from being in school being left out? Has she had an opportunity to read what the Commission for Racial Equality said about the total cost of exclusions, which I believe was part of the point made by the hon. Member for Hammersmith? Will my right hon. Friend join me in seeking alternatives to exclusion, of which corporal punishment might be one?
    Mrs. Shephard: The Government's views on corporal punishment have been set out by me and by others. My hon. Friend's views are equally well known to the House. I remind him of the findings of the recent Ofsted report on exclusions, which pointed out that good teaching in particular is likely to be the solution to many behavioural problems. The report also said that schools which exclude few pupils tend to be better at managing behaviour than those which exclude many.
    Mr. Davidson: Let us return to the serious issue of excluded students, and not talk nonsense about corporal punishment. When will the Government recognise that an increasing number of young people who have been excluded from school join the large percentage—14 per cent.—of people who receive no education or training beyond the age of 16? That is a shameful record, and an indictment of 17 years of Conservative rule.
    Mrs. Shephard: As the festive season is approaching, I do not wish to be ungracious to the hon. Gentleman. I merely mention Calderdale and Labour control as providing a lesson in how not to cope with behaviour problems. It is clear that a well-structured and soundly taught curriculum is the best way of dealing with unruly behaviour. Some pupils are demotivated and thus at risk of disaffection, and they will be helped by the relaunch provisions and entry qualifications arrangements outlined in the White Paper that I announced on Monday.
    Mr. Harry Greenway: Does my right hon. Friend think that the old maxim which is often applied in schools as it is in families—"Spare the rod and spoil the child"—is entirely out of date?
    Mrs. Shephard: I have nothing to add to the answer that I gave to my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey).

    Training and Enterprise Councils
    Mr. Eastham: To ask the Secretary of State for Education and Employment when she next plans to meet representatives of training and enterprise councils to discuss the future of training. [7055]
    Mrs. Bridget Prentice: To ask the Secretary of State for Education and Employment when she next plans to meet with the training and enterprise councils to discuss the future of training. [7059]
    Mr. Paice: My right hon. Friend and I meet regularly with TEC representatives to discuss a wide range of topics, including the future of training.
    Mr. Eastham: When the Minister next speaks to the TEC organisation, will he discuss the serious problem of skill shortages? How does he reconcile those shortages with the fact that the budget for TECs has been cut by £34 million and that that figure will increase when the inflation factor is taken into account? How does he justify the merger with local chambers of commerce, which are using TEC funding—private organisations using public money—and how will that help the 600,000 young people under 25 who have no jobs?
    Mr. Paice: On mergers with chambers of commerce, the public funding of the TEC parts of those organisations is closely audited and there is no question of its being used for other matters related to the chamber of commerce.
    On overall funding, the reality is that we will be spending more money on programmes for young people, more on work experience and more on TEC discretion. The only significant reduction will be in training for work: we expect to spend 4.5 per cent. less than forecast for this year while unemployment has decreased by 10 per cent. in the same period.
    Mrs. Prentice: Is the Minister aware that not only have 600,000 young people under the age of 25 no job or education or training place, but 250,000 young people have been out of work for more than six months? What guarantee of a future can the Minister give them in view of the cuts that the Government have made in the TEC budgets?
    Mr. Paice: The overall number of opportunities provided by TECs and the Employment Service is not being reduced—there are just as many. Young people who have not found their way into the work force for a long period will benefit from the tripling of opportunities in pre-vocational programmes next year. It has been clearly established that one of the problems is that some of those youngsters do not have the basic skills on which to build a vocational qualification. The Employment Service offers the one-to-one programme. As my right hon. Friend the Secretary of State said, in the longer term the measures announced in the White Paper on Monday will guarantee all young people a good opportunity for training or education up to national vocational qualification level 3.
    Mr. Hawkins: Does my hon. Friend agree that one of the most significant developments is the growth of modern apprenticeships? As industry is so concerned to improve training for young people, the fact that 67,000 modern apprenticeships are due to be on stream by 2000 is good news, and a clear demonstration of the Government's commitment to that policy.
    Mr. Paice: I welcome my hon. Friend's remarks. He is right that industry and commerce across the piece have

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    widely accepted modern apprenticeships, not just in the traditional vocations but in many modern and novel vocations. The success of modern apprenticeships has led us to adopt the same approach to the development of national traineeships which we outlined on Monday.
    Mr. Byers: Can the Minister confirm that he has received the strongest possible representations from the TEC movement urging the Government to submit an application under objective 4 of the European social fund? Does he accept that a failure to submit such a programme would mean the loss of £140 million from Europe which is badly needed to assist in-work training? Even at this late stage, will the Minister give an assurance that further consideration will be given to an application for objective 4 funding under the European social fund?
    Mr. Paice: I do not accept the position as the hon. Gentleman describes it, but the Government will be setting out their position on objectives 3 and 4 in the near future.

    Jobseeker's Allowance
    Mr. Connarty: To ask the Secretary of State for Education and Employment what policies she intends to pursue to increase the opportunity for full-time employment for people on jobseeker's allowance. [7056]
    Mr. Forth: We shall continue to pursue the policies which have led to our having more people in work and fewer unemployed people than any other major European Union country.
    Mr. Connarty: Is the Minister not ashamed to be still dragging his heels and refusing to bring in regulations to ban sex advertisements in publications such as those revealed this year in a question by my hon. Friend the Member for Makerfield (Mr. McCartney)? Will he now do something about that and, as we have requested, bring in regulations to ban advertisements for sexual services in publications in jobcentres, which up to this point he has refused to do?
    Mr. Forth: I can understand the hon. Gentleman getting excited about this subject, but we should al I take it—[Interruption.] There is no point in the hon. Gentleman waving bits of paper around and shouting about bans. The matter is being dealt with in the proper way. My right hon. Friend the Secretary of State is taking a direct interest in the matter and—
    Mr. Connarty: I am speaking of a ban.
    Mr. Forth: The hon. Gentleman keeps shouting from a sedentary position about a ban. That seems to be the only thought that occurs to Opposition Members when a problem arises. This is a complicated matter. It is not simple or straightforward. My right hon. Friend and I have discussed it with the chief executive of the Employment Agency, new guidelines have been prepared and legal advice has been taken. The new guidelines will be issued shortly and they will be in the public domain. The matter has been dealt with in a calm, proper and constructive way.
    Sir Alan Haselhurst: Will my hon. Friend give careful consideration to the postal signing arrangements for the
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    jobseeker's allowance, bearing in mind the fact that some of the people seeking full-time employment have particular specialist backgrounds and their continued appearance at jobcentres at some cost to themselves will not necessarily add materially to their prospects of obtaining the full-time employment for which they are experienced?
    Mr. Forth: I understand my hon. Friend's point, but it is not only proper but desirable that those people who unfortunately are out of work and claiming benefit deserve the fullest possible support from the expert staff in our jobcentres. We make appropriate, realistic and proper arrangements for people to claim by post where that is appropriate, but equally it is right that the bulk of people who can make a journey easily should come to our jobcentres, share their experiences with us and receive our advice and support. That includes people of all types and backgrounds. To start to try to make a distinction of the kind that my hon. Friend understandably suggests would probably be rather difficult and I am not sure that it would be wise.
    Mr. Alan Howarth: Will the Minister acknowledge that the Employment Service is using jobseeker's directions and the threat of benefit sanctions to drive people to take part-time jobs which they cannot legally be required to take? Should he not also be very worried that less than 3 per cent. of the Government's target number of employers have availed themselves of the relief from national insurance contributions offered when they recruit someone who has been unemployed for more than two years? Does that not show that the policy has been badly designed and badly implemented?
    Mr. Forth: On the first point, if the hon. Gentleman has any evidence of his allegation, I hope that he will share it with me so that I can have it properly considered, but I am not happy with his implication that part-time work is somehow undesirable, menial or no good. As he should know, many people welcome the opportunity to move from unemployment into part-time work, either of their own choice or often as a useful stepping stone into full-time employment, if that is what they want. Part-time employment has a proper part to play in our labour market and we wish to encourage such employment at all times. However, I should like to follow up the hon. Gentleman's question, so if he is referring to specific cases, perhaps he will please let me have details of them.

    Local Education Authorities (Administration)
    Mr. Steen: To ask the Secretary of State for Education and Employment how many local education authorities increased the amount spent on administration and reduced the amount spent on schools in the last year for which information is available. [7057]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Robin Squire): In 1994–95, there were 14 such authorities. This year the Government have announced a further hefty increase—an extra £633 million—in provision for local education authorities. I urge all LEAs to deliver that spending power to schools and not to use it to fund bureaucracy.
    Mr. Steen: Will the Minister confirm that next year Devon's county education budget will increase by over

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    3 per cent. and that that money will go to schools and not to administration? Will he say something to the misguided and wholly unacceptable banner-waving groups in my constituency who are crying, "Cuts in education." when everyone knows that Devon education has never had more money than it will have next year?
    Mr. Squire: I am grateful to my hon. Friend for his question. I can confirm that the increase in Devon's education standard spending assessment is 3.8 per cent., which is above the national average. Of course—as he is aware, but as some of his constituents, misled by placard wavers, may not be aware—between 1979–80 and 1994–95 the Government increased funding per pupil by 48 per cent., after taking out all inflation. We have a proud record on funding. It is clear that Devon has the resources and I hope that it, and all LEAs, will devote a lion's share of the increases to schools rather than to town hall and county hall.
    Mr. Jamieson: Will the Minister confirm that Devon is in the lowest 15 in Britain for spending on central administration and has a tine record? Perhaps he will also confirm, however, that the high spenders on central bureaucracy are Westminster [HON. MEMBERS: "Tory"], Wandsworth [HON. MEMBERS: "Tory"], Kensington and Chelsea [HoN. MEMBERS: "Tory"] and the City of London [HON. MEMBERS: "Tory"].
    Mr. Squire: I was going to keep a shroud over the list of 14 authorities in the original question, but as the hon. Gentleman tempts me to name some of them, I can confirm that Sheffield, Camden and Durham are also in that list.
    Sir Malcolm Thornton: My hon. Friend is aware of the success of the delegation of budgets to schools and we would all like the maximum amount of money to be transferred from LEAs to schools, consistent with the provision of those essential central services. Does he accept that, because of the tendency to enshrine historic expenditure in the local formula adopted by the vast majority of LEAs, anomalies have started to appear over time? Will he confirm that the Department is still working towards an evaluation of the need for a national formula for funding?
    Mr. Squire: I can certainly confirm my hon. Friend's last point. We are taking careful account of the many representations that we received in the consultation earlier this year.
    On what I judge to be my hon. Friend's central point about local management of schools schemes and the way in which local authorities distribute funding to schools, it is a good responsibility for LEAs to keep such things up to date and to take account of the points that my hon. Friend has made.
    Mr. Don Foster: Does the Minister agree that a great deal of humbug is talked about the amount of money spent on administration in education? Will he confirm that the White Paper published in the summer shows that, on average, administration costs represent about 1.8 per cent. of the total cost per pupil? Will he further confirm that that figure is considerably less than the amount spent by
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    his Department and the Funding Agency for Schools on administration in respect of pupils in grant-maintained schools?
    While we are on the subject of humbug, does the Minister accept that his answer to the hon. Member for South Hams (Mr. Steen) was complete humbug? He tried to tell the House that the Government were making more money available for education, when the Red Book shows that the amount of money that central Government are providing to local government is being cut in real terms.
    Mr. Squire: The hon. Gentleman has underlined why we invariably look to the Liberal Democrat Benches for classic humbug as opposed to occasional humbug.
    On administration, I can give the hon. Gentleman a straight answer. What matters is how each and every local authority and central Government make efficiency savings year on year. Averages often disguise the truth. What matters is that all LEAs have the same commitment to delivering quality services. I repeat for the benefit of the hon. Gentleman, who may not have heard me, that we are providing significant additional funding to schools this year and we expect it to be spent predominantly on the schools themselves.
    Mr. Dunn: Given that Labour and Liberal Democrat-controlled Kent county council is one of the worst offenders and spends a huge amount of money on administration, will my hon. Friend arrange for an official inquiry into the spending plans and policies of that county council to reduce that huge sum so that extra funds can be given to the county's schools? It is a nightmare for the people of Kent.
    Mr. Squire: Obviously, I shall consider my hon. Friend's suggestion, but I know, from his long experience in education matters and his knowledge of the highways and byways, that he will continue to publicise the poor administration record of the Labour and Liberal Democrat-controlled Kent LEA.
    Mr. Dafis: Have not schools shown strong resistance to any proposals to increase the compulsory percentage of money delegated to their budgets? Is that not why the proposal in the White Paper was withdrawn? Is it not time to introduce greater flexibility, as schools bear a heavy administrative burden and small schools in particular find it difficult to cope with heavy management responsibilities? Could that not be achieved through sensible county-wide negotiations between LEAs and federations of school governors?
    Mr. Squire: First, let me confirm that the proposal in the summer White Paper has not been withdrawn. It does not feature in current legislation, precisely because there is a need for widespread consultation among schools and LEAs and because some of the figure work will be fairly complex. Secondly, I am quite prepared to believe that some schools do not wish to have a greater share of their budget devolved to them. However, in response to the central issue that the hon. Gentleman raises, the record of grant-maintained schools—which control 100 per cent. of their budgets—shows overwhelmingly that they achieve better value for money. I am confident that, if LEA schools controlled a greater share of their budget, they could do the same.

    Job Creation
    Mr. John Marshall: To ask the Secretary of State for Education and Employment when she last met the representatives of other member states in the Council of Ministers to discuss job creation. [7058]
    Mr. Forth: Whenever other United Kingdom Ministers and I meet our European counterparts, we make it clear that the way to create jobs is through the development of efficient, flexible and competitive labour markets, not through imposing new legislative burdens on employers which only damage competitiveness and destroy jobs.
    Mr. Marshall: As the United Kingdom is in the premier league of job creation and countries such as Germany are in the third division, will my hon. Friend ask my right hon. Friend the Prime Minister to host a seminar on job creation in Dublin this weekend so that Chancellor Kohl can discover that we in Britain can teach him a thing or two?
    Mr. Forth: I suspect that my right hon. Friend the Prime Minister has been given quite a lot of advice about what he might say in Dublin this weekend from a number of different quarters, and I therefore hesitate to add even my hon. Friend's words of wisdom. He makes the valid point that we can now conclude safely that the route that we have chosen to take and the policies that we have chosen to pursue to create an environment that is friendly to job creation and business and attractive to inward investment present a far better chance of creating the maximum number of jobs—real jobs, jobs for the future—than the route chosen by our continental partners. That is becoming clear. The extent to which our partners have been persuaded by that argument will perhaps be better known after the Dublin summit.
    Mr. Sheerman: Before the Minister goes to the Council of Ministers with his usual bundle of prejudices, will he talk to the Business Services Association and other major employers that want a national minimum wage because they believe that it will raise standards, create jobs and stop the scandal of spending £3 billion of taxpayers' money on subsidising poor employers?
    Mr. Forth: Of course we listen to all groups and all representations on such matters; that has always been so. I must admit to a slight lingering suspicion that some groups take the view that the imposition of a statutory minimum wage would help to eliminate competition that they find difficult and unhelpful. If a statutory minimum wage were ever to eliminate new, thrusting, dynamic, entrepreneurial businesses, which tend to compete with established businesses, it would demonstrate beyond a doubt that the policy of a minimum wage, so beloved by the hon. Gentleman, would destroy many jobs in our economy.

    Village Schools
    Mr. Tyler: To ask the Secretary of State for Education and Employment what educational criteria she uses to assess the case for the retention of small village schools. [7060]
    The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan): The closures of county and voluntary schools are considered on their own merits.
    Mr. Tyler: The guidance that the Minister can give to local education authorities of all political colours will be very helpful and I hope that it will be spelt out in detail. May I ask her more specifically for advice on the plight facing Blisland school in my constituency, where the roll fell to such a level that it was no longer educationally or economically viable and the LEA, with the concurrence and support of the Secretary of State, decided that the school should be closed? What advice can the hon. Lady give in the present circumstances, where the school roll is increasing again and the local authority, with cross-party agreement, has decided to review the situation? Will the Secretary of State be prepared to review the closure and retrieve Blisland school? What educational and economic criteria will she need to be persuaded of to establish its future?
    Mrs. Gillan: The hon. Gentleman knows that I am well aware of the situation concerning Blisland school. The Liberal Democrat-controlled council published the proposal to close it as recently as March this year. Her Majesty's inspectorate visited the school, where there were nine pupils and one teacher. We received no representations from the hon. Gentleman about the school. He is now telling me that the Liberal Democrats have changed their minds, which does not surprise me and I am sure does not surprise anybody else. Now that the decision has been taken to close the school, and since the LEA made such a good case for doing so originally, I must advise him that it will be necessary for that local authority to publish fresh proposals to make a case for keeping the school open.
    Dame Elaine Kellett-Bowman: No doubt my hon. Friend will be pleased to know that those of my village schools that have been assessed in the recent inspection round have had exceptionally good results, co-operate with one another to provide a much broader curriculum and are in every way admirable.
    Mrs. Gillan: As usual, I agree with my hon. Friend, who is obviously making a very strong point in favour of good rural schools. Good rural schools are supported by the Government.

    School Class Sizes
    Mr. Alan W. Williams: To ask the Secretary of State for Education and Employment what steps she plans to take to reduce class sizes in primary schools. [7061]
    Mrs. Gillian Shephard: Decisions about class sizes are a matter for local education authorities and schools.
    Mr. Williams: Do the Government now accept what 90 per cent. of parents considered to be self-evident: with a given teacher in a given classroom, the quality of learning and the amount of individual attention given to children's reading, writing and arithmetic are greater in class sizes of 30 rather than 35?
    Mrs. Shephard: The hon. Gentleman should refer to the report produced by the Office for Standards in

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    Education specifically on class sizes. He will find that the chief inspector stated that there was no simple link between class size and quality of teaching and learning. If the hon. Gentleman remains as unconvinced as he looks, he should ponder on the fact that in Hackney, long under Labour control, standards at the Hackney Downs school were so deplorable that the school had to be closed, yet it had only eight pupils to every teacher.
    Mrs. Peacock: What positive steps is my right hon. Friend taking to encourage all local education authorities to pass 95 per cent. of the budget to schools so that schools can make decisions on class sizes, which is what they really want to do?
    Mrs. Shephard: I should hope that such a policy would be so self-evidently sensible to all properly run LEAs that there would be no need for me to encourage them further.
    Mr. Kilfoyle: Has the Secretary of State seen the recently published Organisation for Economic Co-operation and Development report which illustrates how our international competitors have had a substantial improvement in pupil-teacher ratios, leading to reductions in class sizes? The report also notes that, under three successive Tory Governments, the reverse process has occurred in the United Kingdom, leading to increased class sizes. Given that the Government have appropriated huge parts of Labour party policy in their current Education Bill and given that Her Majesty's chief inspector has admitted the link between smaller class sizes and improved performance at key stage 1, will the Secretary of State now join the Labour party in giving a commitment that, at key stage 1, there will be no class of more than 30?
    Mrs. Shephard: Perhaps I may remind the hon. Gentleman that his party's class-envious plans to destroy the assisted places scheme—and, with it, opportunities for able children from less well-off families—to reduce class size would yield one extra teacher for every nine schools. I wonder how he would divide them up.
    Mr. Nicholas Winterton: I am sure that my right hon. Friend will agree that, although class sizes clearly have a part to play in the attraction of a school, it is the structure and ethos of the school and the quality of teaching that are far more important to parents. Does she accept that, in many rural schools, it is the quality and ethos of the school and the teaching that are important, and that those are the schools that are attractive to parents and to which they want their children to go?
    Mrs. Shephard: Parents are well aware of which schools are popular and successful and willingly choose larger classes if they think those schools will do best for their children.

    School Security
    Mr. Turner: To ask the Secretary of State for Education and Employment what additional financial
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    assistance is being proposed for local education authorities and schools to tackle the problems of school security. [7062]
    Mr. Robin Squire: An extra £66 million is being made available for security measures at LEA-maintained and grant-maintained schools over the next three years.
    Mr. Turner: I thank the Minister for the answer, but the question is whether that is enough. The Minister will be aware that, following the horrific machete attack at St. Luke's school in my constituency, my local LEA has been actively encouraging schools to draw up school security programmes. To date, the total amount of money that has been identified is in the region of £1 million. The amount of money coming to Wolverhampton as a result of the Government's additional programme is approximately £100,000. It can be clearly seen that that is a tiny amount and just a drop in the ocean.
    Madam Speaker: Order. That was another non-question. Perhaps the Minister might try to answer the non-question.
    Mr. Squire: I will do my best, Madam Speaker.
    We will announce shortly the individual LEA allocations, but even if—for the sake of discussion—I ran with the figure of £100,000 that the hon. Gentleman produced, over three years that would mean some £225,000 from Government, in addition, and I stress that, to the money already being spent on security by schools and LEAs. I do not believe that the country would consider £66 million to be as insignificant a sum as the hon. Gentleman suggests.

    Standard Spending Assessments
    Sir Colin Shepherd: To ask the Secretary of State for Education and Employment what representations she has received in respect of the method by which the education standard spending assessment is derived. [7063]
    Mr. Robin Squire: My right hon. Friend has received a number of representations offering a range of views on possible adjustments to the SSA methodology.
    Sir Colin Shepherd: May I draw my hon. Friend's attention to sparsity, which is an important matter in my part of the world? Does he agree that, in a sparsely populated area, it is necessary for a local education authority to maintain a larger number of smaller schools than would be needed in a more densely populated urban area? Small, rural schools cannot achieve the same economies of scale as larger schools. In my county, we have to maintain 5.15 schools per 10,000 of the population, compared to a shire average of 4.86 per 10,000. In my part of the world, it is felt that the sparsity factor is not adequately recognised when the overall figures are considered. Will my hon. Friend ask my right hon. Friend the Secretary of State to go back to the Department of the Environment and the local government associations and review the sparsity factor to ensure that it reflects what is necessary?
    Mr. Squire: As my hon. Friend is aware, I recently met representatives of a group of local authorities, including his. We discussed the sparsity factor and related issues.

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    My hon. Friend is also aware that the sparsity allowance compensates authorities for the additional costs of providing small schools and for extra transport costs in sparsely populated areas. The review recently undertaken did not put forward any robust evidence for increasing the sparsity factor. However, we shall continue to keep the issue under close review.
    Mr. Pike: How many local education authorities, if they limited their spending to standard spending assessment levels, would have to reduce their expenditure from what they are spending this year?
    Mr. Squire: I obviously cannot answer that now. If the hon. Gentleman tables that question as a written question, I shall provide the answer.
    The principle has long existed that local authorities are free to spend more or less than individual SSAs on services. I am pleased that many of them spend more than their SSA on education, but that remains their decision, for which they are accountable to their electors.
    Mr. Viggers: Will my hon. Friend confirm that the increase in education provision in Hampshire is fully consistent with the increase in inflation and with the priority that we give to education? It is misleading for Hampshire county council to stir up a writing campaign of complaint against the provision.
    Mr. Squire: I can certainly confirm to my hon. Friend that the national increase in SSAs of 3.4 per cent.—3.6 per cent. overall in education services to local authorities—is comfortably ahead of the rate of inflation and of the projected growth in pupil numbers.

    Departmental Policy
    Mr. Gapes: To ask the Secretary of State for Education and Employment what account she takes of the relationship between the levels of (a) unemployment and (b) employment in formulating her Department's policy decisions. [7064]
    Mr. Forth: The Department's latest assessment shows that our policies are working; employment is rising and unemployment is falling.
    Mr. Gapes: If unemployment is falling in the way in which the Minister claims, why are there 800,000 fewer people in employment than when the right hon. Member for Huntingdon (Mr. Major) became Prime Minister? Is not the truth that hundreds of thousands of workers are disappearing from the job statistics and that, despite the Government's claims, many people face greater job insecurity as a result of the Government's policies?
    Mr. Forth: No. For political purposes, those such as the hon. Gentleman would like people to think that they face greater job insecurity. It is irresponsible of Labour Members to continue trying to plant that idea in people's minds. There is nothing to support that in the relevant statistics on the average length of job tenure or any other issue. The hon. Gentleman seems to imply that the labour force survey figures, endorsed by the
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    International Labour Organisation, no less, are wrong. He cannot mean that, because I am sure that Labour Members all think that ILO-endorsed figures must be the bee's knees. Since they show that unemployment has been falling and employment is rising, I hope that the hon. Gentleman goes off and does more homework.
    Mr. Nigel Evans: Irrespective of the relationship between unemployment and employment, does my hon. Friend agree that it would be damaging to unemployment and to employment prospects if this country were to adopt the social chapter or the minimum wage?
    Mr. Forth: My hon. Friend is right to remind the House—I do not think we have had the reminder today—that, were this country ever to contemplate signing up to the social chapter or a statutory minimum wage, we would be likely to suffer what our continental partners who signed up to these measures have suffered. They have high and rising unemployment, as opposed to our recent experience which, I am happy to say, is of lower unemployment than most of our direct competitors and partners, and falling unemployment. Any rational man must surely conclude that there is an obvious causal connection between the social chapter and a minimum wage on the one hand and high and rising unemployment on the other.
    Mr. Blunkett: I was going to wish Ministers a happy Christmas, but I suspect that the Minister of State would merely shout, "Humbug," in his usual fashion. Why did unemployment triple under this Government without a minimum wage and without the social chapter? On job tenure, why did 52 per cent. of all those who gained a job in the past year return to the unemployment register within a year? Why has the proportion of inactive males increased by 27.3 per cent. in the past five years? Why has there been a drop in the number of males with full-time jobs in the past 12 months? Is this not a Goebbels approach to statistical analysis that tries to pretend that the more inactive people there are in the labour force, and the fewer full-time jobs there are, the more beneficial it is to the nation as a whole? Is that not the real humbug of Christmas in 1996?
    Mr. Forth: That proves that the hon. Gentleman's researchers have had to become more ingenious in finding some sort of figure to support his gloomy view of what is going on in this country today. The reason why unemployment rose throughout the advanced and developed countries in the 1980s was partly intensive global competition and—in this country—partly the fact that we inherited a position of grotesque structural overmanning in our industries that had to be dealt with. The Government elected in 1979 dealt with those problems, and that has put us in a competitive position that is the envy of our continental partners and competitors. That is the reality, and I invite the hon. Gentleman to consider it over his, I hope, very happy Christmas.
    Sir Donald Thompson: How is it that the Opposition believe the figures when they get worse, but disbelieve them when they get better? Do their prejudices extend

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    to our service industries, about which they are constantly sniping? [Interruption.] Snipe, snipe, snipe. That sector is where new jobs will come from.
    Mr. Forth: Yes, I agree, and it is perhaps time that we did some snipe-shooting. My hon. Friend made an important point. The service sector is a vital part of our economy—one that is growing successfully in leisure, tourism and financial services—and it improves our international competitiveness by leaps and bounds. It is putting us in a strong position to export and to attract inward investment. All these factors put together give rise to our optimism and positivism, and lead me to wonder where Opposition Members get their negativism and the gloom and doom that they peddle every time we have Education and Employment questions.
    Mr. Beggs: Will the Minister seek co-operation from other Departments and officials throughout the United Kingdom in dealing with planning applications so that the Government's policy of keeping jobs in rural areas can be achieved? Will he request that sympathetic consideration be given to those who want to start new play groups in rural areas?
    Mr. Forth: I am grateful to the hon. Gentleman for making that important point. I can assure him that we work constantly with our colleagues in the Department of the Environment and in the territorial offices to ensure that all our policies help the rural areas in every possible way and do not hinder them. It is easyrightly—to become absorbed by the problems of inner cities and we must never forget that the problems of dispersed and remote rural areas are just as serious and deserve every bit of policy attention. We will continue to give that attention.

    Assisted Places
    Mr. Hanson: To ask the Secretary of State for Education and Employment what plans she has to review provision for assisted places in 1997–98. [7065]
    Mrs. Gillan: None.
    Mr. Hanson: If the Minister has no plans for a review, perhaps she should take time to consider whether any changes should be made. Does she agree that the £140 million that is planned to be spent on subsidising 40,000 people on assisted places schemes next year could be far better spent on reducing class sizes for 400,000-plus five, six and seven-year-olds? Will the Conservative party make time for a review next year and try to take care of the many rather than the few?
    Mrs. Gillan: I do not agree with the hon. Gentleman. Everyone knows that Conservative Members believe that the assisted places scheme offers a valuable choice to many parents throughout the country. The scheme plays an integral part in our policy of choice and diversity. The Labour party's proposals to phase out the assisted places scheme would yield about £5 million in the first year, which could possibly deliver 200 teachers into the system,
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    meaning that the Labour party would weigh the interests of 200 more primary teachers against those of the 10,000 children whom they would deprive of the scheme.
    Sir Patrick Cormack: Does my hon. Friend accept that, excellent as the assisted places scheme is, it is still nowhere near as good as the direct grant scheme that it replaced?
    Mrs. Gillan: The assisted places scheme is an extremely good scheme, but we all know what happened to the direct grant scheme and who was responsible for abolishing those schools.

    Training Opportunities (Young People)
    Mrs. Fyfe: To ask the Secretary of State for Education and Employment what plans she has to extend training opportunities for those aged under 25 years. [7066]
    Mr. Paice: The White Paper "Learning to Compete", published on 9 December, builds on the exciting range of opportunities for young people. It sets out a learning entitlement up to national vocational qualification level 3, through a choice of routes including national traineeships and further expansion of modern apprenticeships, with special measures for those who need extra help to get started.
    Mrs. Fyfe: If the Labour party can guarantee real training with meaningful qualifications for a quarter of a million under-25s, what excuse does the Minister have for the betrayal of under-25s in the past 17 years?
    Mr. Paice: The hon. Lady would have done the House a greater service by drawing attention to, and admitting, the fact that Labour party policy is an absolute sham. The Labour party proposes to give people the chance to study only to NVQ level 2, which is equivalent to five GCSEs, when already nearly half our young people achieve that while they are at school. The Labour party is therefore merely extending the opportunity to become semi-skilled, in contrast with our proposals, announced on Monday, which will entitle all young people to study for a level 3 qualification as an entry into higher education or to become a qualified craftsman, technician or supervisor, with a real platform for a future career.

    Examination Results
    Mr. Spring: To ask the Secretary of State for Education and Employment how many (a) grant-maintained and (b) local education authority schools are represented in the top 50 state schools measured by A-level results. [7069]
    Mrs. Gillan: Thirty of the top 50 schools in England are grant-maintained and 20 are LEA-maintained.
    Mr. Spring: Can my hon. Friend confirm that the pattern of GCSE results is similar to that of A-level results in grant-maintained schools, and does she agree that the excellent results from grant-maintained schools vindicate the wide diversity of parents who choose GM schools for their children?
    Mrs. Gillan: I can indeed confirm that. The GCSE results tell the same story: half the pupils in GM schools

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    achieved five good passes at GCSE, compared with 41 per cent. of pupils in local education authority schools. I am delighted that GM schools are achieving such excellent results, not only at A-level but at GCSE and in the national curriculum assessments; they figure strongly both in the top 50 at A-level and in the Office for Standards in Education's list of outstanding schools. They account for a quarter of all schools with sixth forms and three fifths of the top 50 at A-level—and we all know that the Labour party would abolish them.
    Mr. O'Hara: The Minister knows that her last statement is erroneous. The presumption behind the question demonstrates the fault of the obsession with
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    league tables. Would it not be more relevant to compare the performance of grant-maintained schools with what they achieved before they were grant-maintained? There is an element of self-fulfilment in the league tables. How many grant-maintained schools are diagnosed as failing and what will the Minister do about them?
    Mrs. Gillan: The Labour party's opposition to everything that the Government have done to improve our education system is well known. It opposed league tables and grant-maintained schools and it would abolish assisted places. The performance tables have operated for five years and are respected throughout the education system. The Government will continue to produce performance tables, as we have promised.

BILL PRESENTED
  WAR WIDOWS AND PENSIONERS (EQUAL TREATMENT)
  Mr. Simon Hughes presented a Bill to end the differential treatment of war widows and war disablement pensioners by local authorities; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 24 January 1997, and to be printed [Bill 56].

Point of Order
3.31 pm
Mr. Elfyn Llwyd: On a point of order, Madam Speaker. In view of the understanding that the next financial settlement in Wales will result in at least 1,200 teachers being dismissed, has the Secretary of State for Education and Employment applied to make a statement to the House? If not, why not? Given the serious situation, should she not do so as soon as possible?
Madam Speaker: The answer is no. No Minister has let me know today that they are seeking to make a statement. I cannot help the hon. Gentleman any further.

Fire Safety
3.31 pm
Mr. John Heppell: I beg to move,
That leave be given to bring in a Bill to make further provision for the protection of persons from fire risks; and for purposes connected therewith.
The Bill is far-reaching. I recognise that, in the time available, I shall not be able to cover all its points. I shall try to give a decent summary.
The Keighley mill fire in February 1956 resulted in the death of eight people and led to the Factories Act 1961. The Hendersons department store fire in June 1960 resulted in the death of 11 people and led to the Offices, Shops and Railway Premises Act 1963. The Top Storey club fire in Bolton resulted in 19 deaths and led to greater powers for fire authorities under the Licensing Act 1964. The Rose and Crown fire in Saffron Walden on Boxing day 1969 resulted in 11 deaths and led to hotels and boarding houses being designated under the Fire Precautions Act 1971. The Woolworths store fire in Manchester in 1979 resulted in 12 deaths and led to the Upholstered Furniture (Safety) Regulations 1980. The Bradford football stadium fire in May 1985, in which 58 people died, resulted in the Fire Safety and Safety of Places of Sport Act 1987. Finally, the King's Cross rail fire of 1987 resulted in 31 deaths and led to the Fire Precautions (Sub-surface Railway Stations) Regulations 1989.
Those pieces of legislation had one thing in common: they were what is known in the trade as tombstone legislation. People have had to die before action has been taken. I should love to be able to say that I am proposing legislation that will stop tragedies happening rather than legislation as a result of tragedies. Unfortunately, I cannot, because on 6 September 1993, two firemen were killed at Sun Valley Poultry Ltd. in Hereford.
That happened in a former factory that had been turned into a poultry processing plant. Panels had been built round the inside of the building, creating a building within a building. Fire broke through one of those panels. Firefighters who went to fight the fire did not know what was happening in between those panels. The roof burned and collapsed and two firefighters, who were doing the work that they did every day for all the people of this country, were killed. That is one of the reasons why I present the Bill, but there are other reasons.
There was much speculation in 1994 about the weakening of fire safety regulations under the deregulation initiative. I am anxious to ensure that I have cross-party support for the Bill, but it seemed to me, at a time when most people realised the need for greater fire safety, that we were taking forward measures that could cost people's lives. Since then, there seems to have been literally review after review, recommendation after recommendation and report after report. Some the Government have accepted and some they have not, some rightly so. One thing that has become clear as a result of that constant review is that there is a need after more than 25 years to review fire safety legislation.
The Fire Precautions Act 1971 served its purpose well. Most people agree that it was a good piece of legislation, but it did not do what it set out to do. It set out to be an all-embracing Act that would take in every fire safety measure. My Bill would do that. It would consolidate all fire safety legislation. It would replace in part or in total

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more than 54 pieces of legislation on the statute book and put fire legislation into one single Bill. So it is both simplifying and, in some respects, deregulatory. I hope that it will receive the support of the House.
My Bill is also progressive and forward-looking. It incorporates many new recommendations that were made as a result of the 1993 Home Office review of the Fire Precautions Act 1971. My Bill supports the Government's view announced in May 1996 that fire safety should in general be treated separately in legislation and that its enforcement should rest principally with fire authorities. Indeed, one of the main intentions of the Bill is to create a one-stop shop for fire safety. The one-stop shop would be the fire authority and the Department responsible would be the Home Office.
The Bill is also designed to complement the Government's proposals on the EC framework workplaces directive. It is designed to be compatible with the directive and to use the same general duty principle and risk assessment approach as do the Government's proposals. The Bill will use risk assessment to determine fire standards, so that the measures taken are appropriate but not excessive. It will be flexible enough to incorporate all future European legislation.
Even more important, for the first time ever in fire safety legislation, the Bill will take into account not just the safety of the public—most fire legislation has taken that into account—but the safety of firefighters and give them some protection. We are currently building in England and Wales—not in Scotland; they seem to have more sense there—gigantic buildings with no compartmentalisation. It seems to be the view of many people that it is acceptable for such places to burn down; that if there is a fire, the fire services should get the people out and let the building burn. That is not acceptable when it results in the death of firefighters. Nor is it acceptable in terms of insurance, because insurance companies have to meet the cost of fires. That means that all of us suffer as we have to pay extra insurance. Furthermore, it is not acceptable in terms of the effect on the environment. Some fires can be devastating to the environment in general. For the first time, the Bill imposes a duty to think not only of the safety of people, but of the safety of premises. It is a genuine fire safety Bill.
I suspect that, if there is any criticism of the Bill, it will be that it has been designed for firefighters. I make no apology for that—firefighters are the people who, year by year, week by week and day by day, put their lives on the line for the rest of us. As far as I am concerned, they are the experts on fire safety, because they are the ones who tackle fires and who know what needs to be done to put fires out.
I make no apology for the fact that the Bill is drafted by firefighters and I hope that hon. Members will accept that firefighters are the best people to talk about fire safety. The Bill enjoys the support of all the fire service organisations represented by the Central Fire Brigades Advisory Council for England and Wales, which advises the Home Office on all matters relating to the fire service.
Finally, I repeat that firefighters are the experts on fire safety. Let us put responsibility with the fire service, which is where the majority of the general
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public already think it lies. Let us make sure that the people who go into fires when we are coming out of them are protected. Let us make sure that we have decent fire safety legislation for the 21st century.
3.40 pm
Mr. Anthony Steen: I oppose leave being given to bring in the Bill, and I shall explain why.
Fire is a most dreadful, destructive and terrifying force and, in our complex and modern society, we must do all that we can to reduce the prospects of fire. To that end, we have a plethora of fire regulations—25 measures in the past nine years, including an Act of Parliament. There are teams of fire inspectors, spending a total of 1.8 million hours a year enforcing existing regulations. We have smoke detectors, fire alarms and fire stations around nearly every corner. Firemen are poised to respond within seconds to any call. The cost to the taxpayer of that fire operation is £1.38 billion per year and that is a price worth paying.
Yet, in spite of all that and in spite of high public awareness, the number of fires continues to rise. It has risen from 392,000 in 1989 to 411,000 in 1994. None the less, the number of house fires is dropping, because people are taking action to reduce risk, without the need for lengthy, costly, bureaucratic and over-prescriptive regulations. Already European directives in the 1980s have cost industry £10 billion—that is equivalent to 500 new hospitals and no end of lost job opportunities.
The hon. Gentleman's proposal illustrates well the difference between the Labour party's approach and ours. He believes that fire can be outlawed by passing legislation. Legislation, like some elixir, cures all. The Labour party claims that more regulations create more safety, but that does not follow. Take road safety: in spite of the ever increasing number of regulations, nearly 10 people a day are killed on the roads and some 300,000 are injured. Regulations pour in from Europe, on safety in the home, yet in 1994 4,140 adults and children were tragically killed in household accidents. Although no one doubts that the hon. Gentleman has been prompted to seek the leave of the House to bring in his Bill by the highest motives, he is mistaken if he believes that legislation can cure the ills that he describes.
It is worse than that. I suspect that the Bill would create an additional bill in knock-on costs for small businesses. That is the problem with the Labour party. Labour Members do not understand that not only does legislation not solve problems, but additional rules and regulations imposed on industry make us less competitive and cost people jobs. That is why I oppose the Bill.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
The House divided: Ayes 125, Noes 40.

Division No. 29]

[3.45 pm

AYES

Ainger, Nick

Beggs, Roy

Alexander, Richard

Beith, A J

Ashdown, Paddy

Benn, Tony

Ashton, Joseph

Bennett, Andrew F

Barnes, Harry

Bermingham, Gerald

285

Betts, Clive

McAvoy, Thomas

Bray, Dr Jeremy

Macdonald, Calum

Brown, Nicholas (Newcastle E)

McFall, John

Bruce, Malcolm (Gordon)

Mackinlay, Andrew

Byers, Stephen

MacShane, Denis

Callaghan, Jim

McWilliam, John

Campbell, Mrs Anne (C'bridge)

Madden, Max

Campbell, Menzies (Fife NE)

Mahon, Mrs Alice

Campbell, Ronnie (Blyth V)

Marek, Dr John

Canavan, Dennis

Marshall, David (Shettleston)

Clark, Dr David (S Shields)

Marshall, Jim (Leicester S)

Cousins, Jim

Meale, Alan

Cox, Tom

Michael, Alun

Cummings, John

Michie, Bill (Shef'ld Heeley)

Cunningham, Jim (Cov'try SE)

Milburn, Alan

Dafis, Cynog

Mitchell, Austin (Gt Grimsby)

Dalyell, Tam

Morgan, Rhodri

Davies, Denzil (Llanelli)

Morris, Alfred (Wy'nshawe)

Davies, Ron (Caerphilly)

Morris, Ms Estelle (B'ham Yardley)

Davis, Terry (B'ham Hodge H)

Morris, John (Aberavon)

Donohoe, Brian H

Mudie, George

Eastham, Ken

Mullin, Chris

Etherington, Bill

Murphy, Paul

Evans, John (St Helens N)

O'Brien, William (Normanton)

Ewing, Mrs Margaret

Pike, Peter L

Faulds, Andrew

Pope, Greg

Foster, Derek

Powell, Sir Raymond (Ogmore)

Foster, Don (Bath)

Prentice, Mrs B (Lewisham E)

Fyfe, Mrs Maria

Prentice, Gordon (Pendle)

Gapes, Mike

Primarolo, Ms Dawn

Garrett, John

Radice, Giles

Grant, Bernie (Tottenham)

Randall, Stuart

Griffiths, Win (Bridgend)

Rendel, David

Grocott, Bruce

Robinson, Peter (Belfast E)

Gunnell, John

Rooker, Jeff

Hain, Peter

Rowlands, Ted

Henderson, Doug

Sedgemore, Brian

Heppell, John

Sheerman, Barry

Hood, Jimmy

Sheldon, Robert

Howarth, George (Knowsley N)

Shore, Peter

Hoyle, Doug

Skinner, Dennis

Hughes, Kevin (Doncaster N)

Soley, Clive

Hughes, Robert (Ab'd'n N)

Spearing, Nigel

Hughes, Roy (Newport E)

Spellar, John

Hughes, Simon (Southwark)

Squire, Ms R (Dunfermline W)

Jackson, Mrs Helen (Hillsborough)

Taylor, Matthew (Truro)

Jamieson, David

Thompson, Jack (Wansbeck)

Jenkins, Brian D (SE Staffs)

Timms, Stephen

Jones, leuan Wyn (Ynys Môn)

Trimble, David

Jones, Jon Owen (Cardiff C)

Tyler, Paul

Jones, Martyn (Clwyd SW)

Wareing, Robert N

Kaufman, Gerald

Williams, Alan W (Carmarthen)

Kennedy, Charles (Ross C & S)

Winnick, David

Kennedy, Mrs Jane (Broadgreen)

Wise, Mrs Audrey

Khabra, Piara S

Wray, Jimmy

Kilfoyle, Peter

Lewis, Terry

Litherland, Robert

Tellers for the Ayes:

Lynne, Ms Liz

Mr. Keith Hill and

McAllion, John

Mr. Graham Allen.

286

NOES

Arnold, Jacques (Gravesham)

Nicholls, Patrick

Ashby, David

Onslow, Sir Cranley

Bowden, Sir Andrew

Pawsey, James

Butcher, John

Redwood, John

Cash, William

Riddick, Graham

Chapman, Sir Sydney

Shaw, David (Dover)

Cope, Sir John

Shaw, Sir Giles (Pudsey)

Durant, Sir Anthony

Spicer, Sir Jim (W Dorset)

Emery, Sir Peter

Spicer, Sir Michael (S Worcs)

Evans, David (Welwyn Hatf'ld)

Steen, Anthony

Gardiner, Sir George

Sweeney, Walter

Gill, Christopher

Tapsell, Sir Peter

Greenway, Harry (Ealing N)

Thompson, Sir Donald (Calder V)

Grylls, Sir Michael

Townend, John (Bridlington)

Hannam, Sir John

Townsend, Cyril D (Bexl'yh'th)

Heathcoat-Amory, David

Viggers, Peter

Leigh, Edward

Walker, Bill (N Tayside)

Lloyd, Sir Peter (Fareham)

Wiggin, Sir Jerry

Marlow, Tony

Martin, David (Portsmouth S)

Tellers for the Noes:

Mills, Iain

Mr. Tim Devlin and

Mitchell, Sir David (NW Hants)

Mr. Rupert Allason.

Question accordingly agreed to.
Bill ordered to be brought in by Mr. John Heppell, Sir David Knox, Sir Geoffrey Johnson Smith, Mrs. Diana Maddock, Mr. Jim Marshall, Mr. Gordon Prentice, Mr. Stanley Orme, Mr. John Austin-Walker, Mr. Joseph Ashton, Mr. Greg Pope, Mr. David Hanson and Mr. Ian Pearson.

Fire Safety

  FIRE SAFETY
  Mr. John Heppell accordingly presented a Bill to make further provision for the protection of persons from fire risks; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 14 February 1997, and to be printed [Bill 55].
  Mrs. Alice Mahon: On a point of order, Madam Speaker. I understand that the hon. Member for Havant (Mr. Willetts) has resigned his position as a Minister following the publication of the report of the Select Committee on Standards and Privileges. Is it customary or optional for a Member in that position to come to the House and offer an apology or an explanation, or would the Leader of the House offer such an explanation?
  Madam Speaker: If the Member concerned wishes to do so, he or she makes an approach to me to make a personal statement. No such approach has been made to me.

European Union
[Relevant documents: The White Paper on Developments in the European Union, January to June 1996 (Cm 3469); Presidency General Outline for a draft revision of the Treaties; The Commission's Work Programme for 1997: New Legislative Proposals (SEC(96)1819); The Commission's Work Programme for 1997: Political Priorities (COM(96)507); European Community Document No. 10867/96 on the introduction of the euro; European Community Document No. 10893/96 on reinforced convergence procedures and a new exchange rate mechanism; European Community Document No. 10892/96 on a stability pact for ensuring budgetary discipline in stage 3 of EMU; Second and Third Reports from the Select Committee on European Legislation of Session 1996–97 (HC 36-ii and 36-iii); Sixth Report from the Select Committee on European Legislation of Session 1996–97, European Documents on Economic and Monetary Union: the Scrutiny Process (HC 36-vi); Eighth Report from the Treasury Committee of Session 1995–96, The Prognosis for Stage Three of Economic and Monetary Union (HC 283-I and II); Minutes of Evidence taken before the Select Committee on European Legislation on 3rd December (HC 136-i); and Minutes of Evidence taken before the Foreign Affairs Committee on 5th and 9th December (HC 148-i and 148-ii).]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Anthony Coombs.]
Madam Speaker: Before we begin, let me inform the House that it has been indicated to me that, today alone, more than 46 Back Benchers wish to speak, and in my judgment a similar number will wish to speak tomorrow. I ask all hon. Members to stay in the House for the remainder of the day and see what their chances are. In such circumstances, I have had to impose a 10-minute limit for Back-Bench speeches.
Sir Edward Heath: On a point of order, Madam Speaker. Would it be in order for me to ask you whether you would be prepared to refer the situation that has now arisen to the Procedure Committee for further consideration, or whether you would require a Member of Parliament to do that? In a two-day debate, only Front Benchers will be able to develop the argument or answer questions asked by other Members; the rest of us will have no time to develop the argument properly. Moreover, if there are interruptions, we shall not be able to give the information that is requested. I think that the Procedure Committee ought to consider the matter again.
Madam Speaker: The right hon. Gentleman will be aware that it is only recently that the Procedure Committee has given me authority to impose 10-minute limits on speeches throughout a debate. Perhaps the right hon. Gentleman would consider asking the Procedure Committee to look into the matter. I take his point very much to heart. I am concerned with the high quality of debate in the House, and I appreciate that, when I have to limit speeches to 10 minutes, we do not get the debate to which we are accustomed here.
3.59 pm
The Chancellor of the Exchequer (Mr. Kenneth Clarke): Out of deference to the intervention of my right hon. Friend the Member for Old Bexley and Sidcup
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(Sir E. Heath), I shall probably give way rather less than I sometimes do. The temptation will be for hon. Members to interrupt me, my temptation will be to give way and I should probably use a disproportionate amount of time, but I should like to cover a lot of ground.
This is an important debate, because it comes on the eve of the European summit in Dublin, where the British team—my right hon. Friend the Prime Minister, my right hon. and learned Friend the Foreign Secretary and I—will be defending and advancing British interests in Europe. Our overriding aim at Dublin will be to ensure that the United Kingdom continues to benefit from our membership of the European Union and that we continue to play a major role in moulding that European Union as it evolves as a partnership of nation states. The key issue in addressing those objectives is, where does the national interest lie?
In recent weeks, we have debated the details of the arrangements for economic and monetary union—important details, such as regulations relating to article 1091(4) or the public accounting conventions of France—but those details are symbols, and they are a focus for more deep-rooted anxieties about Britain's future political and economic identity. The real core of the debate is the much wider and more important issue of the United Kingdom's national identity and our future role in the modern world. In my experience, this country returns to agonising about its national identity every few years or so when important occasions arise.
Mr. Tony Marlow rose—
Mr. Clarke: In the light of what I said earlier, I may give way later, when I get to more specific points.
I hope that, during the next two days of debate, the House can address and allay some of the anxieties about our relationship with Europe. I want to explain how, in my judgment, our political and economic future is bound up with the future of the European Union, and how our negotiations at Dublin and thereafter will be pursuing our national interest.
I hope that we can avoid irrelevancies. There is no Conservative politician in the House who is a federalist; no Conservative politician would accept a European super-state. Every Conservative opposes any suggestion of the creation of a united states of Europe. Treating the debate about economic and monetary union as if it were a debate about the creation of a super-state arouses public fears and deprives the public of sensible information about the issue. [Interruption.] We may return to this, but we last debated the matter when we debated the Maastricht treaty, and I responded then to several hon. Friends who intervened.
In my view, fewer and fewer people on the continent see economic and monetary union as a tool for political integration—[Interruption.] Well, if they do, we do not agree with them. If they do, I do not think that most of the younger generation of politicians on the continent agree with them either—by "younger", I mean people of my age and below. We have to judge the discussions on economic and monetary union in terms of British economic interests and Britain's role in the European Union.

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The United Kingdom is and must continue to be an extremely influential player on the world stage, but our future national identity and future international influence will be secured and strengthened by our retaining our position as a major European power.
My right hon. and learned Friend the Foreign Secretary will be debating the framework for political co-operation between European Union members in the House tomorrow. The Government remain firmly in favour of the approach taken in the Maastricht treaty, where co-operation over matters such as foreign and security policy and justice and home affairs is dealt with on an intergovernmental basis—the so-called pillared approach.
Dame Elaine Kellett-Bowman: Hear, hear.
Mr. Clarke: I have always said, and my hon. Friend has always said—I have said it in the House and outside—that that pillared approach is and was the best feature of the Maastricht treaty. I will not read out my own speech as reported in Hansard at column 1108 on 27 January 1993.
The pillared approach opens the way for closer co-operation between member states on issues such as foreign policy and home affairs, but on the basis of unanimous decision taking by independent nation states and without the involvement of Community institutions such as the European Parliament and the European court. I have always said in particular that the British armed forces would never be committed to any foreign policy initiative unless the British Parliament supported it. The Government will ensure that it stays that way.
On the other hand, I have always said that the weakest part of the Maastricht treaty was the artificial timetable for economic and monetary union. Those have always been my views, and they remain my views.
Our economic interests are inextricably linked to our position in Europe. British economic success is the result of a combination of three factors: first, the Government's successful macro-economic policies; secondly, the Government's supply-side reforms, which have given us some of the most flexible products and labour markets in the industrialised world; and, thirdly, our access to the European single market, which is our biggest marketplace and the largest open market in the world.
The combination of those three factors is crucial to our future prosperity and success. All three of them lead to job creation, and make Britain a magnet for overseas investors looking for a foothold in the European market.
Mr. Marlow: No one has suggested that the single market is at risk. My right hon. and learned Friend said this morning that the single currency is no threat to nation states. Why does he think that the vast majority of the Conservative party is against the single currency? It is precisely because it would be the end of the nation state.
Mr. Clarke: I know that my hon. Friend holds that belief firmly, so I realise that for him it is a straightforward question. If I shared his belief, I would be against economic and monetary union. We need to have a debate. I do not hold that belief, and I do not think that such a belief is the be-all and end-all of debate.
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Other economic issues are involved, and we must consider the impact on the single market of the creation of a euro zone in the middle of it—I am glad that my hon. Friend and I agree on the importance of the single market. The Government's economic policy consists of getting right our macro-economic policy, our supply-side, micro-economic measures and the nature of the single market in which we operate and our influence on it.
The British Government played a leading role in creating the single market, and in seeking to complete it. When we signed the Single European Act, we entered into a single market that had institutions and rules. We have always accepted that a huge single market requires institutions and rules. We need to ensure that those rules are obeyed by every member state, and that the single market continues to provide the right climate for a competitive, free market economy such as ours to succeed.
That is one of the main reasons why I attend Economic and Finance Council and European Council meetings. It is in our national interest, and one of the key British objectives in our detailed negotiations on the euro zone as it emerges, to ensure that the right climate exists for our competitive position.
Sir Teddy Taylor: How do we display our influence in economic affairs if the European central bank makes the basic economic decisions, and under the Maastricht treaty we are not allowed even to make representations to the bank? Is that not a collapse of sovereignty and democracy?
Mr. Clarke: The European central bank will be an independent bank, such as that which they have had for years in the United States of America and they had in the Federal Republic of Germany. It will be responsible for monetary policy decisions. Questions of taxation, public spending and priorities and budget setting of the kind that I presented to the House two weeks ago would remain the responsibility of the nation state. I shall return to that subject in a moment.
Mr. Gordon Brown: We are anxious to know the Government's position. This morning, the Chancellor said that he supported the principle of a single currency. Is that the position of the Prime Minister, the Cabinet and the Government?
Mr. Clarke: I do not believe that I said that. I support having the option. I am answering questions from those who believe that one of the options would rule out the existence of the nation state. I do not agree with that, but I have made it clear that I am sympathetic to the idea of economic and monetary union. I am trying to explain why I believe that the Government's policy of retaining the choice in both directions, and exercising it responsibly in the national interest, is what we are all about. I am seeking to define the national interest in relation to economic policy.
Mr. Brown: The Chancellor said this morning that he had no objection, in principle, to a single currency. Will he answer a second question? A number of Conservative Members have said that they will stand under a different manifesto, and that they will oppose a single currency in principle. Has the Cabinet agreed a dispensation for them?
Mr. Clarke: I shall be deterred by that irrelevance for only a few moments. I have here a list of 50 members of

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the parliamentary Labour party who, in July this year, put out a document opposing the whole idea of a single European currency. When we discussed Maastricht, Labour was against having an opt-out. At the last election, the Labour party's policy was to bind ourselves by treaty without a choice to a single European currency. We have a clear policy, on which we shall stand at the next election. [Interruption.] The right hon. Gentleman has his answer, and he knows perfectly well what our policy is.
Let us consider the Government's economic aims, which, unlike those of the Opposition, are clear. All Conservatives want a deregulated market economy in Europe. We are all vehemently against the social chapter, no one more vehemently than me. We all want subsidiarity to be respected to the full in the single market. We can accept no question of Government or Parliament giving up control of either public spending or taxation. But we have many allies on those points in the European Councils that I attend. The Germans are probably our strongest supporters on deregulation, subsidiarity and national control of taxation.
The British Government insist that the European market must continue to be based on competitive free market principles and free trade. British membership of the EU was extremely important in shaping the European contribution to the successful completion of the last general agreement on tariffs and trade round. At this very moment, while we have this debate, at the first ministerial meeting of the World Trade Organisation in Singapore, we are pushing forward our free trade agenda. In Singapore, we the British are fending off the protectionist instincts that some of our trading partners would like to introduce into the European position.
It is against that background of the clarity on the Government Benches of our key interest in the nature of the single market that we have to consider our role in negotiations about a possible future single currency.
The European countries committed to joining a single currency are our nearest neighbours. They are the market for nearly 60 per cent. of our exports of goods. Our companies are big investors in their companies. When our continental neighbours do badly, we slow down. When they do well, we prosper. That is the economic reality. That is why we must do everything we can to ensure that, if economic and monetary union goes ahead with any member states in membership, it has to be a success.
The United Kingdom ought to punch its weight inside the EU. We have shaped the rules in the single market, to the benefit of everyone in Europe. We should have the self-confidence to believe that we can do the same on the single currency if we stay at the table.
Mr. Peter Shore: I understand very well that the Chancellor is blind to all the evidence of the federal thrust on the continent of Europe, but he is at least, or so he tells us, concerned about the sustainability of any euro currency that emerges, and totally opposed to finagling with the criteria.
That being so, what has the Chancellor to say about the evidence of finagling on the other side, and in particular of the Commission accepting the French Government's transfer of the France Telecom pension fund into their account, so that they can reduce their borrowing requirement by half of 1 per cent.? The Chancellor knows
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that there are half a dozen other examples as well. According to his own criteria, he should be saying now that he will not join a fiddled currency.
Mr. Clarke: I have been debating the fear of a European super-state with the right hon. Gentleman in one way or another for about 25 years now, and we have always disagreed on that. It has not happened yet, and I do not think that it will happen, either. For the umpteenth time, I am against it.
Mr. Norman Lamont: Will my right hon. and learned Friend give way?
Mr. Clarke: No.
On the second point, I disapprove of the transfer to the French Government of payments for the pensions liabilities of France Telecom being regarded as acceptable—the only difference that it has made. As I shall explain, that one transfer, which everyone knows about, does not affect one's basic judgment about convergence. I, along with most other people, would disregard it when it came to making the key judgment in the end, and I am sure that all the other member states will as well.
Several hon. Members rose—
Mr. Clarke: With respect, I must be allowed to make a little progress. I should like to go on to the negotiations. I will return to convergence.
Our strongest card in the discussions on economic and monetary union is the British option that my right hon. Friend the Prime Minister negotiated at Maastricht. The House needs to debate how and when to exercise that option. Whenever the time for decision comes, the answer must depend on a balanced judgment of possible advantages and disadvantages. Nothing in this world is ever going to be black and white, but, when we do exercise our option, essentially it will be a judgment for the House to make about the upside and the downside, and we will probably find that they present themselves in a combination that we should begin to analyse at this stage of the debate.
Mr. Lamont rose—
Mr. Clarke: I should be grateful if my right hon. Friend would allow me to move on.
I understand how strongly some Members feel about the federal united states of Europe and so on, and we all understand the difference of opinion on that issue, but I should like to move on to what might be the advantages and disadvantages of a single currency. It is time that, as a House, we debated what we perceive the arguments on both sides to be, because that is the balance that we are going to have to strike.
Let me first consider—I stress that I am coming to the possible disadvantages—what the possible advantages of a single currency are. Why are we going to Dublin at all and taking part in the discussion? Why did we leave an option open at all at Maastricht, and why did the Labour party say that it would sign up there and then, and enter into a treaty commitment to take advantage of economic and monetary union?

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If EMU can be made to work, it would eradicate exchange rate movements, which can disrupt trade and have disrupted trade in our recent history. We have done well in the past two or three years partly because we have had a reasonably stable exchange rate, but our comparative success is tending to strengthen the pound. Exporting industrialists have already begun to voice concerns about strong upward movements, which obviously happen when we have a floating currency.
Against a weak euro of non-convergent economies, for example, the pound outside could strengthen a lot or it could simply fluctuate widely. Inside a strong EMU, countries would engage in straight competition, undistorted by the foreign exchange markets.
EMU would also reduce transaction costs, making it easier for smaller businesses to enter into and compete in the European market. The members of a strong euro zone would also expect to enjoy lower interest rates, both short and long term, based on the financial strength and reputation of the bloc. Countries with a history of devaluation or bursts of inflation pay a lasting premium in terms of higher interest rates, as we in Britain know only too well.
Mr. Lamont rose—
Mr. John Redwood rose—
Mr. Clarke: Let me finish the advantages, and then I will give way.
Finally, a single currency will make comparisons of prices and wages across member states direct and stark—they would all be denominated in the same terms. That will expose industry in member countries to more intense direct competition with one another, which could reinforce the desirable pressure on industry and commerce in all member states to become ever more efficient and competitive. It would speed up the drive towards competitiveness.
In that way, EMU could help member economies to rise to the real global challenges of the next 10 years. Every member state in Europe must contemplate the need to be able to compete with the economic might of Japan and of the United States of America, and with the increasing strength of the south-east Asian economies and Latin America. That is one of the European problems, and EMU could speed up that drive, making the core economies competitive.
Therefore, if a single currency could be made to work, it is even arguable—no more than that—that we might benefit more from it than most other aspiring member states. British business is already seriously competitive. Removing exchange rate risk would open up our markets further and provide tremendous opportunities for British business.
We in Britain have already taken the necessary steps to strengthen our private sector and to make our labour markets more flexible. Other countries in Europe are now realising that they must follow the lead that we have been giving for the past 15 years and more. If France and Germany were to fail to restructure their labour markets,
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for example, they would find it very difficult to compete with the British economy within a single currency and a euro zone.
Mr. Redwood: Does my right hon. and learned Friend believe that it is better for France to close factories because she cannot compete within the current exchange rates? Does he believe that it is better to have massive Budget cuts and damaging cuts in public services than to have a flexible exchange rate? Is not part of the genius of the current British economic policy and recovery the fact that we have flexible exchange rates and interest rates suited to our needs?
Mr. Clarke: I believe that it is in the interests of France to tackle her excessive fiscal deficit and bring public finances back under control. If my right hon. Friend were a Frenchman, he would agree with that. He has always agreed with me in that regard in respect of the British Government. I do not think that the French should go in for competitive devaluation or start believing that devaluation is a way out of making the necessary structural changes.
When my right hon. Friend and I were in government together, we never thought that we should duck structural changes or deliberately devalue the currency in order to avoid making those changes. The pace at which France tackles its fiscal problems is a matter for the French Government, who have to decide their own priorities. It is their duty as a sovereign nation state to tackle that. However, I do not think that comments on their methods are germane to today's debate.
Let me turn to the possible disadvantages of EMU and the reasons why that the question must be kept open. That is why we have adopted the most sensible policy. As I have just said, the intense competition which could be one of the key advantages of a single currency could also be its downfall. Countries that cannot be guaranteed to stay competitive or are not sufficiently flexible to respond to shocks in other ways than devaluation should not join EMU.
Any attempt to fudge the criteria to admit such countries would not be in the real interests of those countries, and could be disastrous for the rest of the EU, which would have to suffer the consequences. I have always acknowledged that there are possible disadvantages of membership of EMU. That is why I have always argued for the option. I may have admitted that I was attracted to it in principle, but I have also said that I could see myself being on the side of those who have argued that we should not join.
One of the key risks to the whole enterprise must be the possibility that it is set up on the basis of political compromise rather than economic judgments. The consequences of a euro zone which was badly put together, or which contained seriously non-convergent countries, would be extremely damaging to all member states of the European Union. No stability pact, no matter how strict, and no matter how dire the punishment for transgressions, could hold such a euro zone together.
If EMU is entered into by nation states that are not truly competitive with the others, or which are too inflexible in their economic structures to respond to pressures in other ways than by devaluation, it will set up insupportable and damaging strains.

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When we get there, we shall also have to consider not only the economic arguments, but what EMU implies about the political future of the European Union. As I have said several times already, I do not believe EMU will lead to a European super-state. If I did, I would not contemplate Britain joining it. However, we need to satisfy ourselves about the intentions of our EU partners.
At the end of the day, even if the single currency system is well set up and we believe that it will work for Europe, even if the convergence criteria have been respected properly and in full, we can still ask whether it is right for Britain in economic and political terms. That is the value of our opt-out.
Mr. Lamont: As my right hon. and learned Friend is so adamant that monetary union will not lead to political union, will he address the fact that most of our partners in Europe—certainly the Germans—seem to believe that? The chief economist of the Bundesbank has said:
"there is no example in history of a lasting monetary union that was not linked to one state."
The president of the Bundesbank said:
"A European currency will lead to member-nations transferring their sovereignty over financial and wage policy as well as in monetary affairs. It is an illusion to think that states can hold onto their autonomy over taxation policies."
Our partners believe that; surely it must be addressed.
Mr. Clarke: Hans Tietmeyer does not speak for Germany. It is no good—[Interruption.] I agree with Hans Tietmeyer on large parts of the argument, but I do not believe him if he made that statement.
Putting together the comments of Hans Tietmeyer and one member of the Bundesbank council and saying that therefore all the Germans and all our partners believe such a thing is, with the greatest respect to my right hon. Friend, a non sequitur. There are a variety of opinions across western Europe. He has probably had the opportunities that I have had of hearing Helmut Kohl say frequently enough that he is not in favour of a united states of Europe or a federal super-state.
Mr. Lamont indicated dissent.
Mr. Clarke: It is no good him shaking his head. No doubt we will find next that the state president of the Bank of Baden-Württemberg has said something different.
I said that some people who attend the Dublin summit may believe that EMU is primarily an instrument for achieving closer political integration, but I do not believe that the majority of politicians from the other states do. I do not believe that the Gaullists of France believe that they are submerging the nation state of France in economic and monetary union, yet the French are the biggest, strongest advocates of economic and monetary union in Europe. Some of them advocate it for reasons that I do not share, but it is not the reason that my right hon. Friend fears.
Having for the first time had the opportunity to set out in this way what are in my opinion the advantages, I turn to the disadvantages, so that the House might concentrate on what matters. How do we believe that the national interest should best be judged when we come to make the decision on the option that we have safeguarded for four years? I turn to the question of convergence, which is at the root of many of the present problems.
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If economic and monetary union goes ahead, it is in our interest to ensure that it does so on a timetable and a basis that can be sustained whether we join it or not. I am one of those who, like Theo Waigel, the German Finance Minister, my direct opposite number who first used the phrase that I use frequently, believes that convergence is more important than the timetable. I can reassure the right hon. Member for Bethnal Green and Stepney (Mr. Shore) that I mean genuine convergence. The key is whether the countries wishing to join will be able to achieve genuine and sustainable convergence.
The Maastricht treaty sets out a list of nominal convergence criteria that should be used as a first measure of whether a country is a credible candidate for economic and monetary union. I believe that the criteria are sensible and should be rigorously applied. They take as their underlying principles our own guiding principles on macro-economic policy.
It is not surprising that my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) took part in the negotiations on the convergence criteria, because they concentrate on low inflation and sound public finances. He was one of the architects of those conditions, which are essential for economic success. I believe that they are very necessary conditions that any country must fulfil before even contemplating membership of a single currency.
Countries joining the euro zone must not just meet the convergence criteria in a particular year. That is one reason why a particular transaction, however large and startling, proves nothing. I would certainly not regard it as any evidence that France was achieving anything that mattered. Convergence means demonstrating a credible commitment to durable and sustainable convergence. That is the key; that is what the treaty says; and that is the basis on which decisions on who should join EMU must be taken. It is certainly the basis on which the Government will take their decisions and cast any votes that we come to cast at the relevant time.
I am trying to explain that I am one of those who are genuinely waiting to decide. That is sometimes a difficult position to occupy in the House, but I think it is firmly occupied by at least 70 per cent. of the British public who are trying to follow this debate. My judgment will depend on the actual circumstances we face at the time, and where the national interest lies. It is a parody of my views and those of many others to imply that I think that the UK should join EMU this weekend.
We need to have the full picture and to debate all the issues before we take such a key decision on the economic future of our country. We have not taken all the tough steps that we have to make Britain the enterprise centre of Europe simply to make a premature and superficial judgment of our role in or out of any euro zone.
The British opt-out is described as a wait-and-see policy—a balancing act. In my opinion, those are dismissive terms for an extremely sensible policy that is, in fact, the only policy that is in the best interests of the British. That policy puts us in a position that a number of our European partners clearly envy. Unlike them, we have kept solely in the hands of the British Government, the British Parliament and the British people the ultimate decision about whether or not we will join EMU.
Those who would like us to exercise our opt-out now are asking us to throw away that hard-won advantage. Presumably they would say that a referendum is no

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consolation, and that they would set aside the views of the British public, because they wish to say no now, in the same way that they would say no whatever the outcome of the referendum to which we are committed.
As my right hon. Friend the Prime Minister said at the weekend, to throw away our hard-won advantage would be
"fleeing the field when the game is still to be played".
We have everything to gain and nothing to lose from staying in the game. It is only now, as practical preparations get going and as a picture begins to emerge of who will be part of the project and how it will be run, that we are enjoying the full value of our opt-out.
Mr. Edward Leigh: Will my right hon. and learned Friend give way?
Mr. Clarke: I must get on, because otherwise I will take up a disproportionate time.
We are determining—for example, in the discussions on the regulations which most of us have now forgotten and which originally gave rise to the demand for this two-day debate; although I am glad we have moved on to the wider scene—the terms on which any British Government might, at any time in the foreseeable future, join EMU. That is why the legislation is so important. We are also helping to shape the rules that will govern the system, whether we are a member of it or not.
Our EMU option is no soft option, and I am better placed than most to know that because I have been attending the Council of Ministers since 1979. It takes a lot of hard work and a lot of nitty-gritty practical negotiations with our European partners on the part of my right hon. Friend the Prime Minister.
That would not be made any easier if partners round the table suspected that it was just an academic exercise for the UK. It is true that we could still sit at the negotiating table even if we had opted out. We could still argue in logic that our national interests enabled us to play a full part, but the reality is that the influence at the negotiating table of those countries likely to be out for the foreseeable future is far, far less than that of the lead contenders for membership.
Keeping our options open is much more than just a bargaining ploy. It is leaving us with a genuine choice to exercise at the right time in our national interest, and meanwhile keeping our national power to influence the course of great events at the negotiating table.
Mr. Malcolm Bruce: The Chancellor is making a clear case for monetary union and the circumstances in which the Government would not join. The Government would not join if they thought there was a political fudge, and, of course, if the United Kingdom had not qualified. What would be the Government's position if it were agreed that there was no political fudge and the United Kingdom had qualified? Will the British Government recommend that we enter in the first tranche?
Mr. Clarke: I hope that the logic of my speech makes it clear that, if—as events turn out—those possible advantages that I have described strongly outweighed the
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possible disadvantages that I described, I would probably be in favour of joining. When I say that I retain the right to wait and decide, I have made it clear that that decision could go in either direction so far as I am concerned. I am not saying that I would necessarily say no, but I tend to emphasise that I could probably say no because that is always found more surprising by my auditors. It is obvious that I could also say yes, because I think we might lose if we stayed out of a properly functioning economic and monetary union.
Several hon. Members rose—
Mr. Clarke: Before I give way again, I should like to explain why we cannot sensibly decide now. Apart from the matters that I have already mentioned, there are far too many uncertainties about the shape of the euro zone and how it will function. No one can yet say for certain when or if EMU will happen. It would be foolish to ignore the huge political capital and practical effort that is being invested in the project by the other member states of the European Union.
We do not know which countries are likely to be in the first wave if and when it goes ahead. We do not know how much economic convergence will have been achieved, how strictly the criteria will have been adhered to, and how far participants will have achieved the necessary flexibility in their markets to deal with, for example, differing levels of structural unemployment. We do not even have enough detail on how the European central bank or the single monetary policy will operate. We also need to consider how relations with those who remain outside the euro zone will be handled by those inside it.
We need to consider the implications for the enlargement of the European Union. It is far too soon to determine the overall balance of advantage for the City and for British business in general. Those issues will all have a significant impact on the relative advantage of being in or out. Whatever we decide—in or out—EMU will affect us. We must stay involved and ensure that British interests are protected and advanced.
We have already made major advances in negotiations. We played a critical role in the original design of economic and monetary union back in 1991, when my right hon. Friends the Members for Witney (Mr. Hurd) and for Kingston upon Thames took part in the negotiations. The British negotiators took the key role in ensuring that the European central bank would be independent, that price stability would be its goal, that convergence criteria would apply and that only genuinely convergent countries would go ahead to join stage 3.
By staying involved since 1991, we have continued to exercise a key influence. My right hon. Friend the Member for Kingston upon Thames put the relations between ins and outs firmly on the agenda when other member states were seeking to avoid it. Recently, we have ensured that the so-called ERM 2 remains voluntary. We have agreed the terms, subject to our parliamentary reserve, of regulations on the continuity of contracts after a single currency. That is important for the City of London, as I explained to the House last week.

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Those are just some concrete examples of how staying involved in the preparations for EMU has already proved, and will continue to prove, the best way to protect British interests.
Mr. William Cash: As my right hon. and learned Friend knows only too well, we stated in the Maastricht treaty that, legally, we would never prevent the other member states from going ahead. Thereby we sold a pass.
However, can my right hon. and learned Friend explain how we can be said to be negotiating at the table when we have specifically excluded ourselves from discussions on the single currency at the intergovernmental conference, unlike those at the European Monetary Institute, in which we are engaged in the preparations? Will my right hon. and learned Friend explain the distinction between those two situations? How can we be negotiating on something that we have ruled ourselves out of?
Mr. Clarke: With the greatest respect, my hon. Friend is getting himself into some confusion. It is true that, in the original treaty, we are committed not to seek to obstruct the progress of those member states that wish to proceed to economic and monetary union. It would clearly be unproductive to do so, and, anyway, the treaty is so constructed that it is not possible to vote to do so in any meaningful fashion at any time.
Economic and monetary union is not being raised at the intergovernmental conference. All the member states have agreed that it is not on the agenda. The two are separate items at the summit tomorrow. No discussions are going on about economic and monetary union from which the British Government have excluded ourselves. I am seeking to ensure not only that we do not exclude ourselves, but that we continue to punch our weight on our behalf, in our interests, when we take part in the discussions.
The immediate issue for Finance Ministers tomorrow night on the eve of Dublin will be the stability pact. The stability pact seeks to give practical effect to our existing treaty commitments to pursue sensible economic policies and avoid unsustainable deficit financing. It is all about ensuring that convergence is sustainable and durable—that is important to members of all parties. It is worth making it clear precisely why we need a stability pact.
In today's global financial markets, any nation state that fails to keep Government borrowing under control is rapidly punished by those deregulated markets as the interest rates it has to pay to finance its debts rise. In an EMU, if any one member state gets itself into fiscal difficulties or debt problems, all member states may be punished by the markets. All EMU members may have to pay the penalty of higher interest rates exacted by the financial markets for one member's irresponsible policies. Any country that was a close trading partner of the EMU bloc would have a very close interest in the stability of that bloc for its own economic prosperity.
That is why the Maastricht treaty envisages fines for countries in the single currency that run excessive deficits and which not only incur a deficit but fail to take any effective action to get it down again. The current
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discussions on the so-called stability pact are about how to determine such fines and when to impose them. In my view, it is important to get these rules right.
Sir Peter Tapsell: Those who favour a single European currency are in the habit of pointing to the United States as an example of where such a currency operates, but the United States does not have a stability pact. The state of California—which produces about 12 per cent. of the GDP of the United States—very nearly went bankrupt, as did the city of New York, but there was never any suggestion that the Federal Reserve or the US Government should step in. Why does Europe need a stability pact, except as part of a bureaucratic, socialist, centralising, federalist state?
Mr. Clarke: The United States of America is not a partnership of independent nation states of the kind we are contemplating. As I have been emphasising throughout most of my speech, most of the analogies with the United States are, in my opinion, substantially wide of the mark, both politically and economically.
There is absolutely no suggestion of the European central bank stepping in to rescue any member state from the financial consequences of its own fiscal indiscipline. That is not what we are contemplating. There is a no-bail-out clause in the treaty that expressly stops one country bailing out another. We are talking about putting pressure on a sovereign nation state to take the necessary action in the interests of the EMU group—to which, by then, it will belong—to get its fiscal affairs back under control so that the markets give the benefits of membership to all EMU members. Those rules must be right.
Several hon. Members rose—
Mr. Clarke: I shall give way in a moment, but I wish to continue my comments on the stability pact.
We cannot have a set of rules so rigid and inflexible and fines so draconian that every fiscal problem is turned into a crisis. That is the view that I have been taking, and many right hon. and hon. Members will be relieved to know that that is probably the only substantial matter that I shall be discussing in depth over the next two or three days.
But while I am against inflexible rules and draconian penalties, we cannot have a set of commitments so vague that they are more often broken than met. In particular, we need to retain an element of flexibility and political discretion over the whole process. That is the way in which Ministers such as myself, who believe that it is the right way, are steadily taking the discussion.
The other part of the stability pact is making all EU members submit convergence reports on how they are managing their economies. In the European single market—whether or not we have EMU—all countries share an interest in promoting macro-economic stability. Surveillance provides a mechanism for this, and it is now a part of the international financial scene in the modern world.
The British Government believe in international and mutual surveillance of economic performance. We have signed up to independent examination of our economic health by the International Monetary Fund, the

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Organisation for Economic Co-operation and Development and the G7, as well as the EU. The UK is a role model in the provision of open, up-to-date and independent statistical information on the progress of our economy. I have published the IMF article IV report on its annual surveillance of the UK, and I am the first British Chancellor ever to do so.
All member states agreed to produce convergence reports when they signed up to the Single European Act, and we agreed to that when we signed it as a Government led by my noble Friend Baroness Thatcher. The United Kingdom has always produced the reports scrupulously, while other member states sometimes produce out-of-date reports or reports thin on information.
Making the reports compulsory is a very sensible idea, but I am determined to ensure—I give this undertaking again to my right hon. Friend the Member for Wokingham (Mr. Redwood) and to others among my right hon. and hon. Friends—that there is nothing in the regulations on the stability pact that gives rise to any possibility that the monitoring could have binding legal consequences for the UK if we remained outside economic and monetary union.
We have been in favour of the principles of the stability pact all along. By staying involved in negotiating the details, I intend to ensure that, when the time comes to agree it, it will be a system that a future British Government can sign up to.
Mr. John Wilkinson: Can my right hon. and learned Friend explain to the House how, if a country exceeds its stipulated budget deficit and consequently has a relatively weak economy, that will be improved by a fine? Was not the demand for reparations from Germany after the first world war utterly disastrous, and did it not lead to Germany borrowing more money to comply? Would it not be a system of paying tribute to a superior power—the European Union?
Mr. Clarke: If I may say so, my hon. Friend warmed to his argument. He began with a good argument, with which I have some sympathy, and I can reassure him that we are not contemplating anything on the scale of reparations or penalties about which the country can do nothing and which are a burden placed on it for the misdeeds of a former Government.
When we helped to put the provisions in the Maastricht treaty, I am sure that we had in mind the possibility of penalties as a last-resort deterrent to give some added determination to a Government and a Parliament to take effective action to remedy their fiscal deficit. Not to have any deterrent in prospect could lead to some countries constantly expecting to be forgiven extremely slow progress towards fiscal health.
In the negotiations, I have been against those who want automaticity and rapid timetables for the penalties and who think that it gives credibility to the system to show the markets that huge penalties would fall on countries suffering fiscal difficulties. I quite agree that John Maynard Keynes would be spinning in his grave if he was told that the solution to a country getting into serious fiscal deficit problems was to impose on it a fine equivalent to the cost of our bovine spongiform encephalopathy crisis.
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We are negotiating something that, like all the best deterrents, would not be used but would reinforce the political will of a Government to take the necessary action to get back into conformity with their treaty commitments.
To join or not to join is ultimately a political decision. Britain's interests will dictate which way our decision goes. To rush into a premature decision, to extract ourselves from the debate about Britain's future, would be, as my right hon. Friend the Prime Minister put it, "a dereliction of responsibility".
It is entirely right that the House should be debating the Government's policy on Europe over the next two days. We spend too little time debating these matters in the House. I hope that this debate will be part of the process of defining where we believe our national interests lie and determining the true balance of advantages and risks that we face, so that we can help the British public to form their views.
Mrs. Teresa Gorman rose—
Mr. Clarke: The key question for the country is, who do we want sitting in the chair at the negotiations? Tomorrow we go to Dublin. It remains to be decided who goes to Amsterdam in six months' time. The right hon. Member for Dunfermline, East (Mr. Brown) has a simplified approach of not exercising or having an option on the single currency. I know whom I would prefer to go to Amsterdam, when faced with the choice of the man who negotiated our option on EMU, or the man who says that he would never be isolated in Europe.
Over the years, I have sat many times alongside my right hon. Friend the Prime Minister negotiating at the big tables, not just at the European Council but at G7 meetings. He is a master of the art of small negotiation; that is why he came back with a triumph from Maastricht. When I look across the House, as I sometimes do, at the polished public image and public relations shallowness of the Leader of the Opposition and listen to the shadow Chancellor and the shadow Foreign Secretary, I know which team I prefer. In my judgment, the leaders of Europe would eat the Opposition Front-Bench spokesmen alive. They would not be so much turkeys dressed for Christmas as a prawn cocktail before tea for the great statesmen of Europe.
When the time comes, it must be a Conservative Government who consider the issues coolly and come to the right decision for Britain. So long as this party remains in power, the people of Britain can he sure of one thing: we will decide at the right time, for the right reasons; and our decision will be entirely determined by the interests of the United Kingdom.
4.50 pm
Mr. Gordon Brown: The first question that came into the minds of Conservative Members when the Chancellor was asking who they would want to represent them at Amsterdam was whether they would want him to. When he set out the advantages and disadvantages of being inside a single currency; set out, with enthusiasm, what he believed were the principal advantages of a single currency; and said that Britain might get some of the biggest advantages from the lower interest rates that could result from a single currency, he spoke with enthusiasm, passion and conviction. But I kept asking

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myself whether he spoke for the Conservative party and for the Government. Does he, week to week, continue to speak for the Prime Minister on those vital issues?
The problem was summed up when the Chancellor said that the policy of the Government had the support of 70 per cent. of the population and there were jeers from Conservative Members. We know exactly what Conservative Members think of that policy. As we had jeers when the Chancellor talked of the advantages of the single currency and cheers when the right hon. Member for Kingston upon Thames (Mr. Lamont) put the disadvantages, we know why the Government were so anxious to avoid a vote on a take note motion after this debate and why the Prime Minister had to admit on Sunday that divisions in the Conservative party were damaging the national interest.
Several hon. Members rose—
Mr. Brown: I do not know whether to take a Euro-sceptic, a Euro-enthusiast or what. I shall take the hon. Member for Gainsborough and Horncastle (Mr. Leigh).
Mr. Leigh: It is almost certain that Britain will meet the Maastricht economic criteria at the appropriate time. Will the right hon. Gentleman confirm that it is still Labour party policy to commit the nation to join the single currency in that event, and therefore confirm that, by voting Labour, people will vote to abolish the pound?
Mr. Brown: I will come to the hon. Gentleman's point. We will make the decision in the national economic interest and I will lay out the factors that we will consider. [Interruption.] The hon. Gentleman disparages what I am saying, but that is the policy of the Chancellor of the Exchequer as well. Today, the hon. Gentleman expresses himself as opposing the Opposition; on Friday, he was all over the airwaves saying that the Chancellor and the Prime Minister were defying the will of the majority of the Conservative party. That is the current state of the Conservative party.
Mr. David Shaw rose—
Mr. Rod Richards rose—
Mr. Brown: I do not know whether to give way to the hon. Member with the Union Jack tie or the hon. Member for Dover (Mr. Shaw).
Mr. Shaw: Can the right hon. Gentleman say whether it is still Labour party policy, as written in its policy documents of the past year, that the convergence criteria must be applied flexibly? Is its policy still to fudge the convergence criteria or has it moved from its original policy document?
Mr. Brown: The word "flexible" is not used in our policy document. If the hon. Gentleman wants to read it out, let him please do so.
Mr. Shaw: My understanding is that—[HON. MEMBERS: "Ah."] If the right hon. Gentleman reads "A New Economic Future for Britain" published by the Labour party in June 1995, he will see on page 23 the words:
"Convergence must be based on improving levels of growth and employment, and not just on monetary objectives alone. That is why we have long argued that the convergence criteria must be applied flexibly."
Mr. Brown: The hon. Gentleman mentions employment and growth—exactly issues that we believe
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should be taken into account. The hon. Gentleman was trying to suggest that we intended to fudge the public spending guidelines. I had better deal with this now. We have always said, first, that we see substantial benefits in the principle. We have always said, secondly, that the decision should be made in the national economic interest. We have said, thirdly, that employment criteria—the real condition of the economy—have to be taken into account and, fourthly, that there must be a test of public opinion. That is a fair way of approaching the issue.
Mr. Richards: Will the right hon. Gentleman give way?
Mr. Brown: I shall make some progress and then give way to some hon. Members. [Interruption.] The Exchequer Secretary to the Treasury is shouting. Perhaps he will answer when he replies to the debate why he has been put up to answer the debate by the Chancellor when he said on the Frost programme only a few weeks ago, "I am a Euro-sceptic. I cannot support the principle of economic and monetary union." Why has he been put up to close the debate and give a position that is diametrically opposite to that of the Chancellor?
Mr. Richards: Will the right hon. Gentleman give way?
Mr. Brown: I will give way once more and then I shall move forward.
Mr. Richards: Does the right hon. Gentleman have any objection in principle to a single European currency?
Mr. Brown: I have said exactly what is the case. We see substantial benefits in principle in a single currency, but the decision must be made in the national economic interest. We must take into account the advantages and disadvantages of being in, but also the advantages and disadvantages of being out. We must take a decision when we know the full economic information and can make an assessment of it. If the hon. Gentleman disagrees with me on that, he disagrees with the Prime Minister because that is the position that the Prime Minister laid out on Sunday.
I shall examine point by point the important decisions that will be made this weekend in Dublin and the Conservative party's position on them. The Chancellor did not deal with those important issues. I shall state the Labour party's position. We will show issue by issue that Conservative divisions are denying us the unity that is necessary, and therefore damaging the national interest on these matters.
The Chancellor tried to take comfort from what he said were divisions in the Labour party on a single currency. Let me give him a challenge. Let him do what the Labour party did and put his policy to his party membership, including its proposals on Europe, a commitment to the benefits that we see of a single currency, and the need to make the decision in the national interest and to consult the public. Let him see what the result is. Judging by his speech this afternoon, I doubt that the Chancellor will be able to guarantee a majority not just in his party but among his Back Benchers for his position, and perhaps not even a majority in the Cabinet. Who is divided on the issue of Europe?

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The Chancellor presented a theoretical case for being inside a single currency. The fact is that decisions are being made every week in Europe on these issues, and Conservative Members know that. The Chancellor concentrated, as he has done in our two previous exchanges, more on the decisions that have not been made, not yet been made or will be made later, for which he wants discretion from the House, than on the decisions that are being made.
In this two-day debate, we must face up to the decisions that have been made, say what is our view on the matter, give advice to the Government where that is necessary and see why the divisions on the Conservative Benches, which cannot be concealed, are preventing our national interest from being effectively represented.
The Chancellor says that there will be no final agreements at Dublin. It is true that there will be no legislative agreements until Amsterdam and that the Finance Ministers meet again tomorrow, but no one is in any doubt that important economic decisions—perhaps some of the most important decisions that Europe has made on economic matters—are being reached in ECOFIN and are to be put to the Council and to the summit on Sunday.
We know what newspapers across the continent are saying. French newspapers are reporting French Ministers as saying that all but two issues of detail have been agreed. Indeed, the Chancellor told the Select Committee on European Legislation, chaired by my hon. Friend the Member for Clydesdale (Mr. Hood), that political agreement is likely at the European Council on 13 and 14 December. The Leader of the House said that we had to have scrutiny in the Committee because political agreement was likely. The Chancellor, reporting back to the House last Tuesday, said that there were only two outstanding issues. We know that the Irish Prime Minister has said that 98 per cent. of the proposals on the economy are already agreed in outline form and that the formal agreement comes to be ratified in Dublin before the legislation is drawn up.
Try as he does to find common ground with his Back Benchers, the Chancellor has to deny the importance of all the decisions that are being made at the moment. I believe that debate is required on the details of those agreements, which are about to be made. I shall raise some of those issues, because parliamentary approval should be sought. The public need to know and to understand what is at stake. If they do not, because divisions in the Conservative party prevent that full national debate on the detailed issues from taking place, it will not be in the national interest.
It is important also to understand why the take note motion is not before the House this afternoon. We were told that the take note motion had to be dealt with before Dublin, yet suddenly last Thursday we were told that it was not necessary because political agreements would not be reached.
Mr. Marlow: Will the right hon. Gentleman give way?
Mr. Brown: No, I am not giving way at the moment.
The truth is that political agreements are being reached. The position of the Government and that of Parliament should be known on these issues. What has changed in the
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past few days is not that no agreements are going to be reached—what has changed is the Government's ability to get that motion through the House of Commons. That is why divisions weaken this country in negotiations. The Prime Minister goes to Dublin without the authority of Parliament to reach the final decisions, when he knows that those agreements are being reached and are only to be ratified at the Amsterdam summit.
Let us look at substantive issues. I have said where the Labour party stands. Our draft manifesto clearly states our position on the principle of a single currency and on the decisions that have to be made. The Chancellor raised the subject of the stability pact. He has reached agreement on all but two outstanding issues. He has agreed that there will be limits to deficits and that there is an agreed procedure for dealing with them. He has agreed that penalties will be there as a last resort and that fines will be paid to the European Commission. All that is agreed—Conservative Members should know that he has not opposed those proposals and that the common view in the Finance Council is that they are agreed.
In addition, the Chancellor has already agreed, as he mentioned, that convergence programmes are important for the outs who remain outside the single currency; that they will now be obligatory; that their contents will include matters on budgetary deficits; that they should be developed along the same lines in reporting as the stability programme; that those plans will have to be submitted every year and that they will form the basis of public comment by Commission; and that Britain could be rebuked for failure to take "necessary action".
Those proposals should be debated in detail in the House, but the main thrust of the Chancellor's report from the summit last Tuesday and of his speech today is that he has secured copper-bottomed guarantees in respect of Conservative Back Benchers' demands that things be written into the agreement to ensure that the obligation to avoid excessive deficits does not apply to the United Kingdom, as long as it remains outside the euro.
Mr. Shore: My right hon. Friend has made it clear—very convincingly—that all the information is now available about the stability pact, about what would happen to us if we remained outside and so on, to enable us to make a rational decision about whether it is in the British interest to join. What we would also like to know is what my right hon. Friend thinks about the stability pact and its imposition on the British people.
Mr. Brown: If my right hon. Friend, who contributes to all these debates and has done so for many years, will be patient, I shall tell him. As he knows, there are two outstanding issues relating to the stability pact that have yet to be agreed and I shall come to those issues in a minute. They are the definition of exceptional circumstances and the discretion that is available to the Council. I think that he would agree that those are important issues on which the Labour party—[Interruption.] This is the problem with trying to have a rational debate on Europe. Because some Conservative Members are against a single currency in principle and in all circumstances, they are not prepared to debate the issues that affect the United Kingdom.
Several hon. Members rose—
Mr. Brown: Now they ask me to give way to them, so that they can repeat their views. I shall not do so.
Mr. Bernard Jenkin rose—
Mr. Cash rose—
Mr. Brown: The two hon. Members, who have ruled out support for a single currency in all circumstances, now ask me to give way simply so that they can put their case. Let us look at the detail—that is what we are going to do.
Mr. Jenkin: On a point of order, Madam Deputy Speaker. I believe that the right hon. Gentleman is misleading the House. He says that he wants a debate, but when anybody tries to engage in debate with him, he does not give way.
Madam Deputy Speaker (Dame Janet Fookes): That is not a point of order for me.
Mr. Brown: The Chancellor tries to find common ground with the rebels. He goes to Europe and comes back saying that he has got what amounts to a footnote in the new agreements that member states that are outside the euro will be under no obligation to avoid excessive deficits—something that was already stated in black and white in the Maastricht treaty anyway.
The Chancellor gets that provision in order to appease Conservative Members, but it makes no difference to them. They have only one mission in mind, which is to prevent there being a single currency in any circumstances—the tragedy is that the Chancellor knows that too. If they can, they will write into the Conservative manifesto that there will be no commitment to a single currency in any circumstances. If they fail to do that, they have made it clear that they will have their separate, personal manifestos and write it into those. They will also write in a statement that they would prefer Britain to be outside the European Union altogether.
Mr. John Townend rose—
Mr. Brown: Here is another Conservative Member who takes that view. That is the position of many hon. Members on the Conservative Back Benches—I suspect that they form a majority of the hon. Members present today. Increasingly, they are becoming a party within a party and no amount of rabble-rousing on their part can disguise their agenda and their pursuit of it.
Several hon. Members rose—
Madam Deputy Speaker: Order. It is quite clear that the right hon. Gentleman is not giving way. It is his right not to do so, if that is his wish.
Mr. Brown: I shall give way to one hon. Gentleman, but then I shall move on.
Mr. Townend: Will the right hon. Gentleman now come to the heart of the problem? If he, as Chancellor of this country, decided that it was right to abolish the pound, does he accept that that would mean a major transfer of sovereignty from this House to Europe?
Mr. Brown: We do not accept that a country moves into a federal Europe immediately on considering the
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issue of a single currency. We shall look at the issue in terms of what is the national interest. The hon. Gentleman should look at those questions in detail.
I give way all the time to Conservative Members and, instead of asking questions about details that affect Britain's interest, they repeat the same old question, because they are wholly against the single currency. That is their agenda.
Sir Peter Tapsell: Get to the detail.
Mr. Brown: I am now on the detail. [Interruption.] We have one section of the Conservative party saying, "Let's have a debate on the detail," and another saying, "We must debate only the principle and we must rule out the principle of a single currency."
Several hon. Members rose—
Mr. Brown: I shall make progress with my speech now and take no more interventions from the disruptive element that is trying to prevent me from speaking.
Mr. Terry Dicks rose—
Mr. Brown: If, in the interests of fairness, I take one intervention from a pro-European on the Conservative Benches, I suppose that it must be the hon. Gentleman.
Mr. Dicks: The right hon. Gentleman just said that he would make a decision in the national economic interest. Does he see a distinction between that, which is what the Chancellor said, and the national interest vis-à-vis sovereignty? There must be a distinction. Does the right hon. Gentleman not see it?
Mr. Brown: I am glad that the hon. Gentleman is participating in this debate. He is the person who rebelled on Sunday when the Prime Minister talked about irrelevant Members of Parliament who were stirring up the issue to get a moment's fame. The hon. Gentleman asks about sovereignty. I do not accept that a single currency removes our freedom to make decisions on taxation and other issues in the House of Commons. It will annoy Conservative Members that I share the Chancellor's view on that matter—[Interruption. The Chancellor is smiling because he has at least one supporter on the issue in the House. That will be the Labour party's position on the matter.
We cannot sit out these negotiations simply because a group of Conservative Members say that we must rule everything out in principle. We must play an active part in the negotiations, but, try as the Chancellor does to find common ground between him and his Back Benchers, it is becoming impossible as they push him further and further to a position where he cannot agree with them.
On the two outstanding issues on the stability pact, there must be flexibility rather than rigidity in the definition of exceptional rules. On that point we would agree with the position that the French have put over the past few days.
There must be discretion for the Council. Indeed, that was the spirit of the Maastricht treaty. In answer to a question put earlier, we should have the ability to examine

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the state of the economic cycle and to take past trends and levels of investment into account when deciding what action to take.
Mr. David Hunt: Will the right hon. Gentleman allow me to recap? When a question was put to him earlier, he said that the word "flexibly" did not appear in the document. It was then put to him that page 23 of "A New Economic Future for Britain" says:
"the convergence criteria must be applied flexibly".
What does he mean by that?
Mr. Brown: I thought that the right hon. Gentleman was referring to "The Road to the Manifesto", the document that we have produced and circulated to our members. That has been voted on by 95 per cent. of the members and is the manifesto on which we shall fight the next general election. The right hon. Gentleman is not quoting from that document, but that was my understanding of the comment that was made, and that is the basis on which we shall fight the election. I understand that it is impossible for the Conservatives to have a similar document at this stage. Indeed, it may be impossible for them to agree on a manifesto on those issues, but the Labour party has agreed its position. [HON. MEMBERS: "But what does it mean?"] I explained to hon. Gentlemen what it meant. It meant taking into account employment issues when making a final decision on monetary union.
It is interesting that the Chancellor said little about exchange rate co-operation, but concentrated on the stability pact. We know that the exchange rates of the outs as well as the ins will have to be monitored and assessed under the new arrangements being agreed, but the purpose is to avoid real exchange rate misalignments. Surveillance of what are clearly market-sensitive areas will be published by the Commission in the form of recommendations. Whether binding or not, recommendations in such market-sensitive areas are bound to have an impact. Once again, however, desperate for common ground, the Chancellor tried to get included in the document an understanding that that would be non-binding on the British Government if they were outside the euro.
The House must debate the fact that all member states, whether they introduce the euro or not, will be subject to recommendations on their exchange rates. Those will have market-sensitive implications, and we must take that point into account. We shall support the necessary surveillance. We accept that exchange rates will be monitored and published. That is another issue which, for reasons of holding the Conservative party together, the Chancellor, who has raised no general objections to those matters, chooses not to emphasise.
Mr. Barry Legg: Will the right hon. Gentleman give way?
Mr. Brown: I shall not give way again. I have made that absolutely clear.
We have dealt with the stability pact and exchange rate co-operation, the issue that will come to the Dublin summit. But, as all the interventions from Conservative Members who are against Europe and a single currency have made clear, the real issue is the single currency. We
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know that the Chancellor agrees with the principle and that a decision should be made in the national interest. We also know that he agrees that we should assess the advantages and disadvantages of being out as well as in. That would be my position as well. However, it is because the Chancellor is in favour of the principle of a single currency that the Conservative party cannot unite on the issue. That is what the House should face up to today.
At least 50 Members of Parliament and candidates have said that they will stand on a separate manifesto. Like the debate on what the IGC should recommend, the debate on a referendum and the decision made by the Prime Minister and the Cabinet on that matter in March, a pattern of events is consistently followed. Conservative Euro-sceptics make a demand, they expect the Prime Minister to vacillate, the Chancellor digs in, the Prime Minister retreats a little, factional war then breaks out and the war of the factions effectively decides the final outcome.
Even when we have a period of truce, the silence lasts only a few days, sometimes even less, while regrouping takes place so that the Euro-sceptics can fight again. A group of Conservative Members is so implacably opposed to the principle of a single currency that no peace within the Conservative party is possible.
Mr. Marlow: Will the right hon. Gentleman give way?
Mr. Brown: No, I shall not give way.
That is the new constitutional theory that runs the Government. Ministers used to initiate, the Cabinet used to decide and Parliament used to approve. Now, however, Euro-sceptics initiate on this great issue of Europe, Ministers are always in a position of reacting, factional in-fighting always breaks out, and the war of the factions decides the final solution. That is what lies behind all the events of the past few days.
When the Chancellor went to lunch at Chez Nico only a few days ago, at the back of his mind was the attempt by Conservative Back Benchers to force on to the Prime Minister a new manifesto commitment, or at least a statement during the election campaign, that he would rule out a single currency. If anybody doubts that, he or she should read the interview given by Lord Tebbit on Sunday when he made it absolutely clear that a plan was afoot. He said that he was in discussion with Downing street and made it clear that moves were being made by some people with influence at No. 10—
"some people like myself—to find a formula which would bring me and my friends back on board. This formula, which looks as though it might be successful, was that we would accept the Prime Minister's word. Let me say that at the beginning of the election campaign he would say, 'Look, Ken Clarke takes his view. I take this view: while I am Prime Minister I can assure you we are not going into the single currency in the next Parliament because the Europeans arc fudging it and it would be a mess.'"
That plan led to the article in The Daily Telegraph, which was what so exercised the Chancellor when he went to lunch. It was just a few days after the Budget when he had been boasting about the state of the economy. When he went to that lunch with two BBC journalists, was he there to boast about his great economic achievements and his success story in Europe? What was on his mind? What was his agenda? Was it to defend the Budget? Was it to reassert the ringing declaration of his loyalty and that
"any enemy of John Major is an enemy of mine"?

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No. What was his real agenda? So keen was the Chancellor, after the events of the previous few days, to unburden himself on the European issue that, it is reported, he did not even drink much of the two bottles of wine that were produced by the BBC reporters—he was talking so much. It turned out to be a perfect lunch. That may be an additional reason why the Chancellor got more exercised towards the end of the conversation. The significant claim that he made was not about explosives or scooters. The significant claim that he made—the straight talking—was, according to the report,
"Mr. Clarke does not doubt that the source of the story ruling out a single currency was someone close to the Prime Minister."
In vino veritas. No wonder his mind was not on the Budget or the economy. It was on the attempted betrayal, as he saw it, of No. 11 Downing street by No. 10. After that, the next stage of the familiar cycle started to work itself out. Nothing that I could say about what is going on in the Tory party could be as damaging as what its members have said about each other over the past few days, with talk of madness, purges, Ministers alleged to be puppets, allegations of political suicide, betrayal, treachery—those are only the allegations that they made about themselves during the past week—words that make the Chancellor's comments about boomerangs, explosives and scooters seem mild and statesmanlike, even if he was speaking through the wine that he had enjoyed. One member—
The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): Will the right hon. Gentleman give way?
Mr. Brown: I am not giving way now. [Interruption.]
Mr. Oppenheim: I thank the right hon. Gentleman for having the courtesy to give way. He is in misquotation mood. He claimed earlier that I made a statement on "Breakfast with Frost". It may have been a little too early for the right hon. Gentleman—he was probably bleary. Let me tell him what I said. It was not what he claimed. I said:
"I am a Euro-sceptic. I may not be in quite the same league as you …"—
I was referring to the hon. Member for Billericay (Mrs. Gorman)—
"but I would find it totally unacceptable if the British Government was trying to commit us to EMU without having a referendum and without it going through Parliament."
I hope that the right hon. Gentleman will have the good grace to apologise for his earlier misquotation.
Mr. Brown: The Minister said that he was a Euro-sceptic. I saw "Breakfast with Frost". He has now read out his statement. The Minister who is to reply to the debate on behalf of the Chancellor later this evening went on the programme as a Treasury Minister who is supposed to defend the documents, and said that he was a Euro-sceptic. [Interruption.]
The House will look strangely on a Minister of the Treasury who said publicly on "Breakfast with Frost" that he was a Euro-sceptic. That sends out a clear message. If he says—which I accept—that he does not support the principle of a single currency without a referendum being held and without proper parliamentary approval—[HON. MEMBERS: "Apologise."] If the Minister is saying that he will not support the principle of a single currency—economic and monetary union—without a referendum and without the matter coming before the
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House, is he saying that with a referendum and after it has come before the House, he will be prepared to support the principle of a single currency?
Mr. Oppenheim: Earlier in the debate the right hon. Gentleman attributed to me a statement that was wrong. It is beneath him and shows ill grace for him not to withdraw it and apologise.
Mr. Brown: I was reading the quotation from The Independent on the Monday after the Minister's Frost interview. Does he deny saying that he was a Euro-sceptic? [HON. MEMBERS: "Withdraw."] "I am a Euro-sceptic," he said. That is typical of the Conservative party. Conservative Members are divided and they are clutching at straws. We have a Conservative Treasury Minister—
Mr. Douglas Hurd: The right hon. Gentleman should not debate in this way. After the remark about my hon. Friend being a Euro-sceptic, the right hon. Gentleman went on to attribute to him remarks on the Frost programme that he now knows my hon. Friend did not make. In those circumstances, the right hon. Gentleman should withdraw.
Mr. Brown: I am reading the report from The Independent. [HON. MEMBERS: "Withdraw."] If I have misquoted the hon. Gentleman, I apologise. [HON. MEMBERS: "Five minutes."] The hon. Gentleman said that he is a Treasury Minister who is a Euro-sceptic. Given a referendum and parliamentary approval, would he support the principle of economic and monetary union—yes or no?
Mr. Oppenheim: Only if the Government of the time thought that that was in the British interest. That is the policy of the Government Front Bench, subject to a referendum. I understood that that was the policy of the Opposition Front Bench, too.
Mr. Brown: There is the division. During the debate the Chancellor said that he supports the principle of monetary union. The Minister cannot say that. Is that not an example of the division at the heart of the Treasury? Conservative Members are clutching at straws if they believe that they can wish away the fact that within the Treasury the Chancellor says one thing and the Minister who is to reply to the debate says another.
Mr. Kenneth Clarke: May I tell the right hon. Gentleman that wine played a much smaller part at the lunch than he believes, but that is the least of my complaints against the BBC journalists involved?
On the argument that the right hon. Gentleman is trying so passionately to deploy, can he deny that if he went to lunch with the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and the hon. Member for Bolsover (Mr. Skinner), he would not find the slightest shred of agreement on any of his arguments? At least 50 members of the Labour party do not believe a word that he is saying and would vote against his argument if they had the chance. Why is he trying to distract attention, instead of trying to deal seriously with the real issues?
Mr. Brown: The Chancellor knows that it would be extremely difficult to get my hon. Friend the Member for Bolsover (Mr. Skinner) to a place like Chez Nico.

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Can the Chancellor imagine putting to his party membership his policy on Europe and finding that he could get a straight majority, far less 95 per cent. of the party voting in favour of a draft manifesto?
The situation in the Conservative party is summed up by events since the Prime Minister's interview on Sunday. The Prime Minister went on television on Sunday. He was to unite the party. He would draw a line. Clarity and coherence would reappear. The in-fighting would stop. All the damage done off the record by the Chancellor would be resolved by the interview on the record by the Prime Minister. Yet within five minutes of the interview being completed, the right hon. Member for Wokingham (Mr. Redwood) was saying one thing, Lord Howe was saying another and the cycle began again—there was a momentary remission during the Prime Minister's interview, before the relapse.
Small wonder it is that Lord Blake said:
"Since I was old enough to vote I have lived through 14 general elections. I have never seen the party I support in a worse state of disarray, a worse state of confusion, of factiousness, than today."
What chance is there of reconciliation when, clutch at straws as they might this afternoon, Conservative Members express entirely different views from the Government Front Bench and have no intention of reconciliation on the issue of the single currency? We were taught that Cabinets decide and Parliament approves. We now know that factions in the Conservative party initiate, Ministers react, factions fight it out and struggle among the factions decides the outcome.
Very important issues are at stake at Dublin. There is the stability pact, which I have mentioned; there is the future of exchange rate co-operation; there is the decision on the euro. The decisions about a European single currency must be made in the national economic interest. In my view, the worst thing that has been happening in recent days is that, when we have needed a debate in the national economic interest so that a decision can eventually be made on those issues, divisions within the Conservative party on matters of theology, ideology and dogma have prevented that decision from being made. It seems that, despite what the Prime Minister said on Sunday, the national interest always comes second.
Three years ago, the Chancellor said that the Conservative party was in a hole. It still is. It has long ceased to be able to govern on the vital issue of Europe. It is no longer seen as a party by the general public. It cannot unite the country; it cannot even unite itself. Its divisions are damaging the national interest. It is time that the national interest came first: it is time that this Government went.
5.30 pm
Sir Edward Heath: It is a long-established tradition in our Parliament, and particularly in the House of Commons, that on all questions of international negotiations—and, indeed, on many involving national negotiations—no attempt should be made to bind the hands of those taking part, whether Prime Minister, members of the Cabinet or other Ministers. In my experience of innumerable negotiations, particularly international ones, no attempt has ever been made to bind me to particular positions while they have been going on.
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During the long negotiations between 1961 and 1963 on the first attempt to enter what is now the European Union, I reported frequently—to the astonishment of my colleagues from other countries involved in the negotiations—but was never asked here to bind myself either to what had been agreed or to what was going to happen. That position should, I believe, be maintained—and more so, not less so, because we are within five months of a general election. That is vital.
These negotiations cannot be finished before the possible date of a general election. We should therefore accept, as a Parliament—I believe that the people of this country are perfectly prepared to accept it—that we shall not know the answer until the negotiations are concluded, whichever party is in power. Unless we do that, we are heading for catastrophe.
I believe that my right hon. Friend the Prime Minister was absolutely right to say on Sunday that he would not be forced to make any announcement, either now or during an election campaign. He is backed by the Chancellor of the Exchequer, the Deputy Prime Minister and the Foreign Secretary, and rightly so. I therefore hope that all of them will adhere strictly to what has been said. I believe that it is right. It is what Parliament is accustomed to, it is what Parliament needs, and I believe that Parliament should have it.
When considering the general questions that are at issue, we must recognise that the Six, as they originally were—and the members of the Union, as they are today—have always benefited from the fact that their principal parties have agreed on their membership of the Union and on the steps that have been taken to develop it, as, almost without exception, have all members of those principal parties. There are those who say today that they never realised that there was any politics in it. Many people say that all the time. I am sorry, but it has been clear from the beginning that this was a political development, and also an economic development. There are those who talk glibly about sovereignty. Of course the Union, or the European Coal and Steel Community as it was then, had supranationality. It gave up sovereignty at once, in order to maintain peace in our continent by governing, centrally, what Germany and France could do in regard to creating weapons of war by means of the two materials of coal and steel. That has always been there.
Every treaty has emphasised this. The treaty of Rome, which we signed—we are not in the habit of breaking treaties—sets out quite clearly that what is involved is ever closer union, which involves sovereignty, and that such a union is political as well as economic. That is absolutely clear, and always has been.
Mr. Cash: Will my right hon. Friend give way?
Sir Edward Heath: No.
Sovereignty exists for the benefit of the people. It exists for the benefit of our fellow citizens. If we can do something to which our sovereignty contributes for the benefit of our people, its use is absolutely justified.
I must also point out that when it comes to NATO, on which there is very little division of opinion—perhaps I could draw the Chancellor's attention to this—our surrender of sovereignty is complete and absolute. NATO says that an attack on one is an attack on all. It does not say, "You must go back to Parliament to get approval." It

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does not say, "You must have a referendum," or, "You must have a general election." What it says is, "Without question, you go to the defence of the member that is attacked." No one could ask for greater abandonment of sovereignty than that. Why? Because we believe that it is justifiable, in our national interest and in the interest of peace.
As for the single currency, an argument that has not been used today but that I consider important is that no single market in the world has more than one currency. We have heard great support for the single market, and in some ways I agree with what has been said about the United States, which is the world's biggest single market—unless we consider the Union to be a fully developed single market: in any case, the United States is a very big single market, and it has only one currency. It is impossible to imagine the United States with 50 different currencies. We can work out individual aspects, but that is a very important one.
The reason is simple. If members keep their currencies, they cheat. That is what we did when we devalued the pound by 15 per cent: we cheated, and they all believe that we cheated. That is an essential aspect, quite apart from the benefit to industry and to individual citizens.
A factor that should not be overlooked, particularly by members of our party, is that industry believes that it will benefit from a single currency in the Union. It will benefit, and that is why it wants a single currency. As for the question of articles 103 and 104, health and society, and so on, those in industry are clear about the fact that that does not bother them. The Confederation of British Industry has said that, if we return to minimum wages at a reasonable level, the effect on us will be perfectly acceptable. Even the Institute of Directors says that it does not mind. Very well: we cannot ask for more than that from the business point of view. Is it not time that we paid some attention to what industry wants, given that industry is the basis of our own existence? Of course we should do that.
We hear a great deal about the nation state. The fact is that the Union, as it is today and as it has always been, is sui generis: it exists in its own framework. There has never been anything like it before, and it is unlikely that there will be. What we must do is not waste time on arguments about the definition of federalism, and so forth, but ensure that what we as a Union need to operate efficiently is there, in the framework.
What worries me is that in all these debates—today's debate was announced as being of great importance from the point of view of the details of the single currency—there is no positive contribution. If there are problems, and we all know what they are, why can we not make a positive contribution to their solution—Members of Parliament, apart from Ministers and the Government? That, I believe, is the task that we face.
As I have said, we have heard a great deal about the nation state. I have not heard so much about the nation state since I was an undergraduate reading political history. In the past, people talked about the nation state; it is only in the past three years, and only in this country, that there has been so much emphasis on the nation state. The plain fact is that the nation state seeks the highest standard of living for its people. That has been the emphasis here, and we must judge things on the benefits that they bring to the people of our nation state.
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My view is quite clear: the greatest possible benefit for the nation state lies in the European Union. That is why we must remain not only members but positive, constructive members of it, which in turn will help the rest of the Union to develop in the way that is most beneficial to its people. That is the task to which we should address ourselves and to which I believe the people of this country want us to devote ourselves.
There are perhaps some people here who think that the election will be settled on the question of Europe. It will not. It will be settled on many other issues—and we know what they are. Let Parliament concentrate on making a success of the European Union to which we belong.
5.40 pm
Mr. Peter Shore: It is always a challenge to follow the right hon. Member for Old Bexley and Sidcup (Sir E. Heath). I must say straight away, however, that although he used phrases such as "sovereignty" and "nation state", the conspicuous absentees were "democracy" and "self-government". What is at stake in our relations with Europe is very much the question of who governs Britain in the future. If that is not of great concern to the right hon. Gentleman, it should be: his failure to take account of that marred his own negotiations and the signing of the treaty of accession in 1973. I should like to spend more time on this matter, but so little is available to us that I turn straight away to what I regard as the major new factor in this debate—the stability pact.
The stability pact was not even mentioned on the Floor of the House until today, or at least until the Chancellor was forced—reluctantly—to make a statement on 23 November, or whenever it was. The stability pact is a major new dimension to the Maastricht treaty. It has three components of which we should be very conscious.
The first is that the norm expected of member states that are party to the single currency is that they should break even on their balance budget account year by year, and the 3 per cent. of gross domestic product figure is the exceptional margin that is to be allowed when things go wrong and when the economy appears to be plunging into recession. That is not exactly what people thought the original Maastricht criterion of 3 per cent. meant.
Secondly, under the stability pact, we are to be subject to fines which could amount to 0.5 per cent. of our gross domestic product every year. That is the formula. In Britain's case, it would be a fine of up to £3,500 million a year—that is what we are exposing ourselves to.
The third and very disagreeable feature of the stability pact is that, although the initial call is to make a deposit with the European central bank, if that deposit is not redeemed after two years it will be turned into a fine.
I find it truly remarkable that, as he told us in the letter he sent to us on 22 November, the Chancellor considers that
"the stability pact makes good economic sense".
He went on to say:
"we believe that deposits and fines will be useful deterrents against any member of EMU stage 3 who maintains irresponsible fiscal policies".
I intervened on the Chancellor and pointed out that, had the stability pact been in force during the four years that he had held that office, Britain would have had to

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contribute £11 billion to the European Union. I then asked him—I ask the House again today—whether we really think that he has been wholly irresponsible in his conduct of our affairs during the past four years, or whether we in fact accept that Britain had fallen into serious recession following our unhappy stay in the European exchange rate mechanism from which we broke out—or were driven out—only in September 1992. The economy was deeply depressed and, as my hon. Friends should understand better than the Conservatives, it therefore made sense to have a large borrowing requirement and to increase public expenditure even though it meant incurring that large borrowing requirement.
That is what sensible economic management dictates, and it is something that we as a party should never agree to abandon, in treaty form, to those in Europe who have an entirely different view about what is good economic policy and an entirely different political aim—that of creating, as soon as they can, a federal state or a united states of Europe. Those people do not disguise their intentions; it is only here that we cannot bear to face the reality.
I find it inconceivable that any British Government should have so little self-respect that they feel they have to be bound by treaties that others have written and hand over to unelected authorities in Europe the single most important financial judgment of the year—the Budget judgment on what the balance should be between taxation and expenditure. Are we really saying that, to pick up a phrase used by a Conservative Member some time ago, we are no better than a rate-capped local authority? Do we really think that we do not have the good sense to make the correct economic judgment for our people and our nation year by year?
If we feel that we no longer have the self-confidence or the ability to decide our yearly economic policy or, indeed, our economic policy as a whole, and if we are prepared to hand over control of not only our interest and exchange rates but the Budget judgment—and to do so without argument—what arguments have we against those who would press us at the intergovernmental conference, as they are now doing, into letting them take over our immigration and asylum policies and even our foreign policy? That is what is at stake.
I cannot believe that the House has so little regard for itself and its people that it is prepared to abandon that which the British people achieved for themselves and which has caused us to be the envy of the greater part of the world because we maintained it for so long and despite great difficulties. After all, most of us have lived through a period in which we in Britain were proud of our achievement in creating something like 40 additional nation states by the voluntary withdrawal from empire. Are we now to abandon for ourselves what we so prized for so many other nations and peoples—nations much weaker and smaller than ourselves and with far less experience of self-government? We should reject the stability pact and all that goes with it.
I come now to an entirely lesser matter of helping the Chancellor out of his difficulty. I intervened on him to tell him that he had a way out, if he was not too stubborn to take it. That way out is simple. Our European partners have indeed cheated on the convergence criteria. I mentioned France, but Italy, Spain and Belgium are all involved in
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open manipulation of and cheating on the so-called convergence criteria. However, something like two of the four convergence criteria have already been abandoned.
One involved being a member of the ERM within the narrow band of 2.5 per cent.—but that whole system has been scrapped, so that criterion can no longer be observed. In addition, is it not clear that, although the 3 per cent. criterion is still being partly adhered to, the 60 per cent. criterion is being abandoned? There is no question of Italy, Belgium, the Netherlands or any of the so-called candidate states—apart from Germany, France and Luxembourg—reducing their ratio of national debt to gross domestic product in the one year that is left. In some countries, the figure is 120 or 130 per cent. We know perfectly well that those countries will not observe the criteria.
The Government could say, "We don't think you are entitled to join. We don't think that it would make a sensible, strong euro." But that will be decided by qualified majority vote, and Britain does not have a veto to prevent any such candidate country—however fudged the criteria may be—from joining the single European currency.
Other than the political restraints within his party, the Chancellor has every reason to say no to Britain joining the European single currency, to say it now and to maintain that opposition throughout the next Parliament. The same applies to my right hon. Friend the Member for Dunfermline, East (Mr. Brown), who knows that there has been no convergence of the real economies.
5.50 pm
Mr. Douglas Hurd: The right hon. Gentleman always speaks eloquently and in tones of certainty. He speaks now in December 1996 as if he knows what the position will be in December 1997 or the spring of 1998. I think that that is wrong. Next year will be a year of turbulence and uncertainty right across the argument. This year began with doubts about whether the timetable and criteria for economic and monetary union would work. We passed through some months of total confidence, and now doubts are returning.
There are two certainties. First, if the single currency comes about, it will affect us greatly whether we are in or out. Secondly, if it goes ahead, it is in our interests for it to be well constructed and to succeed. It is not in our interests to be surrounded by the chaos and bad-tempered confusion of an abortive currency scheme. That could undermine the single market, which is the greatest achievement of the European Union to date, and is still incomplete.
I have never been an advocate of the single currency. It was planned as the latest in a series of great leaps forward in the integration of Europe. It is a gigantic leap. Currency stability is a sound aim of policy. It is now the fashion to extol wholly floating exchange rates, but retired Ministers do not have to be fashionable. I am sure that Europe needs a system with a bias towards currency stability, but that system should not impel a country to defend a particular exchange rate when economic reality has condemned it. When the memories of the last, partly mismanaged, tightly reined exchange rate mechanism have faded, we shall look again for such a system.
At Maastricht, instead of a flexible system, all those present—except us and the Danes later—plumped for a drastic, inflexible system. That political solution provides that, at a date to be fixed by political decision, every

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citizen in every high street in Europe, including Germany, France and Britain, will be told that what he or she has in his or her purse is trash. It assumes that, despite most of the present evidence, the economies of the nation states will converge and, more difficult to achieve, will stay converged. No one proposes what so alarmed my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). No one would tolerate the huge increases in the European budget that might be necessary to keep convergence in place.
The single currency is a drastic proposal. It is right that if the British Government in the next Parliament—or at any time—decided that it was in the national interest for us to join, there should be a referendum. I am glad that the Government finally decided that they would hold a referendum, and that slowly and in a bedraggled way the Labour party has also taken that view.
One cannot be certain about where the national interest lies. Probably—not certainly—the euro will go ahead. No one can tell what its impact would be on our prosperity if others went ahead and we stayed out. I do not know of a single British institution that is not divided on that issue. Industry is divided, the City is divided, the Trades Union Congress is divided, the Labour party is divided and, occasionally, if I am right, even the Conservative party is divided on that issue.
Many people speculate, but the truth is that we do not know whether our economy and our prosperity would begin to lose blood. We do not know whether we would begin to lose investment, jobs and national prosperity. If there were such a haemorrhage, we do not know how great it would be, or whether it would be great enough to counterbalance the political arguments against a single currency, which are strongly felt, not just in parts of my party.
It would be rash, therefore, for people to say at the coming general election that, without any qualification, come wind come weather, they would never support the entry of this country into a single currency. I strongly support the line that was taken by the Cabinet this spring and reaffirmed by senior Ministers in the past few days.
As my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) said, we must consider this matter against the background of the part we play in Europe. It was disappointing that the right hon. Member for Dunfermline, East (Mr. Brown) did not attempt to do that. It is difficult to do so, partly because of the lamentable state of reporting of these matters in our press. Politicians are scared of attacking the press, but again ex-Ministers do not have a great deal to lose. In my experience, it is not possible to read in any of our broadsheet newspapers—except one—anything like a full, plain, factual account of what happened yesterday, whether in Paris, Bonn or Brussels. There is plenty of opinion and gossip, and there are some fine columnists, but factual reporting is thin and trivial.
I shall give one example of that—I could give many. It is difficult to find in our press reports on the liberalisation process within the single market. The Commission and the European Court are our allies in that liberalisation, however imperfect it may be. The prising open of telecommunications, aviation, electricity and, I hope, gas is a huge advantage to British enterprises that are already liberalised. British Airways is a classic example. It is subtly and energetically using the prising open of the
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continental market achieved by the Commission and the court, and it is seizing every opportunity to pounce and to move in. It is not put off by the caricature of Europe, which supposes that we will always be isolated and defeated.
I have always been against pushing the process of integration to a fully integrated united states of Europe. Many hon. Members and I have seen the reef—a barrier of rocks under the water. That barrier reef is the loyalty that most people—not just in Britain—bear to their nation and its ways. It is not true that we are alone. What defeats me so often in these arguments is the wrong assumption that we are alone and isolated in our feelings. That barrier reef exists in France, Germany and in all the Scandinavian states.
I would be delighted if I were told tomorrow that all the leaders of Europe were aware of that reef and were determined to avoid it, and that their main concern was to carry through what we have already undertaken but not completed: liberalisation in the single market, the enlargement of our Union to the east and co-operation on foreign policy so that we can be valid partners of the United States on important issues.
The priority for Europe should be to make a success of the present before launching further into the future. The arguments that Ministers have made over and again—particularly in the White Paper this year—are valid. They are weakened, perhaps crippled, by the trivial, distorted nature of much of the debate in Britain. My right hon. Friend the Member for Old Bexley and Sidcup is right. We are trying to achieve something that is new in history. The United States and Germany are not the models. We are trying to reconcile the identity of European nations with their working together far more effectively than ever before—the ever closer union not of states but of peoples. I believe that that is what most people in the House and in Britain want, and the main danger to realising that is that we shall be defeated by our own defeatism.
Mr. Tam Dalyell: On a point of order, Mr. Deputy Speaker. One of the difficulties of 10-minute speeches is that distinguished former Ministers can make statements that are factually not true. The Trades Union Congress is not divided.
Mr. Deputy Speaker (Mr. Michael Morris): Order. We are not debating the 10-minute rule now.
6 pm
Mr. Malcolm Bruce: The debate has been characterised by a great deal of uncertainty and division across the parties, certainly the two larger parties, and in the country. That lack of purpose is a matter of concern. At least the Liberal Democrats have a clear position on a single currency. We believe that a well-formed single currency would be in Britain's national interest. It would help us to cut interest rates and transaction costs and it would help our trade.
The Chancellor gave a robust explanation of what he believed the potential advantages would be, and we concur with that point of view. To some extent, the current level of interest rates across Europe confirms that view. We have the highest long-term interest rates in Europe, with the exception of Greece. Even Italy, Spain and Portugal have lower interest rates than Britain.

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That is partly a sign of the failure of the Government's economic policy, but it is also a sign that long-term investors in the United Kingdom do not believe that we shall pursue the stable, consistent economic policies to which those most committed to monetary union have declared themselves committed. It makes a fundamental difference.
Those who make passionate statements about what they are against in the frame of monetary union have some obligation to explain how they believe that Britain will operate differently outside and what the benefits would be. Mostly, they articulate the negative rather than the positive view of being outside.
Sir Teddy Taylor: Will the hon. Gentleman give way?
Mr. Bruce: No. I do not have much time and I do not wish to detain the House.
The arguments for and against monetary union, where they are genuine as opposed to rooted in a totally rigid preconceived position, are well known. Therefore, I shall concentrate on the three current most topical issues—the convergence criteria, whether they could be fudged and what that would mean, the stability pact and monetary policy.
The convergence criteria have been well discussed and argued as being good housekeeping agreements by those who seek to prepare themselves for monetary union, which needs to be followed with a degree of firmness and genuine commitment. At the moment, one of the arguments in the Conservative party, which may be designed to lighten the divisions, is that the convergence criteria might be fudged. Those on the extreme anti-monetary union wing of the Conservative party say that they definitely are being fudged and that that is their rationale for suggesting today that we should declare that we want no part of it. Those on the other side may be grasping at the idea that the possibility that they might be fudged is some kind of argument for leaving the option a little blurred.
The reality is—I challenged the Chancellor and he gave me a fairly straight answer—that if the convergence criteria are to be strictly applied, and Germany for one is saying that they must be, and if the United Kingdom were to meet those convergence criteria, which is by no means as certain as some hon. Members suggest, the benefits to Britain in being a founder member of the euro zone far outweigh the disadvantages. It would be a unique opportunity for the United Kingdom to be in on the ground floor of a European enterprise for the first time rather than to be dragged in struggling, kicking and screaming at a later date. That is extremely important.
The Government's position is not quite clear. The position that the Chancellor articulated was that there are real advantages and if those two criteria were met, he was clear that he could argue that it would be in the British national interest to be a member. It is not at all clear whether he has the Cabinet behind him on that.
We are entitled to know the circumstances in which the Government would exercise their opt-out to opt in. The paralysis of the Conservative party and the Government stems from the fact that they are so internally divided that no one but the Chancellor seems capable of expressing a
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view on that. That is greatly to the weakness of Britain's negotiating and bargaining position. That is at the heart of why the Prime Minister was forced to admit in his interview on Sunday that the divisions within his party were damaging the British national interest and weakening our negotiating position before monetary union. Therefore, I do not believe that opting out, as some member states want, would benefit the Conservative party. Failing to explain the circumstances in which it will opt in is serving neither its interests nor the national interest.
There is no doubt that none of us believes that a monetary union that goes ahead on the basis of blatantly fudged criteria is likely to be sustainable. In a sense, the trumpeting of the merits of the opt-out is slightly overblown in that there is no real suggestion that any member state would be forced unwillingly into monetary union if it were deemed that in so doing it was being asked to accept criteria which other member states knew had been severely fudged—no one favours that—but if they are sustained and we qualify, we should join.
Because the convergence criteria are so important to the determination of who is eligible and whether monetary union is likely to be sustainable, it is inevitable that there should be discussion of a stability pact. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) is right on that count. Simply to determine on an instant in time that a number of member states have achieved an agreed set of criteria which makes them eligible to join monetary union and for that union to go ahead should not be the end of the matter. The conditions under which new members should join as monetary union grows then have to be determined, and those members within monetary union should determine their relationships with each other. That is perfectly rational and some of the more extreme elements of the Conservative party are simply wrapped up in a lather of phobia about this, without recognising that there have to be agreed principles in order for there to be business-like arrangements. Therefore, there needs to be a stability pact and it needs to be firm, not blurred at the edges.
There should also be some discretion within that pact. Its purpose is to stop nations backsliding into bad old ways. If they do not have the option of competitive devaluation, about which some Conservative Members seem so enthusiastic, they must clearly operate on other criteria and the level of borrowing is a significant factor.
Why should those countries which, for example, have qualified well under the GDP-debt criteria of 60 per cent., be constrained to the same degree as those which have qualified above those criteria but are moving down sharply? It is reasonable that the stability pact should differentiate between countries that have got their GDP-debt ratio down much further than others at the time of membership. The treaty is clear that 60 per cent. was never an absolute criterion, but an objective to which all applicants should aspire and be moving rapidly towards. In those circumstances, it might be possible to say that a country that had got its GDP-debt ratio down to 50 per cent. might, if it so required and if it were agreed by the other members, run a budget deficit of, say, 4 per cent. and not be strictly tied to a 3 per cent. deficit.
Within that context, there has been discussion of the role of monetary policy. It is unsustainable to suggest that the creation of a single currency unit automatically leads to the abolition of sovereignty. It is a pooling of

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sovereignty. It is an agreement to share certain decisions in common, in particular the setting of interest rates. It is an interesting comment on the British style of economic management, as contrasted with the continental style, that politicians of both Labour and Tory persuasion seem anxious that they should have the opportunity to interfere in the short-term strategy of interest rate setting, even though the record shows that such interference nearly always damages the long-term interest of sustained recovery and growth. The short-term intervention of successive Chancellors, Labour and Conservative, has created the UK's boom-bust climate. The absence of that facility has contributed significantly to the much more constant and sustainable growth that, for example, Germany has achieved.
Having said that, I believe that whether Britain opts in or out, we should be considering moving the central bank from its position of current transparency to genuine operational independence. That needs to be done whether or not Britain joins in the first wave of monetary union.
Even if we decided to stay out in the first wave, we would presumably continue to monitor our position and, effectively, remain an applicant. Sooner or later, we would by treaty be obliged to create an independent central bank, but in any case the markets would be highly suspicious of an economy that had qualified for monetary union and then refused to join it.
Therefore, it would be highly desirable for us to give a clear signal to the markets that we are not going to take advantage of the position in an irresponsible way and that, as a measure of our good faith, we are going to make our central bank independent. I suggest to Front-Bench teams that it would be extremely beneficial if both could pledge to the House today—although, disappointingly, I do not expect them to do so—that the operational independence of our central bank will be in the next Queen's Speech, whoever wins the election.
The Chancellor made a good case for keeping Britain's option open on monetary union, but unfortunately he made it—this was apparent from the Opposition Benches—against the background of a party that has already closed its mind. He remains clearly of the view that monetary union might be in Britain's interest. He can envisage circumstances where signing up in the first tranche would be in Britain's interests, but many in his party have decided, not because they think that it is in Britain's interests, but because they think it is in their party's interests, to close that option and to leave the Government effectively defenceless in the negotiations.
The sceptical members of the Conservative party are trying to put a fudge on a fudge. The whole point about the opt-out was that it was a fudge to try to placate the Euro-sceptics in the Conservative party. The problem with the Euro-sceptics is that the more the Government give them, the more they want. It is absolutely clear that the opt-out is not good enough. They want it to be exercised now and in so doing they want the national interest to be thrown to the winds.
As the right hon. Member for Witney (Mr. Hurd) made absolutely clear, it is not possible to determine now exactly who will qualify, on what terms, whether it will be viable and whether it will be in the British national interest to join. What is clear is that there is a political determination among the main players in Europe to be part of monetary union. Britain must think carefully about
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the extent to which our national interest would be well served by qualifying, by seeing others qualify and then by exercising our option not to be part of that monetary union. That would be a betrayal of Britain's economic interests. It would be a lack of vision and a narrowness of appreciation of the fact that Britain's future is bound up in Europe whether we are in or out. Being in gives us a hell of a lot more influence than being out ever will.
6.13 pm
Mr. Norman Lamont: Since the Maastricht treaty was agreed four years ago, the House has had many opportunities to debate monetary union and the question will not go away, although I am sure that the Government wish that it would. European politicians have performed their primitive rain dance and, contrary to the predictions, the first few drops of rain are beginning to appear.
The Government have had four years to develop their position, years that saw the Danish referendum and the tortured passage of the Maastricht Bill through the House. Our economic performance conclusively demonstrates that Britain can prosper without an exchange rate link to Europe. All that might have been a reason for the Government to have moved confidently towards saying no to monetary union.
The Government risk being left powerless to lead the debate on Europe at the general election. In contrast with the Labour party, they say that they are against political integration. It is not entirely credible for them to be opposed to making Britain part of a federal Europe and at the same time to be neutral on the most important move to a federal Europe ever proposed.
I understand the Prime Minister's predicament, but in Britain there is a legacy of distrust and a sense of betrayal over Europe. I welcome the fact that the Prime Minister said at the weekend not only that the convergence criteria should not be fudged, but that convergence must be lasting. As lasting convergence cannot be demonstrated in advance and as, in fact, it will not be achieved, I took that as a signal that the Prime Minister is moving towards saying no to a single currency, and so he should.
As my right hon. Friend the Member for Witney (Mr. Hurd) said, Europe is taking a monstrous gamble—a huge unprecedented risk. The convergence criteria are really financial criteria designed to stop Germany, having to be responsible for Italy's debts. The criteria do not tell us anything about real economic convergence.
The conditions for a single currency in Europe simply do not exist. A natural currency zone—normally a country—has to be both a single and a flexible labour market. Europe's labour market is neither single nor flexible. The most important barriers in Europe's labour market involve the fact that Europe consists of different countries. Someone who has been made unemployed in Motherwell going to Brescia or to Germany to find a job is a completely different matter from someone who has been made redundant in New Jersey going west to find work elsewhere in his country.
The labour markets in individual countries in Europe are notoriously inflexible. I think of the non-portability of pensions, job protection regulations and social security entitlements. Everything that Europe does makes that worse and a single currency would make it worse still.

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With monetary union, there will be one interest rate for the whole of Europe. Surely the lesson of our experience in the exchange rate mechanism was that it is difficult to set a single interest rate for a whole continent, with different economic conditions in different parts.
The Government say that they will not make up their mind until the last moment because they want greater influence. It is a curious logic to think that other countries will be remotely influenced by a country that cannot persuade itself what it wants to do. The trouble with a wait-and-see policy is that it assumes that there is no fundamental issue of principle involved in monetary union, but a profound principle is involved: can a country continue to be independent and self-governing within monetary union?
The Chancellor of the Exchequer thinks that no such dilemma exists, but the Prime Minister recognised it when he said that the possibility of a single currency was
"the greatest constitutional question to face this country this century".
I quoted to the Chancellor what the president of the Bundesbank and another of its members have said. European politicians are completely open in arguing for monetary union on the ground that it will lead to political union. Not so long ago, I took part in a public debate in Switzerland with Karl Lamers, a European spokesman in the Bundestag and a close friend of Chancellor Kohl. I stated my opposition to monetary union on the ground that it would lead to political union. When Mr. Lamers began his speech, he said, "I am not sure that there is anything to discuss. Of course Mr. Lamont is right. That is why we Germans want monetary union." Whether the Chancellor of the Exchequer recognises it or not, that is what is felt by many continental politicians.
Part of the debate has been about the stability pact. Some of my hon. Friends worry that it will not be enforced and others worry that it will. They are all right. It will be a disaster if it is enforced and it will be a disaster if it is not.
The risks of being in the single currency are far greater than the risks of being out. Britain has nothing whatever to fear from being out. The City of London already trades more deutschmarks than are traded in Frankfurt. There is no reason why, outside the single currency, London should not be the centre of trading in euros.
Increasingly, the only argument for the single currency—it resembles one argument for the EU that is increasingly advanced in desperation—is the feeble one that if we are not part of it, others will discriminate against us. The very same people who tell us that Europe is liberal, outward looking and free trading hint darkly that if we do not go along with its plans, Europe will find a way around GATT and the treaty of Rome to make life difficult for us. That is an argument not for being at the heart of Europe but for having nothing to do with the single currency.
Far from being afraid, Britain should welcome the opportunity to go it alone in monetary affairs and to set an example of what can be achieved with an independent Bank of England and a competitive, deregulated economy, especially to create jobs for the unemployed.
The Europeans support monetary union on the basis of politics, not economic analysis. The mystery is why European politicians are so obsessed with political union.
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In his recent Harold Wincott memorial lecture, the Spanish economist Dr. Pedro Schwartz said that he sometimes thought that the Common Market had not been
"founded in Rome but in Vienna, on Dr. Freud's couch".
He said that the Germans wanted the Union to stop them falling into Nazi ways; the French wanted to be cured of an inferiority complex; the Italians wanted to become a nation; the Spaniards wanted to bury Franco; the Portuguese wanted to be French; and the Greeks did not want to be Turks.
The trouble is that it is not just the Europeans who have their neuroses; we British have them too. We have been bullied into believing that we can prosper only through Europe. We are told that millions of jobs depend on the European Union. Millions of jobs may depend on European consumers and markets, but no business actually sells to an organisation called the European Union. The Swiss, the Norwegians, the Japanese and the Americans have all increased their exports into the European Union just as quickly as we have.
There is no reason why Britain should not prosper outside a single currency or in a semi-detached relationship with Europe. Our prosperity depends on the efforts of our people and our Government. We should not just be trying to halt the drift towards a European state; we should be trying to reverse it. It is not sufficient just to say no to more powers for the European Parliament and the European Commission. We should be repatriating powers to national Governments.
The British Government say that they want a Europe of nation states, but is Europe really interested in being a Europe of nation states? A Europe of nation states would not seek to weaken our anti-terrorist laws. It would not promote anti-smoking campaigns nor would it have 100 embassies around the world. Should we be surprised by that? Chancellor Kohl has told us that the day of the nation state has passed and nation states cannot solve the problems of the next century.
We are not winning the argument in Europe. There is a fundamental, irreconcilable difference between what we want from Europe and what the Europeans want from Europe and one day that clash will have to be faced and choices made.
6.23 pm
Mr. Giles Radice: I congratulate both my right hon. Friend the Member for Dunfermline, East (Mr. Brown) on his speech and the Chancellor, who gave us a fine exposition of the pros and cons of the single currency.
Like my right hon. Friend the Leader of the Opposition, I congratulate the Prime Minister on his "On the Record" interview on Sunday. Although I considered him far too negative about the British negotiating stance at the intergovernmental conference and about the prospects for the intergovernmental conference, I agreed with what he said about the importance of British membership of the European Union and the need for Britain to keep open the option of joining the single currency.
Indeed, it is a pity that the Prime Minister has not given a few more interviews such as that one and made a few more speeches in the same spirit. Had he done so, the Tory party might not be in such deep trouble about European issues. The problem is that the so-called

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Euro-sceptics who are scheming away on the Conservative Back Benches think that they can push the Prime Minister around and make him change his political position. That is what the article in last Monday's The Daily Telegraph was all about. No doubt in the new year they will make another attempt to change the policy. That is bad news for Britain.
I should like to warn the House against the unholy alliance of Europhobic ideologues—we have just heard from one of them—blatantly biased newspaper editors and owners—I do not see any of them in the Press Gallery, but it is typical that they do not want to listen to the debate—and ambitious Conservative politicians who seek not only to capture the Tory party, but to subvert the national interest.
Let us make no mistake about it, for all their occasionally comic aspects, the so-called Euro-sceptics are dangerous people. The term Euro-sceptic is a total misnomer. If they were truly Euro-sceptics, they would approach the IGC pragmatically and want to keep open the option of joining the single currency—as poll after poll shows the majority of people do. If they were truly Euro-sceptics, they would be in favour of compromise and of a constructive relationship with our European partners.
The only genuine Euro-sceptic speech was made by the right hon. Member for Witney (Mr. Hurd), the former Foreign Secretary. He is a Euro-sceptic; the rest are Europhobes. They hate the European Union and all its works. They distrust anything from Brussels and they blame Brussels for almost anything that happens here. In their heart of hearts, many of them still believe that, far from being good democrats, the Germans still wear jackboots. We hear that occasionally from the hon. Member for East Lindsey (Sir P. Tapsell), who once talked about Panzer divisions. That is quite disgraceful.
Unfortunately, those people are uncritically backed by the Murdoch and Black press. Those powerful combines should declare their interest. One would never know from reading The Sun or The Times that they were owned by an Australian American who has a commercial interest in keeping nations weak and unco-operative. That is the reality that we never hear. One has to ask how credible the Canadian-owned newspaper, The Daily Telegraph, is as a judge of the British interest.
Those newspapers consistently pump out anti-European propaganda. They are a disgrace to the British press. They suppress any debate about the European Union. One has only to ask pro-European Conservative Members how easy it is to get articles or their letters into The Times or The Daily Telegraph. It is almost impossible. I was amazed that The Times actually accepted an advertisement from the European Movement, signed by hon. Members on both sides of the House. I hope that that was a turn for the better. Journalists and editors who work for those newspapers should start to examine their conscience and what they are doing for a free press in Britain. Above all, we should be aware of the motives of the leaders of the anti-European faction in the Conservative party.
Of course, there are genuine anti-Europeans, such as the hon. Member for Southend, East (Sir T. Taylor) and my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), who have always been against the European Union; there are genuine sceptics, such as my pair, the right hon. Member for North Shropshire (Mr. Biffen); and there are the genuine resigners on
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principle, such as the right hon. Member for Wells (Mr. Heathcoat-Amory), whom I respect for it; but I must query the credentials of hon. Members such as the right hon. Member for Wokingham (Mr. Redwood). One would never guess from listening to him—and we do so quite a lot—that he headed Mrs. Thatcher's policy unit at the time of the signing of the Single European Act, which not only introduced the single market but greatly increased and strengthened qualified majority voting. One would never guess from his present stance that he was in the Government who took the Maastricht treaty through the House.
One would never guess from listening to the right hon. Member for Kingston upon Thames (Mr. Lamont) that he was at Maastricht negotiating the opt-out. If all is as he has said, why did he not resign from the Government or insist on Britain using its veto? That is the logic of his position. He tells us now how terrible everything is, but I listened to his speeches and he was not saying that at the time. We should examine the records of such right hon. Members, and they should examine their conscience and what they are saying now.
I have a message for my own party. Labour Front Benchers are absolutely right—I congratulate my party on it—to stick to the policy of keeping the option open of joining the single currency in the first wave, if we think that it is right to do so. We are also right to say that a deal is waiting to be struck at the IGC. It is not a difficult deal to make, but it will very much be in Britain's national interest. The Conservative party cannot make a deal because it is so hampered by the Euro-sceptics on its Back Benches.
Contrary to press reports and what has been suggested in the debate, my party is overwhelmingly united behind the party policy that was agreed at conference and, as my right hon. Friend the Member for Dunfermline, East said, in a ballot of all members. Our supporters will be strengthened by representation in the House after the next election because the young candidates are all pro-European. I regret to say from a personal point of view that some older anti-European Members will leave.
I believe that European policies need to be carried through the House on a cross-party basis. One of the Prime Minister's biggest mistakes has been to rely solely on the Conservative majority. That majority has been threatened by the Euro-sceptics and has now disappeared. There is a European majority in the House; in the right circumstances, there will be a majority in favour of a single currency. There is certainly a majority in favour of a positive European approach, although we never hear it fully, because it is suppressed and subverted by the Euro-sceptics, who do not speak for the majority of the House or—I believe—for the majority of the country.
The prototype for the approach that we should be taking is represented by the all-party European Movement, of which I am fortunate to be the chairman. A number of other hon. Members are also officers of it. We placed an advertisement in The Times—the hon. Member for Gillingham (Mr. Couchman), who is in his place, signed it—which described what I believe is a prototype. If I have a single message to send to my party, it is this: if we are to be successful when we are in government after the next election in promoting the British interest in the European Union, we need to mobilise the widest possible cross-party alliance for our European policies.
6.33 pm
Mr. David Howell: I do not share the terrors of the objectives of the stability pact that the right hon. Member for Bethnal Green and Stepney (Mr. Shore) expressed in his passionate and eloquent speech, because I have always believed that rigid monetary and fiscal discipline is the key to prosperity, growth and jobs. We are benefiting today in this country from that austere approach. That is what I have always argued—except perhaps during a flirtation with Keynes in my student days.
I have never believed that competitive devaluation is the easy way out. Oddly, it might have worked—although I do not think that we yet have the full story—when we were most recently bounced out of the exchange rate mechanism, but I do not believe that it worked very successfully throughout the post-war period. It was a desperate remedy to try to compensate for a basic lack of enterprise and firm government by successive Governments, especially the disastrous post-war Labour Government, who got us off to such a bad start after the second world war, from which it has taken us 50 years to recover.
It seems like only yesterday when some of my right hon. and hon. Friends agreed with me that the key was monetary and fiscal austerity and discipline, yet suddenly, they are implying that the disciplines that would be imposed by the Maastricht convergence criteria—which are very disciplined—are undesirable and not the key to economic equilibrium and growth. I am not quite sure why they have undergone that U-turn, given that they believed so strongly—as I do—that the key to good economic policy was monetary and fiscal discipline and encouraging enterprise as much as possible.
I should like to make three assumptions that are almost predictions. First, the euro project will take place. A group of countries, probably including France, will pass the selection criteria in 1998 and get going on 1 January 1999. In July 1999, about six months later—this is the latest version of a little bit of fudge—Italy, Spain, Portugal and possibly Sweden will enter the single currency as well. We must start from that fact—amidst all the adversarial comment, this debate has struck some constructive notes—and ask ourselves how we shall address it.
Secondly, I do not believe that we should be in the first wave. I do not think that we shall be, although Labour Members might deny that. I do not envisage this country joining that first wave in January 1999 in whatever form it takes, although there will certainly be such a wave on that date.
Thirdly, it seems that the choice is really between a weak euro and a very weak euro. The latter is a danger to us all. The prospect of monetary chaos, which would spread far outside those in the inner core and members of the single market such as ourselves to world financial markets, is extremely worrying. It is not at all in our interest to stand back and see that develop.
Although I may not agree with all his nuances, I share the view of my right hon. and learned Friend the Chancellor—he expressed it clearly—that we must play a strong role in the monetary situation regardless of whether we are in or out. Incidentally, I found some of the
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barracking and baying behind him during his speech, as opposed to the honest interruptions, rather repulsive. I personally believe that we can probably play a stronger role from outside than we could by opting in, but a strong role we must play. The idea that one can stand back, that somehow an independent sterling policy can be operated and that sterling will not be implicated in what others are up to, whether in the stability pact or under other arrangements, is nearing the land of the cloud cuckoo.
There is no possibility of our not being implicated through the exercise of international capital markets in what happens to the euro. As I said, not only will it be extremely bad for us if a very weak euro tries to take off and comes crashing down, but international capital markets will be watching even if it is less unsuccessful. They will consider the pound, and while Members of Parliament think that it is wonderful that we are not bound by the stability pact and are somehow free, there will still be rebukes issued under the surveillance system and the monitoring. Those rebukes will be noted by international capital markets and punishment will be visited on any currency, including sterling, if it has diverted from what are called the convergence criteria but are actually the criteria of sensible, orthodox monetary and fiscal behaviour. Those rebukes will be swift and just as painful as any sanctions and punishments.
The idea that we could stand outside is like our dear old friends in the Lambeth Labour party making the borough a nuclear-free zone, as if when the holocaust came, it would not hurt them. Likewise, when my right hon. and hon. Friends seek to have written on the face of the treaty some protection, it is equivalent to asking that when the rain rains on everybody else, it does not rain on them.
We have to face the detailed involvement into which we have already been sucked. That may be a matter for regret and it could be argued that treaties should not have been signed and that mistakes have been made, but we are involved and we must address the policy needed to pursue our national interest in that entirely new context. That is why I support the German attempts to have a strong stability pact—we should support them from outside—and why I believe that we can, by staying out, play a strong and leading role with those inside. My right hon. Friend the Member for Witney (Mr. Hurd) wisely warned us—some people are living in a world of illusion—that we shall shortly have to face the question of our relationship with that pact. Will the pact be an exchange rate mechanism mark 2—the very words cause apoplexy in some of my right hon. Friends—or will we take a lead in some other type of more flexible central rate shadowing without intervention, of the kind that is being discussed especially in the Bundesbank?
All I ask my right hon. and hon. Friends to do is not to live in the world of illusion where they think that there are copper-bottomed guarantees that we can stay clear—there are not—or where they demand that protection is written into the treaty, because it will not be. We shall be deeply involved and we must have a firm policy for our currency to ensure, first, that we play a good role in Europe and see that chaos is prevented from coming to a disintegrating Europe—and that has always been one of the dangers of the single currency project, which I oppose—and, secondly, that we promote our interests and keep control of our internal domestic affairs, which could be bitterly and directly affected by currency chaos.

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The policy of waiting and seeing should include a strong wait and a strong see. We are right to stand back from this dangerous project. I see great dangers ahead, but we, as a leading European power, need to play a responsible, constructive and positive role in facing the situation.
6.41 pm
Mr. Tam Dalyell: During the period in which the right hon. Member for Guildford (Mr. Howell) was flirting with Keynes—to borrow his picturesque language—I was the lowly parliamentary private secretary to the Leader of the House, Richard Crossman, who was sent some 30-odd years ago to find George Brown on the night of the gold crisis. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) will recollect that that was vividly recalled in Mr. Crossman's diaries. Such an experience makes me into one of those, tagged by the Chancellor of the Exchequer this afternoon, who would have us sign up to EMU this proverbial weekend. No wait, no see. We should take the plunge and get on with it.
In that view, I am sustained by the trade unions. The right hon. Member for Witney (Mr. Hurd), the former Foreign Secretary, was wrong, because the Trades Union Congress statement has gone unchallenged. I am also sustained by employers who operate from Scotland, not on a British basis but on a European basis. Part of the reason why I speak as I do is that every week I travel by the Edinburgh-London shuttle and I sit next to people who are going to Brussels, Dusseldorf, Milan and Frankfurt to do their business in a wider context. Those people influence me greatly. I am also influenced greatly by my excellent local Member of the European Parliament, David Martin, who has done a study in depth of the issue.
The problem is that we are not operating in a vacuum. If we were to start from scratch, there would be arguments on both sides, but the fact is that EMU will go ahead if Germany is willing and France is able—and that seems increasingly likely. In 1999, 12 or more member states, including Ireland, could join the first wave of EMU, because the convergence criteria are not as rigid as they appear. There is no binding rule that countries must have a maximum of 3 per cent. deficit and a debt ratio of 60 per cent. Those are reference values inserted into a protocol and not the main text of the treaty. There are a number of loopholes. If countries are reducing debt or deficit, they do not have to reach the magic figures. If Governments are investing rather than spending, that allows further leeway. The Commission is also required to take account of other relevant factors, including the medium-term economic and budgetary position of member states.
I believe that economic and monetary union could be balanced by an employment union. The Swedish Government, backed by Labour in Europe, argue that the intergovernmental conference should add an employment chapter to the new treaty. That would commit the Union, first, to enable all men and women to attain a secure livelihood through freely chosen productive employment; secondly, to do something about long-term unemployment and social exclusion; thirdly, to ensure that demand grows at an adequate rate to ensure sustainable growth; and fourthly, to promote flexibility by providing workers and job seekers with the skills to adapt to a constantly changing economy. For any Labour Member of
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Parliament, those are extremely important ends. The TUC argues that if EMU goes ahead, it will have a fundamental effect on the UK economy, whether we are in or out. We should therefore be in the first wave and helping to write the rules to ensure employment and prosperity for all Europe's people and for future development.
The real question for Britain is not whether a single currency is good or bad, but rather whether we can afford to stay out when other leading European Union countries go ahead. What we need is a genuine and sustainable convergence. I shall also be blunt. I would be relaxed—but some of my colleagues would not—about the condition for an independent Bank of England. I do not see that as a bogey or as an impediment to a Labour Government. The sooner we get ahead with a single currency and make up our mind that we shall be in it and enthusiastic about it, the better.
6.47 pm
Mr. Tim Renton: I also wish to congratulate my right hon. and learned Friend the Chancellor of the Exchequer on his robust speech this afternoon, which went into the details of the advantages and real disadvantages of joining economic and monetary union.
I am one of those who feel that it would, at this early stage, be totally crazy to throw away our option to participate in forming the terms of economic and monetary union, whether or not we join. In saying that, I wish to point out to Opposition Members, who seem to think that there are no interested, positive Europeans on the Conservative Benches, that I am the fourth Back Bencher now to speak along those lines. We are not all Sir Buftons who have been wheeled out to make those comments: we do so because we believe in them solemnly. I believe that a large majority of the Conservative party also believes in them, although among the exceptions is my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont)—an old friend of mine, who is unfortunately absent from his place—who takes a different view. I think that he is wrong, and that he is in the minority. The other Conservative Back Benchers who have spoken so far represent the sensible, positive majority.
Mr. Denis MacShane: Will the right hon. Gentleman give way?
Mr. Renton: I have no time to give way.
Like my right hon. Friend the Member for Witney (Mr. Hurd), I have concerns about the single currency, but I feel strongly about the subject because I look back in history. I remember well that, twice at the beginning of my political life, under Macmillan, we made approaches to join the single market, some seven or eight years after it had been founded, and we were rejected by de Gaulle.
In consequence, by the time we joined in 1972, many of the rules had already been decided, including those of the common agricultural policy. We have been arguing and fighting against those rules that were decided before we joined, and paying for them ever since. That is precisely what we do not want to happen on this new, extremely important occasion.
My right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) suggested that it would be good if some of us came forward with one or two positive ideas

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in the debate, apart from the grand scale of ideas. Yesterday, the Bank of England published a little book called, "Introduction of the Euro—What does it mean for business?" It was produced for the joint Confederation of British Industry and the British Chambers of Commerce workshops on EMU this month. I heartily recommend it to anyone who has not yet read it.
Given that there is likely to be a referendum on the subject at some point after the next general election, it would be sensible of the Treasury to ask the Bank of England to produce a booklet spelling out fairly the advantages and disadvantages of EMU, to be distributed to every household in the country before the next election. Only the Bank of England can do that, because it is not politically driven.
Our constituents need to know the facts. Of course, a large amount of hypothesis is still involved, because we do not know what will happen after 1999, but they should have an objective summary of the current situation produced by a respected body such as the Bank of England. I hope that my right hon. Friend the Chief Secretary, who is on the Front Bench at the moment, will take note of that and pursue the idea.
My right hon. Friend the Member for Guildford (Mr. Howell), for whose financial knowledge I have a great deal of respect, hinted that he did not think that we could join in the first wave. If we do not, there can be no certainty that we could join in the second wave after 2002. We cannot take that for granted, for the simple reason that, if we met the criteria, our application would have to be decided by qualified majority voting at ECOFIN, and there would have to be unanimity on the rate of conversion between sterling and the euro.
Despite the remarks of my right hon. Friend the Member for Kingston upon Thames, it is possible that, by that stage, the Korean and Japanese companies that are currently investing heavily in this country—the House should remember that, in recent months, Korean and Japanese investment in our manufacturing industry has run at a staggering $1 billion a month and in some months has reached £1 billion a month—might decide that, with us out of EMU but EMU working on the continent, they should put their new plant in Leipzig, Marseilles or Barcelona rather than here.
It would be perfectly understandable if some of the countries in EMU decided that it was going along very well without us and that that would be a real reason for trying to keep the British and other countries out, just as de Gaulle did in the 1960s. We cannot take for granted our ability to get in on the second wave.
That leads on to the question whether we can have a truly effective single market—we all agree that that is necessary—without a single currency throughout that single market. We are understandably pleased with the results of the devaluation of sterling a few years ago, just as the Italians are pleased with the results of the devaluation of the lira. It has had a huge improving effect on our trade figures. The converse of that is the chagrin of the French and Germans, who do not want it to happen again, because it had a bad effect on their trade figures. It is possible to argue that every member of a true single market must be within a single currency to stop competitive devaluations that fundamentally change the terms of trade.
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One does not like to say it too publicly, but the unpleasant obverse of the coin is that, whatever the formal rules, members of EMU are likely in the long run to bend the practice and observation of the rules of the single market to the disadvantage of those members of the European Union that are not in EMU. That point was made by Sir lain Valiance, the chairman of British Telecom, in the recent publication of the Philip Morris Institute, "Is the Single Market working?" He said:
"Some form of supranational monetary discipline may be necessary to realise the full benefits of the single market."
I do not think that the European Union is at a critical stage. Progress on EMU and enlargement will be made in future, but it will be slow and tricky, and there will be quite a few changes of course. Sometimes, the only ones who seem to be in a crisis on the issue are us—the Members of Parliament at Westminster—aided and abetted by a generally anti-European press.
I noted the comments of the hon. Member for North Durham (Mr. Radice). I end by quoting the conclusion of an article that appeared in The Daily Telegraph today—a sometimes anti-European paper:
"At Maastricht, John Major gained an invaluable breathing space that enables us to take part in the formation of EMU without yet deciding whether we wish to join, a negotiating position that we painfully lacked with the CAP. What we must do is use that advantage to the full. We owe it to the electorate."
It is pure chance that the author of that article is me.
6.56 pm
Mr. Denzil Davies: I thought for a fleeting moment during the debate that we had all become Euro-sceptics on the single currency—the right hon. Member for Witney (Mr. Hurd) did not know whether we should join; the Chancellor of the Exchequer did not know whether we should join; the shadow Chancellor did not know whether we should join. For a moment, I thought that perhaps we were winning the argument. Then I listened to the reasonable and rational tones of the right hon. Member for Mid-Sussex (Mr. Renton) and the uncharacteristically strident tones of my hon. Friend the Member for North Durham (Mr. Radice).
Mr. Radice: "Passionate" is the word.
Mr. Davies: Strident.
I came back to earth and realised that the Euro-coalition in the House was alive and strong. [HON. MEMBERS: "Hear, hear."] We all know what will happen after the next election: whichever party wins—I expect it to be the Labour party—the Euro-coalition in the House will use every hook and crook, every stratagem and every fear to try to get Britain over the top and into the single currency in the first wave. I have participated in debates in the House on this subject since 1972. I hear the noises of assent all round me as the Euro-coalition bellows from time to time. They are feeling a little confident this evening.
Because there is an election coming, the Government are peddling the line—especially on the so-called stability pact and the convergence criteria—that we cannot rule out the single currency because we, the Brits, have to be in there negotiating in Brussels or Dublin, or wherever it might be. We cannot really trust those foreigners, say the Government, because, if we are not there, those

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continentals will fudge the single currency. The Chancellor did not say that so much today, but that was his escape route when he made his statement of 23 November: "The Brits must be there because these Europeans will fudge it and it will be a weak currency. We, of course, want a strong currency."
If we are concerned about fudging, I ask myself, why do we not support the Germans? The poor Germans are on their own in wanting a super-strong stability pact to prevent fudging. Apparently, however, we are not supporting the Germans. Apparently we are sitting with the other fudgers—the French, the Italians, the Belgians, the Greeks and the Spanish. Apparently we are against fudging—but we are not dogmatic about it.
The Italian fudge is elegant and tasty, as one would expect. The Italians have created something that they call a Euro-tax, which is a forced loan that will be repaid after 1 January 1999 with credits against income tax bills. The Italians, I suspect, are using the fact that there will not be a stability pact on national debt, and they will convert budget deficits—to get the deficit below 3 per cent.—into a national debt, which can be above 60 per cent. after 1 January 1999 because there are no sanctions on national debt. The French are not quite so good as the Italians, but we know what the French have been doing as well.
I am not sure whether the Chancellor of the Exchequer comes to all this with clean hands, either. If one opens the Red Book these days, it is sticky all over with fudge. Of course, it is not Italian fudge, but good honest British fudge. What is the private finance initiative but a fudge to try to avoid the public sector borrowing requirement? The Treasury has been very clever about the sale of the Army's surplus property, which cannot be said to be a privatisation. If it was a privatisation, the money would not show up in the European system of accounts, and we would not be able to get borrowing down to 3 per cent. We are fudging as well.
The real fudge is not in Brussels or Dublin, but here, as the Government and the Opposition try by every means to avoid a debate on the matter until after the general election. Labour Members should not be surprised that the Tory party wants to keep down public borrowing and, indeed, is prepared ultimately to allow fines against countries that transgress.
However, some of us—perhaps there are not many of us left—are worried. We represent constituencies where the income per head is much lower than the average, even for Britain; where the unemployment rate is higher; where the percentage of families on benefits increases all the time and where fewer people bring in money from employment; and where public expenditure, sadly, is a very high percentage of the wealth and income. Frankly, those of us who still worry about these things worry that the shadow Chancellor, my right hon. Friend the Member for Dunfermline, East (Mr. Brown), is, as we saw today, as keen as the Chancellor on the stability pact and all the paraphernalia of fines and reducing borrowing below 3 per cent.
Some unkind people who have made a textual study of my right hon. Friend's speeches in the past six months might say that he would be sitting with the Germans if it came to a decision on the stability pact. But the coalition
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in the Labour party is now in agreement with the Conservative party on limiting public expenditure, and, in effect, public borrowing.
The convergence criteria and the stability pact will be paid for, and there will be a price to be paid for the fines—if they ever come—and a price to he paid for avoiding the fines by reducing public expenditure. As I have said in the House before, the price will be paid by the poor, the unemployed and the disabled, and by the gradual dismantling in Britain and western Europe of the welfare state. There was a time when one could expect growth in the economy to reduce deficits. That was a long time ago, and the central bank will not allow that any more. Herbert Hoover is alive and well. The central bank will make sure that growth will be choked to prevent unemployment from falling too rapidly.
Growth cannot help us, but of course we could increase income tax. We could pay for the convergence criteria by putting up income tax for the comfortable 40 per cent. But we cannot do that—the consensus will not allow it. My hon. Friend the Member for North Durham had a go at newspapers, and perhaps I will as well. The chattering classes who write for pseudo-radical newspapers such as The Guardian and The Observer and who live at the bottom of the think tanks that proliferate everywhere are all for the single currency, but they earn good salaries and do not want to pay for it. In the triangular tug-of-war involving the central bank, the chattering classes and the welfare state, the poor, frankly, do not stand a chance.
The chattering classes will no doubt salve their consciences by writing and reading articles about the evils of a dependency culture, and they will hide behind meaningless phrases such as "welfare to work", when there is no work. I read now that there has been a revival of social Darwinism, and no doubt it will be possible to excuse all this on the ground of biology, not economics.
My right hon. Friend the Member for Dunfermline, East, seemed a bit worried, and said that the stability pact would be agreed, but that is not how I read it, and it is not what came from the Nuremburg meeting. He hopes that a few little details and directives will be agreed, but I suspect that there will not be agreement in Dublin, that it might very well go to Amsterdam, and not just on formalities. If that is the case, my right hon. Friend will almost certainly be there to decide on the matter. I trust, and I hope, that he will decide against it. I trust that he will have the political confidence and the social conscience to do so. I trust so, but I fear not.
7.6 pm
Mr. David Heathcoat-Amory: It is of great benefit to follow the right hon. Member for Llanelli (Mr. Davies), whose record on European matters has been entirely constant and honourable, and usually right. Both he and I would agree that, in the European Union today, we see an organisation that is visibly failing. It is experiencing an unemployment crisis, and there are getting on for 20 million people out of work in the EU. It is suffering a loss of competitiveness on the world stage. That is extremely serious, and bodes very ill for the future prosperity of all the citizens of Europe. It is losing the respect of the European public.
Instead of grappling with these fundamental problems, the organs of the EU are instead pursuing the wholly irrelevant project of monetary union. The reason is that

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monetary union is not primarily an economic project, but a political one. On the continent, it is quite openly seen as the next big step towards a politically integrated Europe, with centralised powers and a federal budget. My right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) confirmed this when he drew a parallel between his vision of a single currency in Europe and the success of the dollar in the United States.
In the United States, they first achieved a federal union. It took a civil war, incidentally, in which 600,000 American soldiers died. Much later, the United States formed a currency union, and the Federal Reserve was set up only in 1914. The circumstances were favourable, as America has a tradition of labour migration, and the states share a language and a political system.
Most tellingly of all, the United States has a federal Government with federal powers and, by European standards, an enormous federal budget that acts as a stabiliser between the various regions. If we want a single currency zone, we must, and will, have a federal Government with federal powers. That is apparently seen much more clearly on the continent than on the Treasury Bench.

My criticism of advocates of monetary union is that they do not make clear the huge constitutional implications of what they propose. When challenged—an example is the right hon. Member for Dunfermline, East (Mr. Brown)—they are dismissive of the democratic issue at the heart of the debate.
Let us be clear. If we join a single European currency, we will thereby transfer decisions on monetary policy immediately and irreversibly to the European central bank in Frankfurt. We will have one representative on the governing council, and that person will be forbidden by treaty law from taking any instructions or advice from the British Government or the House. We now learn, in addition, that there is to be a stability pact to add to the bonfire of democratic controls by subjecting our borrowing levels to external control and ultimately to the judgment of the European Court of Justice, which of course has its own activist, federalist mission.
It is extraordinary that Labour Members—with a few honourable and notable exceptions—who until recently were prepared, and even proud, to call themselves socialists, are willing to accept that control of the British economy should be handed over not only to bankers but to bankers in another country who are by treaty law insulated entirely from the democratic process. Surely some vestigial principle still lurks among them: an attachment, at least, to the concept of self-government and to the notion that we should not hand over to an external authority the powers that the public give to us.
Leaving aside for a moment the constitutional debate, there are enormous economic risks in what is proposed. A national currency is not there merely to give national politicians something to adjust or devalue; it is an indispensable adjustment mechanism that allows policy to be set according to the particular requirements of the national economy.
The economies of Europe have different structures, financial markets, pension funds and trade patterns, and they respond differently to external shocks. To try to force
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them all into the same financial straitjacket with a single interest rate and a single monetary and fiscal policy would be to risk catastrophe.
We glimpsed such a catastrophe in our experience with the exchange rate mechanism. By 1992, Germany wanted higher interest rates to ease inflationary pressures, while we and many other member states wanted lower interest rates to prevent a recession, and the mechanism broke up. At least it could break up, and we could get out of it. The much-derided devaluation that followed led to the economic success and stability and to the growth and falling unemployment that we have experienced from that day to this.
In a single currency area—this is the warning—those differences and divergences would persist and be repeated. Without the migration of labour and the flexible labour markets that exist in other currency zones, such as the United States, the strains and stresses would become intolerable, and would be relieved only by huge transfers of cash from one member state to another. That was the conclusion of a study group set up by the Commission under the chairmanship of the British economist Sir Donald MacDougall. He postulated at least a quadrupling of the size of the European budget to make possible those cash transfers.
When that point is made to Ministers or to Opposition spokesmen, they simply deny that it will happen, and wish away the conclusions of the study group, because they conflict with their political desire for monetary union.
The question of direct financial cost—the cost to retailers, banks, computer systems, tax agencies and Government Departments of abolishing our currency and converting to the euro—has not yet been raised in the debate. The cost would certainly be many billions of pounds, but when I tabled a parliamentary question on the subject, I was told:
"The Government have not made any such estimates."—[Official Report, 12 November 1996; Vol. 285, c. 165.]
That is in breach of the White Paper, "Releasing Enterprise", in which it is clearly stated that compliance cost assessments are to be provided
"for every proposed regulation that could affect business."
I cannot imagine regulations that affect business more directly than the proposal to abolish our currency, but when the regulations were presented to the House for scrutiny three weeks ago, there was no cost assessment.
Leaving aside the technical requirements and the understanding between the Government and the House on the matter, I find it extraordinary that we may be committing ourselves next year to a multi-billion-pound expenditure project affecting the entire economy, yet the Treasury has no idea what it would cost.
As part of the debate that we have started today, I ask my hon. Friend the Economic Secretary, who may be winding up the debate—if I can attract her attention for a moment; if not, perhaps someone else will hear me—to respect the procedures of the House and give us the information that I have requested. That would be in line with previous Government commitments, and if we intend to spend tens of billions of pounds changing our currency, we would like at least to have the raw material and know what it will cost.
Mr. Deputy Speaker: Order. Mr. Mike Gapes.
7.16 pm
Mr. Mike Gapes: I had a conversation on Saturday with a German Member of Parliament who represents Frankfurt. He said that he would be happy if our country stayed out of a single currency, because that would mean that Frankfurt would replace London and get more of its business.
One of the problems in this debate is the incredible insularity and the feeling that we can debate the matter as though we could act independently of the world outside. If we stay out of the single currency, there will be costs, as the right hon. Member for Guildford (Mr. Howell) said. Those costs must be examined calmly. There may also be costs involved in going in, but the fact remains that if there is not a zero sum gain—costs of going in and costs of staying out—we must consider the situation calmly, logically and rationally.
The costs of staying out—in which we would be accompanied perhaps by Denmark and Sweden and definitely by Greece—would involve our political influence being reduced and a possible reduction in our economic potential. There would be speculation against our currency, potentially higher interest rates and damage to inward investment, because the Japanese and others would choose other European Union countries—perhaps Ireland, because it also uses the English language—rather than the United Kingdom, as they might prefer to invest into the single market and the currency established with it.
Staying out in 1999—in January or a few months later—may not be so bad. But, as has been said, there is no guarantee that it will be easy to get in later on. I hope that if we stay out at that time because we do not get political consent, we will recognise that our long-term interest is to be in the system. Surely it is better to face the issue at the first stage than to go into a system that we are known to have entered reluctantly and in a way that could be damaging.
If our economy meets the convergence criteria in 1998–99 and we choose to stay out, we may damage the economy in such a way that we cannot meet the criteria two or three years later. Perhaps that is what some Conservative Members want. As some of them said, they think that it is an issue of principle that we should under no circumstances be in a currency union with anyone else. I do not know whether they took that view when the British and Irish pounds were in a currency union or whether they apply it in all respects to the international economy. Do they think that the Hong Kong dollar should not be linked to the American dollar? If one believes for all time in floating exchange rates and the potential for massive movements that bear no relation to the real economy through devaluation or appreciation over short periods, one will take that view. I can understand free market Thatcherites taking that view but not why people on the left or left of centre in the Labour party or the trade union movement take it.
We believe that there is a role for state and society in the way in which our affairs are governed. The right hon. Member for Wells (Mr. Heathcoat-Amory) asked whether there were any socialists any more, which was amusing coming from him. Some of us believe that there is more to life than a free market and that the European Union has a role in minimum standards, environmental protection and other matters about which we can co-operate with our neighbours.
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If the single currency goes to a referendum, the referendum will not be about a single currency but about the position of Britain in the world and the direction on which we focus. It will be a watershed for the sort of society that we wish to live in. I say that as someone who has opposed a referendum because I do not believe that we should have them on narrow issues. But if we are to have one, fine; but let us have it early and lance the boil of Euro-scepticism. Let us get the issue out of the way once and for all so that the people of Britain can choose whether we wish to be a grumbling island off the Eurasian landmass and, though not the 53rd or 54th state of the United States, a country with an important role in the world whose potential is undermined because we have excluded ourselves from our largest markets, our closest neighbours. The political and economic costs—
Mr. Nigel Spearing: No.
Mr. Gapes: Yes. There will be costs that will damage our trading relationships if we take that course to its logical conclusion. The logic of the Euro-sceptic position is, "We don't like foreigners, especially Germans, and we do not want anything to do with them." I see that the hon. Member for Billericay (Mrs. Gorman) agrees with that.
Mrs. Gorman: It was my hon. Friend the Member for Welwyn Hatfield (Mr. Evans).
Mr. Gapes: I apologise to the hon. Lady if I have maligned her.
The positive Labour case for a single currency was put forward in the pamphlet that 14 Labour Members published in September. It is worth reading. Conservative Members have also written pamphlets: the hon. Members for Stamford and Spalding (Mr. Davies) and for South Derbyshire (Mrs. Currie) and others have written in support of a single currency from a different philosophical point of view. At least they recognise that Britain cannot say, "Stop the process, we want to opt out," because, at the end of the day, it is going to happen. There will be a single currency. The question will be whether we want to be in at the beginning, influencing the way in which it develops, whether we try and fail, as we will undoubtedly will, to sabotage it or whether we sit it out and damage our economy and the future prosperity of our people.
7.24 pm
Sir Wyn Roberts: I am bound to say that the European Union issue, symbolised by the single currency, is the biggest that has confronted the country for some time. It looms ever larger as European intentions and the choice that confronts us become clearer. Opinion in Britain is sharply divided, and that is reflected in the House. The division cuts across party boundaries, so the House has become a parade ground for statements of personal beliefs, which are often strongly held. Some of us may feel that we have a surfeit of drill sergeant-majors shouting at us from different quarters of the parade ground introducing confusion into the ranks. Be that as it may, it seems that the choice before us—certainly from this debate—is whether to become more deeply involved in the European Union and pay the political price that that entails, or to preserve such independence as we have and possibly assert it more strongly as circumstances permit.

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The ultimate determinant of our choice must be the future economic and political well-being of our people. Without political freedom, we cannot properly exercise economic self-control. Of course, we are reluctant to give that control to people outside this country and our democratic process. In these matters, I tend to follow my right hon. Friend the Member for Mid-Sussex (Mr. Renton) and take a historical approach.
Although we have lost our empire and not yet found a role, as Dean Acheson put it in his damning dictum of the early 1960s, as a people we are still imbued with the imperial spirit; we like to get our own way in the world. However, it is becoming increasingly clear that we are not getting our way in Europe. Perhaps, as my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) said, it is because we are not pressing our views hard enough.

We envisage Europe as a vast free trading bloc in which we can continue to flourish. But that is not the prime objective in the eyes of the European political elite, as Jacques Santer, the President of the Commission, made clear yet again only last week. Its main thrust is towards greater political unity. That comes from Germany and France, and Germany in particular. It seems that there is no stopping them.
Chancellor Kohl said that the Union is about war and peace in the 21st century; he may well be right. The Germans certainly distrust themselves, and with two world wars behind them I suppose that they have good reason. Perhaps they can see foresee troubles on their extensive eastern and southern frontiers and want the moral and military power of Europe behind them in resolving any difficulties that may arise. That is understandable from their point of view. But what is the British interest in all that? We have learned from our participation in two world wars that we have an interest in the preservation of peace in Europe, but historically our ability to influence developments and events in Europe is limited, especially without the backing of the United States. Any thought that we can do so independently is illusory. We are an island, not a continental power.
We also have our eyes on the rest of the world, especially those parts of it where we have traditionally exercised great influence. It is a fact of life that the most promising prospects of economic growth in the next century lie outside Europe in Asia and the emerging markets elsewhere. As a trading nation, we cannot afford to be confined and tied down by our European involvement, as will inevitably be the case. So the challenge to us now is to keep our foothold in Europe, reaping such economic advantages as we can at the least possible political cost. We certainly cannot afford to endanger that 60 per cent. of our trade which is with Europe. Nor can the European countries afford to lose their trade with us. We certainly cannot afford to lose all the foreign investment that has come here on account of our membership of the EU and the single market.
The Government have a difficult task in ensuring that our future remains unshackled and that any opt-outs that we secure are respected and not eroded. The "wait and see" description of the Government's policy is a misnomer. I believe that the Government are in there fighting for British interests, and they must continue to do
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so as vigorously as possible. It may often look like a rearguard action because of the considerable extent of our involvement to date and the way in which we have been drawn in ever closer to the European vortex which so many of us find uncomfortable.
The pledge that no irrevocable commitment to a single currency will be given without a referendum—a pledge that has been belatedly reciprocated by the Labour party—should provide sufficient reassurance. I cannot agree with my colleagues who would like the Government to commit themselves in advance to blocking out a possibility which may or may not materialise and, if it does, might profoundly affect us, whether we are in or out of the single currency and what I call its accoutrements—the central bank and so on. Our negotiators must not be sent naked into the conference chamber, to adapt a phrase that may still be familiar to some. We really must trust my right hon. Friend the Prime Minister and my right hon. and learned Friend the Chancellor, who will report to the House at every stage.
One thing seems certain. The Leader of the Opposition and new Labour are more committed to more of the European agenda than is the Conservative party. I am not talking only about the social chapter. There is a pseudo-socialist ethos to present-day Europe and my guess is that new Labour is comfortable with it. The idea that primacy should be given to Britain's interests as a trading nation does not sound quite Labour's line. It may be antipathetic to them. I believe that new Labour would willingly throw in its lot with the other European nations in the Union and hope for the best, which might well be made attractive to the mass of British electors in the short term.
We should take a long-term view of British interests. Wages and standards of living may be low in the emerging markets now, but they will not always be so. We know that those markets can develop. We must not only face up to their competition but supply those expanding markets. Just as the European Common Market beckoned us in the second half of this century, the global market is beckoning us now, as we approach the next century.
I think that I have made my position clear. I hope that we stay in Europe and safeguard British interests there. At the same time, I hope that we are not so closely bound up with Europe that we are unable to take full advantage of the burgeoning opportunities in the world outside.
We must not get so involved in the detail that we lose sight of the principles that should govern our policies. Politics and economics are inextricably intertwined in this situation and there is no clear dividing line. There is an element of give and take and our job is to ensure that the take is more substantial than the give, not just for the present—
Madam Deputy Speaker (Dame Janet Fookes): Order.
7.34 pm
Mr. David Winnick: It was reported recently that at the time of the Maastricht treaty the Prime Minister did not believe that the other countries were serious about the third stage of EMU. If that was the position, I am rather surprised. It is spelt out clearly on

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page 87 of the Maastricht treaty. The leading and founding countries of the European Union have always wanted to proceed to deeper integration. Britain has always made the mistake, whichever party happened to be in office, of underestimating the deeply held and far from secret wish of those countries, particularly France and Germany, for deeper integration. So it comes as no surprise to me that the leading countries which have signed the treaty on the third stage of EMU now wish to proceed as quickly as possible.
Nor should we work on the assumption that when those Governments argue and press for deeper integration, they are necessarily out of step with most of their electorates. I have been pleased and encouraged by the demonstrations that have occurred in a number of European countries. I do not know whether some of my hon. Friends who are very keen on the third stage of EMU believe that those protests and demonstrations—today in Spain and recently in France and Germany—against convergence and what it implies have been justified. I believe that they have been because it has meant large cuts in public expenditure and services.
Some Conservative Members argue that we should not take too seriously the convergence criteria and the rest of it. I accept that there is a good deal of fudge, but the fact remains that many public expenditure cuts have been made on the continent to meet the criteria. Hence the reason for the protests, led in almost all circumstances by trade unions.
One of the ironies of the political situation in Britain is that the sorts of policies to which I am opposed in so many respects are precisely the policies of which the Euro-sceptics in the Conservative party are usually in favour, including strict economic and fiscal discipline, taking the axe to public expenditure and continued privatisation. Conservative Members who have been critical tonight have described what they called a pseudo-socialist Europe, but such policies are hardly what I would describe as socialist or on the left. It is understandable that many of us have the deepest reservations about pursuing those policies.
One of the differences of view about deeper integration between the continental countries and Britain is that most people in Europe probably believe that it will reduce substantially the chances of another European war. That is why I said earlier that I accepted that when national Governments on the continent pressed for deeper integration, they were not necessarily out of step with their electorates. It is a view sincerely held by people. I do not believe—I want to make this clear—that EMU or anything connected with it is a deep German plot to carry out economically what they could not carry out militarily in the past two wars. That view is alien to my thinking and, I imagine, to that of almost everyone in the Labour movement.
I do not however take the view that European peace is dependent on a tightly integrated Europe. On several occasions, it has been said that stable democracies rarely go to war against each other and that is true. I cannot accept the view expressed by the hon. Member for East Lindsey (Sir P. Tapsell), who I understand was reported
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as having said, at the last meeting of the 1922 Committee, that this is another 1940. Despite all my reservations, I do not believe that this is another 1940.
Sir Peter Tapsell indicated dissent.
Mr. Winnick: The hon. Gentleman shakes his head. If he says he was reported incorrectly, I accept that entirely.
It is important to have a balanced debate and to recognise that the situation is as far removed from that of 1940 as it possibly could be. As I shall argue, there are many concerns about political and economic sovereignty, but it would be foolish to exaggerate in such a way as to make it appear that this is the same situation as we faced 56 years ago.
On the third stage of EMU, I have heard my hon. Friend the Member for North Durham (Mr. Radice), who is the chairman of the European Movement, and my hon. Friend the Member for Linlithgow (Mr. Dalyell) express their enthusiasm. Indeed, my hon. Friend the Member for Linlithgow said that he would like to go into EMU as quickly as possible.
However, I heard the same enthusiasm expressed by some of my hon. Friends and by some Conservative Members in connection with the European exchange rate mechanism. I heard the same wish on the part of the European Movement—we were told that we should not any longer be isolated and that to stay out of the ERM would be disastrous for Britain. I know what was disastrous for Britain—going into the ERM. Any recovery that we have experienced since 1992 started after we left. Of course I have such reservations, because EMU would lock us in even further than did the ERM. No one could argue that the ERM was not disastrous for Britain, although we could argue about whether that was because we went in at the wrong rate. Given that it was disastrous for Britain, why should we conclude that joining the third stage of EMU and having a fully integrated economic Europe would be to our advantage?
Whichever view we take, there are profound implications relating to the economic and political sovereignty of this country. That is why it is right and proper that, at the appropriate time, the British people should have a say. I am not generally in favour of referendums, but this issue is so serious and so profound that it is necessary to consult the British people in the same way as they were consulted in 1975. We should not work on the assumption that we know best and that we can, in the next Parliament, act on an issue of such significance for this country's future without consulting the people in some form other than a general election. That is why I am pleased that both main parties are now committed to a referendum.
I am glad that this debate is taking place. We shall continue it for a long time to come, because the issue is not settled. We are not going to join EMU in the near future, as my hon. Friend the Member for Linlithgow would like. When we do—if we do—it must be on different conditions from those laid down in the Maastricht treaty.
7.43 pm
Sir Peter Emery: I congratulate my right hon. and learned Friend the Chancellor of the Exchequer on a speech made in the face of barracking from in front

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and behind. He set out to try to make a debate and spelled out in a reasonable fashion both the pros and the cons of the problem. Hon. Members on both sides of the House should congratulate him on that effort.
In debating fashion, I turn to two of my right hon. Friends, who have now left the Chamber. My right hon. Friend the Member for Mid-Sussex (Mr. Renton) tried to remind the House that, if we did not get into the common currency in the first wave, we might not get in in a second wave. That is exactly what happened when we did not insist on signing up to the treaty of Rome—we allowed that to be signed so that it could be completed before the German and French elections, but said that we would come in soon afterwards. In fact, after two years of negotiation between 1962 and 1963, and just as everything appeared to be favourable, down came the no. It was 20 years before we became part of the Common Market.
My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) seems to claim that every European Member of Parliament is massively in favour of a federal, unified structure of greater growth. That simply is not true. I am a member of the North Atlantic Assembly and treasurer of the parliamentary assembly of the Organisation for Security and Co-operation in Europe. Nearly twice a month, I meet Members of Parliament from all the countries of the European Community. On the whole, I find that the Germans and the French have no desire for a position whereby their economy and their fiscal and monetary policy are controlled by a central bank; they want to be able to ensure that French and German taxes are controlled by Frenchmen and Germans, just as we want to ensure that our policies are controlled by the English people.
I am concerned that a number of my hon. Friends, normally described as intelligent, if not highly intelligent, are allowing prejudice to overcome logic in this matter. Of course, there have always been a handful of Conservative Members and a handful of people in the country who have never wanted to be in Europe at all, but they have always been a very small minority. In the past, they pointed to Sweden and Switzerland and to what those countries were doing. Now, Sweden is a member of the European Union and Switzerland—the most non-aligned of all countries—has applied to join. How can it make sense that we should stand apart?
Some argue that we can align ourselves with the Commonwealth and with America, but the Commonwealth, in the old sense, no longer exists as a trading bloc. Australia and New Zealand participate massively in the Association of South-East Asian Nations and look to the far east as their market. Canada has already aligned itself with the trading bloc that includes America and Mexico. America, in many instances, looks to us as the influential player in Europe that has the greatest affinity to the United States. If we were not in Europe, playing a major part, the Americans would soon turn to Germany or some other EU member state for such a relationship. Equally, anyone who believes that inward investment from Japan and Korea would continue to come to Britain if we left is dreaming. Those countries see production in this country as the way to get their products into the European continent.
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The negotiations surrounding the common currency are massively complicated. No one knows today what the presiding conditions will be at the end of negotiations. We have some idea, but we do not know absolutely. No ordinary person with any common sense will either accept or reject a proposition or deal until he knows all the surrounding facts. For instance, our national reserves might be used to stabilise the whole European monetary position—whether or not that was to our advantage. Would that not change if we negotiated a reserve position that allowed Britain to use British reserves, when we wanted to do so and, in any necessity, for our domestic fiscal or economic position? That could easily be negotiated and I suggest that it should be.
The position if the central bank set the rate of interest within a snake, perhaps with a variation of 2 or 2.5 per cent., would be vastly different from what it would be if a single rate of interest were set, and it would allow the sort of development that we would want in the British economy. Therefore, the concept that a common currency would allow a European central bank to dominate Britain's fiscal and monetary policy need not be true. If it is, there is a different picture to paint of the euro. If we saw that investment continued to come to Britain, that, too, would alter our judgment.
I am not in favour—I would fight it as a matter of basic principle—of Britain being pushed away from our growing trade success, brought about by the conditions established by a Conservative Government. Nor am I willing to see Britain's position in the world eroded. But the first absolute fact in the argument about EMU and a common currency is that Britain will be and must be affected, whether we enter the currency or not. It is therefore essential that the Prime Minister goes to the IGC in Dublin to negotiate, with the backing of the nation, to ensure the best possible deal for Britain. Anybody who does not want the best possible deal to be negotiated for Britain should stand up and be counted.
Do we start, before the negotiations begin, by declaring unilaterally that under no regime and in no circumstances would Britain join a common currency? In two quite disparate ways, that is nonsense. Certain businesses, and commercial and tourism interests, find considerable advantage in a common currency and their opinions must hold some weight, even with the sceptical. Before we make up our minds, we need to know the facts. We need to ensure that those matters, which are imperative for Britain's interests, are tied up as legally as possible.
I appeal to the whole House to accept the obvious fact that if, at the start of the negotiations, we categorically state that our position is to undermine and contract out of a common currency, none of our friends will be interested in our arguments and views. Of course we shall sit at the negotiating table, but everyone will turn a deaf ear to our arguments and proposals. That will not be negotiating to win the best position for Britain; it will be exactly the reverse.
Some people have made the ludicrous claim that most Conservative Members support the Euro-sceptics or the Euro-sceptical position rather than the position of the Government and the Prime Minister. Those who repeat that untruth must believe in the Goebbels philosophy that, if one keeps saying something frequently enough, people will eventually believe it.

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What are the facts? Only eight weeks ago at a conference of more than 3,500 Conservatives in Bournemouth, support was given on the conference floor to the Chancellor, the Prime Minister and the Foreign Secretary without a ripple of dissent, interruption or speech in opposition. A vast standing ovation was given to the Prime Minister—[Laughter.] Some Conservatives may laugh at that, but that is how the people in the country feel. Senior members of the Conservative party, who claim to be good Conservative Members of Parliament, should realise that, if they continue as they are, they will lose the election for the Conservative party. That is what our constituents feel.
The media's calling the Prime Minister's stance a "wait and see" policy was disparaging and misleading. The Prime Minister's negotiating stance is best for Britain—
Madam Deputy Speaker: Order. I call Mr. Keith Hill.
7.53 pm
Mr. Keith Hill: This has been an excellent debate, because it has provided a platform for a number of highly reasonable and positive contributions on the single currency from hon. Members on both sides of the House. Hitherto, the so-called Euro-sceptics have dominated discussion surrounding a single currency, and few issues in modern British politics have been the subject of wilder exaggeration and distortion.
Not all the distortions have been confined to the Prime Minister's enemies and the Conservative party. I regret to say that we continue to hear from Labour Members about the myth of the £18 billion cut in public expenditure, which, it is asserted, would be forced on us to meet the 3 per cent. criterion. Ludicrous claims are made about massive rises in income tax and VAT. It is even claimed that unemployment could rise by up to a million.
None of that is true, however. The Treasury summer forecast projected a deficit of 3 per cent. in 1997–98, a figure endorsed by the International Monetary Fund. The Red Book now puts the figure at 2.5 per cent., both for the public sector borrowing requirement and for the general Government financial deficit, which is the deficit measure now adopted by the European Commission. Nothing that I have heard from my right hon. Friend the shadow Chancellor suggests a significant relaxation in that target, even if the market would permit it, which is doubtful. Are my hon. Friends who have so far stuck to the £18 billion myth so pessimistic that they believe that growth will cease under a Labour Government? I cannot believe that that is a rational or politically appropriate expectation.
The dominant myth among Conservative Euro-sceptics is different. It is that entry into a single currency will represent a terminal loss of sovereignty or, even more dramatic, an irreversible step towards creating a European super-state. In part, as Professor Joad might have said, it all depends on what one means by sovereignty. I shall say a little more about that shortly.
It is simply wrong to claim that a single currency will mean the end of the British state. Since 1921, Belgium and Luxembourg have enjoyed the benefits of a currency union without any trend towards political integration between their countries—quite the contrary, as anyone who knows anything about the history of Belgium understands. Perhaps we should learn something from those countries and their experience of a currency union. Whereas Britain stands at No. 18 in the OECD's world prosperity league, Belgium stands at No. 5 and Luxembourg tops the list.
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Let me bring the argument closer to home. For nearly 60 years, until 1978, Ireland and Britain had a de facto monetary union. Would any hon. Member seriously suggest that that led to the political integration of our countries? The idea is preposterous. It is equally preposterous to imagine that monetary union—a single currency—will in itself coerce the nations of Europe against their will into a European super-state. The facts of history speak against it.
The next fallback for Euro-sceptics is loss of economic sovereignty; yet, five days ago, two words from the chairman of the American Federal Reserve wiped £14 billion off the value of stock in the City of London. We must ask ourselves just how real is the concept of economic sovereignty in the modern world of interlocking financial markets. What genuine freedom of manoeuvre nowadays remains to a British Chancellor of the Exchequer when it comes to setting interest rates, deficits and the level of debt? Like it or not, the decisions of the Bundesbank, currently made only in the interests of Germany but backed up by the money markets, determine the main outlines of monetary policy in Britain as elsewhere in Europe.
Is it not logical, therefore, that Britain should be represented in a European central bank, exerting a direct influence on European economic and monetary policy in the British interest? Whether inside or outside EMU, Britain will have no option but to pursue the convergence criteria. The markets will give us no choice. Are we to understand that Conservative Euro-sceptics think that the markets would be wrong? Are we to understand that they are in favour of deficits over 3 per cent. and debt ratios at more than 60 per cent.? For 17 years, the Conservative party has preached the gospel of sound money. Is devaluation the new Euro-sceptic orthodoxy? If we opt out of EMU, that will be the inevitable conclusion drawn by the money markets. With equal inevitability, Britain will pay the penalty in higher interest rates and lost jobs.
The last refuge of the Euro-sceptic is the currently fashionable argument that the convergence criteria are being fudged, the stability pact will not work and, two or three years down the road, it will all end in tears. Even if that happened to be true, there is no way that Britain could escape the fallout. That in itself is a powerful argument for our remaining at the centre of the negotiations, doing our best to get it right.
Of course, putting public finances on a sound footing is a stressful exercise. We should know a little about that in Britain. Is it seriously suggested that our European partners are going through all that pain, with no intention of sticking to the criteria? Our European partners are already proving that they can reduce the deficit sharply in a short period and sustain those reductions. In 1993, Sweden's deficit stood at more than 12 per cent.; in 1996, it is just under 4 per cent. It is now likely that Sweden will meet the criteria for EMU.
It is patronising and ignorant to suggest that our European partners would sign up to EMU and not be serious about the criteria or about their commitment to fulfilling them. EMU will happen. Our European partners will make it happen, because it makes sense for their economies. It makes sense for Britain too, and I see no virtue in delaying our entry.
In explaining our case for the euro, we should not fall into the trap of exaggeration and distortion, which has characterised the Euro-sceptic approach. The benefits of

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EMU will not be huge, but they will be widespread and significant. The elimination of national currencies will be cheaper and more convenient for the tourist. The ending of transaction costs will improve the competitive position of small to medium-sized firms vis-á-vis large companies. The consumer will benefit from increased cross-border competition between firms, once all prices are quoted in the same currency. EMU will render currency speculation obsolete. That will be a special gain to British firms and to small traders in particular, whose exports and business plans have often been damaged by fluctuations affecting sterling in the post-war period.
For a country such as Britain whose currency has carried a risk premium because of our record on inflation and devaluation, there will be a permanent gain in lower interest rates. That will mean higher growth and more jobs, cheaper mortgages for British householders and cheaper finance for industry.
Those are the sensible and practical economic and financial arguments for monetary union. Sooner, I hope, rather than later, the Labour Government will hold our promised referendum on the single currency. When that day comes, I have no doubt that the common sense of the British people will give us a massive yes to the euro.
8.3 pm
Sir Peter Tapsell: To reply to the question put to me by the hon. Member for Walsall, North (Mr. Winnick), I did not suggest in a recent speech that there was any military analogy between 1996 and 1940. The point that I made was that there are rare occasions in politics when the use of the word "never" is justified. In 1940, Churchill said that Britain would never surrender. I thought that we ought to say in 1996 and 1997 that Britain would never join a single currency.
We should make that declaration not only because of the serious technical disadvantages that would flow from membership of a single European currency—I earned my living, such as it was, for 35 years in the City of London in currency and bond markets—but because the overwhelming argument against joining a single European currency is the constitutional argument.
I cannot accept that it is possible to join a single European currency without giving up a large measure of our national sovereignty, particularly because the mechanisms of the single currency that are proposed are essentially undemocratic. As many hon. Members on both sides of the House have pointed out, the proposed European central bank, which would dominate the proceedings, would not be accountable in any democratic way to any elected body.
Only three days ago, President Chirac said that he was concerned about the undemocratic nature of the European central bank and suggested that some counterbalance to it was needed. For some extraordinary reason, he seemed to think that the proposed stability pact might provide that counterbalance.
It must be remembered that a nation state depends for its continued existence on three conditions: control of its armed forces, control of its currency and control of its borders and the territory contained within them. If it loses any of those, it ceases to be a nation and becomes a
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satellite, a province or a Government in exile, such as those of many countries that were set up in London during the war.
Without control of our currency, we would lose control of our interest rates. Those would be determined by the European central bank. Britain would be particularly adversely affected by that: interest rate movements have a greater political impact in Britain than in any other country in continental Europe, because a far higher proportion of people buy their houses in Britain and there is a much smaller rented sector than in the rest of Europe. Everyone knows that the smallest movements of interest rates in Britain have a large social and political impact via mortgage rates. The idea that those decisions should pass into the hands of non-accountable foreign bankers is politically unacceptable.
What guarantee is there that the European interest rate would always be appropriate to the needs of the British economy? The hon. Member for Streatham (Mr. Hill) made that assumption. He understands such matters, but I draw different conclusions from his. I do not understand why he assumes that sterling outside the euro would necessarily be a weak currency. On the contrary, precisely because there are fears throughout Europe and among international fund managers that the euro may come into being, there has been a considerable outflow of their funds into Switzerland and Britain. Even the Germans have been transferring money into sterling for fear of the euro.
Following our experience with the exchange rate mechanism, I do not know why the hon. Member for Streatham should assume that our interest rates would necessarily be higher if we were outside the euro than if we were in it. They would, of course, vary according to the state of the British economy in relation to the state of the continental European economies.
In the period from 1990 to 1992, our interest rates would unquestionably have been lower if we had been outside the ERM. I remember clashing publicly and quite fiercely on two occasions with my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), who was then the Chancellor of the Exchequer, when he kept saying that if we left the ERM, our interest rates would go up. I argued forcefully during that period that we should leave the ERM before we were driven out and that our interest rates would go down. I do not think that there is any certainty about those matters, but I think that it is important for us to retain effective British control of them.
It is time for the leaders of our nation, particularly the leaders of the two main political parties, to spell out clearly to the British people exactly what is their vision of the Europe of the future, and what that future holds for us. If the vision is of a Europe of independent nation states co-operating to increase trade and prosperity and combining to maintain peace and combat crime, it is a vision behind which all the British people could unite; but that vision is wholly incompatible with British membership of a single European currency, and it is grossly dishonest and insulting to the intelligence of the British electorate to pretend otherwise. A single European currency is the chosen instrument by which Chancellor Kohl plans to create a federal super-state.
I, too, frequently attend international conferences in Europe. I was in Helsinki the other day—the day on which the Finns joined the exchange rate mechanism. Everyone there, from many European countries,

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welcomed it, because they saw it as a step towards the building of a federal Europe. I have seldom met a leading politician in a continental country who was not enthusiastic about the building of a federal Europe. European politicians think that the single currency is the essential element of such a process, and that is why they attach so much importance to it.
The idea that certain absolutes should be laid down, in the form of the Maastricht economic criteria, strikes me as naive and economically illiterate. We all know that in every aspect of life, especially politics and business, the laying down of absolutes is usually very unwise. It so happens that, in this particular phase of the British economic cycle, the Maastricht criteria are consistent with the broad economic policies that any sensible British Government would now be following—we are following them with great success—but that will not always be the case for Britain, and it is certainly not the case for France or Spain now. Indeed, it was not the case for Britain in the ERM in 1991 and 1992.
The idea that one particular set of economic targets will always be appropriate for a wide variety of countries in all circumstances, at different stages of their economic and social development and at different stages in their trade cycles, is absurd. That degree of convergence is unattainable, and always will be.
Anyone reading the economic provisions of the Maastricht treaty would suppose that John Maynard Keynes had never lived. The capacity to employ variations in our country's exchange rate, interest rate and fiscal arrangements is an essential economic tool if Britain is not to be plunged into mass unemployment.
8.13 pm
Mr. Calum Macdonald: I welcomed the opening speeches of the Chancellor and shadow Chancellor. Both clearly stated their personal support for the principles of a single currency, and argued strongly for its advantages—provided, of course, that the convergence conditions were met. Both made excellent speeches, which I believe have moved our debate forward considerably.
One of the accusations levelled against the Chancellor by those sitting behind him during his speech was that much of the motivation for the drive towards a single currency was political. I do not think that we should be embarrassed about saying that the single currency is a political as well as an economic project: of course it is. A serious political debate is taking place in Europe today—but it is not between those supporting the caricature of federalism and the super-state and those supporting subsidiarity; the real debate is between nationalists and unionists.
As the Chancellor made clear, there is no federalist plot or project for Europe. What there certainly is, however, is a unionist argument within Europe. I am a unionist when it comes to Europe, for exactly the same reason that I am a unionist in the debate about the future of the United Kingdom. I oppose nationalism in Europe for exactly the same reason that I oppose it at home. That is because I believe that the peoples and nations of Europe grow stronger and are enriched when they co-operate, combine and pool their sovereignty. That is the real argument that is going on, not the absurd argument and accusations about a federal super-state. The real argument is between
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unionists—those who want the ever-closer union in Europe to which the treaty of Rome refers—and nationalists—those who believe in maintaining the maximum degree of sovereignty, and favour an abstract concept of independence for nation states.
I cannot understand those Tory Members who are staunchly unionist when it comes to the multinational Union of the United Kingdom, but somehow transform themselves into nationalists when it comes to addressing the same issues in Europe. I find that illogical, just as I find it illogical for some Opposition Members to be nationalists—Scottish nationalists, for example—in the United Kingdom, but unionists in Europe. I find those positions inconsistent.
I do not think that we should hide from the fact that there is a political argument behind the case for economic and monetary union. It is not simply a dry and bloodless argument over statistics; politics is at its heart, and those of us who have a political belief in an ever closer union should be happy and proud to declare that.
The economic arguments are also vital. Some economic issues have been identified today as obstacles in the way of monetary union. The right hon. Member for Wells (Mr. Heathcoat-Amory), for example, advanced an argument that has become quite familiar in the debate—that Europe is not what the economists call an optimal currency area. In other words, the regional differences between European countries are too great to permit their currencies to be locked together without the risk of dislocation and turmoil in those countries.
Although it is used a lot, I do not consider that a serious argument. It is obvious that none of the national currencies that currently exist in Europe occupies an optimal currency area; it is absurd to think that they do, or that they ever did. Europe's existing national currencies were not based on any rational calculation by a committee of economists: they are the product of historical and political evolution. There are huge regional differences within the existing national currency areas.
If the north of Italy were a separate country—as some northern separatists would like it to be—it would be the richest country in Europe; yet that zone of growth in northern Italy shares the lira with regions such as Calabria and Sicily, which are notorious for being among the most stagnant and underdeveloped in Europe. Likewise, no one can pretend that the highlands and islands in Scotland and the south-east of England share an optimal currency area—yet they share the pound, and both are affected by the decisions of the Chancellor and the Bank of England.
Of course there will be regional differences within the currency area of the new euro, but there are equally great differences within the existing nation states in terms of economic competitiveness, growth and unemployment. We find all those differences in the existing national currency areas. Just as the pound and the lira must respond to the different economic conditions and prospects in Britain and Italy respectively, so the new euro will have to respond to regional differences in the countries that sign up to the new single currency.
There will be one absolutely vital advantage: unlike the Bank of England which, as far as I know, has no voice representing the interests of the highlands and islands, the new European central bank will have representatives from all the nations that sign up to the new euro. Its decisions will therefore be properly representative of all the

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conditions across the currency area and will not be dominated by a single economic centre, whether it be London or Frankfurt.
Another argument commonly used against monetary union is that Europe is increasingly stagnant and uncompetitive economically and that such stagnation is made worse by the need to deflate European economies in order to meet the single currency criteria on inflation and borrowing. It is astonishing how widely that pessimistic and gloomy view of Europe has spread beyond its natural home on the Tory Back Benches and into the media. However, if we examine the statistics, we see that the reverse is true.
If we take the European Union as a whole and take its currencies as a single currency, we find that last year the European Union enjoyed growth of 2.5 per cent., that European Union inflation was below 3 per cent. and that it enjoyed a trade surplus of $145 billion. Indeed, were it not for the UK, the trade surplus would have been even greater. Europe has had a trade deficit in only three of the past 15 years.
I believe that that record, in terms of trade, competitiveness, growth and productivity, compares favourably with that of the United States, for example, which is often put forward by Euro-sceptics as a model to which we should be aspiring. They are the real facts that the Euro-sceptics and Euro-pessimists have consistently failed to address. I believe that it is in Europe's interest to form a single currency, provided that the convergence criteria can be met, and that it is in Britain's interest to join that single currency. When the Labour Government come to make their judgment in two years' time, I am confident that—provided the convergence criteria are met—they will reach the same conclusion.
8.22 pm
Mrs. Edwina Currie: I am delighted to be called relatively early in this two-day debate and put on record my pleasure in the fact that we are having this debate. It is about time that the importance of European issues was recognised by the business managers in the House. It took a lot of effort to get a two-day debate, and I hope the fact that nearly 100 Members have asked to be called to speak is taken into account when such matters are next discussed. Indeed, I hope that we are setting a precedent and that future European Council meetings are preceded—preferably in good time—by a two-day debate in the House, which will give far more of us an opportunity to be called.
The Father of the House, who spoke earlier, was absolutely right. It is about time that members of our Front-Bench team spoke far more positively about Europe. What worries me is that by not doing so, Cabinet members and members of important Ministries and Departments such as the Department of Trade and Industry and the Treasury are making a rod for their own backs or, indeed, for our backs. Where no enthusiasm is expressed about the European Union and its developments, doubt will tend to creep in; and if no information is made available, even from the Government, about any proposals—their complexity and their advantages and disadvantages—anxiety takes its place. Doubt and anxiety are now the prevailing emotions that pervade much of the discussion in the country at large.
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I should like to hear from every member of the Cabinet the same type of robust speech in defence of Europe that we have heard from the Chancellor today and, indeed, in the past few weeks. Would it not be wonderful if the Home Secretary spoke in favour of the European Court of Justice? Would it not be absolutely terrific if the Secretary of State for Social Security made positive suggestions as to how the unfunded pension liabilities of our colleagues overseas might be dealt with, and if he made available to them details of our experience in a friendly and constructive tone? We would gain a tremendous amount in this country and overseas if we adopted that approach.
In particular, I should like to hear far more Conservative Members and Ministers talk about how we gain from membership of the European Union. I should like to hear the same from Opposition Front Benchers. In the next few weeks, as we go into the general election, I hope that the Opposition do not start to back off; indeed, I look to one or two Labour colleagues who I see nodding at me to ensure that it does not happen.
Membership of the European Union is especially relevant to my constituency. The unemployment rate in South Derbyshire is 4.5 per cent. That must be one of the lowest rates in any industrial area in Europe, perhaps anywhere on the entire continent. It is partly due to the advent of Toyota, which has brought the largest inward investment that Europe has ever seen. In my area, it means jobs and exports. In fact, the United Kingdom has had the lion's share of inward investment to Europe from outside, and we ought to make it absolutely clear why that is so.
What we have tended to hear from the Government is that we have gained that inward investment because the UK is different from the rest of Europe. I should like to hear them say that it is because the UK is a member of the European Union and that, were we not, Toyota would not have given us a second glance—nor would most of the other overseas companies that have invested so heavily in us and are still doing so. We must make it clear that it is because we are a member of the European Union that these companies come to us. We must never let anyone in government, or out of it, forget that.
I am absolutely certain that Toyota did not come here because of a flexible exchange rate or because we were in or out of the exchange rate mechanism. Such considerations are not part of its planning. Much of our current economic strength is due not to the fact that we are in or out of the ERM but to the inward investment that has brought not only money but skills, management, jobs and imagination and the exports which it generates and which help to improve our situation.
As for the single currency—
Mr. David Shaw: Will my hon. Friend give way?
Mrs. Currie: I hope that my hon. Friend will forgive me, but there is not time.
As for the single currency, I am convinced that it will happen. From what I see on the continent, people are planning for it far more vigorously than we are. I am also convinced that it will work. I sometimes hear colleagues talk about foreigners as if they were all stupid. I have to say that most are not as stupid as some Members of this House. We ought to take into account the fact that they are planning carefully for what is going to happen in a couple of years' time.

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My concern is that a single currency might work too well. I fear that if a group of extremely strong countries with very high levels of foreign exchange reserves—Germany's foreign exchange reserves, for example, are twice as high as the UK's, and ours are tending to fall rather than rise—got together in a currency union, they would have a very strong currency indeed. Colleagues in the Bundesbank are quite mistaken if they fear that the single currency will be a weak currency. As I have said, I fear, and I believe that they should fear, that it will be a very strong currency, stronger even than the deutschmark. That would be rather worrying, given the lack of competitiveness which is a problem in much of Europe.
People who do not want monetary union—I refer especially to Conservatives—should make it absolutely clear why they do not want it. In all the kerfuffle about dominance by Germany and in all the talk about democracy and the nation state, they fail to admit, and are shy of coming to grips with, the fact that the one policy option that would disappear were we to adopt the euro would be the option to devalue. It is an option which we have used extensively during my lifetime and which, I believe, we should abandon.
Devaluation means fiddling with our currency. At the least opportunity, or under the least pressure, Tory and Labour Governments have tended to debase our currency. The net result is that my constituents work just as hard as they did 10 years ago—indeed, they work with a higher percentage of capital investment than they did 10 years ago—but when they go abroad their precious sterling buys less than it did 10 years ago. Even though our currency has appreciated in recent weeks, it still costs them more to live in this country, because interest rates are increasing. Our interest rates are twice those of countries which it is widely believed will join the euro, and where devaluation is not a policy.
If the Government move any further to rule out our joining the single currency in the next Parliament or at any future point, they will have a problem with members of the Conservative party such as me. I have been a member for 30 years, but if the Government were to decide to shift from a policy of wait and see, I could not be a candidate at the next election. I defend the policy of wait and see: it is entirely sensible, as we do not yet know how the currency will work and which countries will join. It is right that, as we approach the election, we should say that, until we have more information, it would be unwise to make a decision.
We should be a core nation of the European Union. This nation will pay a great price if we do not join the single currency, provided that it is well run. As my right hon. Friend the Member for Mid-Sussex (Mr. Renton) said, the option is open to us now, but it may not be open to us when the single currency is in existence. Once it has been created, the option may be removed. We had the option to join the Common Market in the first place, but we refused and were then denied entry for 18 years. We should take that very seriously.
I say to my right hon. and hon. Friends on the Front Bench, "Please, this far and no further. Don't budge any further towards the Euro-sceptics. You won't win a single vote, and you will not do this party, this Government or this country any good by shifting." If the Government shift any further, this lady at least will not be fighting in South Derbyshire. When so many jobs depend on us being at the heart of Europe in the future, I cannot explain to
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my constituents why the Government have become Euro-sceptic. That is not the way forward, and it is not a view that I can accept.
8.31 pm
Mr. Stuart Randall: I endorse the point made by the hon. Member for South Derbyshire (Mrs. Currie) about the two-day debate. A debate on the pros and cons of EMU, the stability pact and such matters is welcome and long overdue.
I support the point made by my hon. Friend the Member for North Durham (Mr. Radice) about the way in which the debate on Europe has been conducted so far. The xenophobia and nationalism that has come through has brought Parliament and this country into disrepute. We can never support such behaviour. I hope that from now on debates will be conducted better than they have been.
I want this country to join the single currency on 1 January 1999. I believe that the benefits far outweigh the disadvantages. The single currency is unstoppable: it is bound to happen. The momentum behind it is immense.
The system must operate successfully. The euro must be a hard currency. We do not want a currency that is susceptible to speculation. All the member states that participate must have good monetary and economic discipline. The stability pact is not only desirable but essential to ensure that each member state acts responsibly, so that the single currency works successfully.
Both the major parties are in a wait-and-see situation. Some of the negotiations on the stability pact are still uncertain. They may argue that it is necessary to wait and see, but the Chancellor told us that the discussions in ECOFIN have gone far beyond what I imagined, and the whole package for EMU and a single currency seems to have already been tied up.
It is extraordinary that we have not yet debated the advantages and disadvantages of a single currency. I should like to use the few minutes available to me to list some of them, so that they are on the record. The obvious advantage is that traders and tourists would not have to change currencies. Currently, that equivalent to a trade tax amounts to about £3 billion per annum. A single currency would allow us to improve the profits of small businesses in particular. The consequence of a single currency would be a boost in trade between Britain and the other countries of the European Union.
Any business—especially a small business—needs stable exchange rates. That is an important requirement. Businesses can keep their costs under control, invest in the best technology and equipment and employ skilled and educated people, but a nasty fluctuation in the exchange rate can wipe out their profits, and possibly the businesses. I see hon. Members nodding in agreement, who, like me, have run businesses. It is a swamping factor. In the 1980s, under the Thatcher Government, we had huge rises in the value of sterling, which caused havoc for many small traders.
When companies submit bids for competitive tenders, they have to allow for such fluctuations. Their bids become less competitive because of the need to guarantee their business against fluctuations. When companies lose contracts, they lose jobs. The great advantage of a single currency is that companies are not susceptible to speculation.

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What would be the advantages for a small company in west Hull, which is near the Dutch coast? There is a North sea ferry across the channel. I would like such a small business in my constituency to be able to trade as easily with a company in Rotterdam as it does with a company in Leeds or Manchester. It would then be able to exploit the huge and exciting single market. That would not only boost the profits and business opportunities of that company in Hull, but create many jobs in my constituency.
If we had a single currency, we would be able to open up the single market, which has been extraordinarily successful. We want to take advantage of the single market, but we can do that only when we have a single currency.
My hon. Friend the Member for Streatham (Mr. Hill), who is not present at the moment, made a valid point about prices. Groups of pensioners go to Spain every winter for the sunshine and warm weather. The prices in the shops are in pesetas, so they do not know whether a product is cheaper or more expensive than it is at home. They need to know what the current rates are, and they need a calculator to work it out. With a single currency, they would be able to determine whether the prices in Spain were good or bad. That would lead to competition, and would bring great benefits to consumers. Economic and monetary union would have the great advantage of bringing prices down.
Another important benefit of the euro would be lower interest rates. British long-term rates are estimated to be about 1.5 per cent. greater than the rates in Germany and France, because the markets believe that the British economy is susceptible to higher inflation. Therefore, countries using the euro will be seen to be a lower risk, so we can expect lower interest rates.
For too long, Britain has been bedevilled by a bust-boom economy, and our competitors have been able to enjoy appreciably lower interest rates and lower inflation than ourselves. They have also been able to sustain those lower rates. With the European central bank, we can build on such experience in our competitor countries in the EU. The European central bank will provide a great opportunity for a euro zone, by ensuring that we can perform as well as our competitors. As a consequence, businesses will be able to make long-term investments without worrying about huge fluctuations in interest rates, and that will lead to greater investment.
Opting out of the single currency will leave us isolated. Experts to whom I have spoken have said that Germany and France will join by 1999 and that Benelux, Austria and Ireland will all join, leaving Britain, apart from Denmark, isolated. We would incur substantial costs, in terms of both lost investment and higher interest rates, if we were not part of the euro. Therefore, I appeal to all hon. Members to push for our membership of the euro by 1999.
8.41 pm
Mr. William Cash: A joke going around Westminster at present suggests that the arguments of the Euro-realists somehow undermine the national interest. As I mentioned to the Prime Minister the other day, I hope that we can all keep a sense of humour about this matter.
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It is important and serious, but I hope that we can keep a sense of humour and remain even-tempered. As I said last year at the time of the leadership election, it is important that we should talk to one another rather than at one another.
At the heart of the fudges within fudges and the arguments that we have heard so often today there is the question of the Maastricht treaty itself. That is why we are in such incredible difficulty and why it is now so difficult for many people who subscribed to it and whipped it through to admit that it went wrong. They now face the consequences of what was decided at that time.
The problem was that we said that we would never use our veto to prevent the other member states going ahead. Therefore, as I said in a paper that I was asked to write for the Conservative party's manifesto committee in 1991, we put ourselves on the outer tier of a two-tier Europe, where we would be marginalised, lose influence and be dominated by other countries, including Germany.
I am quite prepared to say that at that time I was simply trying to analyse or predict what might happen. I thought that I was right. But we now have the concrete evidence to demonstrate the veracity of the arguments that were presented during the Maastricht debates, in which, with hindsight, many people today would have liked to take part.
When we consider the exchange rate mechanism and its effect on the British economy, the riots and the disorder in other parts of the continent and the difficulty—I would say impossibility—of convergence, one is bound to ask whether that artificial construction is not based on something that could be described as an economical and political lie.
It is impossible to achieve the criteria because the convergence is impossible. Therefore, within the fudge within a fudge that we are now experiencing, we are being drawn deeper into a quagmire simply because of the lack of the realisation and acceptance that this is not merely a question of assertion, but a question of evidence. Furthermore, it is a question of principle.
In the Select Committee on European Legislation in February this year, I put it to the Foreign Secretary that economic and monetary union is surely a matter of principle. He replied that he did not follow my point. Many British people would be extremely surprised to hear that. It is a matter of principle on which we must sustain the national interest.
The national interest is undermined by our refusal to accept that the consequences of the single currency, the movement towards political union—which is infinitely more important than these artificial arguments dancing on the head of a pin about fudges within fudges and whether we shall be able to achieve the criteria—are ultimately about our democracy.
It is a great tribute to the House that this debate is taking place at all. It was precisely because, following the suggestion of the Select Committee on European Legislation, there was a genuine coalition, in the national interest, of people who refused to accept that there should not be a debate on the stability pact. that we have had this debate. Interestingly—I pay tribute to them—that coalition was made up of federalists and anti-federalists; people from all sides of all parties who joined together. We proved the point that our democracy in the national interest is at the heart of the reason why we are taking the position that we do on this European question.

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Another point connected with that is that in Europe the stability pact has, as a result of this victory for the House of Commons, been restrained, if not stopped—in other words, vetoed by the House of Commons. Mr. Chirac may now be beginning to Ilex his muscles on the stability pact, precisely because he knows that, with the scrutiny reserve under the resolution of 1990, the stability pact has been put on hold. We were told last Thursday by the eminently wise Leader of the House that the matter will be shunted forward possibly, perhaps probably, to Amsterdam next year. The bottom line is that the stability pact has been put on hold with the opportunity for us to examine this matter by virtue of a democratic decision taken by the House.
The intergovernmental conference in Dublin will have to consider the questions of defence and foreign policy and their dreadful implications, on which I am sure that the Government will take a tough line, as I hope they will on the 48-hour week and on quota hopping. But given the importance of the single currency issue and its direct relationship with Britain's ability to govern itself, it is essential that the matter is properly discussed at the intergovernmental conference. In an intervention on my right hon. and learned Friend the Chancellor of the Exchequer, I made the point that it is all very well talking about negotiations at the table, which was the basis on which our party conference gave him and my right hon. and learned Friend Foreign Secretary a standing ovation, hut, as the transcript of the Prime Minister's "On the Record" interview on Sunday clearly shows, they did not explain that, in this context, being at the table means the preparations in the European Monetary Institute, which are determined by qualified majority vote. That is the difference.
All the suggestions, which permeate the interview, that somehow or other we can veto and stop the arrangements, are simply not accurate. We are not properly negotiating the question of a single currency. The issue is fundamentally being dealt with in the European Monetary Institute, which is the preparatory stage and which, al: the same time, does not prevent us from being able to extricate ourselves from the mess that the Maastricht treaty put us in.
It is no good people saying that the Euro-realists, the Euro-sceptics or even—if they care to call us this—the Europhobes are marginalising us and putting us on the sidelines, when it was the protocol in the third stage of the Maastricht treaty which said that, legally, we would never prevent the other member states from going ahead, which effectively allowed the surge of federalism to drive forward. That is precisely where we are now.
It is of the greatest concern that the "On the Record" interview does not seem to deal with the fundamental question that we should be considering in relation to where we are going on monetary union as a whole. My right hon. and learned Friend the Chancellor said, I think—he is here now, so I have an opportunity to test this—that about 70 per cent. were in favour of a single currency. [Interruption.] Perhaps I have got it wrong. My right hon. and learned Friend will no doubt correct me.
Mr. Kenneth Clarke: I think that about 70 per cent.—and I confess that I was speaking from memory—say that they are in favour of keeping the option open.
Mr. Cash: If, to put it another way—
Madam Deputy Speaker: Order. I am afraid that the 10 minutes are up.
8.52 pm
Mr. Denis MacShane: I have been in the House only a short time—not yet three years—but tonight has been a remarkable occasion because, since I entered the House, to be openly pro-European in Westminster meant feeling very much in a minority. [Interruption.] I meant in SW1, not in the House of Commons. I do not know what the House's view is, but in SW1, on television, Europhobes pant against Europe and in my newspapers, most of the pundits rant against it. I do not even quite know what is the line of my own preferred paper, The Guardian, on Europe.
Everyone can be in favour of some sludgy Europe, but when core decisions have to be taken—and in all honesty the only one that faces Britain in the next few years will be the next stage of European construction, which will involve economic and monetary union—even many of the so-called pro-Europeans tend to fade away into oblivion or find all the reasons why they are against taking a tough decision.
That is a hard decision. The decision was hard in 1950 when we did not go into the Schumann plan. It was hard in 1957 when we scorned the treaty of Rome. It was hard perhaps in 1962 when General de Gaulle was willing to make a deal with Harold Macmillan, provided that Mr. Macmillan distanced himself somewhat from subordination to the United States. Mr. Macmillan said no. That may have been the correct decision at the time, but the hard decision was fudged.
When finally the decision was taken in the early 1970s, it was massively endorsed in 1975 at the referendum. A set of interesting opinion polls were taken in the early 1980s when the British people, by three to one, said that they wanted to withdraw from Europe, let alone he part of a single currency. Withdrawal was the policy offered to the British electorate by my party in 1983 and the opposite policy was offered by the Conservative party—fat lot of good it did us.
This has been an interesting debate because, for the first time perhaps, the House of Commons—and I think probably the majority of Members reflect this—is saying no to the Europhobes, to the pundits and to the foreign press proprietors, and yes to the fact that the British people's interests lie in being in Europe and—if it is in our interests, as I believe it is—in playing a full part in the next construction of Europe.
I pay tribute to the Chancellor of the Exchequer because, apart from some rather jejune, boilerplate, anti-Labour stuff at the end of his speech, he offered a lead. He discussed in an adult and mature way the technical problems, the economic difficulties and the issues that are at stake.
I am looking forward to the winding-up speech of the Budget Master General, or whatever his new title is, because, in his interesting exchange with the shadow Chancellor, he did not deny that he said on television that he is a Euro-sceptic. A Euro-sceptic on the Conservative Benches means someone who is hostile to Europe, not someone who is sceptical about aspects of Europe—all of us are. It means someone who is in the Euro-sceptic and

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Europhobe camps. When he rises to his feet, he may dissemble—I think that that is the new parliamentary verb for facing both ways at once—but I want the Budget Master General to tell us whether he stands by his Chancellor, or whether he is going to run with what appears to be the majority of his party.
Sir Leon Brittan made the point passionately this week in his semaphored intervention from Singapore on Radio 4's "Today" programme. In effect, down on his knees, the former Home Secretary was saying to his party, "Grow up and get real because Britain's standing around the world"—forget Europe—"is declining as this broken-backed Government have to rely on one man—the Chancellor—to tell the truth about our future in Europe."
I found some of the Chancellor's remarks about the details of his negotiations most interesting because, in effect, we are seeing the tragedy of this once great party. It now has to speak a double language: one language negotiating the patriotic interests of Britain with our partners in Europe and another for The Daily Telegraph and the Daily Mail, in which the inducement of saying no to the single currency and no to Europe has to be offered to keep the rebellious troops in their place. I really would like a clear answer from the Europhobes.
Yesterday, I discussed the issue on television with the right hon. Member for Wells (Mr. Heathcoat-Amory), who had the courage to resign from the Government because of his opposition to the single currency. He was asked whether he was against the single currency on constitutional or sovereignty grounds. He replied that he could not decide what Parliament would do in five or 10 years' time. So, are we talking about a matter of sovereignty or a calendar?
Let the anti-Europeans make their position clear. There are two or three of them in the Labour party. They have given long and distinguished service to our party and our country and, sadly—I think that is the appropriate adverb—they will be retiring at the next election. They will be replaced by Labour party candidates who are sceptical about much of what happens in Europe, but profoundly believe that Britain's place is in Europe, that we have to work with our European partners and that the best interest of our nation is served not by standing outside, but by playing a full part in the next stage of European construction. In contrast, all the incoming Conservative candidates are anti-European.
This is not just a matter of the single currency; it concerns the future of Britain. Our country has at its essence the need to play a full part in the new global economy. If we are outside Europe, we shall not be new merchant venturers, but isolated also-rans. All the surveys suggest that inward investment is wholly predicated on the fact that Britain is a member of the European Union. If we withdraw from the European Union—as half the Conservative party would have us do—that inward investment will dry up and factories in Derbyshire, Sunderland and elsewhere will be relocated to elsewhere in the world's greatest single market.
I have long been in favour of a referendum. I do not want to lance the boil, as my hon. Friend the Member for Ilford, South (Mr. Gapes) said; I want to drain the poison that has destroyed the ability of the House—and I fear that of the Government—to take the best decision in the
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interests of our people. When that referendum comes, let us be quite clear that it will be on the future of Britain and whether we are in or out of the European Union. I have no fear of that question being put to the British people and I am quite confident about the result.
I say that from a position on the left. The Conservatives drove unemployment to unprecedented heights and have reduced it through devaluation, debauching our currency and driving wages down so far that people cannot earn enough even to afford to pay income tax. Until we learn some of the lessons not of Germany, which had to accommodate reunification, which is distorting its economy, or France, which needs labour market reform—
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Time is up.
9.2 pm
Mr. James Couchman: I am delighted to speak in this evening's debate. As the hon. Member for North Durham (Mr. Radice) suggested, I am one of those who signed the European Movement policy statement that appeared in The Times on Monday. That statement accorded with much of the Government's position on many of the major issues that now confront the European Union.
I am no more a Euro-federalist than the great majority of Conservatives in the House or the country, but I wish to see the United Kingdom play a full role in a union of sovereign nation states. By full role, I mean that we should cease to play Eeyore at every possible opportunity. I have no doubt that the unhelpful policies adopted by the EU over bovine spongiform encephalopathy have been backed much more enthusiastically by some countries that are aghast at our frequently obstructive attitude.
Today's debate is principally about the economic issues facing the EU, particularly the single currency. I am pleased that we have started to discuss the practicalities of a single currency rather than simply indulging in polemics.
Yesterday, I and a number of right hon. and hon. Members on both sides of the House enjoyed a working lunch with senior members of the retail industry. They expressed their aspirations and fears about the changeover to a single currency should the United Kingdom decide to join such a currency. They did not express a view either way as to whether we should or should not join, but they identified the possible difficulties of training staff, educating customers and reprogramming cash-handling equipment. They pointed out the considerable advantages of a "big bang" approach—a direct changeover rather than running two currencies in parallel.
The retailers pointed out how unsuitable a date 1 January would be, as it falls in the middle of their busiest time of year. Mid-February or mid-October would be much better, they said. They asked for national and international consultation, and I trust that that will happen, for the retail industry will need at least three years' lead-in time to make a smooth transition to a single currency. They were particularly worried about over-prescriptive arrangements for pricing, especially unit pricing. Our retail friends were, however, able to appreciate the advantages that the low on-costs in Britain would have on much more transparent pricing across Europe. Lower prices in Britain could significantly benefit British retailers.

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The discussion with people who will have to adapt their businesses to the introduction of a single currency if—or more likely, when—it occurs was very useful and practical. It was also a good example of why my right hon. Friend the Prime Minister has been absolutely right to keep the British option open to the point where the whole scheme and its regulations and mechanisms will be negotiated and agreed. The Maastricht opt-out negotiated by my right hon. Friends the Prime Minister and the Member for Kingston upon Thames (Mr. Lamont) was indeed precious.
I am no great economist and do not pretend to be able to foresee the macro-economic consequences of a single currency, but I am not alone. In June, I attended a Confederation of British Industry conference on business in Europe. Some of the great panjandrums of British industry were there, telling the Government that they had to give a great lead to our push for European business.
Somewhat imprudently I asked those great leaders for a lead from industry on whether the United Kingdom should join a single currency in the first wave. There was a nervous coughing and spluttering into their sleeves by the chairmen of BA—British Airways—BP, BT, and B almost everything else, but answer came there none, for there is no certainty even among the major companies represented in the CBI about whether we should join.
No one knows what impact our participation—or perhaps our non-participation—in the first wave will have on the City, which is Europe's and possibly the world's pre-eminent financial centre. It would indeed be surprising if some of EMU's fiercest critics were not to be found in the ranks of foreign exchange dealers—self-interest is probably viewed as a quality in those circles.
What I do know is that if the Government had closed the possibility of the UK joining a single currency before May 2002—the probable end of the next Parliament—and a single currency introduced by our partners in our absence had a seriously deleterious effect on the City's complex but vital markets, the British Government would have been grossly negligent in their duty to do what is best for Britain.
There is great uncertainty about the impact on various aspects of our economy of a properly constituted single currency scheme. Will it lead to substantial employment migration from the poor south in Europe to the prosperous north? With falling unemployment in the UK at present and rising unemployment elsewhere, such migration could and may be taking place now—hence blond, blue-eyed Finnish nurses in Hackney. Employment migration certainly takes place in the United States from time to time.
Resource transfer from northern to southern Europe, or in future to new entrant countries in eastern Europe, might be necessary to turn back that tide, but employment and resource adjustments are more a feature of the single market than the prospect of a single currency. They will happen whether the UK joins a single currency or not. EMU would not limit Parliament's powers to tax and spend, although it would prevent future Governments from avoiding the consequences of their decisions. We could choose to be a low-tax, low-spending economy or a high-tax, high-spending economy. We could not be a high-spending, low-tax economy and cover the deficit by borrowing or monetisation—but only an irresponsible Government would want to do that.
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Britain has been remarkably successful in attracting investment into Europe from outside Europe, as several of my hon. Friends have said, and 40 per cent. of American and Japanese investment comes here. The European operations of three Japanese second or third-line companies are located in my constituency, partly for Gillingham's unique connections with Japan but mainly for the reasons why so much inward investment comes to the UK: the English language, benign company and individual tax regimes, a flexible and relatively well-trained work force, low social on-costs for labour, and so on. Above all, as my hon. Friend the Member for South Derbyshire (Mrs. Currie) said, companies from the US, Japan and other major far eastern countries set up their European operations here because we are in Europe. Those of my hon. Friends who advocate staying clear of any closer links with Europe, whether economic or political, and furthermore advocate a progressive disengagement from Europe, neglect to tell us what might happen to the hundreds of thousands of jobs already created here by inward investment or to such investment in the future, if their proposals were adopted.
For my part, I am convinced that it remains the duty of the Government to fight for Britain's interests in a Europe to which it fully contributes; to exercise our privileged position of opt-out or opt-in to a single currency at the proper moment; and to retain the possibility of reconsideration at a later date if we decide not to join in the first wave. It is a wise politician who never says never. The United Kingdom should have learnt the lesson of Messina. Joining someone else's club without the opportunity to contribute to the rule book always means being a second-class member.
9.10 pm
Mr. Stephen Timms: The hon. Member for Gillingham (Mr. Couchman) made an interesting speech, but the question that I wish to raise at the conclusion of today's debate is what sort of nation we want Britain to be in the future. Those in the Conservative party who attack the Prime Minister's policy frequently tell us what they do not want our future to be. They do not want us to be part of a federal European super-state ruled from Brussels, and we can all agree with that, but what they do not tell us is what sort of nation they do want us to be. Like it or not, Europe and the world are changing and we must change as well. We cannot stay as we are because our role in the world will change and the question is what we want that change to be. Conservative Members sometimes give the impression not only that they want our role to stay as it is now, but that they want it to return to what it was 100 years ago. That will not happen. We must be realistic in making a shrewd assessment of the future role that Britain can play in the world.
Let us suppose that we stay out of European monetary union for good. Most European countries will join it and it will extend to much of Europe the success that the deutschmark has enjoyed in Germany since the war, with low inflation and low interest rates. The euro will stand alongside the dollar and the yen as one of the world's three main currencies.
If we stand outside and stick with the pound, what will be our place in the world? Some 20 minutes away through the channel tunnel, one of the world's strongest currencies will be operating. More than half our international trade

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will be with the euro zone. We will have higher inflation, as we do now, and given the tradition of devaluation that has continued to flourish since 1979, we will have higher interest rates, as we also do now. Is not the reality that we would be locked into permanent economic weakness?
We have a poor record on investment, which is at the heart of our current economic weakness, and the weakness of our currency against the whole euro zone will simply make matters worse. It is true that we have captured a large share of the investment coming from outside Europe, but the benefits of that are dwarfed by the problems of the small investment in the United Kingdom by ourselves, so that our total level of investment is much smaller than elsewhere and much less than it should be. Permanently higher interest rates in the UK than in the whole euro zone will simply make matters worse.
It is not only our economic prospects that will be so gloomy if we stay for ever outside monetary union. We need to square up to the much wider question of our role in the world and, indeed, our sovereignty. Given economic and monetary union, Europe's main economic decisions will be made in Frankfurt. We will inevitably follow whatever is decided there because our trade is so dominated by countries in the euro zone. If we are not in the monetary union, we will have no say whatever in those decisions, but we will be profoundly affected by them. Surely the sovereignty argument, which is frequently articulated by Conservative Members, pushes us to be inside monetary union rather than outside it, because at least that way we will have a say in the most important decisions about our economy which, as I say, will be made in Frankfurt whether we are there or not.
I submit that being a committed member of a strong European Union—pooling our sovereignty in some areas in order to exercise our influence through the European Union and seeking to win the arguments about how Europe should be run—presents an attractive future for Britain. That approach would retain for Britain in the new millennium the influence that we have enjoyed in the latter part of this one, but in a modern form that can prosper in the new conditions of the world economy.
That will work only if the governing party ceases to be rent asunder by people arguing that we should not be involved. As the Prime Minister recognised on Sunday and again yesterday, he cannot win the arguments in Europe with the current shambles at home. Given a consensus in the governing party, participation in Europe—including in monetary union—holds out an attractive future role for our nation consistent with our history and with the reality of our current strength as the home of just 0.5 per cent. of the world's population.
What sort of future role do those who want us to stay outside monetary union or to leave the European Union want Britain to have? We know that they do not want Britain to be in a federal super-state, but what do they want? Some, undoubtedly, want Britannia to start ruling the waves again. My suspicion is that their position is based on an unrealistic view of Britain's place in the world. If that is not what they aspire to, what do they aspire to?
The realistic alternative to membership of economic and monetary union is for Britain to be the Canada of Europe. I am not denigrating that option. We need to have
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a cool debate about the realistic possible roles for Britain. Canada has its own currency, but its economy is dominated by the huge and powerful United States economy to the south. It is a great country. Those who argue against economic and monetary union may well want Britain to be the Canada of Europe, but Canada is a bit player on the world stage. What happens in Canada does not set the pace for the rest of the world. Music, fashion and sport from Canada do not set the world ablaze; music, fashion and sport from Britain do. I do not think that the British people want to be consigned to that role. We have much more to offer and much more to gain.
If we allow ourselves to keep our own weak currency and our economy is dominated, as it will be, by the strong European currency over which we have no influence, damage will be done not just to our economy but to our role in the world. By exercising influence through Europe, we can retain a role consistent with reality and with our history.
Playing a full part in Europe also holds out the prospect of a decent future for all our people, not of large numbers sliding into ever greater disadvantage compared with the few. As my hon. Friend the Member for Linlithgow (Mr. Dalyell) said earlier, that is why the trade union movement supports monetary union. It was striking that of all the major institutions to give evidence on monetary union to the Treasury Select Committee, the Trades Union Congress was the most supportive of the project.
It may not be possible for us to join monetary union at the outset, but we should not fool ourselves that sitting around and waiting to see how it works out before deciding whether to join will solve the problems. All the Chancellor's concerns about giving up our seat at the table would then arise again and the union that we eventually joined would have been completed in our absence. Missing the first wave and going in late would cause serious problems, as the Treasury Select Committee report points out.
I should like to comment briefly on the recent alarm about unfunded pension liabilities in other European countries. That is a red herring. There are plenty of ways of dealing with the problem without damaging the United Kingdom economy. It is certainly not a reason for us not to enter the single currency.
I represent an east London constituency, which has the characteristics eloquently described by my right hon. Friend the Member for Llanelli (Mr. Davies). My constituents in Newham are looking forward with optimism to a future with closer links with Europe. We are looking forward to the construction of the channel tunnel rail link, with an international station at Stratford, and to the subsequent investment in the area from European countries. The United Kingdom economy has not provided the opportunities that my constituents should have had. The European economy can provide those opportunities. I want a Government who will grasp and exploit them, rather than one who are poised to throw them away because of their divisions and their fearfulness for Britain's future in Europe.
9.18 pm
Mr. Ray Whitney: The speech of the hon. Member for Newham, North-East (Mr. Timms) underlines the reality demonstrated by this debate—that there is, across the House, strong support for a positive

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and constructive relationship with Europe and for maintaining our option to enter or stay out of a single currency. Clearly, the Labour and Conservative parties have sizeable minorities who are hostile to Europe. We have seen a document signed by 50 Labour Members of Parliament who express that opinion, and I imagine that a similar number of Conservative Members share their views. But they are not the majority, and they have been made to appear so by the press—about which so much has been heard in this debate, and rightly so.
We are halfway through this important debate—which I greatly welcome—and its value has been demonstrated. The real voice of the House of Commons needs to be heard above the xenophobia and paranoia to which we have grown accustomed over the past two or three years. We have now been able to see a little of what the Euro-sceptics actually believe in. In my view, scepticism is not a genuine political position—one must believe in something.
We have seen a series of contradictions from the sceptics on both sides of the House. They believe, for example, that a single currency will not work and that it is a leaky ship. They think that it will be a disaster, and they may well be right. As my right hon. and learned Friend the Chancellor has pointed out, it could conceivably turn out as they say. I think that that is unlikely, for reasons on which I shall touch in a moment. But those who say that this is a hopeless cause, a leaky ship and a dreadful mechanism that will impose terrible and insupportable burdens on our economy and will make us pay money that we do not have cannot have it both ways.
The sceptics in my party cannot claim to be good Conservatives, and I speak as someone with dry, right-wing credentials—that is, I believe in good housekeeping and all the other good monetary disciplines that are, to a degree, enshrined in the Maastricht criteria. I do not believe that any country can devalue its way into prosperity, and experience over the last generation has demonstrated that. Yet my hon. Friends—who, in months and years gone by, seemed to share those views—now reject them because the views have been embraced by the nasty, suspicious and scheming continentals. It does not negate the sanctity of those principles if other people have now discovered—albeit belatedly—that they are good ideas.
Frequently, the German bogey is brought out of the box. The fear is that, having failed in two world wars, this is the way in which the Germans will achieve domination over western Europe to start with and eastern Europe the day after tomorrow. Oddly enough, the German people seem unconvinced of that and, at the moment, the majority of German people are deeply suspicious. Some 60 per cent. or 70 per cent.—depending on which opinion poll one believes—have yet to be convinced by their political leaders that joining a single currency is a good idea. If I were a German who had worked hard for 45 or 50 years to maintain and develop a stable and strong economy and a stable and strong deutschmark, I would take a lot of convincing that I should launch the deutschmark into a system with other currencies with less impressive track records.
The Euro-sceptics refuse to face up to many challenges and constantly make negative attacks, but they face a conundrum. What are the other countries up to? Why are
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seven, eight or nine countries trying every trick in the book—I accept that there are some tricks being played—to get into the single currency?
Those countries live in much closer contiguity to the Germans than we do and they have genuine experience of German domination and understand much more clearly the realities of Germany. But are they stupid? Are they ready to give away their sovereignty, or do they know something that our Euro-sceptics do not know? I suggest that the answer is the latter.
We must also take account of the possibility that those countries are ready to throw away all their achievements, yet the record of many of them over 30 years is better than ours. In 1965, one could get more than DM11 for a pound and now one can get only DM2.30 or DM2.40, or whatever the rate happens to be today. I cannot believe, therefore, that either the Germans or any of the other countries will launch a ship that will sink within a year or two. We shall have to wait and see, but that seems highly unlikely.
The sceptics tell us that our trade opportunities with the rest of the world are wonderful, and I believe that they are, thanks to the Government's stewardship, but we should not forget the balance of trade and the almost 60 per cent. of our trade that is conducted with European Union countries. To put the matter in perspective, we should remind ourselves that our trade with the Netherlands amounts to as much as our trade with the six Asian tigers, China, Indonesia and the Philippines put together, and that our trade with Sweden amounts to as much as our trade with the whole of Latin America.
My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) suggested that economic success had proved that the United Kingdom could prosper without the single currency, but of course there has not been a single currency. We are dealing with the world as it will be. There is no doubt that, at whatever time and in whatever shape a single currency comes, it will come, so it cuts no ice to suggest that we have done well without it.
My right hon. Friend the Member for Kingston upon Thames also said that he welcomed the opportunity to go it alone in monetary affairs. He had the honour of being Chancellor of the Exchequer. Of all people, surely Chancellors of the Exchequer know that going it alone in monetary affairs is not exactly an option.
On interest rates, it is interesting to note that our borrowing costs are somewhere between £5 billion and £7 billion more than Germany's, because interest rates there are much lower. If we had the German rates, the savings would mean a cut in income tax amounting to £10 a week for the average household. The chances are that a sound single currency will enable us to live with lower interest rates, and we must bear such factors in mind for our constituents' sake.
Some of my hon. Friends say that the majority of people in this country are doubtful and suspicious of the European Union and, more especially, of the single currency. I accept that that is true—it is also true, as I said, in most if not all the countries of the European Union—but it is the job of responsible politicians to lead and educate the electorate and not merely to listen to and follow them.
This debate has demonstrated that, to put it mildly, our minds should he kept open about the beneficial effects of a single currency. It would be a gross dereliction of duty

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to fail to lead the British people in the paths of common sense simply because Mr. Christopher Booker and the newspaper editors and owners about whom we have heard so much have misled them. I am glad to say that the debate has demonstrated that the majority of right hon. and hon. Members have that common sense, and I hope that we shall hear more of it in the months to come.
9.28 pm
Mr. Mike O'Brien: This is the debate that the Government did not want. A couple of weeks ago, they tried to sideline debate on crucial issues relating to the stability pact and the single currency to a backstairs Committee. It was only because ordinary parliamentarians, both Government and Opposition, were so outraged at their behaviour that we are having this debate on the Floor. The British constitution relies on the Executive's abstinence from the abuse of power: it gives great power to an Executive with a majority. Members of Parliament protect their right to debate issues. That is the check on Executive power. The Government tried to undermine the rights of Back Benchers by denying them the right to an open debate on the Floor on the single currency documents.
Mr. Marlow: That sounds strange from a Front-Bench spokesman of the Labour party. It has just passed party regulations that mean that anyone who speaks out of line will be thrown out. They all have to be drones and clones in the Labour party now.
Mr. O'Brien: In our party, we have sensible, reasoned debates. One could hardly call the Conservative party's debates sensible or reasonable.
The Government tried to prevent proper debate. Even now, they are trying to deal with the issues through a debate on the Adjournment because they are frightened of a vote that they might lose. They could not pass their resolution in European Standing Committee B and fear that they will be embarrassed on the Floor. They have become so bereft of proper respect for the British constitution that they are prepared to hide their embarrassment about the divisions in the Tory party by frustrating the right of Members of Parliament to debate and vote on fundamental issues. Those who elect us deserve better than that from the Government.
I do not want to criticise the Chancellor of the Exchequer too much; he has had enough criticism from his Back Benchers. In any case, I agree with much of what he said. As he spoke today, we watched the ranks behind him seethe. They were splintering before our eyes. The right hon. Member for Honiton (Sir P. Emery) referred to the barracking of the Chancellor. The Chancellor was supposed to be speaking for his party, but I suspect that his view was not that of the majority of his Back Benchers. As his speech went on, it seemed more like a personal manifesto—his personal commitment to the European ideal. The exchange with the right hon. Member for Wokingham (Mr. Redwood)—in many ways, the personification of Tory divisions—seemed like the first shot in the post-general election leadership campaign. The inevitable conclusion about his speech was that the Chancellor spoke for himself, not for the Government and much less for a majority of the Tory party.
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Recent newspaper headlines have expressed the consternation felt by the British people about the fiasco of Tory European policy. One Sunday newspaper called it
"Major's Meltdown—ruin upon ruin and rout upon Tory rout—the kites did not fly, boomerangs exploded and scooters were parked on lawns."
The Sunday Times headline was "Divided we fall" and it had a picture of the Prime Minister and the Chancellor, saying:
"Defeated and divided they could wander in the wilderness for years, even decades".
It implied that the Chancellor and the Deputy Prime Minister were more concerned with the post-general election civil war in the Tory party than with the belief that the Tory party, even if the current policy is sustained, would ever be able to take Britain into a single currency.
The Mail on Sunday said:
"thousands of Tory supporters this Sunday morning will be embarrassed and humiliated by the warfare among their party's leaders.
The Mail on Sunday shares that embarrassment and humiliation."
It demanded that the
"Prime Minister should sack Ken Clarke tomorrow."
The Sunday Telegraph headline was "The week John Major's Government fell apart". The following day, The Independent said of the Prime Minister's interview:
"All the Prime minister says is … 'trust me I'm honest John' … He isn't. And there are too many in his party who too obviously don't trust him."
The Prime Minister said that there would be no change in policy, then that there might be, then that there was never any thought of changing it.
The hon. Member for Hayes and Harlington (Mr. Dicks) is quoted in The Daily Telegraph as saying:
"I am in two minds whether to tell him to stuff his Government and his party."
The hon. Member for Reigate (Sir G. Gardiner) was quoted in the same newspaper as saying, "The strife goes on."
The former Paymaster General—or should I say the former, former Paymaster General?—the right hon. Member for Wells (Mr. Heathcoat-Amory), said that he would tell his constituents that he would vote against a single currency. He is quoted as saying:
"I cannot be expected to regard this as a breach of Party Policy since, as we have been told, there is no Party Policy."
Today, he continued his attack on his Front Benchers.
On Monday, Lord Tebbit said:
"If there is clear division and everybody knows about it, between the Chancellor and the Prime Minister, the Government is in desperate problems."
The Financial Times said:
"The electorate will not support a party which puts its own internal squabbles ahead of the national interest."
Mrs. Currie: I am listening to the hon. Gentleman with some care, but some puzzlement. Many hon. Members on both sides of the House are very much in favour of future developments in Europe. We would much rather hear what the Labour Front-Bench spokesman thinks about that.
Mr. O'Brien: If the hon. Lady waits a little while, she may well hear that. I am coming to her.

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During the debate today, we heard about the fears of the hon. Member for South Derbyshire (Mrs. Currie) for her party. She said that, if the policy was to change and the Euro-sceptics got their way, she could no longer stand as a Conservative candidate. That symbolises the strife within the Tory ranks today. Not only have Conservative Members joined the Opposition but some Conservative Members feel that, although they cannot do that, they are no longer prepared to carry the Conservative banner into the next election.
Mr. Bernard Jenkin: What is the Labour party's policy on the matter of convergence? Given that the Library reports that Belgium has a national debt of 130 per cent. of GDP, and it is unlikely that that will reduce below the 60 per cent. threshold in time for the first wave of monetary union, does the hon. Gentleman agree that Belgium does not qualify for monetary union? Will he confirm that that is his interpretation of the Maastricht criteria?
Mr. O'Brien: We are talking about sustainable economic convergence. I am not sure why the hon. Gentleman is so vexed. It seems from all his speeches that he has already decided what he is going to do. Why would he bother to get involved in the realities of the debate facing his Chancellor, who is trying to make a reasonably argued case against the hon. Gentleman and his colleagues on the Back Benches who do not support their Chancellor? What about the right hon. Member for Kingston upon Thames (Mr. Lamont), who talked of distrust and betrayal over Europe? He is right, to the extent that there is distrust because the Government put the party before the country. There is betrayal because the Government failed to get the best deal in Europe for Britain.
The Chancellor is not without some support among his Back Benchers. I have already referred to the hon. Member for South Derbyshire. The right hon. Member for Mid-Sussex (Mr. Renton) made an interesting speech in which he warned that we could not assume that there would be a second opportunity to join a single currency.
Many good points were made by my hon. Friends. My hon. Friend the Member for Ilford, South (Mr. Gapes) challenged the right hon. Member for Kingston upon Thames on his complacency about the City's position. My hon. Friend the Member for Linlithgow (Mr. Dalyell) asked whether we wanted Europe to go ahead, leaving Britain behind. My hon. Friend the Member for Rotherham (Mr. MacShane) gave a timely warning which the Chancellor might like to repeat to some of his Back-Bench colleagues. He said, "Remember when Labour was anti-Europe in the 1980s. A fat lot of good it did us."
My hon. Friend the Member for Newham, North-East (Mr. Timms) asked what sort of vision for the country the Euro-sceptics have. The answer, he said, was none. They hanker after an old empire—an old Commonwealth. Our future is in Europe, he said. The Tory Euro-sceptics might disagree with that, but, as my hon. Friends the Members for Streatham (Mr. Hill) and for Kingston upon Hull, West (Mr. Randall) pointed out, European co-operation can be both effective and successful for Britain if we get it on the right terms.
My right hon. Friends the Members for Bethnal Green and Stepney (Mr. Shore) and for Llanelli (Mr. Davies) made strong contributions to the debate on this issue in
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the Labour party. Let me point out that there are debates within all parties—it would be a poor reflection on our democracy were there not. These questions are of fundamental political importance, which is why we welcome contributions from my right hon. and hon. Friends who question a single currency.
The policy of a Government must be clear and a Prime Minister must lead—the Government owe the British people a clear sense of direction. Debate within a party is fine—it may even be healthy on occasion—but the Prime Minister must give leadership and this Prime Minister, on Europe, has failed to lead. A Labour Prime Minister, with a united shadow Cabinet and backed by a vote within the Labour party supported by 95 per cent. of the party's membership, will have a clear direction, a clear sense of policy and a clear way to lead.
From this Government, we have seen nothing but extraordinary splits, plotting and counter-plotting which extends to the highest reaches of the Tory party. We have a Chancellor who is quoted as talking of "a boomerang wrapped up in high explosive which has rebounded in the Prime Minister's face". The Conservative party is clearly in ferment. The BBC's Mark Mardell said that one Cabinet Minister told him that the party is "in chaos" and that the Chancellor is running policy, not the Prime Minister.
It all started with that now infamous story in The Daily Telegraph, that the Prime Minister was trying to push the Chancellor into ruling out a single currency in the next Parliament. Then the Chancellor and the Deputy Prime Minister swung into action: the Prime Minister was brought to heel. In the last week, the Tories have had the smack of firm leadership—not from the Prime Minister, but from the Chancellor. The Chancellor is the nearest the Government have to a leader—a tough and determined fighter for his pro-European beliefs. The Tories have a leader in Downing street—at No. 11. He sets the policy and the terms of government.
The Prime Minister was prepared to buckle under to the sceptics on his Back Benches, but the firm hand of the Chancellor steadied him in the pro-European course. When the Prime Minister, at Prime Minister's questions last Tuesday, tried to appear firm by committing the Government to a clear policy in defiance of his Back Benchers, one could almost see the Chancellor and the Deputy Prime Minister metaphorically standing behind him, exerting a steadying grip on each shoulder—or perhaps around his throat.
Even as the Prime Minister wavered, the strong Europhiles in the Cabinet showed their backbone. As the captain steered toward the rocks, the first mate and the bursar grabbed the wheel and put the ship back on course. The mutinous crew is still mutinous, but it appears that, from now on, the captain will do as he is told by the first mate and the bursar—but I suggest that there will be few votes from the public in favour of taking another passage with a crew so divided and at each others' throats as this one.
It is clear that the Chancellor and the Deputy Prime Minister have imposed on the Cabinet a strategy on the single currency that is closer to Labour's policy than to the view of the majority of Conservative Back Benchers. The Prime Minister is the prisoner of the Chancellor and the Deputy Prime Minister. As my hon. Friend the

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Member for Western Isles (Mr. Macdonald) implied, there is now clear blue water between the Tory leadership and the Tory party.
We all know the Chancellor's views and those of the Deputy Prime Minister. We know that most Tory Back Benchers broadly disagree with them. We know that the Prime Minister "goes wobbly" from time to time and that the Chancellor has to prop him up. We know that part of the deal is that the Chancellor does not tell us in Parliament what he has really agreed to at ECOFIN, nor can the Prime Minister concentrate on what he agrees at Dublin. Both must tell the House, not what they have done, but what they have not done—that they have not betrayed their Back Benchers. That is how the whole thrust of Government policy on Europe is now directed—to play down any moves towards European agreement and movement forward. They have had to raise isolation to an art form to keep their party together.
The Chancellor claims that binding decisions were not made on monetary union in Brussels on 2 December. The reality is that, with the exception of the definition of "exceptional and temporary" and one or two other small issues, most of the rest of the detail was agreed at various meetings over recent months. There has been a legal base set for the euro and a basis for a new, voluntary exchange rate mechanism. Many of the provisions of the stability pact have been negotiated by the Government.
It is disingenuous to claim that there is no agreement until it is legally binding in June. Either the Government keep the political agreements that they have made or they do not—and most of the agreements have already been made. The idea that it would be practicable for us to reopen all those issues next June is preposterous. The Chancellor is wary of admitting that, because he might exacerbate the civil war in his own party by doing so—yet that civil war goes on.
On Monday, we discovered that the hon. Member for Billericay (Mrs. Gorman) planned for a referendum on complete withdrawal from Europe. The former Tory Minister, Sir Leon Brittan, accused the sceptics of damaging Britain. Lord Tebbit has said that 100 Tory candidates are set to defy the leadership in their personal manifestos. The Tory party is split from top to bottom.
Mrs. Gorman: On a point of order, Mr. Deputy Speaker. The hon. Gentleman said that I had decided to introduce a Bill to withdraw from the European Union. That is completely untrue. My Bill proposes renegotiating with the European Union, so I hope that the hon. Gentleman will correct what he said.
Mr. Deputy Speaker: The hon. Gentleman is responsible for his own speech.
Mr. O'Brien: I thank the hon. Lady for clarifying that point. I accept her clarification, but publicity on the Bill has not been as clear as it should have been.
Labour will fight the next election in favour of constructive engagement in Europe. The Conservatives will claim that that means that we will sell out, but that is just more Tory lies. Labour will defend our national interests in Europe, instead of making a laughing stock of us as the Tories do. Labour opposes a federal state,
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remembering that those who signed Britain up to the Single European Act at Maastricht were the Tories. Labour will not give up our veto on strategic policies.
Constructive engagement means improving our relationship with our European partners, not squabbling with them for the purposes of domestic party consumption. It means putting British interests at the heart of Europe, not, as the Tories do, playing the British hokey cokey in Europe—in out, in out, shake it all about—a pointless little dance that no doubt placates Euro-sceptics' egos but, by turn, merely irritates and amuses our European partners.
The Government have not put Britain's interests first in Europe; they put their own political survival first. They damage relationships in Europe to please their Euro-sceptic rump. Tory divisions mean that the Prime Minister is selling Britain short. Labour will protect our national interests. We demand that Britain becomes a leading player in Europe: setting the agenda, not failing to do so; winning and not losing the debate; demanding the spotlight, not heckling from the sidelines. Labour will point the way forward for Europe while the Prime Minister wrings his hands in eternal indecision.
We shall ensure that we drive the single market forward in telecommunications, aviation and financial services. Whether Britain is ready to enter economic and monetary union on 1 January will not alter the necessity of our future being in Europe. That is why the current state of the British Government is so damaging to our people. On Europe, the Tory party is divided, disorganised and disgraceful. It is letting down itself, the country and the British people.
It is time to get rid of this tired and discredited Government. This country needs vision, direction and leadership in Europe. It will get all three from new Labour: on economic and monetary union; on the regeneration of the British economy; and on giving Britain increased influence on Europe.
We have seen the Chancellor's struggle to reconcile his views with those of his party—[Interruption.]
Mr. Deputy Speaker: Order. The House must settle down.
Mr. O'Brien: The Chancellor's struggle is almost over. He says, "Yes, yes, yes." The Prime Minister says, "Maybe, maybe, maybe." The Tory party says, "Never, never, never." But the British people will say, "Enough, enough, enough—begone."
9.47 pm
The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): In a debate in which hon. Members have had 10 minutes to speak, the Opposition Front-Bench spokesman, the hon. Member for North Warwickshire (Mr. O'Brien), has taken 19 minutes to wind up. I hope that that will be noted.
My right hon. Friend the Member for Witney (Mr. Hurd) made a series of points with which few people would disagree. He stressed the importance of liberalisation, and said that he was against a united states of Europe and for a referendum on a single currency. Most hon. Members, including my right hon. Friends the Members for Honiton (Sir P. Emery), for Conwy

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(Sir W. Roberts), for Guildford (Mr. Howell), and for Mid-Sussex (Mr. Renton) and my hon. Friend the Member for Wycombe (Mr. Whitney), would not disagree with that and made similar good points.
My hon. Friends the Members for South Derbyshire (Mrs. Currie) and for Gillingham (Mr. Couchman) made some good and important points about the success of inward investment into Britain in recent years.
My right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) said that the float of sterling in 1992 was a cheat. I think that he implied that markets were cheats, but I do not wish to dwell too long on that aspect. He stressed the need to remain positive members of the European Union, and most hon. Members would agree with that.
My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), together with my hon. Friends the Members for East Lindsey (Sir P. Tapsell) and for Stafford (Mr. Cash) made a series of points from a slightly different angle. Nevertheless, I found plenty to agree with in their comments, although I shall not dwell on them in detail.
My right hon. Friend and predecessor, the Member for Wells (Mr. Heathcoat-Amory), asked whether the transitional costs of moving to a single currency would be taken into account and whether a compliance cost assessment had been made.
Mr. Heathcoat-Amory rose—
Mr. Oppenheim: As time is limited, I would appreciate it if I could answer the point. The Government have made it clear that their decision on whether or not to go forward into a single currency will take account of a large number of factors. Transitional costs will be one of those factors. A compliance cost assessment will be made in due course.
Mr. Heathcoat-Amory: Will my hon. Friend give way?
Mr. Oppenheim: I hope my right hon. Friend will forgive me. I have very little time. [HON. MEMBERS: "Answer the question."] I have done my best to do so. Very well. I give way.
Mr. Heathcoat-Amory: The Government published a White Paper promising a compliance cost assessment for, any regulations brought before the House affecting business costs. Regulations were submitted to the House three weeks ago without a compliance cost assessment. Will my hon. Friend undertake to correct that deficiency at an early date, and not next year?
Mr. Oppenheim: With respect to my right hon. Friend, my point is still valid. Those regulations will not apply to Britain unless we make a decision to go into the single currency. At that point, if necessary, a compliance cost assessment will be made.
The hon. Member for Streatham (Mr. Hill) attacked with great vehemence a document entitled "Europe isn't working". He called its claims myths. That document was signed by 50 of his colleagues.
Mr. MacShane: They are all going.
Mr. Oppenheim: That is an interesting insight into the unity on the Opposition Benches.
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The hon. Member for North Warwickshire said in his long peroration that his party had sensible and reasoned debates on these matters. The comments of the hon. Members for Streatham and for Rotherham (Mr. MacShane) are the denial incarnate of that.
The hon. Member for Streatham said that a single currency would not reduce sovereignty. He said that EMU means lower interest rates, so we should join. How does he know that EMU will mean lower interest rates? We will not know that until we know whether the criteria are being fiddled with and meddled with. That is why the Government's policy of negotiating and waiting until we are clear on these matters is the right policy.
Mr. Marlow: Will my hon. Friend give way?
Mr. Oppenheim: I hope my hon. Friend will forgive me. We have limited time. I shall try to give way later.
The right hon. Member for Bethnal Green and Stepney (Mr. Shore) came in from a slightly different side of the pitch. He said that he did not want foreigners telling us what to do. For an old socialist, there was not much of the brotherhood of man about his comments, but I know that they represent the views of some of his colleagues.
The hon. Member for Ilford, South (Mr. Gapes), by contrast, said that we should go into EMU at all costs. The hon. Member for Walsall, North (Mr. Winnick) said that we should not go in at any cost. The right hon. Member for Llanelli (Mr. Davies) said that those who want to go into EMU will use any trick to get into EMU. The hon. Member for Kingston upon Hull, West (Mr. Randall), who wants to go into EMU, is probably one of those to whom the right hon. Gentleman was referring.
The hon. Member for North Durham (Mr. Radice) said that Euro-sceptics are dangerous. I assume that he includes in his list the right hon. Members for Llanelli and for Bethnal Green and Stepney, and the hon. Member for Walsall, North, who are Euro-sceptics.
Mr. Cash rose—
Mr. Oppenheim: I hope that my hon. Friend will forgive me for a moment or two longer. I shall give way in a moment.
The hon. Member for Rotherham persists in getting my title wrong, although tonight's performance was a slight improvement on his last effort, when he called me the Posthorn General. He said that I was a Euro-sceptic and therefore I was hostile to Europe. He is right in one respect. I am a Euro-sceptic. That does not necessarily mean that one is hostile to Europe. It means that one is sceptical about Europe. One is pragmatic about Europe. [Interruption.] That is not the same thing.
Several hon. Members rose—
Mr. Deputy Speaker: Order. The House must settle down. The Minister must be given a reasonable hearing.
Mr. Cash rose—
Mr. Oppenheim: I give way to my hon. Friend.
Mr. Cash: Does my hon. Friend—who, of course, is a Euro-sceptic; we are sure of that—accept that anyone who says:

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"under no circumstances should the Government rule out participation in a single European currency, now or in the future"
is saying something that is inconsistent with Government policy? Has he noted the advertisement placed by the European Movement, bearing the names of a lot of people who are blaming the Euro-realists but who themselves are inconsistent with Government policy?
Mr. Oppenheim: We Euro-sceptics really should stick together, but I do not necessarily agree with my hon. Friend's premise.
All that this shows is that all the political parties are having a vigorous discussion. There are people who say that we should not have a vigorous discussion, but I think that they are wrong. This is far the most significant issue that we have faced in my 14 years in this place; it is one of the most pivotal issues since the war, and probably in this century. Many people say that it is as important as our decision to join the Community.
I know that many hon. Members feel that it is wrong in principle for us to go into EMU, and that we should say so now. Others take a different view. Whatever the view, the fact is that a single currency will affect us, whether we are in or out.
Some people say that we could just sit on the sidelines and gain some atavistic, mercantilist pleasure from any mess caused by an EMU based on skewed and muddled criteria. Some say that we may even gain advantage from such a mess on the continent—a kind of "capitalism in one country". I am not sure that they are right. More than half our exports go to Europe; United Kingdom companies are major investors in Europe, and vice versa; monetary and political chaos in Europe would probably lead to an over-strong or at least a volatile pound. We must also protect the position of the City, one of our most successful industries.
Those are all reasons why we must be at the negotiations, and why we cannot make a decision until the final shape of EMU is clear. At that point we do have the option to say no, and, even if any Government decided that it was in Britain's interest to go in, the British people would have the final say through a referendum. That is the right policy.
Mr. Marlow rose—
Mr. Oppenheim: I know that my hon. Friend is dying to get in, so I will give way, but this is absolutely the last time that I shall do so.
Mr. Marlow: I am grateful to my hon. Friend.
Constituents say to me, "Mr. Marlow"—[HON. MEMBERS: "Mr. Marlow!"] Actually, they call me Tony. "Tony," they say, "if we were to join the single currency,
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would that mean not only that we would lose the pound but that our interest rates would be decided overseas, and that eventually our taxation system would probably be taken over the Europeans?" They say, "Tony, does this effectively mean that we would cease to exist as a nation state?" I reply, "Yes, I believe that that is the case, but I can do better than that: I can ask my hon. Friend the Minister." Does my hon. Friend agree as well?
Mr. Oppenheim: I think that my right hon. and learned Friend the Chancellor answered that point in his speech.
One has to be deeply suspicious of a party that has so lost its soul—that so wants to get its collective snout into the red boxes—that wants power so badly—that it is willing to perform gymnastics with its policies, and play games with an issue as important as the single currency. That is what Labour is doing. On 30 October, the shadow Chancellor said:
"Our policy on the single currency has not changed and will not change."
On 11 November, in a speech to the CBI, he said:
"Labour supports the principle of a single currency."
The Opposition said that their policy on EMU would not change. A few days later, they announced that they would prance along behind us and hold a referendum. Some people say that that was a ploy aimed as much at some of my hon. Friends as at anyone else—[Interruption.] I hear one of the shadow Chancellor's hon. Friends say, "Hear, hear." If that is true, it illustrates the cynicism with which the Opposition approach an issue of overriding importance.
I know that the response of some to Labour's latest change of policy is to say, "Let us put clear blue water between the Government and Labour." I am never sure that it is the right tactic, if one is occupying good ground and someone else muscles in, to jump off and swim for it just to put water between oneself and that person. Some would say that a better stratagem would be to chuck them off, but these are questions of judgment and there is clear blue water between the Government and the Opposition, despite the Opposition's attempts to poodle along behind us.
Only yesterday, the shadow Foreign Secretary, who we all know is at one with the shadow Chancellor on these issues—I make that point only to illustrate that we are not the only party that is wholly united on these issues—affirmed that it was Labour policy to surrender Britain's right of veto over key areas such as social, employment, industrial and regional policy—[Interruption.] The hon. Member for Gateshead, East (Ms Quin) says that they are not key areas, but they are. There is clear blue water between the Government and the Opposition. The Opposition want closer union and to take the next big leap forward towards a centralised Europe—that is the difference between them and us.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Medicinal Drugs
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]
10 pm
Mr. Paul Flynn: Medicinal drugs are one of the great triumphs of science. They relieve the pain of millions of people and provide longer, healthier lives. Britain has better safeguards and less drug use—[Interruption.]
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Hon. Members leaving the Chamber should please do so quietly.
Mr. Flynn: Medicinal drugs are one of the great triumphs of science. They relieve the pain of millions of people and provide healthier, longer lives. In many cases, Britain has higher standards and a lower rate of drug use than many other European countries. Drugs are wonderful servants but fearful masters—if misused, they can be the cause of death or disease on a prodigious scale.
In this short debate, it is possible to give only a few snapshots of the many current concerns, which include the 2,000-plus deaths from prescription and over-the-counter drugs, the over-medication of the elderly in residential homes, the hazards of road users whose senses are dulled by psycho-active drugs, the growing availability of potentially lethal doses of drugs, and, perhaps most important, the worldwide growth of antibiotic-resistant bacteria, which is leading to untreatable forms of ancient diseases. There is also concern about the use of antibiotics on animals and the possibility of their transmission to human beings through the food chain.
I had a message from the Alzheimer's Disease Society tonight. It wants to emphasise the fact that the sad cases illustrated in the recent "World in Action" programme, which showed the misuse of anti-psychotic drugs in residential homes, were not uncommon but are a feature of falling standards in residential and nursing homes. The society asked me to express its support for my call for a full inquiry into drug use.
In March 1996, the British Medical Journal gave a very disturbing account of an investigation carried out by researchers in Glasgow into anti-psychotic drugs called neuroleptics. They visited 28 nursing homes and examined the prescribing of what has been called a "chemical cosh" to 217 of the residents. Narcoleptics were considered to be appropriate for only 12 per cent. of them; 190 others had been prescribed them for wholly incorrect reasons—reasons which meant that the homes were probably easier to run but which left the elderly in greater confusion than ever.
The authors concluded that the results were a cause for grave concern, as the drugs have side effects that produce symptoms similar to those of Parkinson's disease. However, the most devastating conclusion of all from the Glasgow researchers was that American studies had proved that, when the use of these powerful drugs was reduced or stopped altogether, even in appropriate cases there was little, if any, deterioration in the patient's behaviour.
The great worldwide threat was illustrated in September in the journal Nature, which used language that is rare for a sober scientific journal:
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"The increased incidence of penicillin resistant bacteria is putting the treatment of serious childhood diseases in jeopardy — multi-resistant TB is becoming the norm".
It reported on the intense frustration of international scientists at a conference in London in the summer at the failure to mount a sustained campaign against what they described as the
"spread of resistance, which is an ecological disaster".
They recommended that we should use antibiotics more sparingly and prudently. The magic bullet that did so much good is losing its potency. A week ago, it was discovered that a disease was being fed and was growing stronger and more virulent on an antibiotic, which is an extraordinary turnabout.
Epidemics are now sweeping the planet. They are far worse in remote lands in Africa and South America. Although they have touched the United States of America, none has affected us to any great extent, with the exception of methicillin-resistant staphylococcus aureus. One bacterium, which is resistant to all known antibiotics, is the principal cause of all childhood deaths in Africa. That is an extremely serious problem. It could appropriately be described as a disaster.
In this city and in this Parliament, our lives were touched by the moving words of Lord Fitt about the death of his wife. He explained that she was suffering from asthma and was taking cortisone, which is a steroid drug. They were worried that she was taking too much of the drug, so she was admitted to hospital to try to get her on to less damaging drugs. Sadly, she shared a ward with someone with MRSA—the lethal hospital bug created by drug over-use. Tragically, Lady Fitt died a few weeks later.

On 16 April this year, the Minister for Health gave me figures on deaths caused by paracetamol. I thank him for that. We have had a long and often heated and angry correspondence, but I think that we now agree about the number of deaths caused by paracetamol. The minimum figure is about 200 a year.
In a recent reply, the Minister gave me the gross figures, which were 452 in 1993, 453 in 1994 and 568 in 1995. That is a huge number of deaths, given that Ecstasy, which everyone is worried about, accounts for 10 deaths a year. Co proximal accounts for 250 deaths a year, dothiepin for 150 deaths, and in America 7,000 deaths a year are caused by aspirin. Those are not drugs to cure life-threatening illnesses: they cure fairly minor illnesses. Drugs that kill people are the familiar, over-the-counter drugs. They are like loaded guns in the medicine chests of almost every home in the land.
Two years ago, a 12-year-old girl in Pontefract was sent out on a trial to buy 50 paracetamol tablets, which was enough to kill her three or four times over. She had no difficulty buying 50, but many people tried to sell her 100. It was not the pharmacists who pushed the drugs the most, but the supermarkets and the garages.
Cheaper, more accessible drugs may be on the way. The Office of Fair Trading is considering the alleged restrictive practice in a first step to abolishing controls on cheaper medicines. A 12-year-old girl may go into Asda and for 25p be able to buy enough paracetamol to kill her twice over.
The Government must take responsibility, because they reversed the 1978 reforms which restricted the sales of some over-the-counter medicines as people were

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becoming addicted to them. Some of those drugs are back on the market, including Paramol 118, which contains morphine and paracetamol. It is fast becoming a major street drug, which is open to abuse as it is an alternative for heroin users. There is even a new help organisation with 2,000 members for what the organiser calls a hidden army of high street junkies, many of whom are hooked on drugs which, until recently, had been available only on prescription.
Drugs also play a part in road accidents. There are 100 million annual prescriptions—a vast figure—for drugs such as tranquillisers, anti-depressants and sleeping pills, which make the user more intoxicated, less able to drive a car and slower in reacting than if that person was above the alcohol limit. The European Road Safety Federation estimates that 10 per cent. of road deaths are caused by drivers affected by medicinal drugs—350 deaths a year in Britain.
Another legitimate cause for concern is the use of antibiotics on animals. Strict limits are laid down so that the antibiotics used for animals are different from those used for human beings. But there is one major problem involving one antibiotic. The danger is that it will get into the food chain and we will become resistant to it. That drug has been banned in Germany and Denmark, but not here. A powerful lobbying organisation in Europe is trying to prevent such a ban, despite the fact that it would be sensible.
Objective science is saying, with one loud, unanimous voice, that there is vast over-use of medicinal drugs. It pleads with the Government to take action, because the bacteria are winning. Patients' organisations and consumer associations all say that we are an over-medicated nation. Health physician Martin Fischer, from Charing Cross hospital, said that half the modern drugs could well be thrown out of the window were it not for the fact that the birds might eat them.
We are less compassionate to ourselves and our children than we are to the birds. Society has been conditioned to believe that every pain, discomfort, grief and moment of boredom suffered must have a remedy in a drug. That myth is the creation not of doctors but of those who are selling the drugs and making large profits from them.
Which? published a devastating report on people's widespread ignorance of the drugs they take. A survey of asthma sufferers showed that 61 per cent. were taking drugs—aspirin and ibuprofen—that can trigger symptoms of asthma. Half those surveyed suffering from high blood pressure were taking remedies that would increase their risk of heart problems. There is widespread ignorance among patients of the drugs that are prescribed.
Many actions can be taken. We need a major inquiry into the use of all drugs. We want restraint in prescribing and no attempt to liberalise the present system or to make drugs cheaper, as supermarkets such as Asda want. The sale of lethal addictive drugs should be confined to pharmacists, with limits on their sales. We should publicise the great dangers to road users who are intoxicated by drugs. We should improve hospital isolation facilities and hygiene standards, preferably with nurse-led wards, as suggested by the King's Fund.
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There should be more of the so-called brown bag trials, where the elderly, who are the worst over-medicated group in society, are called in to explain to doctors what they are taking. Up to 15 per cent. of all elderly people are taking up to six different drugs each, the cocktail effect of which is the cause of many problems. Many trials are being carried out to re-examine such use and to give advice. We need an urgent inquiry into the medication of elderly people in residential homes, and we need a campaign of public education to persuade regular routine users of familiar medicines of the problems they cause.
The European body of specialists in research into headaches said that the main cause of headaches was paracetamol and aspirin. Timothy Steiner of Charing Cross hospital said:
"There are a lot of people who have daily headaches who take daily analgesics. If they stop the analgesics the headaches go away."
For many people, medicinal drugs are often essential life savers, but the greatest scientific wonder that any of us have ever encountered is the human body. It has miraculous restorative powers that are natural, and safer than many failing and dangerous chemical medicines, in which we have unwisely placed our trust.
10.14 pm
Mr. Alan W. Williams: I am grateful for the opportunity to make a few remarks in this debate. I congratulate my hon. Friend the Member for Newport, West (Mr. Flynn) on securing the parliamentary time. I should like to confine my remarks to MRSA—methicillin-resistant staphylococcus aureus—and underline the serious threat that that poses to anyone who goes to hospital for treatment.
I first heard of MRSA in 1993, when a friend telephoned me to say that there were a few cases of the antibiotic-resistant strain in my local Carmarthen hospital. I wrote to the hospital and met the chief executive and the public health laboratory consultant there. I was reassured that the number of cases was quite small.
At the hospital, in 1989, there were two MRSA cases; in 1990 there were two; in 1991 there were five; in 1992 there were 10; and in 1993, the year when I first heard of MRSA, there were 13. I spoke at the time to my brother who was a consultant in a London hospital. He said that MRSA was common in London hospitals, but that in Wales we did not have a particular problem.
I tabled some parliamentary questions at that time, and wrote to the Welsh Office. Generally. I received non-answers. The Welsh Office said that the information was not available, and not collated centrally. The reply that I received from the Under-Secretary of State for Wales was:
"The information … is not routinely collected"—
MRSA, in a sense, was too unimportant in 1993 for the figures to be collated centrally. I kept reading about MRSA incidents, however, in local and national newspapers. In July, I again tabled questions to the Welsh Office, and I was pleased that the information was now being made available and collated.
In my hospital, in 1994, there were 18 declared MRSA cases, in 1995, there were 36, and to July 1996, there have been 49 cases. That was a tenfold increase during that five-year period. Figures in parliamentary replies to my

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hon. Friend the Member for Newport, West show that, for Wales, in 1995 the total was 442, and that this year to date it is 2,100. That is a fivefold growth in the past year.
I am glad that the information is now being collated centrally and made available. A parliamentary reply from the Department of Health to a further question on 3 December showed that, in England and Wales, there were 2,286 MRSA cases in 1992 and 17,063 in 1995. During those three years, there had been a sevenfold growth in the incidence of MRSA in hospitals in England and Wales. That is disturbing. What was a small problem in the late 1980s and early 1990s has become a major problem. I know two people—members of the Labour party, as it happens—in my constituency who last year contracted MRSA while in hospital.
My hon. Friend the Member for Newport, West quoted the speech on 4 November by Lord Fitt, whose personal tragedy highlighted the problems that the bug is causing in hospitals.
The problem of antibiotic-resistant bugs is international and widespread. I only wish that the Government would take it more seriously. First, the Department of Health needs to liaise with the British Medical Association and the Medical Research Council to persuade general practitioners to prescribe antibiotics only when they are necessary.
Secondly, it is absurd for animal feeds to routinely contain antibiotics so that animals gain weight faster. It is done for economic, not health, reasons. Thirdly, there needs to be research into new antibiotics. We are in a race against new super-bugs that are adapting and modifying to become resistant to antibiotics. The Department of Health and the pharmaceutical companies must redouble their efforts to develop new antibiotics to address that increasing problem.
10.20 pm
The Minister for Health (Mr. Gerald Malone): I am pleased to have the opportunity to respond to the important debate initiated by the hon. Member for Newport, West (Mr. Flynn) and the points raised by the hon. Member for Carmarthen (Mr. Williams). They have raised a wide range of issues, and I am sure that they will understand that I cannot cover them all in great detail in the 10 minutes available to me.
First, I should like to reassure the hon. Gentlemen that Britain has one of the most effective control and licensing systems for drugs in any developed country, through the combination of the Medicines Control Agency and the Committee on Safety of Medicines. As the hon. Member for Newport West said, it is important that we do not have a closed mind on developments. The system for investigating the efficacy of drugs and the problems they may cause is a constant process of re-evaluation. Those who are charged by Government with the responsibility constantly to examine such matters on behalf of the public need to review their decisions in the light of any new evidence that emerges.
The hon. Member for Newport, West was quite right to point to the enormous benefits of modern medicine. The proper use of medicines relieves human suffering and cures or alters the course of many life-threatening diseases. However, modern medicine also involves a number of risks, and some concerns have been expressed about antibiotic-resistant organisms.
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It is not a new phenomenon. One might think from the lurid headlines on the issue that we are hurtling towards a post-antibiotic era, and that the problem has only just been spotted. That is not the case. It was identified at an early stage in the use of antibiotics, and was countered by conventional infection control techniques and other intervention strategies, such as limiting or rotating their use. Those methods were successful, but they were also overshadowed by what at the time seemed to be a plentiful supply of new antibiotics. Between 1939 and 1972, for example, more than 30 new antibiotics were discovered. In more recent years, however, the number has fallen.
Microbial antibiotic resistance has always been an issue, but the need to address it has now become more focused. It has to be managed better. In considering new strategies and policies to combat its spread, we need to ensure that we make the best use of those antibiotics currently available, and perhaps be prepared to re-learn a number of lessons from the past.
The hon. Member for Newport, West referred to the particular problems that are found in other countries. It might be useful for the purpose of this Adjournment debate to look at the difference between this and those other countries.
Mr. Jon Owen Jones: Will the Minister give way?
Mr. Malone: I do not intend to give way. I have a limited period in which to answer a very complex debate.
In many countries, the spread of such types of micro-organisms has now been accepted as more or less inevitable. That is not so in the United Kingdom. One of our most effective weapons is the high quality of the infection control systems in our health service and hospitals. We also maintain—the hon. Member for Newport, West asked for reassurance on them—very strict controls over accessibility to antibiotics by ensuring that they are available only on prescription. That is very different from what happens in other countries—even other countries in Europe—where antibiotics are available over the counter, and very readily too. We are concerned about the matter.
MRSA was especially mentioned. It has attracted many headlines recently, and it is not helpful when phrases such as "killer bug" and "super-bug" are used. They have invoked anxiety among many patients and their families and friends, and conjured up images of a modern-day health care system that cannot cope with such problems.
It might be important to put on the record the fact that MRSA is an antibiotic-resistant form of a fairly common bacterium, staphylococcus aureus. It is one of the most common of all bacteria—it is present in about one third of the population—but a problem occurs when it gets out of control, which may have alarming effects. How do we deal with it in the NHS?
Specifically to tackle the problem, clinical guidelines on MRSA have been developed over recent years. Such guidance includes that jointly published, for example, in 1986 by the Hospital Infection Society and the British Society for Antimicrobial Chemotherapy. The guidance was updated, republished in 1990 and formally commended by the Department of Health to the NHS in 1994. We are working with professional groups on

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how to take that further forward. We are of course concerned about such issues and alert to them, and will continue to update guidance as necessary.
The hon. Member for Newport, West raised an important point about treatment of elderly people, which I take extremely seriously. We issue advice on prescribing issues that include prescribing particularly for elderly patients, which is available to GPs from a range of sources. GPs are, of course, ultimately responsible for the prescriptions they write for their patients.
The Department publishes publications such as the British National Formulary, which is regularly updated and provides advice for all doctors. A number of bulletins also provide prescribing advice for all GPs. Copies of the British National Formulary are available in the Library if the hon. Member for Newport, West wants to have a look at it.
Concerns were expressed about the availability of medicines for children. Under guidelines issued by the Royal Pharmaceutical Society in relation to its code of ethics, a pharmacist should not supply medicine to children, regardless of whether they are receiving medicine for their own use or, as quite often happens, as a messenger for others, unless the pharmacist is satisfied that the product will be used correctly and delivered safely to an adult.
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I listened carefully to what the hon. Members for Newport, West and for Carmarthen said about the issue, and I am pleased to be able to reassure them that we are actively considering the need for further restrictions on the sale of medicines to children. If there is evidence of a problem, we shall certainly react to it.
The hon. Member for Newport, West mentioned the problem of paracetamol as he sees it. He is a doughty campaigner on the issue. Paracetamol is a safe medication for the relief of pain, but it is recognised that, if it is abused contrary to the instructions for use, problems result from an unexpected reaction to the drug, causing liver failure, which is not immediately apparent after the drug is taken. That is why consultation is occurring on what should happen about pack sizes.
We take very seriously indeed the points that have been raised by the hon. Members for Newport, West and for Carmarthen. The hon. Member for Newport, West is quite right to say that the matters are on-going and will always require the Government's interest. I give him the reassurance that we shall continue to look at them. A number of other points were raised with which, in the short time left to me, I have not been able to deal, but I shall write to the hon. Gentleman about them. As always, he made a constructive contribution to an extremely important matter.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock.

TREASURY

  Computers
  Mr. David Atkinson
  To ask the Chancellor of the Exchequer what steps the Bank of England is taking to ensure the single currency compliancy of its computer systems, and those with which they are connected; what is its budget for this purpose; and if he will make a statement. [6661]

  Mrs. Angela Knight
  The Bank of England's computer systems will be affected by the introduction of the euro whether or not the United Kingdom adopts the single currency. Work to assess the implications and to ensure preparedness started some time ago. The bank is also liaising with the Association for Payment Clearing Services, which oversees the banking payments systems, and with the commercial banks. No separate budget has yet been set for this process.

  Tax Law Rewrite
  Mr. Forman
  To ask the Chancellor of the Exchequer when the Inland Revenue will publish the document giving the plans and arrangements for the tax law rewrite, referred to in his 1996 Budget statement. [8931]

  Mr. Jack
  I am very pleased to be able to report on the good progress that has been made on the tax law rewrite. The Inland Revenue has today published a document which sets out the response to its consultations on this project to rewrite tax law in clearer and simpler language. I am placing copies in the Libraries of the House.

  This document takes full account of the comments received. It sets out the resulting plans and arrangements for taking the rewrite forward, so that the first rewrite Bill will be ready for enactment in the 1997–98 parliamentary Session.

  This is a very important and worthwhile project which will bring the benefits of clarity and certainty to businesses and ordinary taxpayers alike. We are committed to proceeding with it on the basis of full consultation.

  Mr. Forman
  To ask the Chancellor of the Exchequer who will be the members of the tax law rewrite steering committee being chaired by the right hon. the Lord Howe of Aberavon CH, QC. [8932]

  Mr. Jack
  The steering committee will play a crucial role in the rewrite project. Under the chairmanship of the right hon. the Lord Howe of Aberavon CH, QC, the committee will guide the project through the challenges that lie ahead, while ensuring that it keeps to its objectives.
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  The committee combines the talents and experience of a wide range of members drawn from Parliament, the legal and accountancy professions, consumer interests and the private sector.

  I am delighted to announce today that the other members of the committee will be the right hon. Sir John Balcombe, Mr. Ian Barlow, Dr. John Avery Jones CBE, Mr. Steve Matheson CB, Dr. John Marek MP, Ms Sheila McKechnie OBE, Sir John Shaw and Mr. Tim Smith MP. I am sure that this important project will benefit greatly from their experience.

  Taxation
  Mr. Darling
  To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for Oxford, East (Mr. Smith) of 26 February,Official Report, columns 339–52, to take account of (a) changes made in the Budget, and to provide his latest estimates of the burden of direct and indirect taxes for 1997–98, (b) revisions to figures for earlier years and (c) separate figures for (i) VAT, (ii) other indirect taxes and (iii) the council tax. [5195]

  Mr. Jack
  [holding answer 27 November 1996]: The tables show estimates of tax payments for the requested specimen households for the years 1994–95 to 1997–98.

  The main factors accounting for the increase in payments between years are growth in earnings and inflation. The figures for tax payments do not measure the effects of changes in tax rates, allowances, etcetera. A one-earner couple on average earnings with two children will pay £88 less in income tax and national insurance contributions next year than if these taxes had been left unchanged since 1991–92, apart from indexation.

  Real take-home pay for all these households will rise next year and will be substantially higher than in 1991–92. For the family on average earnings, the increase next year will be £370, bringing the total rise since 1991–92 to over £1,100. These increases take account of all taxes as well as earnings growth and inflation. Other factors are also boosting living standards, such as the lowest mortgage rates for 30 years and the rise in employment by ¾ million since 1992.

  The figures for tax payments are subject to important limitations. The estimates of indirect tax payments are very approximate. They are based on the assumption that these taxes are fully passed on in prices, which may not hold in practice. They also assume particular spending patterns by the households whereas in practice there are wide variations in spending on taxed goods, and hence in indirect tax payments, between households with similar incomes and compositions. Nor do the estimates include the effects of changes in tax on savings, particularly the reduction in the tax rate on savings income to 20 per cent. for basic rate payers or the growth in tax-free tax-exempt special savings accounts and personal equity plans, as the households specified have income only from earnings. The overall tax burden—total taxes and national insurance contributions as a percent of GDP—which includes the impact of all taxes is expected to be at the same level next year as in 1991–92.
  191

  Income tax, national insurance and indirect taxes at multiples of average earnings 1994–95

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1,000

  2,000

  Single person

  £ per week

  Gross income

  184.55

  276.83

  369.10

  553.65

  738.20

  1,107.30

  1,476.40

  1,845.50

  2,583.70

  3,691.00

  7,382.00

  NICs

  13.90

  23.12

  32.35

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  Income tax

  26.69

  49.76

  72.83

  123.71

  197.53

  345.17

  492.81

  640.45

  935.73

  1,378.65

  2,855.05

  VAT

  14.84

  19.78

  30.29

  Other indirect taxes

  20.05

  25.53

  37.19

  Total excluding council tax

  107.78

  150.49

  229.63

  Council tax

  7.10

  7.34

  7.87

  Real take-home pay (1996–97 prices)

  151.79

  215.02

  278.26

  412.77

  529.52

  763.01

  996.50

  1,230.00

  1,696.98

  2,397.46

  4,732.38

  Percentage of earnings

  NICs

  7.5

  8.4

  8.8

  6.9

  5.2

  3.5

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax

  14.5

  18.0

  19.7

  22.3

  26.8

  31.2

  33.4

  34.7

  36.2

  37.4

  38.7

  VAT

  5.4

  5.4

  5.5

  Other indirect taxes

  7.2

  6.9

  6.7

  Total excluding council tax

  38.9

  40.8

  41.5

  Council tax

  2.6

  2.0

  1.4

  Married couple, one earner: no children

  £ per week

  Gross income

  184.55

  276.83

  369.10

  553.65

  738.20

  1,107.30

  1,476.40

  1,845.50

  2,583.70

  3,691.00

  7,382.00

  NICs

  13.90

  23.12

  32.35

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  Income tax

  20.08

  43.14

  66.21

  117.09

  190.91

  338.55

  486.19

  633.83

  929.11

  1,372.03

  2,848.43

  VAT

  15.34

  20.84

  32.54

  Other indirect taxes

  21.47

  25.61

  34.43

  Total excluding council tax

  103.08

  145.01

  222.50

  Council tax

  9.36

  10.06

  11.54

  Real take-home pay (1996–97 prices)

  158.76

  222.00

  285.24

  419.75

  536.49

  769.98

  1,003.48

  1,236.97

  1,703.%

  2,404.43

  4,739.36

  Percentage of earnings

  NICs

  7.5

  8.4

  8.8

  6.9

  5.2

  3.5

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax

  10.9

  15.6

  17.9

  21.1

  25.9

  30.6

  32.9

  34.3

  36.0

  37.2

  38.6

  VAT

  5.5

  5.6

  5.9

  Other indirect taxes

  7.8

  6.9

  6.2

  Total excluding council tax

  37.2

  39.3

  40.2

  Council tax

  3.4

  2.7

  2.1

  Married couple, one earner: 2 children

  £ per week

  Gross income

  184.55

  276.83

  369.10

  553.65

  738.20

  1,107.30

  1,476.40

  1,845.50

  2,583.70

  3,691.00

  7,382.00

  NICs

  13.90

  23.12

  32.35

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  38.44

  Income tax (less child benefit)

  1.63

  24.69

  47.76

  98.64

  172.46

  320.10

  467.74

  615.38

  910.66

  1,353.58

  2,829.98

  VAT

  15.33

  20.30

  30.88

  Other indirect taxes

  24.99

  28.01

  34.43

  Total excluding council tax

  88.13

  128.42

  202.40

  Council tax

  8.72

  9.21

  10.27

  Real take-home pay (1996–97 prices)

  178.21

  241.45

  304.69

  439.20

  555.94

  789.44

  1,022.93

  1,256.42

  1,723.41

  2,423.89

  4,758.81

  Percentage of earnings

  NICs

  7.5

  8.4

  8.8

  6.9

  5.2

  3.5

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax (less child benefit)

  0.9

  8.9

  12.9

  17.8

  23.4

  28.9

  31.7

  33.3

  35.2

  36.7

  38.3

  VAT

  5.5

  5.5

  5.6

  Other indirect taxes

  9.0

  7.6

  6.2

  Total excluding council tax

  31.8

  34.8

  36.6

  Council tax

  3.1

  2.5

  1.9

  Married couple, 2 earners: no children:

  Earnings split 60:40

  £ per week

  Gross income

  184.55

  276.83

  369.10

  553.65

  738.20

  1,107.30

  1,476.40

  1,845.50

  2,583.70

  3,691.00

  7,382.00

  NICs

  9.34

  18.56

  27.79

  46.25

  63.41

  76.88

  76.88

  76.88

  76.88

  76.88

  76.88

  Income tax

  3.79

  24.36

  46.77

  92.90

  139.04

  252.67

  388.44

  536.08

  831.36

  1274.28

  2750.68

  VAT

  16.67

  22.14

  32.98

  Other indirect taxes

  24.78

  29.92

  40.08

  Total excluding council tax

  84.37

  126.62

  212.20

  Council tax

  9.55

  9.74

  10.12

  Real take-home pay (1996–97 prices)

  180.73

  246.61

  310.55

  437.02

  564.86

  820.01

  1,066.01

  1,299.50

  1,766.49

  2,466.97

  4,801.89

  192 193

  Income tax, national insurance and indirect taxes at multiples of average earnings 1994–95

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1,000

  2,000

  Percentage of earnings

  NICs

  5.1

  6.7

  7.5

  8.4

  8.6

  6.9

  5.2

  4.2

  3.0

  2.1

  1.0

  Income tax

  2.1

  8.8

  12.7

  16.8

  18.8

  22.8

  26.3

  29.0

  32.2

  34.5

  37.3

  VAT

  6.0

  6.0

  6.0

  Other indirect taxes

  9.0

  8.1

  7.2

  Total excluding council tax

  30.5

  34.3

  38.3

  Council tax

  3.5

  2.6

  1.8

  Income tax, national insurance and indirect taxes at multiples of average earnings 1995–96

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1000

  2000

  Single person

  £ per week

  Gross income

  190.60

  285.90

  381.20

  571.80

  762.40

  1,143.60

  1,524.80

  1,906.00

  2,668.40

  3,812.00

  7,624.00

  NICs

  14.42

  23.95

  33.48

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  Income tax

  27.63

  51.45

  75.28

  128.43

  204.67

  357.15

  509.63

  662.11

  967.07

  1,424.51

  2,949.31

  VAT

  15.06

  20.08

  30.75

  Other indirect taxes

  21.75

  27.66

  40.21

  Total excluding council tax

  112.20

  156.49

  238.76

  Council tax

  7.51

  7.77

  8.32

  Real take-home pay (1996–97 prices)

  151.72

  214.99

  278.25

  412.62

  529.42

  763.02

  996.61

  1,230.21

  1,697.40

  2,398.19

  4,734.15

  Percentage of earnings

  NICs

  7.6

  8.4

  8.8

  6.9

  5.2

  3.4

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax

  14.5

  18.0

  19.7

  22.5

  26.8

  31.2

  33.4

  34.7

  36.2

  37.4

  38.7

  VAT

  5.3

  5.3

  5.4

  Other indirect taxes

  7.6

  7.3

  7.0

  Total excluding council taxes

  39.2

  41.1

  41.8

  Council tax

  2.6

  2.0

  1.5

  Married couple, one earner: no children

  £ per week

  Gross income

  190.60

  285.90

  381.20

  571.80

  762.40

  1,143.60

  1,524.80

  1,906.00

  2,668.40

  3,812.00

  7,624.00

  NICs

  14.42

  23.95

  33.48

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  Income tax

  22.66

  46.49

  70.31

  123.47

  199.71

  352.19

  504.67

  657.15

  962.11

  1,419.55

  2,944.35

  VAT

  15.37

  20.96

  32.83

  Other indirect taxes

  23.45

  27.87

  37.27

  Total excluding council tax

  109.26

  152.63

  232.93

  Council tax

  9.87

  10.60

  12.15

  Real take-home pay (1996–97 prices)

  156.79

  220.05

  283.32

  417.69

  534.49

  768.08

  1001.68

  1235.28

  1702.47

  2403.26

  4739.22

  Percentage of earnings

  NICs

  7.6

  8.4

  8.8

  6.9

  5.2

  3.4

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax

  11.9

  16.3

  18.4

  21.6

  26.2

  30.8

  33.1

  34.5

  36.1

  37.2

  38.6

  VAT

  5.4

  5.5

  5.7

  Other indirect taxes

  8.2

  7.3

  6.5

  Total excluding council tax

  38.2

  40.0

  40.7

  Council tax

  3.5

  2.8

  2.1

  Married couple, one earner: 2 children

  £ per week

  Gross income

  190.60

  285.90

  381.20

  571.80

  762.40

  1,143.60

  1,524.80

  1,906.00

  2,668.40

  3,812.00

  7,624.00

  NICs

  14.42

  23.95

  33.48

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  39.36

  Income tax (less child benefit)

  3.81

  27.64

  51.46

  104.62

  180.86

  333.34

  485.82

  638.30

  943.26

  1,400.70

  2,925.50

  VAT

  15.36

  20.42

  31.16

  Other indirect taxes

  27.34

  30.60

  37.51

  Total excluding council tax

  94.29

  135.96

  212.64

  Council tax

  9.20

  9.72

  10.82

  Real take-home pay (1996–97 prices)

  176.04

  239.31

  302.57

  436.94

  553.74

  787.33

  1,020.93

  1,254.53

  1,721.72

  2,422.51

  4,758.47

  Percentage of earnings

  NICs

  7.6

  8.4

  8.8

  6.9

  5.2

  3.4

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax (less child benefit)

  2.0

  9.7

  13.5

  18.3

  23.7

  29.1

  31.9

  33.5

  35.3

  36.7

  38.4

  VAT

  5.4

  5.4

  5.4

  Other indirect taxes

  9.6

  8.0

  6.6

  Total excluding council tax

  33.0

  35.7

  37.2

  Council tax

  3.2

  2.5

  1.9

  194 195

  Income tax, national insurance and indirect taxes at multiples of average earnings 1995–96

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1000

  2000

  Married couple, 2 earners, no children:

  Earnings split 60:40

  £ per week

  Gross income

  190.60

  285.90

  381.20

  571.80

  762.40

  1,143.60

  1,524.80

  1,906.00

  2,668.40

  3,812.00

  7,624.00

  NICs

  9.78

  19.31

  28.84

  47.90

  65.22

  78.72

  78.72

  78.72

  78.72

  78.72

  78.72

  Income tax

  6.04

  27.21

  50.29

  97.94

  145.59

  263.55

  404.38

  556.86

  861.82

  1,319.26

  2,844.06

  VAT

  16.69

  22.27

  33.28

  Other indirect taxes

  26.94

  32.64

  43.93

  Total excluding council tax

  90.15

  134.04

  223.05

  Council tax

  10.11

  10.31

  10.71

  Real take-home pay (1996–97 prices)

  178.50

  244.48

  308.51

  435.04

  563.35

  818.41

  1063.91

  1297.50

  1764.69

  2465.48

  4801.44

  Percentage of earnings

  NICs

  5.1

  6.8

  7.6

  8.4

  8.6

  6.9

  5.2

  4.1

  3.0

  2.1

  1.0

  Income tax

  3.2

  9.5

  13.2

  17.1

  19.1

  23.0

  26.5

  29.2

  32.3

  34.6

  37.3

  VAT

  5.8

  5.8

  5.8

  Other indirect taxes

  9.4

  8.6

  7.7

  Total excluding council tax

  31.5

  35.2

  39.0

  Council tax

  3.5

  2.7

  1.9

  Income tax, national insurance and indirect taxes at multiples of average earnings 1996–97

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1000

  2000

  Single person

  £ per week

  Gross income

  197.75

  296.63

  395.50

  593.25

  791.00

  1,186.50

  1,582.00

  1,977.50

  2,768.50

  3,955.00

  7,910.00

  NICs

  14.90

  24.78

  34.67

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  Income tax

  27.08

  50.81

  74.54

  126.88

  205.98

  364.18

  522.38

  680.58

  996.98

  1,471.58

  3,053.58

  VAT

  16.41

  21.91

  33.66

  Other indirect taxes

  23.27

  29.63

  43.23

  Total excluding council tax

  115.27

  160.75

  244.38

  Council tax

  7.74

  8.01

  8.57

  Real take-home pay Percentage of male average earnings (1996–97 prices)

  155.77

  221.03

  286.29

  425.75

  544.40

  781.70

  1,019.00

  1,256.30

  1,730.90

  2,442.80

  4,815.80

  Percentage of earnings

  NICs

  7.5

  8.4

  8.8

  6.8

  5.1

  3.4

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax

  13.7

  17.1

  18.8

  21.4

  26.0

  30.7

  33.0

  34.4

  36.0

  37.2

  38.6

  VAT

  5.5

  5.5

  5.7

  Other indirect taxes

  7.8

  7.5

  7.3

  Total excluding council tax

  38.9

  40.6

  41.2

  Council tax

  2.6

  2.0

  1.4

  Married couple, one earner: no children

  £ per week

  Gross income

  197.75

  296.63

  395.50

  593.25

  791.00

  1,186.50

  1.582.00

  1,977.50

  2,768.50

  3,955.00

  7,910.00

  NICs

  19.90

  24.78

  34.67

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  Income tax

  21.92

  45.65

  69.38

  121.71

  200.81

  359.01

  517.21

  675.41

  991.81

  1,466.41

  3,048.41

  VAT

  16.72

  22.84

  35.92

  Other indirect taxes

  25.07

  29.78

  39.85

  Total excluding council tax

  112.22

  156.67

  238.10

  Council tax

  10.15

  10.90

  12.51

  Real take-home pay (1996–97 prices)

  160.94

  226.19

  291.45

  430.92

  549.57

  786.87

  1,024.87

  1,261.47

  1,736.07

  2,447.97

  4,820.97

  Percentage of earnings

  NICs

  7.5

  8.4

  8.8

  6.8

  5.1

  3.4

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax

  11.1

  15.4

  17.5

  20.5

  25.4

  30.3

  32.7

  34.2

  35.8

  37.1

  38.5

  VAT

  5.6

  5.8

  6.1

  Other indirect taxes

  8.5

  7.5

  6.7

  Total excluding council tax

  37.8

  39.6

  40.1

  Council tax

  3.4

  2.8

  2.1

  Married couple, one earner: 2 children

  £ per week

  Gross income

  197.75

  296.63

  395.50

  593.25

  791.00

  1,186.50

  1,582.00

  1,977.50

  2,768.50

  3,955.00

  7,910.00

  NICs

  14.90

  24.78

  34.67

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  40.62

  Income tax (less child benefit)

  2.32

  26.05

  49.78

  102.11

  181.21

  339.41

  497.61

  655.81

  972.21

  1,446.81

  3,028.81

  VAT

  16.70

  22.23

  34.07

  Other indirect taxes

  29.53

  33.00

  40.42

  196 197

  Income tax, national insurance and indirect taxes at multiples of average earnings 1996–97

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1000

  2000

  Total excluding council tax

  97.06

  139.68

  217.22

  Council tax

  9.47

  10.00

  11.14

  Real take-home pay (1996–97 prices)

  180.54

  245.79

  311.05

  450.52

  569.17

  806.47

  1,043.77

  1,281.07

  1,755.67

  2,467.57

  4.840.57

  Percentage of earnings

  NICs

  7.5

  8.4

  8.8

  6.8

  5.1

  3.4

  2.6

  2.1

  1.5

  1.0

  0.5

  Income tax (less child benefit)

  1.2

  8.8

  12.6

  17.2

  22.9

  28.6

  31.5

  33.2

  35.1

  36.6

  38.3

  VAT

  5.6

  5.6

  5.7

  Other indirect taxes

  10.0

  8.3

  6.8

  Total excluding council tax

  32.7

  35.3

  36.6

  Council tax

  32.2

  2.5

  1.9

  Married couple, 2 earners, no children:

  Earnings split 60:40

  £ per week

  Gross income

  197.75

  296.63

  395.50

  593.25

  791.00

  1,186.50

  1,582.00

  1,977.50

  2,768.50

  3,955.00

  7.910.00

  NICs

  10.02

  19.90

  29.79

  49.57

  67.38

  81.24

  81.24

  81.24

  81.24

  81.24

  81.24

  Income tax

  5.42

  26.42

  49.00

  96.46

  143.92

  262.70

  406.79

  564.99

  881.39

  1,355.99

  2,937.99

  VAT

  18.07

  24.20

  36.26

  Other indirect taxes

  28.94

  34.98

  46.86

  Total excluding council tax

  93.34

  137.98

  229.15

  Council tax

  10.42

  10.63

  11.03

  Real take-home pay (1996–96 prices)

  182.31

  250.30

  317.71

  447.22

  579.70

  842.56

  1,093.97

  1,331.27

  1,805.87

  2,517.77

  4,890.77

  Percentage of earnings

  NICs

  5.1

  6.7

  7.5

  8.4

  8.5

  6.8

  5.1

  4.1

  2.9

  2.1

  1.0

  Income tax

  2.7

  8.9

  12.4

  16.3

  18.2

  22.1

  25.7

  28.6

  31.8

  34.3

  37.1

  VAT

  6.1

  6.1

  6.1

  Other indirect taxes

  9.8

  8.8

  7.9

  Total excluding council tax

  31.5

  34.9

  38.6

  Council tax

  3.5

  2.7

  1.9

  Income tax, national insurance and indirect taxes at multiples of average earnings 1997–98

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1,000

  2,000

  Single person

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1,233.90

  1,645.20

  2,056.50

  2,879.10

  4,113.00

  8,226.00

  NICs

  15.61

  25.89

  36.17

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  Income tax

  27.04

  50.69

  74.34

  127.97

  210.23

  374.75

  539.27

  703.49

  1,032.83

  1,526.39

  3,171.59

  VAT

  17.19

  23.01

  35.39

  Other indirect taxes

  25.09

  32.07

  46.93

  Total excluding council tax

  118.86

  165.59

  251.83

  Real take-home pay (1996–97 prices)

  156.06

  226.29

  293.51

  436.61

  557.02

  797.83

  1,038.64

  1,279.45

  1,761.07

  2,483.51

  4,891.61

  Increase since 1991– 92

  13.66

  19.25

  24.84

  34.13

  38.04

  54.73

  71.42

  88.11

  121.49

  171.56

  338.46

  Increase since 1996– 97

  3.29

  5.26

  7.22

  10.86

  12.62

  16.13

  19.64

  23.15

  30.17

  40.71

  75.81

  Percentage of earnings

  NICs

  7.6

  8.4

  8.8

  6.7

  5.0

  3.4

  2.5

  2.0

  1.4

  1.0

  0.5

  Income tax

  13.1

  16.4

  18.1

  20.7

  25.6

  30.4

  32.8

  34.2

  35.9

  37.1

  38.6

  VAT

  5.6

  5.6

  5.7

  Other indirect taxes

  8.1

  7.8

  7.6

  Total excluding council tax

  38.5

  40.3

  40.8

  Married couple, one earner: no children

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1,233.90

  1,645.20

  2,056.50

  2,879.00

  4,113.00

  8,226.00

  NICs

  15.61

  25.89

  36.17

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  Income tax

  21.76

  45.41

  69.06

  122.69

  204.95

  369.47

  533.99

  698.51

  1,027.55

  1,521.11

  3,166.31

  VAT

  17.47

  23.94

  37.71

  Other indirect taxes

  27.10

  32.20

  43.06

  Total excluding council tax

  115.87

  161.37

  245.01

  Real take-home pay (1996–97 prices)

  164.21

  231.44

  298.66

  441.77

  562.17

  802.98

  1,043.79

  1,284.60

  1,766.23

  2,488.66

  4,896.77

  Increase since 1991– 92

  9.41

  15.01

  20.59

  29.90

  28.15

  44.84

  61.53

  78.22

  111.61

  161.68

  328.59

  198 199

  Income tax, national insurance and indirect taxes at multiples of average earnings 1997–98

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  1,000

  2,000

  Increase since 1996–97

  3.27

  5.25

  7.21

  10.85

  12.60

  16.11

  19.62

  23.13

  30.16

  40.69

  75.80

  Percentage of earnings

  NICs

  7.6

  8.4

  8.8

  6.7

  5.0

  3.4

  2.5

  2.0

  1.4

  1.0

  0.5

  Income tax

  10.6

  14.7

  16.8

  19.9

  24.9

  29.9

  32.5

  34.0

  35.7

  37.0

  38.5

  VAT

  5.7

  5.8

  6.1

  Other indirect taxes

  8.8

  7.8

  7.0

  Total excluding council tax

  37.6

  39.2

  39.7

  Married couple one earner: 2 children

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1,233.90

  1,645.20

  2,056.50

  2.879.10

  4,113.00

  8,226.00

  NICs

  15.61

  25.89

  36.17

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  41.54

  Income tax (less child benefit)

  1.71

  25.36

  49.01

  102.64

  184.90

  349.42

  513.94

  678.46

  1,007.50

  1,501.06

  3,146.26

  VAT

  17.41

  23.26

  35.72

  Other indirect taxes

  31.92

  35.73

  43.84

  Total excluding council tax

  100.58

  144.17

  223.75

  Real take-home pay (1996–97 prices)

  183.78

  251.00

  318.23

  461.33

  581.74

  822.55

  1,063.36

  1,304.17

  1,785.79

  2,508.22

  4,916.33

  Increase since 1991– 92

  10.65

  16.24

  21.83

  31.13

  29.40

  46.09

  62.78

  79.47

  112.85

  162.91

  329.82

  Increase since 1996– 97

  3.24

  5.21

  7.18

  10.81

  12.57

  16.08

  19.59

  23.10

  30.12

  40.65

  75.76

  Percentage of earnings

  NICs

  7.6

  8.4

  8.8

  6.7

  5.0

  3.4

  2.5

  2.0

  1.4

  1.0

  0.5

  Income tax (less child benefit)

  0.8

  8.2

  11.9

  16.6

  22.5

  28.3

  31.2

  33.0

  35.0

  36.5

  38.2

  VAT

  5.6

  5.7

  5.8

  Other indirect taxes

  10.3

  8.7

  7.1

  Total excluding council tax

  32.6

  35.1

  36.3

  Married couple, 2 earners, no children:

  Earnings split 60:-40

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1,233.90

  1,645.20

  2,056.50

  2,879.10

  4,113.00

  8,226.00

  NICs

  10.65

  20.93

  31.21

  51.78

  69.48

  83.08

  83.08

  83.08

  83.08

  83.08

  83.08

  Income tax

  4.74

  26.15

  48.81

  96.11

  143.41

  265.31

  415.19

  579.71

  908.75

  1,402.31

  3,047.51

  VAT

  18.78

  25.24

  37.99

  Other indirect taxes

  31.06

  37.64

  50.62

  Total excluding council tax

  96.92

  142.90

  236.49

  Real take-home pay (1996–97 prices)

  185.67

  255.07

  323.27

  457.72

  594.96

  864.09

  1,119.19

  1,360.00

  1,841.62

  2,564.06

  4,972.16

  Increase since 1991– 92

  8.73

  16.50

  23.06

  34.25

  47.77

  56.46

  66.19

  82.88

  116.26

  166.34

  333.23

  Increase since 1996– 97

  3.36

  4.77

  6.56

  10.50

  15.26

  21.53

  25.22

  28.73

  35.75

  46.29

  81.39

  Percentage of earnings

  NICs

  5.2

  6.8

  7.6

  8.4

  8.4

  6.7

  5.0

  4.0

  2.9

  2.0

  1.0

  Income tax

  2.3

  8.5

  11.9

  15.6

  17.4

  21.5

  25.2

  28.2

  31.6

  34.1

  37.0

  VAT

  6.1

  6.1

  6.2

  Other indirect taxes

  10.1

  9.2

  8.2

  Total excluding council tax

  31.4

  34.7

  38.3

  Income tax, national insurance and indirect taxes at multiples of average earnings

  1991–92 indexed to 1997–98

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  100

  2000

  Single person

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1233.90

  1645.20

  2056.50

  2879.10

  4113.00

  8226.00

  NICs

  14.17

  23.42

  32.68

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  Income tax

  32.64

  58.34

  84.05

  135.68

  217.94

  382.46

  546.98

  711.50

  1040.54

  1534.10

  3179.30

  Percentage of earnings

  NICs

  6.9

  7.6

  7.9

  6.1

  4.6

  3.0

  2.3

  1.8

  1.3

  0.9

  0.5

  Income tax

  15.9

  18.9

  20.4

  22.0

  26.5

  31.0

  33.2

  34.6

  36.1

  37.3

  38.6

  Married couple, one earner: no children

  £ per week

  Gross income

  205.65

  308.45

  411.30

  616.95

  822.60

  1233.90

  1645.20

  2056.50

  2879.10

  4113.00

  8226.00

  NICs

  14.17

  23.42

  32.68

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  Income tax

  22.83

  48.54

  74.24

  125.66

  202.25

  366.77

  531.29

  695.81

  1024.85

  1518.41

  3163.61

  200 201

  Income tax, national insurance and indirect taxes at multiples of average earnings

  1991–92 indexed to 1997–98

  Percentage of male average earnings

  50

  75

  100

  150

  200

  300

  400

  500

  700

  100

  2000

  Percentage of earnings

  NICs

  6.9

  7.6

  7.9

  6.1

  4.6

  3.0

  2.3

  1.8

  1.3

  0.9

  0.5

  Income tax

  11.1

  15.7

  18.1

  20.4

  24.6

  29.7

  32.3

  33.8

  35.6

  36.9

  38.5

  Married couple, one earner: 2 children

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1233.90

  1645.20

  2056.30

  2879.10

  4113.00

  8226.00

  NICs

  14.17

  23.42

  32.68

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  37.51

  Income tax (less child benefit)

  2.78

  28.49

  54.19

  105.61

  182.20

  346.72

  511.24

  675.76

  1004.80

  1498.36

  3143.56

  Percentage of earnings

  NICs

  6.9

  7.6

  7.9

  6.1

  4.6

  3.0

  2.3

  1.8

  1.3

  0.9

  0.5

  Income tax (less child benefit)

  1.4

  9.2

  13.2

  17.1

  22.1

  28.1

  31.1

  32.9

  34.9

  36.4

  38.2

  Married couple, 2 earners, no children:

  Earnings split 60:40

  £ per week

  Gross income

  205.65

  308.48

  411.30

  616.95

  822.60

  1233.90

  1645.20

  2056.50

  2879.10

  4113.00

  8226.00

  NICs

  9.83

  19.08

  28.34

  46.85

  62.78

  75.02

  75.02

  75.02

  75.02

  75.02

  75.02

  Income tax

  4.06

  29.76

  55.47

  106.88

  158.29

  273.96

  420.20

  584.72

  913.76

  1407.32

  3052.52

  Percentage of earnings

  NICs

  4.8

  6.2

  6.9

  7.6

  7.6

  6.1

  4.6

  3.6

  2.6

  1.8

  0.9

  Income tax

  2.0

  9.6

  13.5

  17.3

  19.2

  22.2

  25.5

  28.4

  31.7

  34.2

  37.1

  Notes to Tables:

  1. Income tax payments are calculated on the assumption that the households receive no tax reliefs other than the standard allowances and only have income from employment. All earner, including wives are assumed to pay Class 1 National Insurance contributions at the contracted-in rate. Child benefit is deducted from income tax so as to provide comparability with figures for earlier years when support was partly given through child tax allowances.

  2. Earnings are taken to be the average gross weekly earnings of all full-time males on adult rates with pay unaffected by absence. Estimates of earnings in 1996–97 and 1997–98 are based on earnings growth assumptions of 3 per cent. in 1996–97 and 4 per cent. in 1997–98 on line with the illustrative assumptions set out in the Financial Statement and Budget Report.

  3. The figures for an indexed 1991–92 tax system show the tax payments that would result if the 1991–92 income tax system had been indexed to 1997–98 using the increase in the Retail Prices Index between December 1990 and September 1996, and income tax and national insurance contributions rates had been kept at their 1991–92 levels.

  4. Real take-home pay includes earnings and child benefit less direct tax payments (income tax and national insurance contributions) deflated to 1996–97 prices using the Retail Prices Index. Indirect taxes and council tax are included in the Retail Prices Index and therefore in the inflation adjustment. Those on low earnings may be entitled to income-related benefits not included in these calculations.

  5. Figures for indirect taxes include estimates of the effects of the main intermediate taxes on households as well as the impact of taxes on final goods and services. Estimates of the impact of taxes on final goods and services assume that these taxes are fully incident on households. Estimates of the impact of intermediate taxes are based on the relation between intermediate production costs and final consumption derived using input-output techniques.

  6. Figures for indirect taxes and council tax are estimated from expenditure patterns in the 1994–95 Family Expenditure Survey uprated to later years using forecasts of aggregate tax receipts. All estimates are based on the illustrative assumption that 10 per cent. of disposable income is saved.

  7. Estimates of indirect taxes are very approximate, even within the range for which figures are shown, because spending patterns vary widely between households with the same composition and income. The margin of error is even higher outside the range shown, and even illustrative estimates cannot be made. Because of sampling variation, there can be substantial differences between estimates obtained from Family Expenditure Surveys for different years, so reliable comparisons cannot be made between the estimates for different years.

  Beer Taxes
  Mr. Meale
  To ask the Chancellor of the Exchequer what was(a) the level of tax on beer in each year; since 1979 and (b) the percentage change between each year. [7254]

  Mr. Oppenheim
  [holding answer 3 December 1996]: Tax revenues—excise duty and VAT—for a pint of bitter in licensed premises were as follows:

  Tax in pence

  Percentage change

  1979

  12.2

  23.1

  1980

  14.8

  21.7

  1981

  19.3

  29.7

  1982

  21.7

  12.9

  1983

  23.1

  6.1

  1984

  26.2

  13.6

  202

  Tax in pence

  Percentage change

  1985

  28.3

  8.0

  1986

  28.8

  1.8

  1987

  29.2

  1.4

  1988

  30.8

  5.4

  1989

  31.6

  2.5

  1990

  34.5

  9.3

  1991

  40.6

  17.8

  1992

  43.1

  6.0

  1993

  45.2

  4.9

  1994

  44.5

  -1.5

  1995

  46.2

  3.9

  1996

  46.9

  1.6

  For 1979, price relates to July. For 1980 to 1993 prices relate to April/May and from 1994 onwards they relate to January.

  Tax on a pint of bitter in licensed premises is now the lowest proportion of the selling price in 30 years.

  European Union Budget
  Sir John Stanley
  To ask the Chancellor of the Exchequer if he will list the net EU budget contributions for each member state in 1995 and their estimated contributions in 1996, indicating the sources of his figures. [7677]

  Mr. Oppenheim
  [holding answer 5 December 1996]: The table sets out indicative figures for 1995. These are drawn from the European Court of Auditors' information on member states' total financial contributions to and receipts from the Community budget published this November in the "Annual Report covering the financial year 1995". The net contribution figures show the balance from the two sides of the budget by deducting total receipts from the gross contribution for each member state. A minus sign therefore indicates that a member state received more from the budget in 1995 than it paid.

  Comparable information from the European Court of Auditors relating to 1996 will not be available until November 1997. The figure for the UK's net contribution for 1996 is therefore the Treasury's most recent forecast. This calculation is not directly comparable with that of the European Court of Auditors, but the Government are confident that the UK's net contribution in 1996 will be considerably lower than in 1995 as we recover excess payments relating to the 1995 underspend.

  Net contributions to the EU Budget in 1995

  Millions of ecu

  £ million

  Belgium

  311

  255

  Denmark

  -306

  -251

  Germany

  13,431

  10,999

  Greece

  -3,489

  -2,857

  Spain

  -7,218

  -5,911

  France

  1,727

  1,414

  Ireland

  -1,887

  -1,545

  Italy

  614

  503

  Luxembourg

  45

  37

  Netherlands

  2,005

  1,642

  Austria

  905

  741

  Portugal

  -2,381

  -1,950

  Finland

  165

  135

  Sweden

  937

  767

  UK (1995)

  4,720

  3,865

  UK (1996)

  1,892

  1,603

  Notes:

  1. These figures are net of the UK's abatement.

  2. Exchange rates used are 1.2211 ecu/£ for 1995 and 1.1803 ecu/E for 1996.

  3. These figures can only be indicative of net contributions because the Court of Auditors does not allocate all Community spending by member state. In particular, administrative spending is not fully attributed.

  4. Net contributions can vary significantly from year to year owing to adjustments in Own Resource payments and fluctuations in receipts. The UK's net contribution in 1995 was high because the Community Budget underspent in that year, leading to lower UK receipts than expected. The UK abatement in 1995 was also relatively lower than on average.

  Source:

  European Court of Auditors (UK 1996 figure HM Treasury, Cm 3350)

  Christmas Expenditure
  Mr. Donohoe
  To ask the Chancellor of the Exchequer how much his Department will spend on Christmas trees 204
  and decorations this year; how many Christmas trees will be bought for his Department's headquarters; and what are the type and country of origin of the trees. [7572]

  Mrs. Angela Knight
  [holding answer 6 December 1996]: Two Christmas trees of type Nordmanianna, grown in England, have been purchased at a cost of around £500.

  Economic Statistics
  Mr. Milburn
  To ask the Chancellor of the Exchequer if he will update his answer of 9 June 1995,Official Report, columns 339–40, on economic statistics relating to exports, investments, imports and gross domestic product of EU and G7 countries, to cover the period 1979 to 1995. [7820]

  Mrs. Angela Knight
  [holding answer 6 December 1996]: G7 and EC growth, investment, exports and imports data can be found in the Organisation for Economic Co-operation and Development publications "OECD Quarterly National Accounts" and the "OECD National Accounts, Vol. I", which are available in the House of Commons Library.

  Average annual export volume growth 1979–95 Percentage

  Average annual GDP growth 1979–95 Percentage

  G7

  US

  6.1

  2.4

  Canada

  6.3

  2.4

  Japan

  5.6

  3.1

  France

  3.9

  1.9

  Italy

  4.5

  2.0

  UK

  3.6

  1.9

  West Germany

  5.3

  2.1

  Rest of EC

  Austria

  4.4

  2.2

  Belgium1

  4.2

  1.9

  Denmark

  4.5

  1.9

  Finland

  4.3

  2.0

  Greece1

  5.7

  1.4

  Ireland1

  8.8

  3.6

  Luxembourg1

  3.9

  3.0

  Netherlands

  4.2

  1.9

  Portugal1

  6.2

  2.5

  Spain

  6.7

  2.4

  Sweden

  4.6

  1.4

  1 Latest available year 1994.

  Investment to GDP average ratio 1979–95

  Imports to GDP average ratio 1979–95

  G7

  US

  18.5

  10.6

  Canada

  20.6

  26.7

  Japan

  29.4

  10.0

  France

  20.3

  21.9

  Italy

  20.3

  20.6

  UK

  17.1

  26.3

  West Germany1

  22.7

  30.2

  Rest of EC

  Austria

  24.1

  37.7

  Belgium1

  18.1

  69.6

  Denmark

  17.4

  32.0

  Finland

  22.7

  27.9

  205

  Investment to GDP average ratio 1979–95

  Imports to GDP average ratio 1979–95

  Greece1

  22.0

  26.8

  Ireland1

  20.7

  57.3

  Luxembourg1

  22.1

  91.8

  Netherlands

  20.1

  49.4

  Portugal1

  28.1

  37.2

  Spain

  21.4

  20.1

  Sweden

  18.4

  30.9

  1 Latest available year 1994.

  Household Incomes
  Mr. Milburn
  To ask the Chancellor of the Exchequer what was the average gross weekly income in 1995–96 by decile group for(a) all households, (b) one adult retired households mainly dependent on state pensions, (c) one adult retired households not mainly dependent on state pensions, (d) one adult non-retired households, (e) one adult households with children, (f) two adult

  Family Expenditure Survey 1995–96 Average Gross Normal Weekly Income by Decile Group

  Lowest ten per cent.

  Second decile group

  Third decile group

  Fourth decile group

  Fifth decile group

  Sixth decile group

  Seventh decile group

  Eighth decile group

  Ninth decile group

  Highest ten per cent.

  All households

  All households

  Number of households

  680

  679

  680

  680

  680

  679

  680

  680

  679

  680

  797

  Average gross normal weekly income (£)

  65.30

  102.00

  145.20

  201.20

  270.90

  342.80

  417.40

  514.20

  659.40

  1090.50

  380.90

  One adult retired households mainly dependent on state pensions

  Number of households

  51

  51

  50

  51

  51

  51

  51

  50

  51

  51

  508

  Average gross normal weekly income (£)

  61.20

  65.60

  67.70

  70.60

  72.30

  75.30

  82.40

  92.80

  110.30

  146.00

  84.40

  One adult retired households not mainly dependent on state pensions

  Number of households

  42

  42

  41

  42

  42

  42

  42

  41

  42

  42

  418

  Average gross normal weekly income (£)

  83.40

  99.60

  113.70

  125.20

  136.80

  152.80

  176.30

  209.70

  270.30

  528.30

  189.70

  One adult non-retired households

  Number of households

  90

  89

  90

  89

  90

  89

  90

  89

  90

  89

  895

  Average gross normal weekly income (£)

  44.40

  67.70

  103.80

  156.80

  201.80

  247.00

  292.90

  343.70

  422.10

  640.50

  251.80

  One adult households with children

  Number of households

  44

  44

  44

  44

  45

  44

  44

  44

  44

  44

  441

  Average gross normal weekly income (£)

  63.10

  77.80

  84.80

  93.50

  105.80

  122.00

  156.50

  211.30

  279.90

  493.30

  168.70

  Two adult households with children

  Number of household

  166

  167

  166

  167

  166

  166

  167

  166

  167

  166

  1,664

  Average gross normal weekly income (£)

  117.80

  210.70

  294.40

  356.00

  405.80

  459.00

  531.90

  625.40

  757.20

  1,187.10

  494.50

  One man one woman non-retired households

  Number of households

  134

  134

  134

  134

  134

  133

  134

  134

  134

  134

  1,339

  Average gross normal weekly income (£)

  113.80

  202.60

  276.90

  337.90

  390.50

  449.90

  517.30

  614.10

  748.60

  1,283.10

  493.50

  One man one woman retired households mainly dependent on state pensions

  Number of households

  24

  24

  23

  24

  24

  24

  24

  23

  24

  24

  238

  Average gross normal weekly income (£)

  90.00

  106.50

  111.90

  119.30

  125.70

  133.50

  144.90

  160.20

  177.10

  230.40

  140.00

  One man one woman retired households not mainly dependent on state pensions

  Number of households

  44

  44

  44

  44

  44

  43

  44

  44

  44

  44

  439

  Average gross normal weekly income (£)

  141.20

  168.70

  189.50

  213.70

  238.10

  269.60

  309.50

  364.00

  449.00

  780.90

  312.50

  Note:

  ONS, Family Spending 1995–96, Crown copyright 1996.
  206
  households with children, (g) one man, one woman non-retired households, (h) one man, one woman retired households mainly dependent on state pensions and (i) one man, one woman retired households not mainly dependent on state pensions. [7826]

  Mrs. Angela Knight
  [holding answer 6 December 1996]: The information requested falls within the responsibility of the chief executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.

  Letter from Tim Holt to Mr. Alan Milburn, dated 11 December 1996:
  The Chancellor of the Exchequer has asked me to reply as the Director of the Office for National Statistics to your recent question on the average gross weekly income in 1995–96 by decile group for certain household compositions.
  Estimates from the Family Expenditure Survey (FES) for average gross normal weekly income in 1995–96 by decile group for these household compositions are shown in the attached table. The figures are subject to sampling variations; have been rounded to the nearest 10 pence; are averages for each household composition and have not been adjusted to reflect household composition.

  Budget Effects
  Mr. Ieuan Wyn Jones
  To ask the Chancellor of the Exchequer if he will publish his Department's estimates of the distributional impact of changes made in the Budget(a) by household income decile and (b) by region. [7267]

  Mr. Jack
  [holding answer 10 December 1996]: Estimates of the impact of some of the main Budget tax measures on household income deciles are in the table. Estimates of the effects of other Budget measures and of the distributional impact by region are not available.

  The figures show the direct impact of the measures on households. They do not allow for the lasting prosperity, combining steady growth with low inflation, that has been secured by the Budget and is ensuring that living standards go on rising. A family on average earnings should be £370 better off next year than this, after earnings growth, tax and inflation, and over £1,100 a year better off than in 1991–92.

  Average impact (- loss/+ gain) of main Budget tax measures in 1997– 981 (as a percentage of net income)

  Household income decile2

  Tobacco

  Other measures

  Bottom

  -0.3

  -0.2

  2nd

  -0.2

  0.0

  3rd

  -0.2

  0.1

  4th

  -0.2

  0.3

  5th

  -0.1

  0.4

  6th

  -0.1

  0.6

  7th

  -0.1

  0.7

  8th

  -0.1

  0.7

  9th

  -0.1

  0.8

  Top

  0.0

  0.8

  1 Estimates based on 992–93 to 1994–95 Family Expenditure Survey data, uprated to 1997–98 price and earnings levels. Because of the limitations of the Survey data the estimates are only approximate, particularly at the top and bottom of the distribution. The figures include the main tax measures directly affecting households—real rises of £200 in personal allowances; real rise of £100 in lower rate band; lp reduction in the basic rate of income tax; freeze on beer, wine and cider duties; 4 per cent, cut in spirits duty; 5 per cent, real rise in tobacco duty; 3 per cent, real rise in road fuel duties and the increase in insurance premium tax of 1.5 per cent. The figures show the effects relative to indexed tax allowances and duty rates.

  2 Household incomes are adjusted for differences in composition before allocating households to deciles.

  Tax Evasion
  Mr. Milburn
  To ask the Chancellor of the Exchequer how many cases of evasions of payments of(a) income tax and (b) other tax have been discovered in each of the last five years; and what has been the value of the revenue recovered in each category. [8306]

  Mr. Jack
  [holding answer 10 December 1996]: I refer the hon. Member to the written answer which I gave him on 26 October 1995, Official Report, columns 727–28, which covered the years 1989–90 to 1994–95.

  The equivalent figures for 1995–96 are:

  Income tax investigations

  Other investigations

  Yield from counter-evasion work (£ million)

  57,211

  9,106

  1,309

  208
  Splitting the yield figures for each of the last five years between income tax and other taxes could be done only at disproportionate cost.

  Tax (Tobacco Products)
  Mr. Cummings
  To ask the Chancellor of the Exchequer (1) how many representations he has received from members of the public calling for(a) maintaining present and (b) reducting rates of tax on tobacco products (i) since November 1995 and (ii) since September 1996; [6898]

  (2) how many representations he has received from hon. Members calling for (a) maintaining present and (b) reducting rates of tax on tobacco products since November 1995. [6920]

  Mr. Oppenheim
  The precise information is not available, but the Prime Minister and Treasury Ministers have received many representations, in varying forms, from hon. Members, members of the public and health practitioners on many aspects of tobacco taxation. The Chancellor met hon. Members on 29 October, as did I on 30 October, to hear further representations on the subject of tobacco taxation.

  Airport Passenger Taxes
  Mr. Robert Banks
  To ask the Chancellor of the Exchequer if he will set out the level of airport passenger taxes, where appropriate, in each of the OECD member states. [7450]

  Mr. Oppenheim
  The information is not available in the form requested because the structure of air passenger taxes throughout OECD member states is very varied and complex. It includes embarkation taxes, departure charges, passenger service charges and air transport taxes as well as VAT-type taxes. They also vary, within a single state, according to factors such as airport of departure, place of destination, ticket price and weight of aircraft.

  Prawns
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer, pursuant to the verdict of the European Court on the duty liability of John and Celia Smith of Grimsby on prawns imported from the Faroe Islands with valid EUR 1 certificates, if he proposes to apply to the European Commission for a waiver on the duty. [7684]

  Mr. Oppenheim
  The European Court of Justice has referred this matter back to the United Kingdom High Court for a decision as to duty liability. The judgment specifically stated that it is now for the national court to determine whether the conditions for waiver are met. It is the High Court which will decide this case, not the European Commission.

  Mr. Mitchell
  To ask the Chancellor of the Exchequer what amount of retrospective duty was levied on German and Danish importers of prawns subsequently imported with valid EUR 1 certificates from Iceland and the Faroe Islands; and how many importers were affected. [7682]

  Mr. Oppenheim
  We have no information on amounts of duty demanded retrospectively in Germany and Denmark, or on the number of importers affected. However UK customs is aware that demands have been
  209
  issued in both countries and, as in the United Kingdom, appeals are working their way through the respectively legal systems.

  Zaire
  Mr. Cohen
  To ask the Chancellor of the Exchequer if he will assess the allegations contained in the Cook report of June 1995 relating to arms transport to Zaire, a transcript of which has been sent to him. [7525]

  Mr. Oppenheim
  The investigation and prosecution of any alleged breaches of UK legislation implementing arms embargoes is a matter for the commissioners of Customs and Excise. It is not customs' general practice to comment publicly about the existence or nature of any investigation of individuals or companies not yet accused of criminal offences since to do so could risk prejudicing any on-going inquiries or future criminal proceedings.

  I am, however, on this occasion able to tell the hon. Member that the allegations contained in the Cook report were taken into account in inquiries made by customs in 1995. These inquiries did not produce evidence to support any criminal proceedings.

  British Artists (Germany)
  Mr. Fisher
  To ask the Chancellor of the Exchequer if it is his policy that British artists appearing in Germany should be able to recover or obtain credit for value added tax imposed in Germany on taxes withheld. [7660]

  Mr. Oppenheim
  When UK artists appear in Germany an element for VAT is included in the calculation of taxes withheld there. A deduction in respect of that element may be made by UK artists in computing their income for the purposes of UK income tax.

  Petrol and Diesel
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what is his estimate of total income to the Treasury resulting from an increase in petrol and diesel duties exclusive of value added tax of(a) 1p per litre, (b) 3p per litre and (c) 4.5p per litre. [7479]

  Mr. Oppenheim
  Based on information in the "Tax Ready Reckoner and Tax Reliefs," increasing the duty rate on petrol and diesel by 1p, 3p and 4.5p per litre would yield approximately £0.5 billion, £1.4 billion and £2.1 billion respectively in the first full year. Costings take account of the effects on behaviour where they are likely to have a significant effect on the yield and any consequential changes in receipts from related taxes including VAT; and they are measured against a non-indexed base.

  National Insurance
  Ms Corston
  To ask the Chancellor of the Exchequer if he will list for each source of taxation revenue and for national insurance, (i) the amounts received and what percentage that is of total revenue and (ii) the numbers of people paying in(a) 1980, (b) 1985, (c) 1990 and (d) 1995. [3044]
  210
  Mr. Jack
  [pursuant to his reply, 9 December 1996, c. 27–28]: There was a transcription error in the tables. I apologise for this mistake. The correct figures are given in the following tables.

  Information on the amounts of tax received is in table 1. Figures for the numbers of people paying income tax, corporation tax, capital gains tax and inheritance tax are in table 2. Information on the numbers of people paying other taxes is not available.

  Table 1: Tax and National Insurance Receipts (on a cash basis) £ billion

  1980–81

  1985–86

  1990–91

  1995–96

  Income tax

  24.3

  35.4

  55.3

  68.0

  Corporation tax

  4.6

  10.7

  21.5

  23.6

  Value added tax

  11.0

  19.3

  31.0

  43.1

  Excise duties1

  8.9

  14.9

  19.9

  28.4

  Other taxes and royalties2

  22.6

  41.3

  40.7

  44.2

  Social security contributions

  14.1

  24.5

  35.4

  44.5

  Total

  85.4

  146.0

  203.8

  251.8

  As a percentage of total

  Income tax

  28.4

  24.2

  27.1

  27.0

  Corporation tax

  5.4

  7.3

  10.5

  9.4

  Value added tax

  12.8

  13.2

  15.2

  17.1

  Excise duties1

  10.4

  10.2

  9.8

  11.3

  Other taxes and royalties2

  26.4

  28.3

  20.0

  17.6

  National insurance contributions

  16.S

  16.8

  17.4

  17.7

  Total

  100

  100

  100

  100

  1 Fuel, alcohol and tobacco duties.

  2 Includes local taxes as well as other central government taxes.

  Source:

  Office for National Statistics.

  Table 2: Taxpayer numbers (thousands)

  1980–81

  1985–86

  1990–91

  1995–96

  Income tax1

  24,900

  23,700

  26,100

  25,700

  Corporation tax2

  195

  275

  350

  450

  Capital gains tax

  155

  130

  110

  85

  Inheritance tax

  transfers on death

  21

  27

  21

  22

  lifetime transfers

  5

  10

  7

  3

  1 Husbands and wives are counted separately.

  2 Taxpayers are companies.

  Source:

  Inland Revenue.

  Private Finance Initiative (Universities)
  Mr. Sheerman
  To ask the Chancellor of the Exchequer how many universities have made use of the private finance initiative to date; and what is the total expenditure involved. [8425]

  Mr. Forth
  I have been asked to reply.

  The Higher Education Funding Council for England has an active programme for seeking private finance initiative "pathfinder" projects which can be used as exemplars of good practice for the sector as a whole. So far, 12 institutions have been awarded this status and are progressing projects to a capital value of some £120 million. The funding council has recently closed

  211
  round two of its "pathfinder" programme, and we expect announcements regarding additional successful projects early in the new year.

  Universities are autonomous institutions and make their own procurement decisions. It is therefore impossible to know the exact number of institutions which have procurement arrangements involving private finance. The Higher Education Funding Council for England estimates that total commercial funding in the sector to date exceeds £1.6 billion.

ENVIRONMENT

  Departmental Staff (Local Government)
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment how many personnel in his Department work full time on local government matters; at what cost; and if he will make a statement. [7773]

  Sir Paul Beresford
  In the Department of the Environment, approximately 222 staff work full time on local government matters at a total administration cost of approximately £8.5 million.

  Leader Project
  Mr. David Nicholson
  To ask the Secretary of State for the Environment if he will make a statement on the Leader project; how much funding from European Community resources is available for the United Kingdom, and in which financial years; to what extent matching funding from Her Majesty's Government are required; and which areas of England qualified to receive Leader funding. [8066]

  Sir Paul Beresford
  The purpose of the Leader II initiative is to permit those engaged in the rural economy to implement measures which will help develop their own potential within an overall policy for stimulating rural development.

  The United Kingdom has been allocated £62.64 million up to the end of 1999. Leader II will pay up to 50 per cent. of the eligible costs of a project. The remaining match funding must be found by the applicant, and may come from the Government and other public and private sector sources. The initiative is targeted at objective 5b areas and those eligible in England are parts of the northern uplands, midlands uplands, Lincolnshire, East Anglia, the south-west and the west midlands marches.

  Stockton City Challenge
  Mr. Devlin
  To ask the Secretary of State for the Environment what decision he has reached on the application by Stockton city challenge to redevelop the north end of Stockton high street. [8069]

  Sir Paul Beresford
  The Secretary of State received the report of the inspector who conducted the public inquiry on 3 June 1996, and is considering it. Following receipt of the report, he was asked to reopen the public inquiry by one of the non-statutory objectors to the compulsory purchase order, and this required some further consultation with the parties involved in the inquiry.
  212
  Those consultations are now complete and are also being considered. The decision will be issued as soon as it is practicable to do so.

  Rooms over Shops
  Mr. David Nicholson
  To ask the Secretary of State for the Environment if he will make a statement on progress with the Government's scheme to encourage shopkeepers to use rooms over the shop for private tenancies; what financial incentives are available; and how many units are estimated to have become available since the scheme began. [8067]

  Mr. Clappison
  My Department ran a demonstration flats over shops programme providing £25 million between 1992–93 and 1994–95 to bring empty space above retail premises into residential use. This created some 1,500 additional housing units directly and many more indirectly. Capital funding for such schemes has continued under the Government's housing partnership fund which provided £30 million a year in 1995–96 and 1996–97 for innovative housing projects including the provision of flats over shops. We will be publishing a research report by the South Bank university early in the new year which evaluates the flats over shops programme and other similar initiatives.

  Battersea Power Station
  Mr. Cox
  To ask the Secretary of State for the Environment when the London borough of Wandsworth last forwarded a report to his Department on the overall condition of(a) the structure and (b) the site of Battersea power station; and if he will place a copy of the report in the Library. [8515]

  Sir Paul Beresford
  I have received no such reports. The building is regularly inspected by English Heritage. The last such inspection was on 5 December.

  Mr. Cox
  To ask the Secretary of State for the Environment if he will make a statement about the state of the internal structure of Battersea power station. [8637]

  Sir Paul Beresford
  No. The building is regularly inspected by English Heritage. The last such inspection was on 5 December and is a matter for the Secretary of State for National Heritage.

  Mr. Cox
  To ask the Secretary of State for the Environment when officials from his Department last visited the site of Battersea power station; what reports were published on their visit; and where such reports can be obtained. [8638]

  Sir Paul Beresford
  Officials visited Battersea power station on 3 December for a presentation of the proposals to redevelop the site. No reports have been published.

  Mr. Cox
  To ask the Secretary of State for the Environment what is the acreage of the site of Battersea power station. [8514]

  Sir Paul Beresford
  I understand that the site is some 30 acres—12 hectares.

  New Housing (Access)
  Mr. Rowe
  To ask the Secretary of State for the Environment what research his Department has
  213
  commissioned on the additional building costs involved in extending part M of the Building Regulations to improve access to new housing; who will be consulted in the course of that research; and when he expects it to be completed. [8293]

  Mr. Clappison
  My Department has not yet commissioned any such research, but we have agreed to undertake a joint study with the House-Builders Federation on the additional building costs involved in extending part M of the Building Regulations to improve access to new housing. To this end, officials have written to eight local authorities to ask for their help in selecting suitable schemes for the study. Once all the authorities have replied, the Department will be in a position to commission the research and establish a date for its completion.

  Local Government Finance
  Ms Armstrong
  To ask the Secretary of State for the Environment (1) what is the (i) total standard spending assessment and police grant and (ii) total external support including revenue support grant, non-domestic rates, SSA reduction grant and police grants to be received by(a) all local authorities, (b) each class of local authority, (c) education authorities, (d) authorities other than police authorities and (e) all authorities, in (1) 1997–98 and (2) 1996–97 and for each the change over 1996–97 in pounds and percentages, adjusting 1996–97 amounts for local government reorganisation and for changed local authority functions and responsibilities, and the further transfer for responsibilities for care in the community from central Government budgets in 1997–98; and if he will list each such adjustment and its monetary value; [8002]

  Table 1: Total Standard Spending and Aggregate External Finance for Education Authorities

  Adjusted 1996–97 (£ million)

  Provisional 1997–98 (£ million)

  Change (£ million)

  Change Percentage

  Total Standard Spending for Education Authorities

  35,198.8

  36,011.4

  812.6

  2.3

  Total Standard Spending for Education Authorities (adjusted for 1997–98 Community Care STG)

  35,517.5

  36,011.4

  494.0

  1.4

  Aggregate External Finance for Education Authorities

  27,426.3

  27,879.8

  453.5

  1.7

  Aggregate External Finance for Education Authorities (adjusted for 1997–98 Community Care STG)

  27,745.0

  27,879.8

  134.90.5

  Notes:

  1. The aggregates for TSS and AEF presented in the table include only those types of specific and special grants which are allocated solely to education authorities (whether or not the grant relates to education). Some £150 million of further specific grants are allocated both to some Education Authorities and to other classes of authority. These are housing benefit administration grant, council tax benefit administration grant, national parks grant and part of the ethnic minorities (s11) grant.

  2. The figures for adjusted TSS and AEF are derived from information about standard spending assessments for education authorities and total external support for education authorities set out in tables 3 and 4 of the information provided in the answer referred to above. The notes to those tables provide details of the derivation of the figures.

  3. All figures for TSS and AEF exclude 1997–98 reorganisation SCAs. They also exclude funding for specified bodies, the city offset and reorganisation: transitional reduction grant.
  214
  (2) what is the (i) total standard spending and (ii) total aggregate external finance for (a) all local authorities and (b) all local authorities other than police authorities in England in 1997–98 and 1996–97, and for each the change over 1996–97 in pounds and percentages, adjusting 1996–97 totals for changed local authority functions and responsibilities, and the further transfer for responsibilities for care in the community from central Government budgets in 1997–98; and if he will list each such adjustment and its monetary value. [8003]

  Sir Paul Beresford
  [holding answer 9 December 1996]: I have placed the information requested in the Library.

  Ms Armstrong
  To ask the Secretary of State for the Environment (1) what is (i) the total standard spending and (ii) the total aggregate external finance for(a) all local authorities and (b) all education authorities in England in (1) 1997–98 and (2) 1996–97; and in each case what was the change over 1996–97 in pounds and percentages, adjusting 1996–97 totals for changed local authority functions and responsibilities in 1997–98, and the further transfer of responsibilities for care in the community from central Government budgets in 1997–98; [8564]

  (2) what are (i) the total standard spending assessments and police grant external support and (ii) the total external support to be received by (a) all local authorities, (b) each class of authority, (c) education authorities, (d) all authorities other than policy authorities and (e) all authorities, in (1) 1997–98 and (2) 1996–97; and in each case what was the change over 1996–97 in pounds and percentages, adjusting 1996–97 amounts for local government reorganisation and for changed local authority functions and responsibilities in 1997–98. [8565]

  Sir Paul Beresford
  I refer the hon. Member to the answer I gave earlier. The remaining information is contained in the table.

  Access to Information
  Mr. Meacher
  To ask the Secretary of State for the Environment when he plans to publish his reply to the first report of the House of Lords Select Committee on the European Communities on freedom of access to information on the environment, HL9; and if he will make a statement. [8465]

  Mr. Clappison
  The recommendations in the report are being carefully considered. The Government's reply will be published in due course.

  Genetically Modified Food
  Mr. Nigel Griffiths
  To ask the Secretary of State for the Environment if he will suspend imports of genetically modified maize until a full assessment has been made of the hazards to human health and a proper labelling regime is in place. [8129]

  Mr. Clappison
  In accordance with Council directive 90/220/EEC on the deliberate release into the environment of genetically modified organisms, an assessment on the risks posed to human health and the environment for the genetically modified maize has been carried out by member states. It is now up to the European Commission to take a decision on the importation and marketing of the genetically modified maize. This decision will be in accordance with the provisions of the directive, which include provisions for labelling.

  Energy Efficiency
  Mr. Alan W. Williams
  To ask the Secretary of State for the Environment when the ministerial group on energy efficiency last met; and if he will reconvene it. [8695]

  Mr. Clappison
  The work of the former ministerial group on energy efficiency has been continued by Green Ministers, who met most recently on 28 October 1996.

  Coastal Byelaws
  Mr. Sykes
  To ask the Secretary of State for the Environment when he will publish the proposed discussion paper which reviews the byelaw-making powers for the coast. [8910]

  Mr. Clappison
  The Department of the Environment has today published "Byelaw Powers for the Coast: A Discussion Paper". The paper sets out the main issues regarding current scope and use of the relevant powers in England, ways in which present arrangements might be improved and updated, and the relationship with broader management aims and initiatives. Copies have been placed in the Libraries of the House, and the paper will be widely distributed.

  Sustainable Development
  Mr. Brazier
  To ask the Secretary of State for the Environment if he will make a statement on the future of the UK round table on sustainable development. [9101]

  Mr. Gummer
  The round table was set up in January 1995 and is now approaching the end of its initial two-year term. The Government are encouraged by the progress that the round table has made during this period in developing its role as a body which can build consensus on priorities and actions to assist the UK's pursuit of 216
  sustainable development. The round table is providing an increasingly valuable and welcome contribution to the continuing debate about integrating economic development and environmental protection and enhancement. I am therefore pleased to announce that its life will be extended for a further two years until January 1999. I am considering, in consultation with my colleagues, what the round table's membership should be during that period, with a view to strengthening it in some areas.

OVERSEAS DEVELOPMENT ADMINISTRATION

  Cameroons
  Mrs. Helen Jackson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the major development projects in the Cameroons which have received a United Kingdom contribution. [8434]

  Dr. Liam Fox
  In the last decade we have funded the following major projects:In-service teacher education and training in the Anglophone provinces.
  Agricultural research.
  Forest management and regeneration.
  Community forestry development.
  Conservation and management of natural resources on Mount Cameroon.
  Rural development component of Korup national park conservation project.

  The last three project are on-going.

  World Bank (Environmental Impact Assessments)
  Mrs. Helen Jackson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to request the World bank to undertake an environmental impact assessment before approving funds for major development projects. [8410]

  Dr. Liam Fox
  The World bank recently completed a report which took stock of the bank's progress in implementing its environmental assessment policy. We welcome the steps which the bank has taken to ensure that environmental concerns are properly reflected in its operations, and continue to press for further improvements.

  Great Lakes Region
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the current humanitarian requirements of the Great Lakes region of Africa; and if he will make a statement. [8576]

  Dr. Liam Fox
  According to the United Nations Department of Humanitarian Affairs on 2 December, £52 million had so far been pledged by donors in response to the UN inter-agency appeal for the Great Lakes region. This does not include a commitment of £129 million agreed by the European Union on 6 December. The appeal covered total estimated requirements for food aid up to June 1997 and certain other requirements up to January 1997 estimated altogether at £155 million. The Government of Rwanda have also revised their programme to reintegrate returning
  217
  refugees and re-establish productive communities. On 20 November, my noble Friend the Minister for Overseas Development announced a commitment of £10 million to address immediate needs in the Great Lakes region.

  Mr. Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the current security situation in the Great Lakes region of Africa; and if he will make a statement. [8575]

  Dr. Fox
  The region remains unstable and afflicted by violence. The security situation in Burundi is of particular concern. We continue to support regional efforts to resolve the underlying political problems, and welcome President Moi's intention to convene a further regional summit on Nairobi on 16 December. We also look forward to the report of the UN special envoy to Zaire and the Great Lakes, Ambassador Chretien.

  Mr. Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps the Government are taking to facilitate the holding of an international conference on peace, security and development in the Great Lakes region of Africa. [8579]

  Dr. Fox
  We are committed with our EU partners to early preparations for a conference in peace, security and development in the Great Lakes, under UN-Organisation of Africa Unity auspices. EU envoy Aldo Ajello continues to work to facilitate such a conference. We await the report of UN special envoy Ambassador Chretien, who has been tasked to consider next steps on the conference. We see an important role for regional summits such as that planned for Nairobi on 16 December in preparing the ground for a wider conference.

  Mr. Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has recently held with representatives of the Governments of(a) Zaire, (b) Rwanda, (c) Burundi, (d) Uganda and (e) Tanzania. [8577]

  Dr. Fox
  My right hon. and learned Friend met His Excellency the President of Tanzania on 11 November. We are in regular contact with representatives of the Governments in the region in the search for lasting peace and stability in the Great Lakes.

  Mr. Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the current refugee situation in the Great Lakes region of Africa, with particular reference to(a) the numbers of refugees, (b) the geographical situation of the refugees and (c) the health of the refugees. [8578]

  Dr. Fox
  On numbers and location, I refer the hon. Member to the answer given by my noble Friend the Minister for Overseas Development to Lord Judd in another place on 5 December,Official Report, House of Lords, column 61. The condition of refugees in camps in Uganda, Tanzania and Rwanda is generally good. The United Nations High Commissioner for Refugees reports that substantial numbers of refugees remain beyond the current reach of aid agencies in eastern Zaire. Their condition is unknown but is a cause for concern. With the international community, we are pressing the parties to the conflict to allow access to those in need.

  Nigeria
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the recent Commonwealth ministerial action group mission to Nigeria. [8580]

  Dr. Liam Fox
  The Commonwealth ministerial action group visited Nigeria from 18 to 20 November. The CMAG met General Abacha, representatives of the National Electoral Commission and the transition committees, leaders of the recently registered political parties, traditional rulers and the chairman of the Nigerian Human Rights Commission. The group welcomed the release of three human rights activists during the visit, but pressed for the immediate release of all political prisoners, including Chief Abiola. The CMAG also urged Nigerians to resolve the case of the Ogoni 19, review prison conditions and restore accountable civilian government. My noble Friend Baroness Chalker also had bilateral discussions with human rights and pro-democracy groups. The group will meet again in the new year to consider next steps.

  United Nations Industrial Development Organisation
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans the British Government have for continued participation in UNIDO; and what discussions he is currently having with representatives of UNIDO. [8688]

  Dr. Liam Fox
  I refer the hon. Member to the answer I gave to the hon. Member for Bournemouth, East (Mr. Atkinson) on 10 December, at column 100.

NATIONAL HERITAGE

  Publicity
  Mr. Donohoe
  To ask the Secretary of State for National Heritage how much her Department has spent on promotional or public information campaigns in each of the last five years; and how much she estimates will be spent on these campaigns during the (i) current and (ii) next financial years. [7543]

  Mr. Sproat
  My Department's public relations activities are normally met in-house. During 1993–94, my Department spent £62,500 contracting a company to assist with a programme of events to mark the 50th anniversary of D day.

  Other than that, there have been no individual promotional or public information campaigns undertaken by the Department since its inception in 1992. There are at present no plans for any such campaigns in the future.

  National Lottery
  Mr. Luff
  To ask the Secretary of State for National Heritage if she will make a statement on the eligibility of canal restoration schemes for funding from the national lottery funding bodies. [7949]
  219
  Mr. Sproat
  Canal restoration schemes are eligible to apply for funding from the national lottery. The distributing bodies make their funding decisions independently of Government, and against their published criteria.

  The Millennium Commission has awarded £11.9 million to the Rochdale canal trust to restore 32 miles of the Rochdale canal. The heritage lottery fund made its largest grant to date, £25.1 million, to British Waterways to secure the structure, operation, and environment of the 87-mile Kennet and Avon canal, making it accessible for the enjoyment of future generations.

  Mr. Harry Greenway
  To ask the Secretary of State for National Heritage if she will take steps to enable animal welfare groups to be eligible for lottery funding; and if she will make a statement. [7777]

  Mr. Sproat
  Any organisation established for charitable, benevolent or philanthropic purposes, including animal welfare charities, is eligible to apply to the National Lottery Charities Board. Animal welfare charities are, therefore, welcome to make appropriate applications. The board makes grants to charities and voluntary organisations according to the priorities set for each grants round; I understand that chief executives of several animal welfare charities have welcomed this approach and agreed that the most appropriate round in which to apply is that aimed at improving people's living environment; this round is due to be launched next year.

  Broadcasting
  Mr. Morgan
  To ask the Secretary of State for National Heritage, pursuant to her answer of 3 December,Official Report, column 589, how the shortlist for the job of chairman of the BBC Broadcasting Council for Wales was drawn up; on what dates the interviews took place; on what dates the unsuccessful candidates were told the news; what assessment was made of the recommendations of the Nolan committee; and what use was made of the public appointments unit in processing this appointment. [7986]

  Mr. Sproat
  In considering the appointment of the BBC national governor for Wales, who chairs the Broadcasting Council for Wales, we are applying the principles established by the Nolan committee as set out in guidance issued by the Office of the Commissioner for Public Appointments. Further information about the process can be made available once the appointment has been made by Her Majesty in Council.

  British Library Catalogue
  Mr. Gordon Prentice
  To ask the Secretary of State for National Heritage if all the books currently being transferred to the new British library have been catalogued. [8198]

  Mr. Sproat
  Responsibility for transferring the books to the new British library building at St. Pancras falls to the British library. It has confirmed that all the books currently being transferred have been catalogued.

  Television Licences (Revenue)
  Mr. Wallace
  To ask the Secretary of State for National Heritage what was the total revenue from television licences over the last 12-month period for which figures are available in(a) the United Kingdom and (b) Scotland. [8011]

  Mr. Sproat
  Total television licence revenue in the United Kingdom for the financial year 1995–96 was £1,820 million, of which an estimated £156 million was collected in Scotland.

  Christmas Expenditure
  Mr. Donohoe
  To ask the Secretary of State for National Heritage how much her Department will spend on Christmas trees and decorations this year; how many Christmas trees will be bought for her Department's headquarters; and what are the type and country of origin of the trees. [7564]

  Mr. Sproat
  [holding answer 6 December 1996]: A Christmas tree of British origin, Abis Nordmanniana, with decorations will be purchased at a total cost of £65 for one of my Department's HQ buildings.

  Concessionary Television Licences
  Mr. Flynn
  To ask the Secretary of State for National Heritage what is the(a) cost and (b) percentage of the full television licence paid by (i) pensioners, (ii) registered blind people and (iii) registered deaf people; if she will make it her policy to reduce the cost of the television licence for each of these groups; and if she will make a statement. [7955]

  Mr. Sproat
  [holding answer 6 December 1996]: Television licence fees are currently £89.50 for colour licences and £30 for black and white. Registered blind people are entitled to a reduction of £1.25 from the full licence fee. However, a sound-only television monitor, available from the Royal National Institute for the Blind, may be operated without a licence. Moreover, blind people can enjoy the full range of the BBC's radio services. There is no general concession for pensioners or for registered deaf people. However, pensioners and registered blind and deaf people living in qualifying accommodation can benefit from the concessionary television licence scheme, under which licences cost £5. If the Government introduced reduced-fee television licences for all pensioners and registered blind and deaf people, this would be very costly in terms of lost revenue for the BBC. it would lead to a significant rise in licence fees for all other viewers, irrespective of their means, which is why the Government have no such plans.

  The Government have encouraged the BBC to introduce a range of payment options to enable television

  221
  licence fee payers to spread the cost of their licence. However, the Government do not consider the television licence fee a proper instrument of social policy: the appropriate way to help those with special needs is through the pensions and benefits system.

  Mid-week Lottery
  Mr. Cann
  To ask the Secretary of State for National Heritage what discussions she has had with Office of the National Lottery on the numbers to be used by Camelot in the proposed mid-week lottery. [8041]

  Mr. Sproat
  [holding answer 9 December 1996]: None. Camelot applied to hold a mid-week draw using the numbers 1 to 49. The decision to approve the mid-week
  222
  draw was made by the Director General of the National Lottery who published a full statement of the reasons for his decision.

PRIME MINISTER

  The Union
  Mr. Robert McCartney
  To ask the Prime Minister if he will list the strategic and economic interests which require the maintenance of the Union between Scotland and England and which do not apply to the Union with Northern Ireland. [7202]

  The Prime Minister
  I firmly believe that the maintenance of the Union is strongly in the interests of each part of the United Kingdom, as well as of the United Kingdom as a whole, but there are no strategic or economic interests which could override the democratic wishes of the people of each constituent part of the United Kingdom in relation to their place within it.

HEALTH

  Accident Prevention
  Mr. Ian McCartney
  To ask the Secretary of State for Health if he will publish the recommendations of the accident prevention task force. [7983]

  Mr. Horam
  The accident prevention task force concentrated its efforts on identifying outstanding research and information needs in accident prevention. Its conclusions were published in the following reports which have been placed in the Library:Improving Information on Accidents (PHIS 19), DH 1995
  Agreeing an Accident Information Structure (PHIS 19B), DH 1996
  Health of the Nation Accident Reduction Targets - A Research Review: What Further Work is Needed? - Dr. Irene Higginson, DH June 1995.
  The Effectiveness of Interventions to Prevent Accidental Injury to Young Persons Aged 15–24 Years - Prof. Jon Nicholl et al.

  Mr. McCartney
  To ask the Secretary of State for Health if his Department has abolished the accident prevention task force. [7982]

  Mr. Horam
  The accident prevention task force was disbanded in May 1996 on completion of its work.

  Mr. McCartney
  To ask the Secretary of State for Health what is his role on the interdepartmental group on accident prevention strategies; and if he will list the programme of work currently being undertaken by that group. [7984]

  Mr. Horam
  There is no such group.

  Dental Services
  Mr. Gordon Prentice
  To ask the Secretary of State for Health how many dentists solely offered national health service treatment in(a) September 1992 and (b) September 1996. [7972]

  Mr. Malone
  Data on the number of dentists who offer solely national health service treatment are not collected centrally.

  Mr. Prentice
  To ask the Secretary of State for Health, pursuant to his answer of 28 November,Official Report, column 372, if he will list the number of national health service dentists for each health authority in England on (a) 30 September 1992 and (b) 30 September 1996. [7985]

  Mr. Malone
  Data on the number of general dental service dentists were collected by family health services authority before 1 April 1996 and by health authority thereafter. The data at 30 September 1992 and 30 September 1996 are set out in tables 1 and 2.

  Boundary changes have taken place and even where the authorities have the same name the authority areas may not be identical.

  Table 1: General Dental Service: number of dentists by family health services authority, at 30 September 1992

  England

  Family Health Services Authority

  Number of dentists

  England

  15,411

  Cleveland

  166

  224

  Table 1: General Dental Service: number of dentists by family health services authority, at 30 September 1992

  England

  Family Health Services Authority

  Number of dentists

  Cumbria

  143

  Durham

  142

  Northumberland

  83

  Gateshead

  64

  Newcastle upon Tyne

  96

  North Tyneside

  59

  South Tyneside

  45

  Sunderland

  70

  Humberside

  205

  North Yorkshire

  235

  Bradford

  144

  Calderdale

  56

  Kirklees

  116

  Leeds

  258

  Wakefield

  87

  Derbyshire

  257

  Leicestershire

  238

  Lincolnshire

  123

  Nottinghamshire

  272

  Barnsley

  62

  Doncaster

  85

  Rotherham

  62

  Sheffield

  165

  Cambridgeshire

  179

  Norfolk

  223

  Suffolk

  196

  Bedfordshire

  140

  Hertfordshire

  381

  Barnet

  139

  Brent and Harrow

  192

  Ealing, Hammersmith and Hounslow

  259

  Hillingdon

  80

  Kensington, Chelsea and Westminster

  209

  Essex

  438

  Barking and Havering

  99

  Camden and Islington

  175

  City and East London

  175

  Enfield and Haringey

  168

  Redbridge and Waltham Forest

  147

  East Sussex

  273

  Kent

  495

  Greenwich and Bexley

  150

  Bromley

  123

  Lambeth, Southwark and Lewisham

  268

  Surrey

  455

  West Sussex

  283

  Croydon

  125

  Kingston and Richmond

  128

  Merton, Sutton and Wandsworth

  246

  Dorset

  229

  Hampshire

  512

  Wiltshire

  173

  Isle of Wight

  46

  Berkshire

  251

  Buckinghamshire

  243

  Northamptonshire

  140

  Oxfordshire

  191

  Avon

  360

  Cornwall and Isles of Scilly

  141

  Devon

  366

  Gloucestershire

  204

  Somerset

  149

  Hereford and Worcester

  207

  Salop

  123

  Staffordshire

  237

  Warwickshire

  131

  225

  Table 1: General Dental Service: number of dentists by family health services authority, at 30 September 1992

  England

  Family Health Services Authority

  Number of dentists

  Birmingham

  300

  Coventry

  82

  Dudley

  74

  Sandwell

  71

  Solihull

  53

  Walsall

  59

  Wolverhampton

  64

  Cheshire

  331

  Liverpool

  146

  St. Helens and Knowsley

  89

  Sefton

  90

  Wirral

  112

  Lancashire

  421

  Bolton

  74

  Bury

  55

  Manchester

  177

  Oldham

  69

  Rochdale

  57

  Salford

  62

  Stockport

  107

  Tameside

  66

  Trafford

  85

  Wigan

  85

  1. The figures represent the number of dentists (principals) on the family health services authority/health authority list and their assistants and vocational trainees.

  2. Some dentists have a contract with a more than one FHSA/HA, these dentists are counted only once.

  3. The figures exclude salaried, hospital and community dentists.

  Table 2: General Dental Services: number of dentists, by health services authority, at 30 September 1996

  England

  Family Health Services Authority

  Number of dentists

  England

  16,336

  Bradford

  141

  Calderdale and Kirklees

  180

  East Riding

  143

  Gateshead and South Tyneside

  122

  Leeds

  256

  Newcastle and North Tyneside

  157

  North Cumbria

  107

  North Yorkshire

  264

  Northumberland

  96

  Sunderland

  74

  Tees

  183

  Wakefield

  92

  County Durham

  151

  Barnsley

  54

  South Humber

  72

  Doncaster

  92

  Leicestershire

  257

  Lincolnshire

  134

  North Derbyshire

  108

  North Nottinghamshire

  106

  Nottingham

  200

  Rotherham

  68

  Sheffield

  181

  South Derbyshire

  156

  Bedfordshire

  150

  Berkshire

  276

  Buckinghamshire

  238

  Cambridge and Huntingdon

  121

  East Norfolk

  219

  226

  Table 2: General Dental Services: number of dentists, by health services authority, at 30 September 1996

  England

  Family Health Services Authority

  Number of dentists

  Northamptonshire

  158

  North West Anglia

  105

  Oxfordshire

  195

  Suffolk

  201

  Enfield and Haringey

  191

  East London and The City

  193

  Barking and Havering

  114

  South Essex

  210

  Brent and Harrow

  202

  North Essex

  266

  Ealing, Hammersmith and Hounslow

  316

  Camden and Islington

  185

  Kensington, Chelsea and Westminster

  203

  Redbridge and Waltham forest

  152

  Barnet

  141

  Hillingdon

  89

  West Hertfordshire

  214

  East and North Hertfordshire

  193

  Bexley and Greenwich

  146

  Bromley

  123

  Croydon

  134

  Kingston and Richmond

  139

  Merton, Sutton and Wandsworth

  253

  Lambeth, Southwark and Lewisham

  276

  East Surrey

  195

  West Surrey

  271

  East Kent

  182

  West Kent

  358

  East Sussex, Brighton and Hove

  289

  West Sussex

  295

  Cornwall and Isles of Scilly

  149

  North and East Devon

  166

  South and West Devon

  224

  Somerset

  163

  Avon

  379

  Wiltshire

  177

  North and Mid Hampshire

  178

  Southampton and South-west Hampshire

  177

  Portsmouth and South-east Hampshire

  167

  Dorset

  240

  Isle of Wight

  43

  Gloucestershire

  201

  Herefordshire

  62

  Worcestershire

  173

  Shropshire

  126

  North Staffordshire

  108

  South Staffordshire

  152

  Warwickshire

  144

  Birmingham

  304

  Coventry

  77

  Dudley

  84

  Sandwell

  84

  Solihull

  59

  Walsall

  58

  Wolverhampton

  64

  Bury and Rochdale

  122

  East Lancashire

  157

  Liverpool

  150

  Manchester

  172

  Morecambe Bay

  103

  North Cheshire

  89

  North West Lancashire

  159

  St. Helens and Knowsley

  96

  Salford and Trafford

  152

  Sefton

  92

  South Cheshire

  244

  227

  Table 2: General Dental Services: number of dentists, by health services authority, at 30 September 1996

  England

  Family Health Services Authority

  Number of dentists

  South Lancashire

  83

  Stockport

  110

  Wigan and Bolton

  178

  Wirral

  129

  West Pennine

  154

  1. The figures represent the number of dentists (principals) on the family health services authority/health authority list and their assistants and vocational trainees.

  2. Some dentists have a contract with a more than one FHSA/HA, these dentists are counted only once.

  3. The figures exclude salaried, hospital and community dentists.

  Mental Health
  Dr. Lynne Jones
  To ask the Secretary of State for Health how the NHS executive's regional office network monitors the mental health services' implementation of the care programme approach; and if the results of the monitoring are publicly available. [8263]

  Mr. Burns
  Implementation of the care programme approach is monitored via quarterly returns made by health authorities to the national health service executive.

  The results of the monitoring are not routinely published.

  Dr. Jones
  To ask the Secretary of State for Health, pursuant to his answer of 4 November,Official Report, columns 397–98, what was the average length of the previous stay in hospital of the 5,000 patients aged 16 to 64 years readmitted as emergencies within 90 days of discharge. [8259]

  Mr. Burns
  The information requested is not available centrally.

  Dr. Jones
  To ask the Secretary of State for Health, pursuant to his answer of 31 October,Official Report, column 197, what schemes for (i) residential and (ii) 24-hour nursed care accommodation for mentally ill patients under 65 years are currently being negotiated under the private finance initiative. [8257]

  Mr. Horam
  All capital schemes have to be tested for private finance. The table shows those schemes with a capital value of £1 million or more that are currently, or will be, tested for private finance and which are wholly or partly for 24-hour nursed care or residential accommodation for mentally ill patients under 65. Information on smaller schemes is not held centrally.

  Trust

  Scheme

  Addenbrooke's NHS Trust

  Mental Health Strategy Phase 2

  Aylesbury Vale Community Healthcare NHS Trust

  Mental Health Intensive Care Unit

  Mid-Anglia Community Health NHS Trust

  Acute mental Health—Ward G8

  North West Anglia Healthcare NHS Trust

  Mental Health Reprovision

  Oxfordshire Mental Healthcare NHS Trust

  Medium Secure Unit

  228

  Trust

  Scheme

  South Bedfordshire Community Healthcare NHS Trust

  Fairfield Reprovision

  Bolton Hospitals NHS Trust

  Integrated Acute Psychiatric Services

  Guild Community Healthcare NHS Trust

  Medium Secure Unit

  Calderstones NHS Trust

  Medium Secure Unit

  Portsmouth Healthcare NHS Trust

  Mental Health and Learning Disabilities Schemes

  Salisbury Healthcare NHS Trust

  Inpatient Mental Health Scheme

  Black Country Mental Health NHS Trust

  Acute Psychiatric Unit

  Northern Birmingham Mental Health Services NHS Trust

  Reprovision of Community Based Facilities

  Walsgrave Hospitals NHS Trust

  Project 2002

  North Staffordshire Combined Healthcare NHS Trust

  Reprovision of Mental Illness and Health Services

  BHB Community Healthcare NHS Trust

  Long Stay mental Health Reprovision

  Hillingdon Hospital NHS Trust

  Mental Health Reprovision

  Riverside Mental Health NHS Trust

  Long Stay Mental Health Reprovision

  Leeds Community and Mental Health Services Teaching NHS Trust

  Reprovision of Mental Health Services

  South Durham Healthcare NHS Trust

  New Acute Mental Health Facilities

  South Durham Healthcare NHS Trust

  25 Bed Facility with Treatment Suites

  Leeds Community and Mental Health Services Teaching NHS Trust

  Seacroft Mental Health Unit

  Calderdale Healthcare NHS Trust

  Centralisation of Acute Hospital Services

  Community Healthcare: North Durham NHS Trust

  Facilities for Difficult to Place Patients

  Chichester Priority Services NHS Trust

  Graylingwell Reprovision

  Hastings and Rother NHS Trust

  Mental Health Reprovision

  North Downs Community Health NHS Trust

  Farnham Hospital Development

  Surrey Heartlands NHS Trust

  West Park Hospital Reprovision

  Worthing Priority Care NHS Trust

  Homefield Hospital Redevelopment

  North Kent Healthcare NHS Trust

  Sheppey Community Hospital

  Oxleas NHS Trust

  Bexley Hospital Reprovision

  Lewisham and Guys Mental Health NHS Trust

  Adolescent Psychiatry Unit

  Greenwich Healthcare NHS Trust

  Queen Elizabeth Military Hospital

  Dr. Jones
  To ask the Secretary of State for Health what plans he has to discuss with the Royal College of Psychiatrists the reasons for the readmission of 5,000 patients aged 16 to 64 years to hospitals as emergencies within 90 days of previous discharge between April and June 1996. [8261]

  Mr. Burns
  None.

  Dr. Jones
  To ask the Secretary of State for Health how many psychiatric patients aged between 16 and 64 years who were discharged from hospital in the period from July to September were readmitted to hospital within 90 days of discharge or by the present date. [8260]

  Mr. Burns
  From the information collected centrally it is not possible to identify how many of the psychiatric patients aged 16 to 64 who were discharged during the period July to September have subsequently been readmitted as emergencies.

  Meningitis
  Mr. Alan W. Williams
  To ask the Secretary of State for Health what assessment his Department has made of the link between over-prescribing of antibiotics and meningitis clusters. [8024]

  Mr. Horam
  We are aware of the recent publication of a scientific paper reporting on a study conducted by the Gloucester public health laboratory in 1987 which a Sunday newspaper reported as suggesting an association between meningitis and the high use of antibiotics. However, the scientific paper, which has produced some interesting observations, explores several possible explanations. Further work is necessary before any conclusions can be reached and the public health laboratory service's meningococcal committee is to consider recommendations on future work.

  Mr. Williams
  To ask the Secretary of State for Health how many incidents of each strain of meningitis have been reported in England and Wales in each year since 1990. [8025]

  Mr. Horam
  The numbers of laboratory confirmed cases of meningococcal meningitis since 1990 are given in the table:

  Isolates of N Meningitidis received at the Public Health Laboratory Service's Meningococcal Reference Laboratory 1990–1996, England and Wales

  Group

  1990

  1991

  1992

  1993

  1994

  1995

  19961

  A

  13

  6

  1

  2

  1

  0

  0

  B

  997

  959

  923

  929

  789

  921

  736

  C

  466

  394

  326

  319

  291

  468

  507

  Other groups

  24

  39

  45

  47

  48

  70

  62

  All groups

  1,500

  1,398

  1,301

  1,297

  1,129

  1,459

  1,305

  1 To 15 November 1996 only.

  Mr. William O'Brien
  To ask the Secretary of State for Health how many people were diagnosed as suffering from meningitis in each of the area health authorities in West Yorkshire in the past 12 months. [8092]

  Mr. Horam
  Information is not available in the form requested. Notification data are routinely collected by local authority and district rather than health authority. Provisional numbers of cases of meningitis notified to the Office for National Statistics, and the notification rates per 100,000 population, for the county of West Yorkshire for the last 12 months are given in the table:

  Provisional numbers of meningitis notifications in West Yorkshire October 1995-September 1996.

  County-West Yorkshire

  Number of meningitis notifications1

  Annual notification rates per 100,000

  County District

  Bradford

  41

  8.5

  Calderdale

  9

  4.7

  Kirkless

  15

  3.9

  Leeds

  44

  6.1

  Wakefield

  6

  1.9

  West Yorkshire

  115

  5.5

  1 Notifications are made on the suspicion of clinical disease, not all of which will be confirmed cases of meningitis.

  Mr. O'Brien: To ask the Secretary of State for Health what advice his Department has given or plans
  230
  to give to local health authorities in respect of a possible winter meningitis outbreak; and if he will make a statement. [8093]

  Mr. Horam
  Guidelines on the control of meningococcal infection have been issued by the public health laboratory service since 1989. These are regularly updated and published and copies are sent to all directors of public health and consultants in communicable disease control. The most recent guidelines on the control of meningococcal infection were issued on 8 December 1995 in the PHLS's communicable disease review.

  Methicillin-resistant Staphylococcus Aureus
  Mr. Alan W. Williams
  To ask the Secretary of State for Health what is the annual total of recorded incidents of MRSA in England and Wales for each year since 1992 in(a) hospitals, (b) nursing homes and (c) other locations. [8029]

  Mr. Horam
  Data are not available in the form requested.

  The public health laboratory service publishes aggregate data on the occurrence of methicillin-resistant staphylococcus aureus from isolates voluntarily submitted by hospitals in England and Wales for specialist typing. The total numbers of incidents—three or more patients with the same strain of MRSA in a month from the same hospitals—since 1992 are as follows:

  1992: 339

  1993: 549

  1994: 1.073

  1995: 1,575

  19961: 1,764

  1 to 31 October.

  Mr. Williams
  To ask the Secretary of State for Health how many fatalities have been recorded as due to MRSA in each year since 1990. [8031]

  Mr. Horam
  I refer the hon. Member to the reply I gave the hon. Member for Newport, West (Mr Flynn) on 19 November at columns 532–33.

  Mr. Williams
  To ask the Secretary of State for Health what assessment he has made of the threat of MRSA in hospitals; and what precautions are taken against its spread. [8032]

  Mr. Horam
  Methicillin-resistant staphylococcus aureus is no more likely to cause infection and no worse infection than methicillin-sensitive strains of the organism. Because, however, MRSA is more difficult to treat, it can pose a threat to certain vulnerable patients. Most experts therefore believe efforts to prevent its spread are worth while.

  All hospitals have specialist infection control teams whose function is to advise on the precautions necessary, in the individual circumstances of each hospital and according to the type of patient, to prevent the spread of infection. The Department issued guidance to the national health service in September 1994 on the control of MRSA and in March 1995 on the general control of infections in hospitals, copies of which are available in the Library.
  231
  Mr. Flynn
  To ask the Secretary of State for Health how much has been spent on research into MRSA in each of the last five years; and if he will make a statement. [8237]

  Mr. Malone
  The main agency through which the Government support medical and clinical research is the Medical Research Council. The council is an independent body which receives its grant in aid from the Department of Trade and Industry. The council does not currently fund any research specifically into methicillin-resistant staphylococcus aureus. However, the council does have a portfolio of research on staphylococcal bacteria in general, which underpins research into MRSA. This amounted to £200,000 in 1994–95 and £144,000 in 1995–96.

  In addition, two research projects have been funded at regional level, amounting to £47,706 in total.

  Mr. Alan W. Williams
  To ask the Secretary of State for Health how many incidents of MRSA in 1995 occurred in(a) geriatric wards, (b) intensive care, (c) surgical wards, (d) general medical wards and (e) other wards. [8034]

  Mr. Horam
  The information requested is not available centrally.

  Mr. Williams
  To ask the Secretary of State for Health what factors underlie the trend in reported incidents of MRSA in hospitals; and what evaluation he has made of the extent to which(a) standards of hygiene, (b) re-use of infected equipment and (c) patient turnover contribute to the spread of MRSA. [8037]

  Mr. Horam
  The trend in reported incidents of methicillin-resistant staphylococcus aureus—three or more patients with the same strain of MRSA in a month from the same hospitals—reflects, in part, the emergence and spread, from the early 1990s, of two new strains of MRSA. Other factors include changes in medical practice, such as the transfer of more patients to specialist units in other hospitals.

  Good personal hygiene, such as thorough hand washing, is important in preventing the spread of all types of infections, including those caused by MRSA. The Department has made no evaluation of re-use of equipment and patient throughput on the spread of MRSA. These are matters for individual trusts and health authorities to consider.

  Mr. Williams
  To ask the Secretary of State for Health what is his Department's policy in respect of the practice of sending home patients with MRSA in order to prevent its spread in hospital. [8038]

  Mr. Horam
  The Department issued guidance to the national health service in September 1994 on the control of methicillin-resistant staphylococcus aureus. MRSA does not pose a risk to healthy people.

  Mr. Williams
  To ask the Secretary of State for Health how many incidents of MRSA were reported during 1995 in (a) each member state of the European Community and (b) the United States of America. [8039]

  Mr. Horam
  We are not aware of any other country which routinely compiles national data on methicillin-resistant staphylococcus aureus.

  Multiple Sclerosis
  Mr. Gordon Prentice
  To ask the Secretary of State for Health if he will list the drugs currently being trialled in the United Kingdom aimed at alleviating the symptoms of MS. [8214]

  Mr. Malone
  Such information is confidential. Section 118 of the Medicines Act 1968 precludes the disclosure of confidential information received in pursuance of the Act.

  Mr. Prentice
  To ask the Secretary of State for Health if he will list those areas of the United Kingdom where there are MS clusters. [8197]

  Mr. Horam
  This information is not available centrally.

  Questions relating to Wales, Scotland and Northern Ireland are matters for my right hon. Friends the Secretaries of State for Wales and for Scotland and my right hon. and learned Friend the Secretary of State for Northern Ireland, respectively.

  General Practitioner Fundholders
  Ms Jowell
  To ask the Secretary of State for Health if he will list for each health authority the amount borrowed from the underspend by local general practitioner fundholders in each of the last five years; and how much of this amount has been repaid by each health authority to date. [8035]

  Mr. Malone
  The information requested is not held centrally. We expect health authorities and fundholding general practitioners to work together to make the best use of resources in year.

  Repair and Maintenance Backlog
  Ms Jowell
  To ask the Secretary of State for Health what was the overall repair and maintenance backlog at NHS facilities within the areas controlled by each NHS executive regional office in each year since 1991. [8036]

  Mr. Horam
  I refer the hon. Member to the reply I gave the hon. Member for Southwark and Bermondsey (Mr. Hughes) on 19 November 1996 at column 529.

  Disability Allowance
  Ms Lynne
  To ask the Secretary of State for Health what steps his Department proposes to take to monitor the impact of the changes to the disability allowance mobility component for hospital patients with reference to the extent to which(a) the mobility opportunities for hospital patients are fully maintained, (b) patients leave hospital treatment prematurely to avoid the cut-off point for the mobility component and (c) the rehabilitation of hospital patients is hindered. [8211]

  Mr. Horam
  None. This is a matter for local decision by health authorities and trusts.

  Learning Difficulties
  Mr. Thurnham
  To ask the Secretary of State for Health what guidance he is issuing to local authorities concerning the evaluation of alternative care options for people with learning difficulties. [8209]

  Mr. Burns
  I will write to all directors of social services and chief executives of health authorities about the second phase of the research project evaluating various types of residential support for people with learning disabilities before Christmas. I intend to make it clear in my letter that departmental guidance remains as set out in LAC(92)15, copies of which are available in the Library, and that therefore all forms of residential provision including village communities remain options to be considered by those planning and purchasing services.

  NHS Dentistry Contracts
  Mr. Chris Smith
  To ask the Secretary of State for Health for how long records relating to the payment of NHS dentistry contracts are retained. [8433]

  Mr. Malone
  The dental practice board retains dental claim forms in prior approval cases for 18 months and non-prior approval cases for 13 months. The dental payment schedules are retained on microfiche back to June 1989.

  Vitamin B12 Unit
  Mr. Chris Smith
  To ask the Secretary of State for Health what is the timetable for the independent review of the vitamin B12 unit at the Chelsea and Westminster Healthcare NHS trust; who are the members of the review body; and what are the terms of reference of the review. [8430]

  Mr. Horam
  The inquiry into the work of the vitamin B12 unit at the Chelsea and Westminster hospital is the responsibility of, and has been commissioned by, the Chelsea and Westminster Healthcare national health service trust.

  The members of the inquiry are Professor Albert Aynsley-Green, Nuffield professor of child health, and Professor Brian Neville, professor of paediatric neurosciences at the institute of child health, university of London. It is intended that the inquiry will finish by March 1997 and report to the trust board in April.

  The terms of reference are:
  1. To review the process of the hospital's clinical management of the patients for whom the vitamin B12 unit has provided advice or resources for investigation from 1 April 1994 to date.

  Number and average waiting time for specified operations

  1993–94

  1994–95

  11995–96

  Average waiting time

  Average waiting time

  Average waiting time

  Number

  (days)

  Number

  (days)

  Number

  (days)

  Hip replacements

  1,649

  161

  1,842

  152

  1,793

  138

  Hysterectomies

  3,487

  85

  3,427

  86

  3,542

  91

  Cataract extractions

  8,489

  170

  9,374

  138

  10,491

  145

  Tonsillectomies

  4,606

  171

  4,756

  197

  5,224

  167

  Kidney transplants

  9

  99

  8

  23

  10

  24

  Hernia operations

  3,748

  91

  3,918

  103

  3,975

  110

  1 Data for 1995–96 are not comparable to earlier years as records are not yet available for all hospitals.

  234

  2. In particular to advise whether reasonable steps have been taken by the trust to ensure the appropriate treatment of the patients according to the principles of evidence-based medicine and effective and safe healthcare.

  3. As necessary, to consider and review issues which may arise from an NHS point of view with regard to the management aspects of clinical research and the treatment associated with it.

  4. To advise on the future NHS management arrangements by the trust for patients whose neurodevelopmental diagnosis and/or treatment may involve the services of the vitamin B12 unit.

  Injury Prevention and Control
  Mr. Ian McCartney
  To ask the Secretary of State for Health if his Department has signed the Melbourne declaration on injury prevention and control, adopted on 22 February. [8644]

  Mr. Horam
  The "Melbourne declaration" does not provide for formal endorsement by Government of its conclusions. The Government demonstrated their commitment to accident prevention by including it as a key area in their "The Health of the Nation" strategy launched in 1992.

WALES

  NHS Pension Scheme
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what actuarial reports have been carried out on the effect on the NHS pension scheme's overall liabilities of including general practitioners' staff in the scheme; and if he will make a statement on the conclusions of the reports. [7482]

  Mr. Hague
  The Government are considering the case for allowing general practitioners' practice staff to enter the national health service pension scheme and a decision will be announced soon.

  Hospital Waiting Times
  Mr. Alex Carlile
  To ask the Secretary of State for Wales how many(a) hip replacements, (b) hysterectomies, (c) cataract extractions, (d) tonsillectomies, (e) kidney transplants and (f) hernia operations were carried out by the NHS in Wales in each of the last three years; what was the average waiting time for each operation in each year; and if he will make a statement. [7468]

  Mr. Hague
  The information is given in the following table:

  Dental Services
  Mr. Alex Carlile
  To ask the Secretary of State for Wales how many new NHS registrations in Wales with a dental practitioner occurred in each six-month period between January 1990 and January 1994 and in each month since January 1994; how many of these are estimated to have been duplicate registrations; and if he will make a statement. [7491]

  Mr. Hague
  Information on the number of new registrations is given in the following table. It is not possible to identify how many of the registrations were for patients who re-registered after lapsing, were already registered with another dentist, or who were completely new registrations.

  Number of new NHS registrations with dentists in Wales

  Period

  Number

  Period

  Number

  October-December 19901

  449,989

  March 1995

  53,721

  January-June 1991

  640,040

  April 1995

  59,114

  July-December 1991

  386,458

  May 1995

  52,557

  January-June 1992

  385,586

  June 1995

  40,823

  July-December 1992

  350,665

  July 1995

  37,463

  January-June 1993

  350,340

  August 1995

  37,912

  July-December 1993

  285,074

  September 1995

  55,585

  January 1994

  36,814

  October 1995

  47,896

  February 1994

  71,366

  November 1995

  42,353

  March 1994

  57,521

  December 1995

  42,841

  April 1994

  46,531

  January 1996

  49,473

  May 1994

  56,672

  February 1996

  51,978

  June 1994

  52,790

  March 1996

  59,338

  July 1994

  52,585

  April 1996

  53,969

  August 1994

  44,855

  May 1996

  53,283

  September 1994

  45,615

  June 1996

  51,970

  October 1994

  45,527

  July 1996

  49,578

  November 1994

  61,153

  August 1996

  53,562

  December 1994

  50,976

  September 1996

  76,164

  January 1995

  40,295

  October 1996

  54,648

  February 1995

  78,188

  November 1996

  59,694

  1 There are no new registrations in October 1990, the first month of the new dental contract.

  Council House Repairs
  Mr. Barry Jones
  To ask the Secretary of State for Wales what amounts of cash were available for the modernisation and repair of council homes in (i) 1992, (ii) 1993 and (iii) 1995; and if he will make a statement. [7772]

  Mr. Jonathan Evans
  Credit approvals made available by the Department for capital expenditure on council housing can be supplemented by authorities' use of some capital receipts and revenue contributions. In addition, councils have some flexibility in the level of spending on revenue repairs within the housing revenue account. The following table, therefore, shows capital and revenue spending by Welsh councils in cash terms on modernisation and repair of council houses in 1992–93, 1993–94 and 1995–96.

  £ million

  Revenue spending

  Capital spending

  Total

  1992–93

  112.4

  75.4

  187.8

  1993–94

  119.6

  84.6

  204.2

  1994–95

  126.3

  88.4

  214.7

  Physiotherapy
  Mr. Barry Jones
  To ask the Secretary of State for Wales what initiatives he proposes to reduce the waiting times for those seeking physiotherapy after suffering accidents and injuries; and if he will make a statement. [7774]

  Mr. Gwilym Jones
  The number of training places for occupational therapy and physiotherapy being contracted for by the NHS in Wales has increased from an intake of 25 in 1993–94 to 57 in 1996–97 for occupational therapists. The number of training places has also increased for physiotherapy from an intake of 36 in 1993–94 to 69 in 1996–97. This increased level of training will be maintained in 1997–98.

  Public Appointments
  Mr. Llwyd
  To ask the Secretary of State for Wales how many re-appointments to non-departmental public boards in Wales there were in 1995; and if he will make a statement. [7910]

  Mr. Hague
  I or my predecessor made 123 re-appointments to NDPBS or NHS bodies in Wales in 1995.

  Housing
  Mr. Barry Jones
  To ask the Secretary of State for Wales what was the amount available to Tai Cymru in(a) 1992 and (b) the latest available year for new housing association homes in Wales. [7763]

  Mr. Jonathan Evans
  The capital programme for housing associations, including private finance, in 199192 was £160.4 million. In the current financial year this is forecast to be £154.4 million.

  Mr. Jones
  To ask the Secretary of State for Wales how many social housing lettings were made in(a) 1992 and (b) 1995. [7767]

  Mr. Evans
  In the financial years 1992–93 and 1995–96, there were 17,089 and 21,088 lettings, excluding transfer and exchanges. These data are a combination of local authority lettings figures from annual returns, together with a summary of housing association lettings from the continual recording of the lettings system.

  Mr. Jones
  To ask the Secretary of State for Wales what is his estimate of the number of new homes required up to the year 2000. [7768]

  Mr. Evans
  Estimates of additional homes required were published in the 1992-based household projections, a copy of which is in the Library of the House. This report expected the average number of additional homes each year, up to the year 2000, to be 8,800.

  Mr. Jones
  To ask the Secretary of State for Wales how many private homes were built in(a) 1992 and (b) 1995. [7769]

  Mr. Evans
  This information is in table 2.3 of Welsh housing statistics 1996, which is in the Library of the House.
  237
  Mr. Jones
  To ask the Secretary of State for Wales what is his estimate of the number of(a) council and (b) housing association homes required in each of the years to 2000. [7770]

  Mr. Evans
  A breakdown in the form requested is not available. Our estimate for subsidised dwellings for each years is between 2,500 and 3,500.

  Departmental Running Costs
  Mr. Llwyd
  To ask the Secretary of State for Wales what were the revenue costs of running his Department in (i) 1994 and (ii) 1995; and if he will make a statement. [7911]

  Mr. Hague
  My Department's running costs were £77.4 million in 1994–95 and £74.9 million in 1995–96.

  Community Health Councils
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on the future role of the community health councils. [8172]

  Mr. Gwilym Jones
  I envisage no change in the statutory roles and functions of community health councils in Wales.

  Graduate Unemployment
  Mr. Rogers
  To ask the Secretary of State for Wales how many graduates are currently on the unemployed register in Wales. [8524]

  Mr. Jonathan Evans
  The unemployment register does not hold details of the qualifications held by claimants so the information requested is not available.

  Injury Prevention and Control
  Mr. Ian McCartney
  To ask the Secretary of State for Wales if his Department has signed the Melbourne declaration on injury prevention and control, adopted on 22 February. [8642]

  Mr. Gwilym Jones
  The Melbourne declaration does not provide for formal endorsement by Government of its conclusions. Its main recommendations are, however, already being taken forward in Wales through implementation of the "Protocol for Investment in Health Gain: Injuries". Injury prevention and control is also identified as a health priority area in "Caring for the Future". Welsh mortality rates for injury are now among the lowest in Europe.

  NHS Expenditure
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is the current level of spending on the NHS in Wales; and what it was in 1993. [8171]

  Mr. Gwilym Jones
  The level of provision for the NHS in Wales in 1993–94 was £1,975 million and in 1996–97 is £2,275 million.

EDUCATION AND EMPLOYMENT

  Part-time Working
  Ms Gordon
  To ask the Secretary of State for Education and Employment what steps she plans to take to assist people who are currently working part time who want to find a full-time job. [7067]

  Mr. Forth
  We shall continue to oppose unnecessary regulations, such as the social chapter, the national minimum wage and the working time directive which would make it harder for employees to choose freely between full-time and part-time work.

  Clinical Staff Pay
  Mr. Cousins
  To ask the Secretary of State for Education and Employment what proposals she has to ensure pay comparability between clinical academic staff and national health service staff. [7068]

  Mr. Forth
  My right hon. Friend has placed a condition of grant on the Higher Education Funding Council for England from 1997–98. This will require the council to enable universities and colleges to meet any additional costs for medical schools arising from any pay increase awarded by the Government to NHS clinicians.

  Education Budget (London)
  Mr. Simon Hughes
  To ask the Secretary of State for Education and Employment what assessment she has made of the effect of the budget settlement on(a) class sizes and (b) education attainment in (i) Southwark and (ii) London local education authorities. [7070]

  Mr. Robin Squire
  The effects of the settlement upon class sizes and the attainment of pupils will depend upon decisions taken by Southwark and other London LEAs. If they give priority to the chalk face and to improving teacher quality, there is no reason why class sizes should rise.

  Lifetime Learning
  Mr. Nicholas Winterton
  To ask the Secretary of State for Education and Employment what steps she is taking to increase acceptance of the concept of a lifetime of learning. [7071]

  Mr. Paice
  We fully support the concept of lifetime learning. Copies of the Department's policy framework on lifetime learning published in June are available in the Library. Our most recent initiative to promote lifetime learning are learning line—a new free national telephone helpline on learning opportunities to be launched in September 1997—support for further development of local partnership activities, and our recently published strategic guidance "TECs Beyond 2000" which asks TECs to extend their work with employers and their other partners to create a culture for lifetime learning locally.

  Higher Education Vouchers
  Mr. David Atkinson
  To ask the Secretary of State for Education and Employment if she will make it her policy to introduce a voucher system for higher education. [7072]
  239
  Mr. Forth
  My right hon. Friend has no plans at present to introduce a voucher system for higher education. She has set up an inquiry under Sir Ron Dearing to look at how our higher education system should develop to meet the needs of the UK over the next 20 years. We will consider carefully its recommendations on the future funding of higher education, when it reports next summer.

  Examination Results
  Mr. Dunn
  To ask the Secretary of State for Education and Employment how many(a) grant-maintained and (b) local education authority schools are represented in the top 50 state schools measured by A-level results. [7073]

  Mrs. Gillan
  I refer my hon. Friend to the reply I gave earlier to my hon. Friend the Member for Bury St. Edmunds (Mr. Spring).

  Private Finance Initiative
  Mr. Sheerman
  To ask the Secretary of State for Education and Employment when she will next meet the Committee of Vice Chancellors and Principals to discuss the role of the private finance initiative. [7074]

  Mr. Forth
  There are no plans to do so at present.

  Assisted Places Scheme
  Mr. Flynn
  To ask the Secretary of State for Education and Employment what is her most recent assessment of the impact of the assisted places scheme on the feeder schools from which the assisted pupils are drawn. [7075]

  Mrs. Gillan
  The assisted places scheme gives able children from low-income families the opportunity of an excellent education at good independent schools.

  Job Creation
  Mr. McAvoy
  To ask the Secretary of State for Education and Employment what steps she is taking to encourage the creation of more full-time jobs. [7076]

  Mr. Forth
  We shall continue to develop the policies and programmes which have reduced unemployment by nearly 1 million and increased employment by nearly three quarters of a million since 1993 and which have reduced unemployment in Scotland, Wales and every English region to below the average rate in the European Union.

  Corporal Punishment
  Mr. Jamieson
  To ask the Secretary of State for Education and Employment if she will make a statement on her policy in respect of corporal punishment in the independent school sector. [7079]

  Mr. Forth
  We do not support any change in the present law which prohibits the use of corporal punishment for publicly funded pupils in independent schools. It is, however, still permissable for parents of privately funded pupils in independent schools on grounds of parental freedom to choose a school with disciplinary 240
  arrangements of which they approve. But where it is administered, the law requires that such punishment must not be inhuman or degrading.

  Teachers (Payment for Extra Work)
  Mr. Chris Davies
  To ask the Secretary of State for Education and Employment if she will make a statement on her policy with regard to the payment of teachers for out-of-hours and extra-curriculum work. [7080]

  Mr. Forth
  The statutory conditions of employment for teachers set rates of pay for the whole of a teacher's job. Within that framework, governing bodies can at their discretion pay teachers for a variety of extra-curricular professional activities that might take place out of school hours.

  Dyslexia
  Dr. Goodson-Wickes
  To ask the Secretary of State for Education and Employment what special provision she has made with respect to teaching pupils with dyslexia. [7081]

  Mrs. Gillan
  The code of practice on the identification and assessment of special educational needs emphasises the need for early identification of learning difficulties such as dyslexia, and sets out guidance to local education authorities and schools on the assessment of a dyslexic child. In 1995–96 almost £1 million of expenditure under the grants for education support and training programme supported training for teachers of dyslexic pupils. The Department is supporting research into assessment and teaching strategies for dyslexia with grants of more than £200,000 over the period 1992 to 1998. The Government propose that there should be a particular focus on literacy in the new national curriculum for initial teacher training; the Teacher Training Agency will be consulting on this in the new year, when comments from organisations representing dyslexia will be welcome.

  Age Discrimination
  Mrs. Wise
  To ask the Secretary of State for Education and Employment what steps she is taking to reduce discrimination against potential employees on the grounds of age. [7082]

  Mrs. Gillan
  The Department promotes the Government's campaign for older workers which persuades employers to recruit, train and retain them on merit, disregarding age. Through the campaign, which is supported by complementary booklets, regional presentations to employers and media coverage, we offer help, advice and support to older people seeking work. There is sound evidence that the campaign is working; many employers are reviewing their practices and policies towards older workers.

  Education Authority Expenditure
  Mr. Deva
  To ask the Secretary of State for Education and Employment how many local education authorities increased the amount spent on administration and reduced the amount spent on schools in the last year for which information is available. [7084]
  241
  Mr. Robin Squire
  In 1994–95, 14 LEAs increased spending on central administration while reducing spending on schools, by comparison with the previous year.

  Primary School Standards
  Mr. Carrington
  To ask the Secretary of State for Education and Employment what new measures she is taking to monitor standards in the primary sector. [7085]

  Mr. Robin Squire
  The Government's policies now enable the performance of children of primary age to be closely monitored at national, local, school and pupil level. The two main mechanisms are the assessment of performance of pupils against the national curriculum, and the regular independent inspection of all schools. We published last month the national results of the 1996 statutory assessments of all seven and 11-year-olds in English, mathematics and science, and in March we shall publish primary school performance tables. Some 7,000 primary schools have been independently inspected, with a summary of the report sent to each parent. These measures enable parents, schools and others to monitor children's progress at this vital stage in education.

  Project Work
  Ms Eagle
  To ask the Secretary of Stale for Education and Employment what proportion of those participating in project work have gained permanent employment. [7086]

  Mr. Forth
  It is too early to make a proper assessment of the experience of those who leave project work, as the pilot has been running for only eight months. A full survey of those who leave project work is being carried out, and will include details of the jobs they have entered. Results of the survey will be published in 1997. Early indications, however, are that twice as many people leave project work to enter a job as leave a comparable group outside the pilot areas. There is no significant difference in the rates at which all those who leave project work, and those who leave a comparable group, return to the unemployment register.

  School Discipline
  Lady Olga Maitland
  To ask the Secretary of State for Education and Employment what steps she is taking with regard to discipline in schools. [7089]

  Mr. Forth
  The Education Bill introduced on 30 October includes a package of measures to strengthen schools' ability to take action in the face of poor behaviour and discipline; to help ensure there is proper support for schools in dealing with pupils with behaviour problems; and to promote effective provision for such pupils out of school where necessary.

  Pupil Achievements (Gender Differences)
  Mr. Brian David Jenkins
  To ask the Secretary of State for Education and Employment what plans she has to address the gap between the achievements of girls and boys at school. [7090]

  Mr. Robin Squire
  The Government's policies are intended to raise standards for all pupils, and are doing so. The improvement of girls has been even more rapid 242
  than for boys at certain ages. While this rapid improvement is very welcome, Her Majesty's chief inspector has drawn attention to the low attainment of some boys, especially at key stages 3 and 4. It is primarily for schools to address gaps in performance of different groups of pupils. In setting its annual performance targets, each school should consider how best to develop the potential of every category of pupil.

  School Performance Tables
  Mr. Touhig
  To ask the Secretary of State for Education and Employment when she plans to publish value added performance tables. [7078]

  Mrs. Gillan
  The School Curriculum and Assessment Authority will be reporting on the development of value added measures in February 1997. Consideration will be given to the inclusion of such measures in school performance tables in the light of that report.

  Schools Access Initiative
  Mr. Steinberg
  To ask the Secretary of State for Education and Employment, pursuant to her answer of 5 November,Official Report, column 426, what financial provision she proposes to make in respect of the schools access initiative. [8053]

  Mrs. Gillan
  We are today announcing an extension of the schools access initiative. We will provide support totalling £12 million over the next three years for projects to make more mainstream schools accessible to pupils with disabilities. We shall encourage local education authorities and schools to seek local partnership funding to maximise the value of projects to be undertaken under the initiative.

  Clinical Academic Salaries
  Mr. Merchant
  To ask the Secretary of State for Education and Employment what recent representations she has received about changes in clinical academic salary levels. [8246]

  Mr. Forth
  My right hon. Friend has received numerous representations on this matter. She announced at the time of the Budget statement that she has placed a new condition of grant on the Higher Education Funding Council for England from 1997–98 requiring the council to enable universities and colleges to meet any additional costs for medical schools arising from any pay increase awarded by the Government to NHS clinicians.

  Education and Community Values
  Sir Irvine Patnick
  To ask the Secretary of State for Education and Employment what representations she has received regarding the consultation exercise conducted by the School Curriculum and Assessment Authority on values in education and community; and if she will make a statement. [8292]
  243
  Mrs. Gillan
  My right hon. Friend has received about 10 representations, mostly from people concerned that the distribution of questionnaires meant that the consultation was restricted. The questionnaires were distributed in accordance with prescribed samples. The School Curriculum and Assessment Authority has assured my right hon. Friend that it was at the same time open to anyone to ask for the consultation document and submit their views. SCAA will take account of all representations received to date.

  Secondary School Funding
  Mr. Deva
  To ask the Secretary of State for Education and Employment if she will list for each year from 1992 to 1996(a) the total standard spending assessment for secondary schools, (b) this figure expressed as an amount per secondary pupil, (c) the amount spent on secondary pupils and (d) this figure expressed as an amount per pupil for the London borough of Hounslow. [8297]

  Mr. Robin Squire
  The following table shows for Hounslow local education authority secondary education(a) standard spending assessment and (b) SSA per pupil for the years 1992–93 to 1995–96; and (c) net institutional expenditure and (d) NIE per pupil in LEA schools for the years 1992–93 to 1994–95, the latest year for which outturn figures are available. All figures are in cash terms, and have not been adjusted for changes in function.

  Hounslow LEA secondary education

  1992–93

  1993–94

  1994–95

  1995–96

  (a) SSA (£m)

  33.006

  33.487

  35.249

  38.110

  (b) SSA per pupil (£)

  2,917

  3,122

  3,145

  3,128

  (c) NIE (£m)

  33.383

  29.530

  32.691

  n/a

  (d) NIE per pupil (£)

  2,419

  2,282

  2,582

  n/a

  Further Education Colleges (London)
  Mr. Bryan Davies
  To ask the Secretary of State for Education and Employment what was the total allocation of funding from the Further Education Funding Council to colleges in the Greater London region in each year since 1993 in(a) cash prices and (b) current prices. [8412]

  Mr. Paice
  The total allocation of funding by the Further Education Funding Council to colleges in the Greater London region since 1993 is as follows:

  ITT target and actual intake in each subject area since 1993

  1993–94

  1994–95

  1995–96

  1996–97 provisional

  1997–98

  1998–99

  1999–00

  England

  Primary

  Target

  13,937

  12,990

  12,115

  11,500

  11,050

  10,900

  10,800

  Actual

  15,775

  13,743

  13,603

  12,470

  —

  —

  —

  13 per cent.

  6 per cent.

  12 per cent.

  8 per cent.

  Secondary

  Art

  Target

  725

  810

  825

  900

  950

  1,000

  1,000

  Actual

  703

  754

  818

  900

  —

  —

  —

  -3 per cent.

  -7 per cent.

  -1 per cent.

  0 per cent.

  History

  Target

  605

  790

  780

  850

  900

  900

  900

  Actual

  669

  927

  872

  900

  —

  —

  —

  11 per cent.

  17 per cent.

  12 per cent.

  6 per cent.

  244

  cash prices £ million

  current prices £ million

  1993–94

  377.9

  419.5

  1994–95

  396.7

  422.7

  1995–96

  429.1

  442.3

  1996–97

  427.1

  427.1

  Mr. Davies
  To ask the Secretary of State for Education and Employment what was the level of funding per full-time equivalent student from the Further Education Funding Council for colleges in the Greater London region in each year since 1993 in current prices. [8413]

  Mr. Paice
  The Further Education Funding Council no longer funds colleges on the basis of full-time equivalent students.

  Jobseeker's Allowance (Students)
  Mr. Rogers
  To ask the Secretary of State for Education and Employment if her Department will establish a review of students on part-time courses and their eligibility for the jobseeker's allowance. [8523]

  Mr. Forth
  During the passage of the Jobseekers Bill we said that we would collect more and better information on the effectiveness and cost-effectiveness of the jobseeker's allowance rules on education and training. We are doing this. We are also considering this issue as part of the general JSA evaluation. In addition, on 6 November I announced the workskill pilots. These will evaluate new, more flexible arrangements for people to undertake employment-related education and training while receiving JSA. The pilots are due to start in April 1997 in four areas.

  Teacher Training
  Mr. Blunkett
  To ask the Secretary of State for Education and Employment if she will list, for each year since 1993–94 and up to 2001, the target and actual intake for initial teacher training in total, for(a) secondary, (b) primary and (c) secondary by subject, showing the percentage change between the target and actual intake and the revised targets for 1997–98; and if she will make a statement. [8609]

  Mr. Forth
  The following table shows the actual and target intakes to initial teacher training courses in England from 1993–94 to 1996–97 with target intakes for 1997–98 to 1999–2000.
  245

  ITT target and actual intake in each subject area since 1993

  1993–94

  1994–95

  1995–96

  1996–97 provisional

  1997–98

  1998–99

  1999–00

  Music

  Target

  485

  580

  585

  600

  600

  600

  600

  Actual

  461

  490

  548

  510

  —

  —

  —

  -5 per cent.

  -16 per cent.

  -6 per cent.

  -15 per cent.

  RE

  Target

  421

  500

  510

  700

  700

  800

  850

  Actual

  367

  448

  494

  660

  —

  —

  —

  -13 per cent.

  -10 percent.

  -3 per cent.

  -6 per cent.

  English

  Target

  1,362

  1,710

  1,832

  2,100

  2,150

  2,150

  2,150

  Actual

  1,465

  1,829

  1,877

  2,080

  —

  —

  —

  8 per cent.

  7 per cent.

  2 per cent.

  -1 per cent.

  Modern Language

  Target

  1,665

  2,060

  2,092

  2,250

  2,650

  2,700

  2,700

  Actual

  1,542

  1,789

  1,790

  1,750

  —

  —

  —

  -7 per cent.

  -13 per cent.

  -14 per cent.

  -22 per cent.

  Geography

  Target

  560

  645

  700

  850

  900

  950

  1,000

  Actual

  599

  636

  696

  840

  —

  —

  —

  7 per cent.

  -1 per cent.

  -1 per cent.

  -1 per cent.

  Maths

  Target

  1,755

  2,230

  2,267

  2,550

  2,250

  1,950

  1,950

  Actual

  1,796

  1,950

  1,795

  1,680

  —

  —

  —

  1 per cent.

  -13 per cent.

  -21 per cent.

  -34 per cent.

  Science

  Target

  2,615

  3,200

  3,402

  3,700

  3,300

  3,000

  3,000

  Actual

  2,373

  2,918

  2,794

  2,930

  -9 per cent.

  -9 per cent.

  -18 per cent.

  -21 per cent.

  Technology

  Target

  2,119

  2,360

  2,312

  2,700

  3,200

  3,200

  3,200

  Actual

  1,991

  2,133

  1,854

  1,970

  —

  —

  —

  -6 per cent.

  -10 per cent.

  -20 per cent.

  -27 per cent.

  PE

  Target

  1,156

  1,255

  1,250

  1,300

  1,550

  1,550

  1,550

  Actual

  1,074

  1,309

  1,311

  1,380

  —

  —

  —

  -8 per cent.

  4 per cent.

  5 per cent.

  6 per cent.

  Other

  Target

  500

  460

  445

  400

  350

  350

  350

  Actual

  481

  327

  378

  380

  —

  —

  —

  -4 per cent.

  -29 per cent.

  -15 per cent.

  -5 per cent.

  All Secondary

  Target

  13,968

  16,600

  17,000

  18,900

  19,500

  19,150

  19,250

  Actual

  13,491

  15,510

  15,226

  15,980

  —

  —

  —

  -3 per cent.

  -7 per cent.

  -10 per cent.

  -15 per cent.

  —

  —

  —

  Total

  Target

  27,905

  29,590

  29,115

  30,550

  30,050

  30,050

  30,050

  Actual

  29,266

  29,253

  28,829

  28,450

  —

  —

  —

  Notes:

  All figures include School Centred Initial Teacher Training.

  English includes Drama.

  Technology includes Business Studies and Home Economics.

  "Other" includes Classics, Economics and Social Sciences.

  1996–97 actual figures are provisional and rounded to the nearest 10.

  Vocational Qualifications
  Mr. Frank Field
  To ask the Secretary of State for Education and Employment what was the total Government expenditure on national vocational qualifications, including Scottish vocational qualifications, in each year of their existence; if she will make a statement on the aims and objectives of the qualifications; and what research she has commissioned to examine the kinds of employment gained by people who gain national vocational qualifications. [8223]

  Mr. Paice
  Expenditure through the Department's programmes on development costs of national vocational qualifications between 1988 and March 1996 is £106 million. This figure includes £83 million from the standards programme and £23 million grant in aid to the National Council for Vocational Qualifications. For each year this is:

  (£ million)

  1988–89

  1989–90

  1990–91

  1991–92

  1992–93

  1993–94

  1994–95

  1995–96

  Standards Programme

  3

  7

  9

  12

  12

  12

  11

  17

  Grant in Aid

  3.8

  3

  2.6

  3.7

  3.9

  3.8

  1.9

  0

  Total

  6.8

  10

  11.6

  15.7

  15.9

  15.8

  12.9

  17

  246
  The Department does not hold the information for Scottish vocational qualifications; this is the responsibility of the Secretary of State for Scotland. However, the development of occupational standards through the standards programme serves both NVQs and SVQs.

  National vocational qualifications provide a clear system which defines employers' needs in terms of occupational competence, assesses that competence when it has been achieved, ensures individuals undertake relevant and meaningful training and enables employers to know who has met the standards.

  NVQs are gained by many different categories of individual, including those already in employment in firms as well as those entering the labour market and unemployed. Information on the employment destinations of those on youth training and training for work, many of whom gain NVQs during their training, is regularly published by the Department. Recent research published by the Department has indicated that 42 per cent. of employers using NVQs gave pay rewards to employees gaining NVQs and 58 per cent. gave greater opportunities in terms of further training, priority in promotion or work opportunities involving higher pay.

  GCSE League Tables (Error)
  Mr. Don Foster
  To ask the Secretary of State for Education and Employment what estimate she has made of the costs incurred in correcting the programming error in respect of a number of local education authorities' entries in the recent GCSE league tables; and if she will make a statement. [8358]

  Mrs. Gillan
  [holding answer 10 December 1996]: None. Fewer than 10 LEAs are affected and corrections are being made under existing errata procedures.

  School Rolls
  Mr. Harry Greenway
  To ask the Secretary of State for Education and Employment what steps she is taking to ensure(a) the provision of new school places required by rising rolls and (b) the elimination of surplus places no longer required; and if she will make a statement. [7301]

  Mr. Robin Squire
  Section 14 of the Education Act 1996 places a duty on each local education authority to secure sufficient school places for its area unless the Secretary of State has made an order under section 27 of that Act, in which case the responsibility for providing sufficient school places may be shared with or held solely by the Funding Agency for Schools.

  We look to local education authorities to take action to remove surplus places in the first instance. My right hon. Friend has powers under the Education Act 1996 to direct an authority to bring forward rationalisation proposals where numbers of surplus places appear excessive.

  Both the provision of new places in areas of population growth and the cost-effective removal of surplus places are among our priority categories for capital support.

  Sickness Absence
  Mr. Blunkett
  To ask the Secretary of State for Education and Employment how many working days were lost through sickness by(a) teachers in England, (b) staff in the local education service and (c) staff in her Department in each of the last five years. [8616]

  Mr. Robin Squire
  The Department for Education and Employment does not collect the information requested at(a) and (b).

  The numbers of working days lost through sickness by staff in my Department from 1992 to 1995 are shown in the following table. Information prior to 1992 is not available.

  1992

  1993

  1994

  1995

  Former Department for Education (including Teachers' Pensions Agency)

  20,368

  20,966

  13,926

  —

  Former Employment Department (excluding Employment Service)

  71,953

  80,620

  62,266

  —

  DfEE

  —

  —

  —

  172,857

  1 Includes data covering all staff in the former ED and DfEE up to the merger on 5 July 1995; and in the DfEE for the remainder of the year.

  National Curriculum Publications
  Mr. Blunkett
  To ask the Secretary of State for Education and Employment how many national curriculum publications have been sent by her Department to schools in England, in the academic years 1994–95 and 1995–96; if she will list them; which delivery service has been used; and what has been the cost. [8621]

  Mrs. Gillan
  The answer is confined to the national curriculum statutory documents which set out the mandatory programmes of study and attainment targets, since information on other documents bearing on the national curriculum could be assembled only at disproportionate cost. The figures include mailings to higher and further education establishments and local education authorities, as well as to schools, for which separate figures are not available. The great majority of mailings are to schools.

  All figures are to the nearest thousand.

  Academic year 1994–95
  3,000 documents containing programmes of study and attainment targets for the National Curriculum as it stood before the Dearing review were issued through Christians, a commercial mailing house. The documents were "English in the National Curriculum", "Mathematics in the National Curriculum", "Science in the National Curriculum", "Technology in the National Curriculum", "History in the National Curriculum", "Geography in the National Curriculum", "Modern Foreign Languages in the National Curriculum", "Art in the National Curriculum", "Music in the National Curriculum", and "Physical Education in the National Curriculum".
  In January and February 1995, a total of 774,000 documents containing programmes of study and attainment targets for the revised national curriculum were issued to all schools, higher and further education establishments and local education authorities in England through Prolog, a commercial mailing house. Up to August 1995 Christians issued a further 149,000. The revised national curriculum documents are "The National Curriculum", (covering all subjects at all key stages), "Key Stages 1 and 2 of the National Curriculum", "English in the National Curriculum", "Mathematics in the National Curriculum", "Science in the National Curriculum", "Design and Technology in the National Curriculum", "Information Technology in the National Curriculum", "History in the National Curriculum", "Geography in the National Curriculum", "Modern Foreign Languages in the National Curriculum", "Art in the National Curriculum", "Music in the National Curriculum", and "Physical Education in the National Curriculum".
  Invoices for mailing house charges do not correspond exactly to the academic year. From June 1994 to August 1995 they totalled £298,000. The cost of printing revised national curriculum documents was £1,093,000.

  Academic year 1995–96
  Forty-five thousand documents for the revised national curriculum were issued through Christians. The total cost was £61,000 for mailing house charges only.

LORD CHANCELLOR'S DEPARTMENT

  Public Defender Scheme
  Mr. Austin Mitchell
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will initiate a pilot public defender scheme in England. [7516]

  Mr. Streeter
  It is not our intention to pilot such a scheme.

  Rights of Audience
  Mr. Austin Mitchell
  To ask the Parliamentary Secretary, Lord Chancellor's Department when he plans to make an announcement about rights of audience of employed advocates. [7514]

  Mr. Streeter
  The application for rights of audience for employed solicitors in the higher courts is still being considered by the Lord Chancellor and the designated judges, in accordance with the procedure laid down in the Courts and Legal Services Act 1990. They hope to be in a position to make an announcement in the new year.

  Legal Education and Conduct (Report)
  Sir Anthony Grant
  To ask the Parliamentary Secretary, Lord Chancellor's Department when the Lord Chancellor's Advisory Committee on Legal Education and Conduct plans to publish its fifth annual report. [9010]

  Mr. Streeter
  The Lord Chancellor's Advisory Committee on Legal Education and Conduct has today published its fifth annual report, and copies have been placed in the Libraries of both Houses.

NORTHERN IRELAND

  Seat Belts
  Mr. Flynn
  To ask the Secretary of State for Northern Ireland how many drivers have been prosecuted for allowing a child aged under 14 years to travel in a vehicle without wearing a seat belt or legal restraint in Northern Ireland in each of the last five years; and if he will make a statement. [8226]

  Sir John Wheeler
  The number of persons proceeded against for carrying a child aged under 14 years without a seat belt are set out in the list:

  1991: 55

  1992: 55

  1993: 69

  1994: 87

  1995: 99.

  Computerisation of penalties other than prosecutions commenced late 1995. For the period 20 October 1995 to 7 October 1996 a total of 35,016 "advice and warnings" were given and 2,211 fixed penalty notices issued for various seat belt offences.

  Operation Road Safe has been running since March 1995 and included in its priorities is the wearing of seat belts in vehicles.
  250
  Mr. Flynn
  To ask the Secretary of State for Northern Ireland if he will estimate how many(a) drivers, (b) front-seat passengers and (c) back-seat passengers have been (i) killed and (ii) injured as a result of not wearing a seat belt in a vehicle in Northern Ireland in each of the last five years; and if he will make a statement. [8228]

  Mr. Moss
  The information requested is set out in the following table:

  Drivers

  Front-seat passengers

  Back-seat passengers

  Year

  Killed

  Injured

  Killed

  Injured

  Killed

  Injured

  1991

  14

  165

  5

  95

  8

  214

  1992

  10

  231

  4

  124

  4

  222

  1993

  10

  252

  2

  138

  3

  503

  1994

  10

  137

  1

  84

  9

  447

  1995

  6

  148

  3

  109

  7

  390

  These figures exclude fatalities and casualties where seat belt usage is not known.

  The Department of the Environment for Northern Ireland, in conjunction with the National Safety Council in Ireland, and with private sector sponsorship, launched a seat belt campaign on 14 October 1996 covering both Northern Ireland and the Irish Republic.

  Schools
  Mr. Worthington
  To ask the Secretary of State for Northern Ireland if he will provide a breakdown of schools in Northern Ireland by the percentages which they attract from each of the major traditions in Northern Ireland. [971]

  Mr. Ancram
  [pursuant to his reply, 2 November 1996, c. 473–74]: The breakdown of schools in Northern Ireland by the percentage which they attract from each of the major traditions is given in the tables.

  Table 1a: Controlled nursery schools (attended mainly by Protestant pupils)

  Percentage Catholic

  Number of schools

  0

  13

  .01–1

  0

  1.1–5

  11

  5.1–10

  7

  10.1–20

  4

  20.1–50

  12

  50.1+

  18

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.

  Table 1b: Maintained nursery schools (attended mainly by Catholic pupils)

  Percentage Protestant

  Number of Schools

  0

  22

  .01–1

  0

  1.1–5

  2

  5.1–10

  0

  10.1–20

  1

  20.1–50

  1

  50.1+

  0

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.
  251

  Table 2a: Maintained primary schools (attended mainly by Catholic pupils)

  Percentage Protestant

  Number of schools

  0

  384

  .01–1

  26

  1.1–5

  19

  5.1–10

  1

  10.1–20

  3

  20.1–50

  3

  50.1+

  0

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.

  Table 2b: Controlled/other maintained primary schools (attended mainly by Protestant pupils)

  Percentage Catholic

  Number of schools

  0

  278

  .01–1

  52

  1.1–5

  91

  5.1–10

  26

  10.1–20

  14

  20.1–50

  14

  50.1+

  11

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.

  Table 3a: Controlled secondary/non-denominational voluntary grammar schools (attended mainly by Protestant pupils)

  Percentage Catholic

  Number of schools

  0

  28

  .01–1

  25

  1.1–5

  36

  5.1–10

  7

  10.1–20

  8

  20.1–50

  6

  50.1+

  1

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.

  Table 3b: Maintained secondary schools/voluntary grammar schools under Roman Catholic management (attended mainly by Catholic pupils)

  Percentage Protestant

  Number of schools

  0

  83

  .01–1

  22

  1.1–5

  2

  5.1–10

  0

  10.1–20

  1

  20.1–50

  1

  50.1+

  0

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.

  Table 4: Integrated Schools

  Percentage Catholic

  Number of schools

  0–20

  0

  21–30

  1

  31–40

  2

  41–50

  5

  51–60

  9

  61–70

  4

  71+

  7

  Percentages relate only to the total number of Roman Catholic and Protestant pupils.

  Electricity Interconnector
  Mr. Home Robertson
  To ask the Secretary of State for Northern Ireland what assessment he has made of the value to the Northern Ireland economy of an electricity interconnector with Scotland. [6678]

  Mr. Ancram
  [holding answer 28 November 1996]: None. The proposed construction of an electricity interconnector is a matter for the private companies concerned, Northern Ireland Electricity plc and Scottish Power plc. I can say, however, that the interconnector of neighbouring electricity systems is in line with UK Government and EU policy and is a central feature of Northern Ireland's energy strategy.

TRANSPORT

  Motorway Service Stations
  Mr. Chidgey
  To ask the Secretary of State for Transport what criteria are used to decide where service stations should be located on motorways; and which agency has responsibility for determining proposals for service stations. [8082]

  Mr. Watts
  Following a change of policy announced in 1992, it is now for the private sector rather than the Department of Transport to bring forward new motorway service areas. My Department's involvement is limited to ensuring that proposals are acceptable in spacing, safety and traffic terms, and that any MSA signed from the motorway provides a specified minimum range of facilities. MSAs remain subject to the same controls as any other development, and cannot proceed unless planning permission has been granted by the local planning authority or, in the event of an appeal, the Secretary of State for the Environment.

  Aircraft Noise Limits
  Mr. Chidgey
  To ask the Secretary of State for Transport what steps he will take to enforce the noise limits due to be imposed at Heathrow, Gatwick and Stansted from 1 January 1997. [8083]

  Mr. Bowis
  On 6 December, the High Court ordered a stay on the introduction of the daytime noise limit of 94 dBA Lmax and the night-time noise limit of 87 dBA Lmax at Heathrow, Gatwick and Stansted airports until the determination of an application by the International Association for judicial review of the decision announced by my noble Friend on 28 August. The decision to improve monitoring efficiency by resiting some of the existing monitors and adding new monitors and other matters in the announcement of 28 August are unaffected.

  Road Signs
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what estimate he has made of the costs to British industry of inadequate and poor road signing. [8416]

  Mr. Watts
  There have been no recent studies of the effects nationally of road signing on British industry.
  253
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what assessment he has made on the effect of poor and inadequate road signing on road safety. [8420]

  Mr. Bowis
  The need for particular signs to be provided to maintain safety on trunk roads in England is considered on a case by case basis. Maintenance of the signs is carried out in accordance with the Highways Agency's code of practice for routine maintenance. The provision and maintenance of adequate signing on other roads are matters for the relevant highway authorities.

  Aircraft Safety Standards
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he will list those countries identified by the Federal Aviation Authority as not meeting International Civil Aviation Organisation standards. [8435]

  Mr. Bowis
  I refer to the reply my hon. Friend the Member for Epping Forest (Mr. Norris) gave to the hon. Member for Crewe and Nantwich on 26 March,Official Report, column 542.

  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he will arrange for press releases listing countries not meeting Internatinal Civil Aviation Organisation standards issued by the Federal Aviation Authority to be placed in the Library. [8436]

  Mr. Bowis
  No, this is not a matter for my Department.

  Air Passenger Carriers' Liability
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he will list those countries with an air passenger carriers' liability limit lower than the United Kingdom's. [8440]

  Mr. Bowis
  According to information provided by the European Commission, six European Union member states currently permit carriers licensed in their territory to operate international services with lower liability limits than the United Kingdom in respect of death or injury to their passengers: Austria, Belgium, Germany, Greece, Portugal and Spain.

  Details of liability requirements in countries outside the Community are not currently available. However, the proposed EC regulation on air carrier liability in case of accidents would require a third country carrier operating to, from, or within the Community to provide passengers buying a ticket within a European Union member state with full details of its liability arrangements if these do not match the new Community standards.

  1991

  1992

  1993

  Killed

  Injured

  Killed

  Injured

  Killed

  Injured

  Car or van drivers

  209

  3,307

  199

  3,272

  151

  3,143

  Car or van passengers

  258

  13,269

  211

  10,983

  180

  9,322

  Front seat car passengers

  57

  1,367

  52

  1,428

  55

  1,379

  Rear seat car passengers

  176

  11,194

  142

  8,985

  119

  7,481

  All van passengers

  25

  708

  17

  570

  6

  462

  Channel Tunnel
  Mrs. Dunwoody
  To ask the Secretary of State for Transport (1) if he will place in the Library a copy of the revised safety guidance currently in place following the fire in the channel tunnel; [8439]

  (2) if he will publish the documents relating to the decision by the Channel Tunnel Safety Authority to relax the evacuation standard on the channel tunnel from 90 minutes to three hours; [8437]

  (3) if he will place in the Library copies of the correspondence between Eurotunnel and the Channel Tunnel Safety Authority regarding the recent decision to reopen the channel tunnel. [8438]

  Mr. Watts
  I refer the hon. Member to the reply I gave on 6 December,Official Report, columns 804–805. However, Eurotunnel issued a press notice on 9 December 1996 which summarises the main measures that were taken—both temporary and permanent—before a resumption of Eurostar and tourist shuttle services was authorised by the intergovernmental commission. I can confirm that the issues identified by Eurotunnel were those examined in detail by the safety authority. A copy of the press notice has been placed in the Library.

  North-west Traffic Area Office
  Mrs. Dunwoody
  To ask the Secretary of State for Transport, pursuant to his answer of 5 December,Official Report, column 723, on the north-west traffic area office, what will be the amount of the payment to cover dilapidations. [8423]

  Mr. Bowis
  Negotiations on the amount of dilapidations are in progress between our agents and the landlord. To (late, no figure has been agreed.

  Seat Belts
  Mr. Flynn
  To ask the Secretary of State for Transport if he will estimate how many(a) drivers, (b) front-seat passengers and (c) back-seat passengers have been (i) killed and (ii) injured as a result of not wearing a seat belt in a vehicle in each of the last five years; and if he will make a statement. [8229]

  Mr. Bowis
  Statistics for seat belt wearing are available only until 1993 and only for the occupants of cars and vans. The position of front and back-seat passengers is available only for car passengers. The following table shows the recorded numbers of such drivers and passengers killed and injured in Great Britain while not wearing a seat belt whether or not one was fitted. The table does not include figures for the casualties where the wearing of a belt was not reported—about a quarter of all accidents.
  255
  It is known how many of these casualties were as a direct result of not wearing a seat belt, but it is estimated that 510 lives and 8,800 serious injuries have been saved each year as a result of seat belts being worn.

  Roads Programme
  Mr. Roy Hughes
  To ask the Secretary of State for Transport what criteria have been altered to amend the decisions made in the 1995 review of the road programme in respect of the removal of schemes from the main programme and the promotion of schemes from the longer-term programme. [8617]

  Mr. Watts
  Since the review published in November 1995 as "Managing the Trunk Road Programme", the Government's Green Paper "Transport—The Way Forward", Cm 3234, has been published affecting the Government's view of priorities and there have been changes in the circumstances of individual schemes. In some cases, schemes have been reviewed to reduce their cost and scope; in some cases, costs and benefits have been updated; there has been public consultation on some schemes; some schemes have been taken forward as part of the design, build, finance and operate programme; and, in some cases, local circumstances have changed.

  Mr. Hughes
  To ask the Secretary of State for Transport if he will list in respect of each of the schemes remaining in the road programme and for each scheme removed from the programme, what is the latest figure available on the ratio between current traffic and the critical traffic flow on that link and when the CTF ratio exceeded 100 per cent. or is forecast to exceed 100 per cent. [8619]

  Mr. Watts
  I will write to the hon. Member with details and place a copy of my letter in the Library.

  Mr. Hughes
  To ask the Secretary of State for Transport what is the appraisal methodology used to determine which trunk road improvements will(a) remain and (b) cease to be part of the road programme. [8368]

  Mr. Watts
  Decisions on which schemes should be included within the £6 billion road programme announced by my right hon. Friend on 26 November were taken in the light of a number of factors for each scheme, including the benefit to cost ratio, the environmental impact, the importance of the route on which the scheme was situated, the perceived importance of the scheme in the region, the actual or potential statutory or generalised blight generated by the scheme and the time at which the unimproved road was likely to experience substantial congestion. Longer-term schemes, for many of which little detailed information was yet available, were mostly withdrawn.

  Mr. Hughes
  To ask the Secretary of State for Transport if he will list the regional priorities for road schemes given by the Government offices as part of the latest review of the road programme. [8365]

  Mr. Watts
  No. These were prepared for the purpose of the Department's internal consideration of policy options and were only one of a range of factors taken 256
  into account in reaching decisions on the content of the road programme.

  Traffic Cones and Road Signs
  Mr. Flynn
  To ask the Secretary of State for Transport how many (i) traffic cones and (ii) road signs have been stolen in the last year; at what cost; what plans his Department has to try to reduce such figures; and if he will make a statement. [8316]

  Mr. Watts
  Traffic management at roadworks is provided under contract and it is the contractor's responsibility to take action to prevent theft of his equipment. No central record is kept of thefts of traffic cones or temporary road signs. We are not aware of any cases of theft of permanent road signs on the trunk road network. I understand that some local highway authorities have experienced problems and are dealing with them. This is a matter for the authorities concerned.

  A1
  Mr. Roy Hughes
  To ask the Secretary of State for Transport what impact the decision to cease the upgrading of the Al south of Alconbury and north of Peterborough will have on the concession awarded for the upgrading by DBFO—design, build, finance and operate—of the Alconbury to Peterborough section; and what representations he has received from the concessionaires on the decision. [8367]

  Mr. Watts
  I have asked the chief executive of the Highways Agency to write to the hon. Member.

  Letter from Lawrie Haynes to Mr. Roy Hughes, dated 11 December 1996:
  The Secretary of State for Transport has asked me to reply to your recent question about changes made to the Government's trunk road programme following the Chancellor's Autumn Statement. You ask what implication there might be for the A1(M) Alconbury to Peterborough Design, Build, Finance and Operate (DBFO) scheme in the light of the decision taken to withdraw other A1(M) schemes from the programme.
  The A1(M) Alconbury to Peterborough DBFO concession has been awarded as part of the Government's Private Finance Initiative (PFI). One of the key objectives for any contract awarded under the PH initiative is to achieve the optimal transfer of risk to the private sector in relation to the design, building, financing and operation of roads. For the tenderer, this means that he makes his own assessment of future traffic and accepts any associated risks. For the Department, this means that concessions will only proceed where the level of risk transferred is acceptable to the Government and represents good value for money. Any possible implications, therefore, for the A1(M) Alconbury to Peterborough DBFO concession following changes to the trunk road programme, are entirely a matter for the DBFO Company.
  To date, no approach has been received from the DBFO Company on this matter.

  Cones Hotline
  Mr. Flynn
  To ask the Secretary of State for Transport what final estimate he has made of the(a) average daily and (b) total gross cost to all the Departments and agencies involved in the national cone hotline; and if he will make a statement. [8313]

  Mr. Watts
  I refer the hon. Member to the replies I gave him on 26 March 1996,Official Report, column 547,

  257
  and on 10 July 1995, Official Report, column 403, and to the letter the chief executive of the Highways Agency wrote to the hon. Member for Gordon (Mr. Bruce) on 6 November 1995, Official Report, columns 759–60.

  Mr. Flynn
  To ask the Secretary of State for Transport how many calls to the national cone hotline(a) were made and (b) required remedial action to be taken; and if he will make a statement. [8314]

  Mr. Watts
  I refer the hon. Member to the letter the chief executive of the Highways Agency wrote to the hon. Member for Gordon (Mr. Bruce) on 6 November 1995,Official Report, columns 759–60.

  Mr. Flynn
  To ask the Secretary of State for Transport which other countries in the(a) EU and (b) Organisation for Economic Co-operation and Department have begun operating a system similar to the national cone hotline (i) prior to, (ii) during and (iii) after the British initiative; and if he will make a statement. [8315]

  Mr. Watts
  In France, the Centre National d'Information Routiere operates an information line service, providing motorists with information on road conditions and the opportunity to make complaints relating to the road network. We do not have readily available details of the systems operating in other EU and OECD countries, or of the dates on which other countries' systems started.

  Injury Prevention and Control
  Mr. Ian McCartney
  To ask the Secretary of State for Transport if his Department has signed the Melbourne declaration on injury prevention and control, adopted on 22 February. [8645]

  Mr. Bowis
  No.

  Shipping
  Mr. Jamieson
  To ask the Secretary of State for Transport how many United Kingdom-owned and registered ships there were in each year since 1979.[7838]

  Mr. Bowis
  [holding answer 9 December 1996]: Information on United Kingdom-owned and registered ships alone was not available prior to 1986. The information that is available is as follows:

  United Kingdom owned and registered fleet (vessels of 500 gross tons and over)

  Number of vessels at end of year

  Registered in United Kingdom

  Registered in United Kingdom or Crown Dependencies

  Total

  Of which owned by UK companies

  Total

  Of which owned by UK companies

  Owned by United Kingdom companies

  1979

  —

  —

  1,305

  1,194

  —

  1980

  —

  —

  1,275

  1,143

  —

  1981

  —

  —

  1,118

  994

  —

  1982

  —

  —

  985

  868

  —

  1983

  —

  —

  866

  769

  —

  1984

  —

  —

  777

  690

  —

  1985

  —

  —

  693

  627

  —

  1986

  482

  454

  546

  496

  710

  1987

  410

  387

  506

  464

  657

  1988

  375

  350

  482

  437

  621

  258

  United Kingdom owned and registered fleet (vessels of 500 gross tons and over)

  Number of vessels at end of year

  Registered in United Kingdom

  Registered in United Kingdom or Crown Dependencies

  Total

  Of which owned by UK companies

  Total

  Of which owned by UK companies

  Owned by United Kingdom companies

  1989

  361

  336

  450

  407

  581

  1990

  337

  310

  427

  378

  581

  1991

  321

  303

  409

  370

  586

  1992

  291

  274

  363

  324

  555

  1993

  273

  258

  344

  305

  530

  1994

  282

  263

  360

  310

  532

  1995

  271

  251

  365

  301

  540

  19961

  257

  236

  369

  289

  509

  Note:

  1 At end of September.

  Source:

  Lloyds Maritime Information Service.

HOME DEPARTMENT

  Police National Computer
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will list the markers associated with vehicle data stored on the police national computer indicating when such markers are used. [7554]

  Mr. Maclean
  Details of markers associated with vehicle data stored on the police national computer cannot be divulged since to do so may be prejudicial to the prevention and detection of crime and the security of the state.

  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will list the markers associated with criminal record data stored on the police national computer indicating when such markers are used. [7556]

  Mr. Howard
  The following types of marker may be held for subjects with criminal record data stored on the police national computer:

  Warning Signals

  Information Markers

  Local Cross-References.

  Warning signals contain information about the subject which should be immediately communicated to officers for the protection of themselves, the subject and others.

  Information markers contain useful and operationally important information about the subject.

  Local cross-references are used to identify the existence of information about a subject held on other police systems.
  259
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will list the data fields which are currently used in relation to vehicle information stored on the police national computer. [7553]

  Mr. Maclean
  The following data fields relating to the vehicles application are held on the police national computer:

  Vehicle Registration Mark (VRM);

  VRM previously allocated to the vehicle;

  The Vehicle Identification Number allocated by a manufacturer;

  Driver and Vehicle Licensing Authority (DVLA) make/model/body/colour code;

  Engine serial number and capacity;

  Registered owner's name and address;

  Month and year of first registration in the United Kingdom and name of the Vehicle Registration Office;

  Number and layout of wheels;

  Vehicle history:

  permanently exported;

  scrapped or seriously damaged;

  previous owner has indicated they no longer own the vehicle;

  vehicle has been subject to a cherished transfer;

  local authority has disposed of a vehicle;

  vehicle is subject to direct/personal export regulations;

  lost/stolen/recovered date;

  date vehicle was scrapped;

  VRM has been transferred to another vehicle;

  date on which the registered keeper last changed;

  date when vehicle description details were last updated.

  An indicator to show that the vehicle details are as notified by the previous owner;
  An indicator to show that the contents of the DVLA record have been queried;
  An indicator to show that the vehicle excise licence has been expired for more than three months;
  An indicator to show that the vehicle owner is entitled to diplomatic privilege;
  An indicator to show whether foreign or Great Britain registered;
  Owner/creator of the vehicle details which have been entered by the police (used when no DVLA information is available).

  In addition, various reports may be added by the police service to a vehicle record for operational police use. The report types available are lost/stolen, found, information, restricted—so that information is not given out over the air, correction, seen and removed, into custody or from street to street.

  Criminal Records
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will list the data fields currently used in relation to criminal record information stored on the police national computer. [7555]

  Mr. Howard
  The following data fields are held for subjects with criminal record information stored on the police national computer.

  Subject-related details may contain the following:

  Name under which subject is filed;

  PNC Identification Number;

  Criminal Record Office Number;

  Date and place of birth and nationality;

  260

  Descriptive details;

  Occupations;

  Names, nicknames and dates of birth used;

  Warning signals;

  Information markers;

  Local cross-references;

  Locations of subject photographs and dates taken;

  Police circulation references;

  Police officers with detailed or special knowledge of subject:

  Passport detail;

  Other identity numbers (eg National Insurance Number, Aliens Registration Number);

  Internal cross references to other PNC subjects;

  Driver number issued by Driver and Vehicle Licensing Authority (DVLA);

  Known associates;

  Special skills and knowledge;

  Organisations with which subject is involved and type of relationship;

  Addresses and telephone numbers;

  Places frequented;

  Other details (any other relevant information on the subject);

  For each case the following information may be held;

  Arrest details, including date and time, prosecuting agent, fingerprint status, officer dealing with case, persons co-charged;
  Offences with which charged, including date and time, location, method used and clothing worn, whether committed while on bail;
  How, when and where the case was dealt with, e.g., conviction at court, caution at police station;
  For offences dealt with at court, the plea entered, adjudication, number of offences taken into consideration, sentence imposed, result of appeal;
  Remand appearance information including location, date, result, bail conditions and breaches of bail;
  Periods in custody including dates, institution and release details including date, reason, return/recall dates, licence conditions and supervision arrangements.

  Fire Safety
  Mr. Cox
  To ask the Secretary of State for the Home Department what provision is made for reporting back to the joint fire safety committee of the Central Fire Brigades Advisory Council by Her Majesty's inspectorate of fire services on their involvement,(a) in those areas for which the fire and emergency planning department has a policy responsibility and (b) in liaison with other Government Departments, in the development of fire safety standards and tests. [7978]

  Mr. Sackville
  The joint fire safety committee of the Central Fire Brigades Advisory Council meets twice a year and on an ad hoc basis as necessary to discuss matters of particular concern to the committee. Issues affecting fire safety standards and fire testing are reported to the committee during these meetings.

  Asylum Division
  Mr. Henderson
  To ask the Secretary of State for the Home Department how many staff and of what grades are employed in the Home Office asylum
  261
  division; and what were the figures (a) on 1 January 1996, (b) on 1 January 1993, (c) on 1 January 1990 and (d) on 1 January 1988. [7792]

  Mr. Kirkhope
  The information available is given in the following table:

  Grade

  1988

  1990

  1 January 1993

  1 January 1996

  30 November 1996

  5

  1—

  1

  1

  1

  1

  6

  —

  —

  1

  1

  1

  7

  —

  —

  3

  5

  5

  Senior Executive Officer

  —

  —

  19

  22

  25

  Higher Executive Officer

  —

  —

  37

  76

  85

  Higher Executive Officer (Development)

  0

  0

  0

  2

  0

  Executive Officer

  —

  —

  155

  268

  289

  Administrative Officer

  —

  —

  203

  227

  190

  Assistant Identification Officer

  0

  0

  0

  7

  0

  Administration Assistant

  —

  —

  120

  157

  150

  Personal Secretary

  —

  —

  3

  4

  4

  Total

  52

  86

  542

  770

  749

  1 Indicates figures not available.

  The asylum division, now directorate, was formed in April 1991. Before then, asylum determination staff were part of a division which also did other work, and the figures given for 1988 and 1990 represent the total number of staff dealing specifically with applications for asylum. No breakdown by grades of staff is available for those years.

  French Fishermen (Minquiers)
  Mr. Barry Field
  To ask the Secretary of State for the Home Dpearmtent under what statutory provision French fishermen are permitted to fish in the Minquiers. [7764]

  Mr. Sackville
  The waters around the Minquiers form part of the territorial sea of Jersey. The Sea Fisheries (Jersey) Law 1994 permits continued fishing by French vessels in this area, in conformity with long-standing agreements between the British and French Governments.

  CS Gas
  Mrs. Clwyd
  To ask the Secretary of State for the Home Department what is the value of the contingency fund that he has established to meet damages claims for injuries caused by CS gas to civilians and police officers. [8282]

  Mr. Maclean
  My right hon. and learned Friend has not established such a fund.

  Mrs. Clwyd
  To ask the Secretary of State for the Home Department (1) if he will make it his policy to incorporate the guidelines established by the Himsworth committee into authorisations given to United Kingdom police forces relating to the use of CS gas; [8280]

  (2) what guidelines have been issued to United Kingdom police forces concerning the operational use of CS gas canisters; [8284]
  262
  (3) if the authorisation granted to United Kingdom police forces to use CS gas extends to members of the special constabulary; [8281]

  (4) if guidelines issued by his Department to local police forces regarding the use of CS gas are legally binding. [8285]

  Mr. Maclean
  My right hon. and learned Friend has not issued guidelines on the use of CS spray. The Association of Chief Police Officers has issued operational guidance, which is not legally binding. Individual police officers must comply with the criminal law in relation to any use of force. The Himsworth report's conclusions and recommendations were fully taken into account in the decision to adopt CS spray, and are reflected in the operational guidance, and in guidance to chief officers on the purchase of CS equipment. It is open to chief officers to issue special constables with CS spray.

  Mrs. Clwyd
  To ask the Secretary of State for the Home Department what is the strength of the CS gas used in the United Kingdom relative to that used in the United States of America. [8283]

  Mr. Maclean
  The weight to volume concentration of CS currently used by police forces in England and Wales is 5 per cent. the same as in France. I understand that some law enforcement agencies in the United States of America have used sprays with 1 to 2 per cent. concentrations, but because of concerns about its effectiveness, many have moved to pepper sprays.

  Mrs. Clwyd
  To ask the Secretary of State for the Home Department how many CS sprays are being acquired by United Kingdom police forces; what is the country of origin of these devices; and which companies manufacture them. [8279]

  Mr. Maclean
  The figure requested is not centrally available. A total of 3,800 officers carried CS spray canisters for the trials which took place in 16 forces in England and Wales between March and August this year. The canisters were manufactured by SAE Alsetex of France.

  Closed Circuit Television
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department what was the cost of each of the CCTV schemes cited in his letter to hon. Members of 4 January; and what has been the reduction in the number of crimes in each case since the introduction of each scheme. [8239]

  Mr. Maclean
  The closed circuit television schemes cited are those in Newcastle upon Tyne, Swansea, Northampton, Gloucester and Bedford. None of these schemes was funded by the Home Office and details of their costs are not recorded centrally.

  Local police forces have provided the following data:
  Newcastle upon Tyne: The scheme became operational in December 1992. In the year before its installation, there were 12,400 recorded in the area covered by the cameras. In 1996, it is estimated that 7,000 crimes will be recorded
  Swansea: The system was installed in December 1994. In the 15 weeks before the system became operational, there were 1,544 instances of vehicle crime. In the 15 weeks after, there were 1,382 instances.

  263
  Gloucester: The system became operational in May 1993. After the cameras were installed, there was an 80 per cent. reduction in crimes of violence, a 78 per cent. reduction in commercial burglary and autocrime was virtually eradicated in car parks covered by CCTV.
  Bedford: The system became operational in May 1994. In November 1993, there were 325 recorded crimes in the area covered by the cameras. In November 1996, there were 186.
  Northampton: CCTV cameras have completely eradicated car crime in a local car park.

  Child Abduction
  Mr. William O'Brien
  To ask the Secretary of State for the Home Department (1) how many people have been arrested for attempted and actual baby snatching within the United Kingdom during the past two years in each region; and if he will make a statement; [8096]

  (2) how many attempted baby snatches there have been during the past two years in each region. [8097]

  Mr. Maclean
  This information is not collected centrally.

  Overseas Domestic Workers
  Mr. Fishburn
  To ask the Secretary of State for the Department what estimate he has made of the number of overseas domestic workers who have entered and worked in this country legally since 1980. [8080]

  Mr. Kirkhope
  Comprehensive information on domestic workers admitted to the United Kingdom is not available. The available information relates to persons granted entry clearance in 1995 by the 21 posts in the middle east and far east which are likely to deal with the vast majority of applications by domestic workers. In the whole of the year, there were some 14,000 entry clearances issued at these posts to domestic workers, the great majority to servants accompanying their employers on a visit to the United Kingdom.

  Mr. Fishburn
  To ask the Secretary of State for the Home Department what estimate he has made of the number of overseas domestic workers who have left their employers owing to abuse since 1980. [8081]

  Mr. Kirkhope
  No such estimate is available.

  Green Goddesses
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department how many Green Goddesses his Department currently has; and what is the average age of the fleet. [8216]

  Mr. Sackville
  The Department currently holds 1,085 Green Goddesses.

  The average age is about 42 years.

  Workplace (Fire Precautions) Regulations
  Mr. McFall
  To ask the Secretary of State for the Home Department what meetings he or his officials have had with representatives of the retail industry and other sectors to discuss costs which may result from the proposed Workplace (Fire Precautions) Regulations. [8414]
  264
  Mr. Sackville
  Officials met representatives of the British Retail Consortium on 1 August to discuss compliance costs associated with proposals for Workplace (Fire Precautions) Regulations. Since then, they have corresponded and spoken with representatives of that organisation on a number of occasions. Most recently, officials from the fire safety unit and Her Majesty's fire service inspectorate carried out cost assessment visits to workplaces with the BRC and Francis Maude, chairman of the Government's deregulation task force, on 26 November.

  Representatives of other sectors were consulted as part of the consultative exercise carried out between 21 May and 9 August this year.

  Mr. McFall
  To ask the Secretary of State for the Home Department when he intends to implement the Workplace (Fire Precautions) Regulations; and what compliance costs have been estimated by his Department. [8415]

  Mr. Sackville
  Following an extensive consultation process, we intend to make regulations shortly. A compliance cost assessment will accompany the regulations.

  Plastic Baton Rounds
  Mrs. Clwyd
  To ask the Secretary of State for the Home Department if the police scientific development branch report, entitled "Plastic Baton Round Equipment for the Police", part 2, No. 6/90, is a classified document; and if he will place copies in the Library. [8650]

  Mr. Maclean
  This is a classified document and I will not place copies in the Library.

  Science and Technology Group
  Mrs. Clwyd
  To ask the Secretary of State for the Home Department if he will make it his policy to place copies of all Home Office science and technology group reports in the Library. [8651]

  Mr. Maclean
  Copies of reports published by the former police department science and technology group, and its successor units within the police policy directorate, are placed in the Library where it is considered appropriate to do so, having regard to their subject matter and whether they are classified.

  Bilingual Learners' Support
  Mr. Chidgey
  To ask the Secretary of State for the Home Department what funding will be made available for bilingual learners' support in Hampshire after April 1997. [7087]

  Mr. Kirkhope
  The main source of specific funding for additional education support for members of ethnic minorities is grants paid by the Home Office under section 11 of the Local Government Act 1966. Hampshire's grant allocation figure for 1996–97 is £527,554. I announced on 13 November,Official Report, column 242, that section 11 funding will continue at its present overall level until August 1998. We are currently in touch with Hampshire, Portsmouth and Southampton councils about detailed arrangements in the light of local government reorganisation from April 1997. In addition, the

  265
  Department for Education and Employment currently has under consideration bids for its 1997–98 grants for education support and training programme which includes grants for in-service training to equip mainstream teachers and classroom assistants with skills needed to promote ethnic minority pupils' attainment of English. The outcome will be announced before Christmas.

  Drug Dealers
  Mr. Michael
  To ask the Secretary of State for the Home Department, pursuant to this answer of 2 December,Official Report, columns 471–72, (1) which three-month period of 1994 was used for his analysis; how many offenders were convicted of class A drug trafficking offences in each of the three months; how many of the offenders convicted in each month had one previous offence of class A drug trafficking; how many in each month had two previous offences of class A drug trafficking; and how many in each month had more than two offences; [7850]

  (2) if he will list for (i) the period of the study and (ii) the number of offenders convicted for (a) a first offence, (b) a second offence, (c) a third offence and (d) a fourth or subsequent offence of trafficking in class A drugs, and, against each category for each month, (1) the number who received a custodial sentence and (2) the average length of sentence given to those sentenced to custody. [7928]

  Mr. Maclean
  I refer the hon. Member to the reply I gave to him on 10 December,Official Report, columns 148–49.

  Wiltshire Constabulary
  Mr. Key
  To ask the Secretary of State for the Home Department if he will list the number of(a) police officers, (b) full-time civilian staff, (c) part-time civilian staff and (d) contractors' staff employed by Wiltshire constabulary in (i) 1978, (ii) 1983, (iii) 1987, (iv) 1992 and (v) 1996. [8130]

  Mr. Maclean
  Information on numbers of contract staff is not held centrally. The numbers of police officers and civilians employed by Wiltshire constabulary are set out in the table:

  Number of Civilians

  Year1

  Number of Police Officers

  Part-Time

  Full-Time

  1978

  962

  227

  44

  1983

  1,029

  235

  51

  1987

  1,044

  311

  69

  1992

  1,221

  424

  83

  1996

  1,219

  414

  92

  1 All figures taken at end of March.

  Knives
  Mr. Pickthall
  To ask the Secretary of State for the Home Department what plans he has to provide the police with extra powers to arrest people found carrying a knife. [8364]

  Mr. Maclean
  Since 4 July 1996, the police have had the power to arrest a person found carrying a knife in a public place or on school premises. For the knife-carrying problem to be tackled effectively, we believe it is essential 266
  that the police have adequate powers to stop and search when they have reliable information that people are carrying knives. At present, a police officer may stop and search anyone if he has reasonable grounds for suspecting that he will find stolen or prohibited articles, such as a knife. On 6 November, we announced our intention to amend the code of practice on stop and search powers, issued under the Police and Criminal Evidence Act 1984, to make it clear that reasonable suspicion includes intelligence that members of a group or gang habitually carry knives. We have also proposed that police powers should be extended so that they can stop and search anyone in a particular area if they reasonably believe that people are carrying knives in that area. Those powers would have to be authorised by an officer of at least inspector rank for a maximum period of 48 hours. The association of Chief Police Officers, the Police Superintendents Association and the Police Federation have all indicated that they would support the proposed new powers.

  Christmas Expenditure
  Mr. Donohoe
  To ask the Secretary of State for the Home Department (1) how much his Department will spend on Christmas trees and decorations this year; how many Christmas trees will be bought for his Department's headquarters; and what are the type and country of origin of the trees; [7571]

  (2) how much his Department plans to spend on celebrating Christmas and the new year. [7586]

  Mr. Howard
  [holding answers 6 November 1996]: The full information requested is not held centrally and could be collected only at disproportionate cost.

  It is expected that Home Office expenditure on official Christmas cards will be in the region of £2,000.

  Most Christmas decorations are paid for privately by members of staff. One artificial tree has been purchased for the Home Office building in Queen Anne's Gate at a cost of £75. It is being used as a focal point for a Christmas challenge to members of the Home Office to undertake voluntary work in Westminster during the Christmas season.

  Metropolitan Police (Vauxhall)
  Miss Hoey
  To ask the Secretary of State for the Home Department (1) for what reasons the plan to construct a divisional headquarters in Grafton square, Vauxhall, was not proceeded with; [8329]

  (2) what plans the Metropolitan police have (a) to relocate and (b) to provide adequate modern accommodation on their present site for Vauxhall police division; [8330]

  (3) what consultation has taken place within the borough of Lambeth regarding the proposed use of Grafton square as a criminal justice facility. [8331]

  Mr. Maclean
  I understand from the Commissioner of Police of the Metropolis that a strategic review of the provision of police accommodation in Lambeth, particularly in Clapham and Streatham, indicated that to continue with plans for a divisional headquarters in Clapham would not represent the best use of public funds.
  267
  He considers a criminal justice facility would provide greater benefit to the area. The new criminal justice facility will free much-needed space in the other police stations within the borough of Lambeth, enabling local police managers to make better use of existing police buildings. I understand that Metropolitan police architects consulted the senior planning practitioner for the London borough of Lambeth. The plans were discussed at a meeting of the Clapham sector working group and details of the drawings and proposals were sent to three local councillors. A deputy assistant commissioner from the Metropolitan police also addressed a public meeting. The Commissioner tells me that the Metropolitan police have delayed their planning application to allow more time for residents to consider the proposals.

DEFENCE

  Army Radio System
  Mr. Allason
  To ask the Secretary of State for Defence what is his current estimate of the cost of the Bowman project; and what was the original estimated cost. [8350]

  Dr. David Clark
  To ask the Secretary of State for Defence what was the original estimated cost at today's prices of the Army's Bowman radio system; what is the current estimated cost of the Bowman system; what was the original in-service date; and what is the current estimated in-service date of the system; and if he will make a statement. [8464]

  Mr. Arbuthnot
  The original estimated cost of the Bowman project when the first stage of feasibility studies was approved in 1988 was £1.5 billion, which is equivalent to £2.1 billion at current prices. The current estimate of the cost of the Bowman project is £1.9 billion. The original estimated in-service date was December 1995. The current estimated in-service date is March 2002.

  Low Flying
  Mr. Ainger
  To ask the Secretary of State for Defence when he last reviewed the Royal Air Force low flying strategy; and what were his conclusions. [8466]

  Mr. Soames
  The need for military low flying is kept under continual review. It remains our conclusion that low flying is an essential tactic for a modern air force and one of the most effective ways of penetrating hostile air defences.

  Mr. Ainger
  To ask the Secretary of State for Defence how much compensation has been paid to(a) individuals and (b) organisations for damage resulting from flying activity in the United Kingdom in the last 10 years.[8470]

  Mr. Soames
  It is not possible to differentiate between compensation payments made to individuals and those made to organisations without disproportionate effort. However, the majority of payments made were to individuals.

  Information on the total amounts paid is readily available for the last eight financial years only. The amounts paid relating to activity in the United Kingdom, excluding operational flying in Northern Ireland, were:
  268

  1988–89: £432,000

  1989–90: £414,000

  1990–91: £427,000

  1991–92: £440,000

  1992–93: £506,000

  1993–94: £558,000

  1994–95: £703,000

  1995–96: £374,000.

  Mr. Ainger
  To ask the Secretary of State for Defence how many complaints his Department received about low-flying aircraft in each month of each of the last four years and to date this year. [8471]

  Mr. Soames
  The numbers of inquiries and complaints received by my Department about military low flying by month between January 1992 and January 1996 have been provided in answers given to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) on 5 May 1993,Official Report, column 146, 16 February 1994, Official Report, column 818, 19 October 1995, Official Report, column 346, and 13 February 1996, Official Report, column 490. The numbers received from February 1996 onwards are as follows:

  Month

  England

  Wales

  Scotland

  February

  210

  55

  79

  March

  198

  36

  98

  April

  236

  72

  92

  May

  372

  92

  162

  June

  411

  71

  100

  July

  614

  135

  148

  August

  714

  183

  167

  September

  470

  115

  119

  October

  453

  36

  141

  November

  297

  49

  76

  The figures exclude Northern Ireland, where most low flying is of an operational nature with only a limited number of training sorties. Complaints arising from this activity are dealt with locally, and no central record is available of the number received.

  Mr. Ainger
  To ask the Secretary of State for Defence if he will list the dates on which military aircraft engaged in low flying exercises have crashed since January 1992. [8472]

  Mr. Soames
  The dates of all crashes involving British military aircraft engaged in low flying either in the UK or overseas during the period in question are listed in the table. Details of which of these aircraft were involved in exercises are not recorded separately.

  15 February 1992

  9 July 1992

  22 September 1992

  27 May 1993

  28 June 1993

  30 July 1993

  9 September 1993

  17 September 1993

  21 October 1993

  6 November 1993

  5 January 1994

  14 January 1994

  269

  23 March 1994

  20 May 1994

  2 June 1994

  7 June 1994

  8 July 1994

  1 September 1994

  19 September 1994

  1 June 1995

  20 August 1995

  2 September 1995

  5 October 1995

  11 January 1996

  23 February 1996

  24 July 1996.

  Nuclear Submarines (Disposal)
  Mr. Salmond
  To ask the Secretary of State for Defence what plans he has for the disposal of the redundant nuclear submarine hulks berthed at Rosyth; what plans he has to dispose of them on land; what options he has evaluated for the dismantling and disposal of the radioactive reactors; and if he will make a statement. [8461]

  Mr. Arbuthnot
  I refer the hon. Member to the reply that I gave to the hon. Member for East Lothian (Mr. Home Robertson) yesterday,Official Report, column 158.

  Nuclear Weapons
  Mr. Llew Smith
  To ask the Secretary of State for Defence if he will make a statement on the decisions taken on the deployment of nuclear weapons in new NATO states at the Organisation for Security and Co-operation in Europe meeting in Lisbon on 2 December. [8291]

  Mr. David Davis
  I have been asked to reply.

  No such decisions were taken at the Lisbon Organisation for Security and Co-operation in Europe summit.

FOREIGN AND COMMONWEALTH AFFAIRS

  Law of the Sea Convention
  Mr. Matthew Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the United Kingdom plans to accede to the UN convention on the law of the sea. [8253]

  Dr. Liam Fox
  It is our intention that the United Kingdom will accede to the United Nations convention on the law of the sea in due course. Parliament will be told as soon as the Government have taken a decision.

  Mr. Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the United Kingdom is required to accede to the UN convention on the law of the sea by the beginning of March in order to retain its right to a representative on the Commission on limits to the continental shelf. [8256]

  Dr. Fox
  Any state which has deposited an instrument of ratification or accession to the United Nations convention on the law of the sea on or before 5 February 270
  1997 may nominate a candidate for election to the Commission on the limits of the continental shelf. The UK has not done so. No state has the right to a representative.

  Gold Reserves (Hong Kong)
  Mr. MacShane
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 27 November,Official Report, column 308, what is the current value in pounds sterling of (a) the Hong Kong Government's gold reserves and (b) all other assets of the Hong Kong exchange fund. [8518]

  Mr. Hanley
  The current value of the Hong Kong Government gold reserves, held in the exchange fund, is about £15 million. The total assets of the exchange fund, excluding the gold reserves, as at end November 1996 amounted to about £39.5 billion.

  Ministerial Visit (Cyprus)
  Mr. John D. Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he plans to visit Cyprus; if he will meet the Greek Cypriot and Turkish Cypriot leaders; where he will stay overnight; and if he will make a statement. [8334]

  Mr. David Davis
  My right hon. and learned Friend the Foreign Secretary will visit Cyprus on 16 and 17 December and will overnight in Nicosia. We cannot give further details for security reasons. During the visit he will meet President Clerides, Foreign Minister Michaelides and the leader of the Turkish Cypriot community, Mr Rauf Denktash. Discussion will focus on the prospects of achieving a comprehensive, negotiated settlement of the Cyprus problem in 1997, before European Union accession negotiations begin.

  Council of Ministers Working Group
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will name all the working groups of the European Union Council of Ministers that deal with questions of security, defence and arms control; what is the specific remit of each group and how often they meet; and if he will list the work in progress in those groups, in which the British Government participates. [8618]

  Mr. David Davis
  A number of working groups deal with security, defence and arms control issues. They comprise: non-proliferation, covering nuclear, chemical and biological fields; conventional arms exports; armaments policy; global disarmament and arms control. They meet regularly to discuss topical issues and areas for co-operation including, for example, the recent joint action on anti-personnel land mines. The common foreign and security policy group and Organisation for Security and Co-operation in Europe group also consider European security issues.

  Arms Embargoes
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) if he will list the instances where(a) United Nations or (b) European Union

  271
  arms embargoes have not been immediately incorporated into the law of Britain's offshore dependencies; and what was the reason for that non-incorporation; [8624]

  (2) what arrangements currently exist for the incorporation of (a) United Nations arms embargoes and (b) European Union arms embargoes into the law of the United Nations offshore dependencies; [8623]

  (3) on what date the interdepartmental committee set up to examine the Government's procedures in relation to the trafficking of arms will complete its report; and when a full report will be presented to the House; [8625]

  (4) what measures he has taken to prevent United Kingdom nationals or companies from supplying arms and military equipment via a third country to a destination to which such exports are prohibited under (a) a United Nations and (b) a European Union arms embargo; [8626]

  (5) what arrangements currently exist for the incorporation of (a) United Nations arms embargoes and (b) European Union arms embargoes into United Kingdom national law. [8622]

  Mr. David Davis
  As my right hon. and learned Friend the Foreign Secretary told the House on 27 November,Official Report, column 318, the Government have set up an interdepartmental committee to examine our procedures in relation to trafficking in arms and to determine whether there has been a gap in our controls and if so what action needs to be taken. The committee's terms of reference are as follows:
  To review Government controls and procedures relating to trafficking in arms from third countries to destinations subject to embargo by the UK, when this is arranged from the UK or is arranged overseas by UK nationals or by UK companies;
  To determine whether there are any gaps in controls and procedures, and if so, what action needs to be taken, and to consider whether the Government should have additional powers;
  For the proposes of the review, the UK shall be taken to include Crown Dependencies and Dependent Territories;
  To report by Thursday 19 December 1996.

  The committee is examining the scope and implementation of all current UN, OSCE, EU and national embargoes, including their application in the dependent territories and Crown dependencies. The committee will cover the issues raised by the hon. Member as fully as possible in the time available. My right hon. and learned Friend the Foreign Secretary will report to the House as early as possible.

  General Affairs Council
  Mr. Garnier
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will report on the outcome of the General Affairs Council. [8723]

  Mr. David Davis
  All but three of the 25 A points in document 12425/96, which will be placed in the House as soon as it is available, were approved. The Dutch placed parliamentary scrutiny reserves on three items: stepping up the fight against organised crime; achievements in the field of justice and home affairs; and a draft report to the European Council on drugs. They expect to be able to lift all three of the reserves enabling them to be adopted before the European Council in Dublin on 13 and 14 December.
  272
  The Council noted the resolutions adopted by the European Parliament listed in document 11428/96. A copy of the document will be placed in the House as soon as it is available. The presidency drew attention to a resolution changing the European Parliament's rules of procedure requiring the Council to express an opinion on the Commission's annual work programmed and the Parliament's subsequent resolution on priorities for the year ahead. The Council agreed that this encroached on the Council's competence and that the presidency should write to the European Parliament to restate the Council's position that it did not feel itself duty bound by an obligation imposed unilaterally by the parliament.

  The presidency informed the Council about the timing and agenda at the European Council in Dublin on 13 and 14 December.

  The Council discussed a presidency proposal on an approach for the future trade regime for the mid-term review of the Council decision on the Association of Overseas Countries and Territories—October. Ministers were unable to reach agreement. The Council concluded that OCT should be discussed further by the Committee of Permanent Representatives with a view to reaching agreement before the end of the year.

  The Council noted the approach outlined by the Commission in a short presentation given by Sir Leon Brittan on the upcoming EU-US summit which is being held in Washington on 16 December.

  After hearing a report from the Commission, the Council agreed conclusions on EU relations with Switzerland. It confirmed that considerable progress had been made in various sectors and in particular in regard to the free movement of persons. While recognising that a number of technical issues remain to be resolved at expert level, the Council expressed the view that it should now be possible to proceed to the finalisation of these negotiations. The Council also expressed the hope that a rapid conclusion of the land transport agreement based on a set of common principles could be achieved. The Council also underlined the importance of the global nature of the negotiations and the need for a balance between the different sectors and a parallel shouldering of commitments in accordance with the directives approved in 1994.

  The sixth EEA Council took place at the end of the morning and over lunch.

  The Commission outlined its humanitarian plan for the great lakes region in Zaire. The Council encouraged the Commission to present the plan as soon as possible. There was some discussion of the need for military intervention in the support of humanitarian activities. My right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs commented that the British Government remain committed to the humanitarian effort in the region, but until there is clear evidence to suggest that military intervention would help the humanitarian effort, the British Government remain unconvinced of the need for deployment of a full multi-national force.

  The Council had an exchange of views on Belarus, in the light of the troika's meeting with President Lukashenko in Lisbon on 3 December. The Council reiterated its deep concern about the democratic legitimacy and constitutionality of the Belarus referendum

  273
  and new constitution. It decided to propose to the Belarusian authorities the sending of a European Union fact-finding mission.

  Financial assistance to Turkey under the MEDA regulation was discussed over coffee.

  My right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs debriefed the Council, at the request of the presidency, on the London peace implementation conference. He noted that, while good progress had been made, the conference had realistically identified the huge amount still to be done. The Council welcomed the successful conclusion of the London peace implementation conference. It recognised the symbolic significance of the presence of all the leaders of Bosnia and Herzegovina at the conference. The Council reaffirmed the European Union's commitment to, and support for, the consolidation of peace, reconstruction and the return of refugees, notably through its regional approach. The Council expressed its deep concern at the current developments in the former republic of Yugoslavia and called for adherence to democracy and the rule of law, respect for human rights and democratic principles. The Council underlined that this would be a factor in the development of closer relations between the European Union and the former Republic of Yugoslavia in the context of the application of the regional approach.

  The Council welcomed the successful conclusion of negotiations with the Palestinians on a new interim association agreement as an important step in strengthening their relations with the European Union. It looked forward to the early signature following the planned initialling by the Commission on 10 December.

  The Commission proposed 20 mecu assistance for Bulgaria through the PHARE programme as part of a concerted international effort. Detailed proposals would be put to the PHARE management committee.

  Foreign Ministers held a conclave to discuss the intergovernmental conference. The Irish presidency presented the draft revised treaty outline, which the Florence European Council had requested and which was placed in the House Libraries on 5 December. Ministers were able to give their first reactions to the document in preparation for the Dublin European Council discussion on 13 and 14 December. The Foreign Ministers' meeting was preceded by the normal briefing session with the European Parliament.

  The conference of the representatives of the Governments of the member states agreed that the seat of the Community plant variety office will be in Angers, France.

AGRICULTURE, FISHERIES AND FOOD

  Irradiated Food
  Mr. Martyn Jones
  To ask the Minister of Agriculture, Fisheries and Food if he will estimate the tonnage of food that is irradiated and available for sale in the United Kingdom; and if he will make a statement. [8020]

  Mrs. Browning
  Under the Food (Control of Irradiation) Regulations 1990 a licence holder is required to keep a record of food treated by ionising radiation.
  274
  Returns received show that approximately 25 tonnes of herbs and spices have been irradiated in the UK since 1994. All this was indented for export.

  EU Fish Stocks
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food if equal access for each member state to the EU's fish stocks will apply from 1 January 2003. [8301]

  Mr. Baldry
  At present member states do not enjoy equal access to EU fish stocks. There are restrictions on access within coastal waters and areas such as the Shetland box and Irish box. The principle of equal access is further overlaid in practice by other elements of the common fisheries policy including the operation of quotas under relative stability and the ceilings on effort in Western waters.

  Under Council regulation (EEC) No. 3760/92 the Council has to decide before 31 December 2002 on any necessary adjustments to be made to the present arrangements. The Government are committed to opposing changes to introduce equal access.

  Fishing (Poland)
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the impact on the United Kingdom fishing fleet of Poland joining the EU. [8302]

  Mr. Baldry
  Negotiations for the further enlargement of the European Union are not scheduled to start until after the conclusion of the intergovernmental conference. Any possible impact of Polish accession on the UK fishing fleet will depend on the accession terms proposed which will be discussed in full with the industry before the Government determined their fisheries objectives for the negotiations.

TRADE AND INDUSTRY

  European Energy Council
  Mr. Llew Smith
  To ask the President of the Board of Trade if he will make a statement on the matters discussed and decisions taken at the European Energy Council on 3 December, indicating which items were subject to votes and how the United Kingdom voted; and if he will place in the Library copies of the documents tabled at the meeting. [8255]

  Mr. Page
  In answer to the hon. Gentleman's first question I refer to the answer I gave my hon. Friend the Member for Beaconfield (Mr. Smith),Official Report, column 30. There were no formal votes taken at the Council. The majority of the proposals and reports have been deposited in the Library of both Houses and will appear in the Official Journal of the European Communities. These and other matters discussed at the Council are reported in a Council secretariat press release which is also placed in the Libraries of the House.

  Nuclear Power Stations
  Mr. Battle
  To ask the President of the Board of Trade what plans he has to change the time scale over which nuclear power stations are to be decommissioned. [8050]

  Mr. Page
  Decommissioning of a nuclear power station is a matter for the operator, taking into account the requirements of the regulatory authorities. This includes details of timing.

  Period: 1 April 1995 to 31 March 1996

  Region

  Bedford

  Birmingham

  Bristol

  Cardiff

  Leeds

  London north

  London south

  Manchester

  Newcastle

  Nottingham

  Southampton

  Cases heard:

  total

  1,336

  1,227

  1,572

  1,369

  2,293

  2,734

  2,141

  3,005

  1,058

  1,181

  1,587

  Unfair dismissal:

  cases heard (total)

  701

  626

  737

  592

  1,077

  1,521

  1,166

  1,604

  548

  529

  835

  Unfair dismissal:

  successful

  300

  228

  251

  216

  420

  509

  411

  695

  228

  200

  345

  Unfair dismissal:

  percentage successful

  42.8

  36.4

  34

  36.5

  39

  33.5

  35.2

  43.3

  41.6

  37.8

  41.3

  Period: 1 April 1994 to 31 March 1995

  Region

  Bedford

  Birmingham

  Bristol

  Cardiff

  Leeds

  London North

  London South

  Manchester

  Newcastle

  Nottingham

  Southampton

  Cases heard:

  total

  1,586

  1,790

  1,201

  1,346

  1,827

  1,944

  2,249

  2,879

  1,078

  1,329

  1,870

  Unfair dismissal:

  cases heard (total)

  881

  888

  694

  664

  1,032

  1,613

  1,299

  1,645

  555

  652

  924

  Unfair dismissal:

  successful

  365

  346

  243

  194

  428

  509

  499

  729

  249

  271

  376

  Unfair dismissal: per cent.

  successful

  41.4

  39

  35

  30

  41.5

  31.6

  38.4

  44.3

  44.9

  41.6

  40.7

  Period: 1 April 1993 to 31 March 1994

  Region

  Bedford

  Birmingham

  Bristol

  Cardiff

  Leeds

  London North

  London South

  Manchester

  Newcastle

  Nottingham

  Southhampton

  Cases heard:

  total

  1,765

  2,014

  1,448

  1,442

  2,351

  1,817

  2.329

  3,261

  1,382

  1,619

  1,950

  Unfair dismissal:

  cases heard (total)

  1,049

  1,216

  803

  764

  1,162

  1,093

  1,525

  1,768

  751

  958

  1,042

  Unfair dismissal:

  successful

  504

  529

  381

  276

  490

  469

  703

  814

  379

  430

  455

  Unfair dismissal:

  percentage successful

  48.00

  43.5

  47.4

  36.1

  42.2

  42.9

  43.00

  46.00

  50.5

  44.9

  43.7

  Period: 1 April 1992 to 31 March 1993

  Region

  Bedford

  Birmingham

  Bristol

  Cardiff

  Leeds

  London North

  London South

  Manchester

  Newcastle

  Nottingham

  Southampton

  Cases heard:

  total

  1,136

  1,621

  1,254

  1,091

  1,727

  1,406

  1,720

  2,198

  1.047

  1,353

  1,365

  Unfair dismissal:

  cases heard (total)

  677

  918

  684

  593

  969

  853

  1,024

  1,335

  561

  722

  810

  Industrial Tribunals
  Mr. Ian McCartney
  To ask the President of the Board of Trade if he will list the number of industrial tribunal cases heard, the number of unfair dismissal cases heard at industrial tribunals and the number and percentage of unfair dismissal cases that were successful, by region, in each of the last 10 years. [7954]

  Mr. John M. Taylor
  The information requested is in the table:
  277

  Period: 1 April 1992 to 31 March 1993

  Region

  Bedford

  Birmingham

  Bristol

  Cardiff

  Leeds

  London North

  London South

  Manchester

  Newcastle

  Nottingham

  Southampton

  Unfair dismissal:

  Successful

  337

  363

  304

  245

  460

  374

  439

  561

  262

  359

  351

  Unfair dismissal:

  percentage successful

  49.8

  39.5

  44.4

  41.3

  47.5

  43.8

  42.9

  42

  46.7

  49.7

  43.3

  Period: 1 April 1991 to 31 March 1992

  Region

  Bedford

  Birmingham

  Bristol

  Cardiff

  Leeds

  London North

  London South

  Manchester

  Newcastle

  Nottingham

  Southampton

  Cases heard:

  total

  859

  1,004

  1,033

  871

  1,631

  939

  1,548

  1,979

  445

  884

  1,132

  Unfair dismissal:

  cases heard (total)

  487

  561

  533

  488

  901

  546

  939

  947

  239

  453

  715

  Unfair dismissal:

  successful

  261

  258

  205

  191

  424

  251

  368

  428

  127

  200

  330

  Unfair dismissal:

  percentage successful

  53.6

  46

  38.5

  39.1

  47

  46

  39.1

  45.2

  53.1

  44.2

  46.2

  Offshore Oil and Gas Installations
  Mr. Meacher
  To ask the President of the Board of Trade, pursuant to his answer of 31 October,Official Report, column 184, on environmental inspections of oil rigs, what were the costs in each year of the oil installation inspections; and if he will place copies of the reports in the Library. [7931]

  Mr. Page
  As stated in that reply, figures for the numbers of inspections are not available disproportionate cost. Therefore, the costs result of carrying out these inspections available.

  As files are not available, and reports may contain commercially sensitive information, copies reports will not be placed in the Library of the House.

  Mr. Meacher
  To ask the President of the Board of Trade what type of oil spill containment and treatment is available, and within what time span, for spills or seepages that may occur near or at the North sea and north Atlantic oil and gas platforms and depots. [7893]

  Mr. Page
  All oil and gas operators are required to have an oil spill contingency plan approved by my Department. In areas which are within 25 miles of the coast or are otherwise environmentally sensitive a more stringent plan for each well may be required, as may be an environmental impact assessment. These requirements are the "essential elements" and form part of the licence conditions of certain blocks. Indicative conditions are available in the Library of the House.

  Telephones
  Ms Walley
  To ask the President of the Board of Trade what is his estimate for each of the last five years of(a) the number of households with a telephone and (b) those without by socio-economic category. [8447]
  278
  Mr. Ian Taylor
  We have made no such estimate. However, figures from the family expenditure survey suggest the following:

  in 1991 88.0 per cent. of households had a telephone;

  in 1992 88.4 per cent. of households had a telephone;

  in 1993 89.6 per cent. of households had a telephone;

  in 1994–95 91.1 per cent. of households had a telephone;

  in 1995–96 92.4 per cent. of households had a telephone.

  We do not have figures for each of the last five years on the number of houses without a phone by socio-economic category. However, the results of the general household survey 1994 "Living in Britain" revealed that for households, the head of which was economically active, the proportion without a phone was 7 per cent. For households with economically inactive heads 12 per cent. were without a phone. A breakdown of these figures into socio-economic sub-groups is given in the survey, which is available in the Library of the House and which reveals interesting spending priorities within the categories.

  Wages Councils
  Mr. Gordon Prentice
  To ask the President of the Board of Trade what recent assessment he has made of the consequences of the abolition of the wages councils for wages in those industries previously covered by them. [7083]

  Mr. John M. Taylor
  Changes in earnings in particular industries reflect the varying conditions in those industries and it is not possible to attribute such changes to any particular event. Between April 1994 and April 1995, average earnings of full-time workers covered by the main wages councils before their abolition in August 1993 rose at a comparable rate to those of workers employed in other industries.

  British Airways and American Airlines
  Sir Peter Fry
  To ask the President of the board of Trade what assessment he has made of the advantages and
  279
  disadvantages of the proposed British Airways-American Airlines alliance (a) for the United Kingdom and (b) for other United Kingdom carriers. [8180]

  Mr. John M. Taylor
  On Friday 6 December my right hon. Friend the President of the Board of Trade announced that he was seeking from the alliance undertakings in lieu of a reference to the Monopolies and Mergers Commission. He made it clear that without suitable undertakings the alliance would be likely to lead to a significant loss of actual and potential competition.

  The text of the competition analysis under European competition law is being made available to interested parties as from Friday 13 December 1996. I will arrange for a copy of this to be placed in the Libraries of both Houses.

  Balance of Trade
  Mr. Milburn
  To ask the President of the Board of Trade what was the non-oil balance of trade in goods for the United Kingdom with the European Union in each year since 1979. [7830]

  Mr. Page
  [holding answer 6 December 1996]: The information is given in the table.

  UK non-oil trade with the EU15

  Year

  Crude balance of trade (£ billion)

  1979

  -5.2

  1980

  -3.4

  1981

  -5.2

  1982

  -7.7

  1983

  -11.4

  1984

  -13.3

  1985

  -14.0

  1986

  -16.0

  1987

  -16.9

  1988

  -20.3

  1989

  -21.8

  1990

  -16.7

  1991

  -7.4

  1992

  -10.2

  1993

  -9.2

  1994

  -10.3

  1995

  -8.9

  Fuel Prices
  Mr. Milburn
  To ask the President of the Board of Trade what was the average pump price per litre of(a) petrol and (b) diesel in each year since 1979–80. [7824]

  Mr. Page
  [holding answer 6 December 1996]: The average pump price of four star petrol, premium unleaded petrol, and diesel fuel for the calendar years 1979 to 1995, and the first 10 months of 1996, including all taxes, is given in the table.
  280

  Average UK retail prices of four star petrol, premium unleaded petrol and diesel fuel for the years 1979 to 1996 in cash terms, including all taxes (pence per litre)

  Year

  Four star petrol

  Premium unleaded petrol

  Diesel fuel

  1979

  22.66

  n/a

  23.65

  1980

  28.32

  n/a

  29.67

  1981

  34.29

  n/a

  34.01

  1982

  36.62

  n/a

  35.86

  1983

  39.28

  n/a

  37.30

  1984

  40.62

  n/a

  38.33

  1985

  43.14

  n/a

  41.94

  1986

  37.35

  n/a

  35.60

  1987

  37.90

  n/a

  34.58

  1988

  37.38

  n/a

  33.99

  1989

  40.39

  38.29

  36.18

  1990

  44.87

  42.03

  40.48

  1991

  48.48

  45.07

  43.82

  1992

  50.28

  46.07

  45.01

  1993

  54.12

  49.44

  49.20

  1994

  56.87

  51.58

  51.53

  1995

  59.75

  53.77

  54.24

  19961

  60.90

  55.78

  56.90

  1 Average for 1996 relates to the period from January to October (inclusive) only.

  n/a denotes not applicable.

  Public Appointments
  Mr. Milburn
  To ask the President of the Board of Trade how many of the individuals appointed by his Department to public positions in the last year were first identified by the public appointments unit. [8537]

  Mr. John M. Taylor
  [holding answer 10 December 1996]: For appointments made during 1995 I refer the hon. Member to the answer I gave to the hon. Member for Cannock and Burntwood (Dr. Wright) on 25 April 1996, Official Report, column 219. From 1 January 1996 until 6 December 1996 departmental records show that five appointments to four separate bodies were made from names first supplied by the public appointments unit. A list of the appointments is as follows:

  British Shipbuilders
  Mr. Christopher Campbell

  Coal Authority
  Mr. John Cunliffe (reappointment)

  Copyright Appeals Tribunal
  Mrs. Angela Howorth (reappointment)
  Sir Michael Lickiss (reappointment)

  Human Genetics Advisory Commission
  Prof. Cairns Aitken.

SCOTLAND

  Public Appointments
  Mr. Donohoe
  To ask the Secretary of State for Scotland (1) how many appointments to non-departmental public bodies his Department has made in each of the last five financial years; [6366]

  (2) if he will list, for each of the non-departmental public bodies under the jurisdiction of his Department, how many appointments his Department is entitled to

  281
  make to these bodies; how many of these appointments will require to be made during the next (a) six and (b) 18 months; and of how many of its appointees his Department has extended the period of office during the last 12 months. [6367]

  Executive

  Number of Appointments

  Appointments Made

  Extensions

  Appointments to be Made

  Non-Departmental Public Body

  Entitled to be Made

  1991–92

  1992–93

  1993–94

  1994–95

  1995–96

  January-December 1996

  January-June 1997

  January 97-June 98

  The Accounts Commission for Scotland

  15

  0

  3

  1

  5

  0

  1

  3

  6

  Agricultural Research and Biological Institutes:

  Hannah Research Institute

  2

  0

  0

  0

  1

  0

  1

  1

  2

  Macaulay Research Institute

  25

  0

  2

  1

  3

  0

  5

  7

  10

  Moredun Research Institute

  3

  0

  0

  0

  0

  3

  0

  0

  0

  Rowett Research Institute

  3

  0

  2

  0

  0

  1

  0

  0

  3

  Scottish Crop Research Institute

  20

  1

  3

  0

  0

  2

  0

  8

  15

  Crofters' Commission

  9

  0

  2

  2

  0

  2

  3

  0

  0

  Dear Commission for Scotland

  13

  1

  7

  0

  0

  2

  11

  0

  0

  Highlands and Islands Enterprise

  11

  1

  0

  3

  0

  2

  0

  0

  4

  National Board for Nursing, Midwifery and Health Visiting for Scotland

  10

  1

  0

  10

  1

  4

  0

  2

  2

  National Galleries of Scotland

  12

  2

  1

  0

  1

  1

  2

  5

  7

  National Museums of Scotland

  15

  3

  0

  3

  2

  3

  2

  2

  6

  New Town Development Corporations: Cumbernauld Development Corporation

  8

  0

  1

  0

  0

  0

  0

  3

  3

  Irvine Development Corporation

  8

  1

  0

  0

  0

  0

  2

  0

  0

  Livingston Development Corporation

  8

  1

  1

  0

  0

  1

  2

  0

  0

  Parole Board for Scotland

  16

  1

  1

  3

  6

  0

  2

  6

  8

  Royal Botanic Garden, Edinburgh

  9

  0

  3

  0

  3

  0

  1

  4

  5

  Scottish Agricultural Wages Board

  5

  1

  1

  0

  0

  1

  1

  1

  1

  Scottish Arts Council

  16

  0

  0

  0

  14

  0

  3

  10

  12

  Scottish Children's Reporter Administration

  8

  0

  0

  0

  0

  7

  0

  0

  6

  Scottish Community Education Council

  10

  1

  0

  2

  2

  1

  3

  5

  7

  Scottish Conveyancing and Executry Services Board

  10

  7

  0

  0

  0

  0

  4

  0

  0

  282
  Lord James Douglas-Hamilton
  The information requested is shown in the table. This excludes appointments to advisory NDPBs, tribunals, and so on, which it would not be possible to cover except at disproportionate cost.
  283

  Executive

  Number of Appointments

  Appointments Made

  Extensions

  Appointments to be Made

  Non-Departmental Public Body

  Entitled to be Made

  1991–92

  1992–93

  1993–94

  1994–95

  1995–96

  January-December 1996

  January-June 1997

  January 97-June 98

  Scottish Council for Educational Technology

  4

  0

  0

  0

  1

  0

  0

  4

  4

  Scottish Environment Protection Agency

  12

  0

  0

  0

  0

  12

  0

  0

  0

  Scottish Enterprise

  11

  2

  1

  3

  0

  3

  4

  0

  1

  Scottish Examination Board1

  38

  0

  8

  0

  17

  0

  10

  0

  0

  Scottish Film Council2

  8

  0

  3

  1

  0

  0

  0

  0

  0

  Scottish Further Education Unit

  7

  0

  0

  7

  0

  1

  0

  3

  3

  Scottish Higher Education Funding Council

  15

  1

  10

  1

  1

  4

  1

  4

  12

  Scottish Homes

  9

  0

  1

  2

  0

  1

  0

  3

  5

  Scottish Hospital Endownments Research Trust

  10

  0

  3

  0

  2

  0

  1

  2

  6

  Scottish Legal Aid Board

  13

  1

  4

  1

  4

  1

  3

  0

  6

  Scottish Medical Practices Committee

  6

  0

  0

  0

  2

  1

  0

  5

  5

  Scottish Natural Heritage

  12

  1

  11

  0

  1

  3

  3

  3

  7

  Scottish Seed Potato Development Council

  17

  0

  1

  5

  0

  8

  9

  0

  0

  Scottish Sports Council

  25

  1

  0

  2

  2

  3

  1

  3

  6

  Scottish Tourist Board

  7

  1

  1

  2

  1

  3

  0

  2

  2

  Scottish Vocational Education Council1

  12

  1

  5

  0

  3

  0

  0

  0

  0

  Scottish Water and Sewerage Customers Council

  12

  0

  0

  0

  0

  12

  0

  1

  1

  Notes:

  1 The functions of the Scottish Examination Board and the Scottish Vocational Education Council will be transferred on 1 April 1997 to the new Scottish Qualifications Authority. Up to 19 appointments will be made to the new body.

  2 The functions of the Scottish Film Council will be transferred on 1 April 1997 to the new Scottish Screen. Up to 12 appointments will be made to the new body.

  Landfill Tax
  Mr. Kirkwood
  To ask the Secretary of State for Scotland if he will estimate the amount of landfill tax raised from waste collection authorities in Scotland for the fiscal years(a) 1996–97 and (b) 1997–98. [6827]

  Mr. Kynoch
  Based on their returns of household waste sent to landfill in 1994, the most recent date for which statistics are available, Scottish local authorities might be expected to face a landfill tax liability for £17 million in 1997–98. My right hon. and learned Friend the Chancellor of the Exchequer has offset the charge on business overall by the reduction in national insurance contributions announced in his Budget last year. Scottish local authorities will benefit from this reduction.

  It is not possible to estimate a figure of liability for the past year 1996–97.

  Water Authorities
  Mr. Donohoe
  To ask the Secretary of State for Scotland how much the(a) West, (b) North and (c) East of Scotland water authorities spent during their shadow period. [7427]

  Mr. Kynoch
  Between 17 July 1995 and 31 March 1996, the Scottish water authorities received grant in aid totalling(a) £3.211 million in the west, (b) £3.486 million in the north, and (c) £3.270 million in the east.

  Mr. Donohoe
  To ask the Secretary of State for Scotland what discussions have taken place between officers and Ministers of his Department and the West of Scotland water authority in relation to the construction of a sewage treatment works at Greenan; and what was the content of these discussions. [7426]

  Mr. Kynoch
  There have been no such discussions.

  Overseas Travel (Diseases)
  Mr. Donohoe
  To ask the Secretary of State for Scotland how many cases of rare and tropical diseases related to overseas travel have been diagnosed in each of the last five years in each health board area in Scotland. [7528]

  Lord James Douglas-Hamilton
  Information is not collected routinely under the category of "rare and tropical diseases". The information given in the table relates to laboratory-confirmed cases of diseases known to be of tropical origin and to cases where the disease is likely to have been of tropical origin.

  Laboratory-confirmed cases1 of disease acquired (or likely to have been acquired) in tropical countries, by health board, 1991–1995

  Year

  1991

  1992

  1993

  1994

  1995

  Argyll and Clyde

  2

  0

  0

  6

  0

  Ayrshire and Arran

  1

  4

  1

  2

  0

  Borders

  3

  1

  1

  2

  1

  Dumfries and Galloway

  0

  2

  4

  2

  2

  Fife

  1

  3

  1

  6

  2

  Forth Valley

  9

  1

  1

  2

  0

  Grampian

  22

  24

  20

  23

  34

  Greater Glasgow

  29

  31

  20

  24

  46

  Highland

  7

  1

  3

  2

  3

  Lanarkshire

  4

  2

  4

  3

  1

  Lothian

  17

  23

  29

  40

  58

  Orkney

  1

  0

  0

  0

  0

  Shetland

  0

  0

  0

  0

  0

  Tayside

  4

  2

  4

  4

  8

  Western Isles

  0

  1

  0

  0

  0

  1 From Scottish Centre for Infection and Environmental Health. Figures relate to the health board to which notification was made, which may differ from patient's health board of residence.

  Seat Belts
  Mr. Flynn
  To ask the Secretary of State for Scotland how many(a) drivers and (b) passengers have been prosecuted for not wearing seat belts in the (i) front seats and (ii) back seats of vehicles in Scotland in each of the last five years; and if he will make a statement. [8236]

  Lord James Douglas-Hamilton
  The information available in relation to the prosecution of seat belt offences is as follows:

  Number of prosecutions for seat belt offences, Scotland, 1990 to 1994

  Year

  Number of prosecutions

  1990

  1,892

  1991

  2,193

  1992

  2,689

  1993

  3,580

  1994

  4,022

  Methicillin-resistant Staphylococcus Aureus
  Mr. Flynn
  To ask the Secretary of State for Scotland how many(a) cases and (b) deaths from MRSA have been recorded in (i) hospitals and (ii) the community in Scotland in each of the last five years; and if he will make a statement. [8317]
  286
  Lord James Douglas-Hamilton
  The number of cases of MRSA reported to the Scottish Centre for Infection and Environmental Health by laboratories throughout Scotland for each year since 1991 is given in the following table. It is not possible to distinguish between cases identified in hospitals and in the community.

  Year

  Number of cases

  1991

  432

  1992

  464

  1993

  442

  1994

  464

  1995

  600

  Deaths due to MRSA do not have a distinct code within the revision of the international classification of diseases for encoding death registration data. Consequently, there are no centrally held statistics on deaths from MRSA.

  Injury Prevention and Control
  Mr. Ian McCartney
  To ask the Secretary of State for Scotland if his Department has signed the Melbourne declaration on injury prevention and control, adopted on 22 February. [8641]

  Lord James Douglas-Hamilton
  The authors of the Melbourne declaration have not sought the Government's endorsement, although it has been brought to my right hon. Friend's attention. Accident prevention was identified as a health priority in the policy statement "Scotland's Health—A Challenge To Us All", published in 1992.

  Public Appointments
  Mr. Milburn
  To ask the Secretary of State for Scotland how many of the individuals appointed by his Department to public positions in the last year were first identified by the public appointments unit. [8546]

  Lord James Douglas-Hamilton
  [holding answer 10 December 1996]: The Scottish Office maintains its own public appointments list and therefore makes limited use of names from the public appointments unit. The Scottish Office public appointments list is used as a source of names of suitably qualified candidates for consideration for a wide range of appointments made by my right hon. Friend. From time to time, the public appointments unit passes names to the Scottish Office for the public appointments list, and vice versa. No central records are kept of the sources of names of those who are appointed to public bodies.

SOCIAL SECURITY

  Pensioners' Incomes
  Mr. Ainger
  To ask the Secretary of State for Social Security how many pensioner households there were in which three quarters or more of the total income was derived from national insurance retirement and similar pensions and housing and other benefits in supplement to or instead of such pensions in each of the last five financial years. [6589]
  287
  Mr. Heald
  The information is in the table.

  Calendar Year

  Number of Pensioners Units

  1988

  3,750,000

  1989

  3,750,000

  1990

  3,500,000

  1992

  3,500,000

  1993

  3,600,000

  Notes:

  1. The pensioners' incomes series gives estimates for pensioner units. A pensioner unit is defined as being either a single person over state pension age or a couple where the man is over state pension age (SPA).

  2. Income from state benefits has been calculated as income from national insurance benefits and all other benefits that may be received above SPA, such as income related benefits and disability benefits.

  Source:

  The source of these estimates is the pensioners' incomes series, which is based mainly on data from the family expenditure survey carried out over calendar years and covers the whole of the United Kingdom. The figures given are for the last five calendar years for which pensioners' incomes series data are available, and rounded to the nearest 50,000.

  Mr. Michael Brown
  To ask the Secretary of State for Social Security when he plans to publish new information on pensioners. [8933]

  Mr. Heald
  The "Pensioners' Income Series 1994/5" will be published by the Government Statistical Service at 9.30 am on 12 December. Copies will be available in the Library.

  Mortgage Interest Payments
  Mr. Alan Howarth
  To ask the Secretary of State for Social Security what estimate he has made of(a) the cost and (b) the numbers gaining if the linking period for mortgage interest payments was extended from 12 weeks to 26 weeks. [6732]

  Mr. Roger Evans
  No such estimate has been made and one could be provided only at disproportionate cost.

  War Pensions
  Mr. Livingstone
  To ask the Secretary of State for Social Security, pursuant to his answer of 30 October,Official Report, columns 160–61, if he will give a breakdown of the illnesses and diseases for which the successful claimants received a war pension; and when his Department finished compiling the final report of this special exercise. [6975]

  Mr. Heald
  The information is not available in the format requested. Such information as is available is in the table and relates to cases reviewed under the special exercise.

  Information on the new claims made as a result of the press notice could be obtained only at disproportionate cost. The special exercise was completed on 3 February 1987.
  288

  Bari Habour Exercise: Breakdown of Disablement or Causes of Death for which a War Pension was Awarded

  Nature of Disability/Cause of Death

  Number of Cases

  Burns

  18

  Psychoneurosis

  8

  Injuries to eyes

  8

  Conjunctivitis

  6

  Fractures to bones

  5

  Injuries to limbs and spine (other than fractures)

  5

  Pulmonary tuberculosis

  4

  Amputations of lower limbs

  4

  Nervous disabilities

  4

  Loss of finger or part of finger

  3

  Deafness

  3

  Otitis media

  2

  Effects of gas

  2

  Bronchitis

  2

  Exhaustion

  2

  Concussion

  1

  Shock

  1

  Prolapsed intervertebral disc

  1

  Injury to face

  1

  Ulcers both eyes

  1

  Pyloric ulcer

  1

  Gunshot wound

  1

  Asthma

  1

  Emphysema

  1

  Tuberculosis

  1

  Pneumonia

  1

  Arthritis

  1

  Dysentery

  1

  Note:

  In some instances awards of war pension were made to an individual in respect of more than one disability.

  Ms Harman
  To ask the Secretary of State for Social Security if he will place in the Library the consultation papers presented to the Central Advisory Committee on War Pensions. [8666]

  Mr. Heald
  A copy of the consultation letter of 26 November to the members of the Central Advisory Committee on War Pensions has been placed in the Library. The letter gives full details of the proposed changes and invites comments from the committee by 17 January next year.

  Ms Harman
  To ask the Secretary of State for Social Security if he will place in the Library the correspondence between himself and the Chief Secretary to the Treasury concerning proposals on war pensions. [8668]

  Mr. Heald
  Interministerial correspondence is not normally placed in the Library.

  Data Matching
  Mr. Cohen
  To ask the Secretary of State for Social Security what assessment he made of data matching arrangements in other countries in formulating his recent legislative proposals. [7741]

  Mr. Heald
  The proposals set out in the Social Security Administration (Fraud) Bill for extending checks of relevant data are based on the success of the Department's generalised matching service in identifying fraud. This was developed with the help and expertise of civil servants seconded from the privacy, fraud and control
  289
  division of the Department of Social Security in Australia, with which there is continuing contact and co-operation.

  Housing Benefit
  Mr. Ainger
  To ask the Secretary of State for Social Security what estimate he has made of the amount which will be saved as a result of the changes to housing benefit introduced in the Budget. [8573]

  Mr. Roger Evans
  It is estimated that the proposed changes would save £8 million in 1997–98, £60 million in 1998–99 and £92 million in 1999–2000.

  Mr. Ainger
  To ask the Secretary of State for Social Security (1) what was the total housing benefit budget in each of the previous five years; [8567]

  (2) how much has been paid out in housing benefit for each of the previous five years. [8566]

  Mr. Evans
  The information is set out in the table.

  Housing benefit is a benefit based on legal entitlement and is not subject to a budget or cash limit.

  Year

  £ millions

  1990–91

  5,147

  1991–92

  6,482

  1992–93

  7,901

  1993–94

  9,218

  1994–95

  10,181

  Source:

  Table 3, departmental report 1996.

  Mr. Ainger
  To ask the Secretary of State for Social Security if new claims for housing benefit for single people will be subject to the new rules introduced in the Budget when that person has previously claimed housing benefit within the last year. [3569]

  Mr. Evans
  A single person who had his claim assessed under the local reference rent rules will be affected by the new rules if he renews his claim after the new rules come into force. Most people who have claimed in the last year who are exempt from the local reference rent rules will also be exempt from the new rules.

  Mr. Ainger
  To ask the Secretary of State for Social Security what estimate he has made of the number of people who will(a) be affected and (b) have their benefit reduced by the changes to housing benefit introduced in the Budget. [8574]

  Mr. Evans
  The number of people who are likely to be affected as a result of restricting housing benefit to the local reference rent is estimated as 370,000. Of these, 40,000 are likely to have reduced benefit in the first year with 133,000 and 214,000 having reduced benefit in subsequent years.

  The number of people who are likely to be affected as a result of restricting housing benefit for most single people under 60 years of age is estimated as 365,000. Of these, 72,000 are likely to have reduced benefit in the first year with 210,000 and 265,000 having reduced benefit, in subsequent years.

  However, the proposals will overlap and the numbers likely to have a reduction in their benefit over the next three years are 92,000, 275,000 and 370,000.
  290
  Mr. Ainger
  To ask the Secretary of State for Social Security what safeguards exist in the changes to housing benefit in the budget to prevent unemployed people who are widowed or divorced and left with the tenancy of the house they previously shared with a partner from losing their homes. [8572]

  Mr. Evans
  There are special rules within the housing benefit regulations which give protection to those who lose their partner through death. There is also protection for those who lose their jobs. Generally, widows will be able to retain the level of benefit which was being paid before the late husband's death, for a period of 12 months. These special rules will continue to apply when the proposed changes are implemented even though claimants, over the age of 59, would not be affected by the single room rent proposals. There is no separate protection for divorced people. However, local authorities will continue to have discretion to pay up to the full rent to prevent exceptional hardship.

  Mr. Ainger
  To ask the Secretary of State for Social Security how many people are currently claiming housing benefit in the United Kingdom. [8568]

  Mr. Evans
  At the end of May 1996, there were 4,779,000 housing benefit recipients in Great Britain.

  I refer the hon. Member to my right hon. and learned Friend the Secretary of State for Northern Ireland for the Northern Ireland figure.
  Note:
  A recipient may he a single person or a couple.

  Mr. Ainger
  To ask the Secretary of State for Social Security how many single person households have been in receipt of housing benefit in each of the last five years. [8570]

  Mr. Evans
  The information is not available in the format requested. Such information as is available is set out in the table.

  The information relates to housing benefit recipients in all tenure types, in Great Britain, who are single with no dependants in the household.

  Year

  Housing benefit recipients (000s)

  May 1991

  2,346

  May 1992

  2,411

  May 1993

  2,562

  May 1994

  2,645

  May 1995

  2,702

  Source:

  Housing benefit management information system, annual 1 per cent. sample enquiries with and without income support, taken at the end of May in each year quoted.

  Residential Home Allowances
  Mr. Frank Cook
  To ask the Secretary of State for Social Security in what circumstances the Benefits Agency is able to pay residential allowance to clients in a residential programme not registered as a residential home or mental nursing home under the terms of the Registered Homes Act 1984. [8672]
  291
  Mr. Roger Evans
  Generally, income support residential allowance is payable only to persons in a registered residential care or nursing home. However, residential allowance may be paid to residents of unregistered homes, if the homes are managed or provided 292
  by a body incorporated by royal charter or constituted by Act of Parliament—other than a social services authority—and they provide both board and personal care to the customer.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.

Manchester Bombing: Restoration of City Centre
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
How much money the city of Manchester has received from government funds to assist in the rebuilding of the city centre and the relocation of business following the Irish Republican Army bomb explosion in the city in June.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, the Government gave £300,000 to the Lord Mayor's Appeal Fund for hardship relief and business relocation. They provided £150,000 towards the selection of an urban design team to plan the city centre rebuilding. Some £21.5 million has also been allocated from European funds to help with regeneration and business support and relocation.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that Answer. Is he aware that, bearing in mind the scale of what is required to repair the damage caused by the IRA bomb, the Government's response is pitifully small? It is strange that people who have taken no part in the violence should be funded at a lower rate than the people in Northern Ireland who sponsored the bomb. In Northern Ireland such damage is paid for by this country's taxpayers at a rate much higher than that paid here. Will the Government consider applying the Northern Ireland criteria to Manchester in order to give the people of Manchester justice?
Earl Ferrers: My Lords, I agree with the noble Lord that if one looks at the figures that I have given it appears that the Government's contribution has not been as substantial as he might wish. However, he will realise that the money coming from European funds is essentially British money because we are net contributors to Europe. He will also realise that as yet no proposals have been fully costed. When that has been done, and if an appropriate bid comes forward, they will be considered sympathetically by Her Majesty's Government.
The noble Lord will know that Northern Ireland has the Compensation Agency simply because there are no circumstances for insuring against terrorism. There are in the United Kingdom, which is covered under the Pool Reinsurance. That is the reason why the two are not strictly comparable.
Lord McNally: My Lords, is the Minister aware that the £21.5 million from European funds, which he and
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Ministers often quote, is conditional? As the head of the Government Office in the North West recently made clear, it is conditional on matching private funds. Manchester needs government help up front which can get the rebuilding process moving quickly, otherwise the scheme will fall behind. Other schemes, such as the Trafford Park shopping centre, will move ahead of those in Manchester, and the Government will be left with a derelict city centre. It needs government action now.
Earl Ferrers: My Lords, the noble Lord is correct in one respect; that money from European funds is dependent upon an equivalent amount of money being found whether from the private or the public source. I have no doubt whatever that that money will be forthcoming.
The noble Lord will also realise that the Government cannot commit funds until a proper system has been evaluated, costed and prepared. That has not happened yet. When it is complete it will be up to Manchester to make an appropriate bid, which, as I have said, will be considered sympathetically.
Lord Williams of Elvel: My Lords, the Minister said that there are insurance policies available in the United Kingdom which are not available in Northern Ireland. Will he give an assurance that the Government's financial arrangements will top up any insurance policies which may be defective or insufficient in order to ensure that properties throughout the United Kingdom are treated by the Government in exactly the same financial manner?
Earl Ferrers: My Lords, if I understand the noble Lord's question, it is going further than the position in respect of Manchester. I understand him to have asked whether the Government will top up insurances which do not cover the shortfall. I cannot give that undertaking. That is why in 1993 we set up the reinsurance scheme called Pool Reinsurance in order that insurance cover should be available for terrorism in the United Kingdom.
With regard to Manchester, we expect that most of the rebuilding will be met by businesses. If there is a shortfall, it will of course be up to the city council to make an appropriate bid.
Lord Dean of Beswick: My Lords, does the Minister understand that, if the peace initiative unfortunately fails and the IRA resumes its activities on the mainland resulting in other city centres being blown up, other Members of your Lordships' House will complain bitterly about the treatment that other cities in this country are receiving as compared with Northern Ireland? Is the Minister aware that last year, for instance, Northern Ireland put £3 billion in the kitty and took out £7 billion? Those are startling figures and the Government are asking people in this country who are suffering as a result of the dispute to bear the cost without speaking out loudly about it. It is about time that the system was reviewed and that justice was dispensed over here.
Earl Ferrers: My Lords, everyone enormously regrets the damage that is done by the IRA when it carries out bomb attacks. Everyone considers that they are quite disgraceful and unjustified.
One cannot obtain insurance against terrorism in Northern Ireland. The noble Lord, Lord Dean, wags his head in despair but I am telling him the facts. In this country one can get insurance against terrorism. It is not for the Government to underwrite every single act of terrorism. It is appropriate for businesses and people to take out their own reasonable and responsible insurance when that is available, and it is available here.
Lord Wright of Richmond: My Lords, does the Minister accept that when one travels around the Republic of Ireland one sees frequent acknowledgement of the money which has been provided by the European Union? Can the noble Earl say whether any public acknowledgement has been made of the £21 million given to Manchester, even though, on strict accounting, some of that sum—although, I would argue, not all—probably comes from British funds?
Earl Ferrers: My Lords, if such an acknowledgement has not been given, I readily give it now. We are most grateful to the European Union for providing that money. As we are contributors, it is perfectly reasonable to argue that quite a lot of that money comes from British taxpayers' money which has gone to the European Union and come back again. But it is certainly a great and welcome addition.
Lord Stoddart of Swindon: My Lords, is the Minister aware that there is a great deal of difference between acknowledgement of money by ourselves from the European Union and acknowledgement by the Republic of Ireland? After all, the Republic of Ireland is a net beneficiary to the tune of £1,500 million a year—that is, £500 per person—whereas we are net contributors to the tune of £2.5 billion per year.
Earl Ferrers: My Lords, that may well be so, but that does not stop the people of Ireland from being very grateful to the European Union for providing the money. Indeed, it does not stop us from being very grateful to the European Union for providing the money for Manchester.

Prisons: Chairmen of Boards of Visitors
2.45 p.m.
Lord Harris of Greenwich Lord Harris of Greenwich asked Her Majesty's Government:
Why they have decided that Ministers of the Crown should appoint the chairmen and vice-chairmen of the boards of visitors of prisons in England and Wales.
The Minister of State, Home Office (Baroness Blatch): My Lords, in 1995 a review of the role of boards of visitors found there was no formal recognition of the role of chairman or vice-chairman of a board of visitors. These office holders would
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have been appointed by the Home Secretary solely on their capacity as members of the board. Therefore, in order to enhance their role, the review recommended that a chairman and vice-chairman should be appointed for each board by the Secretary of State following a secret ballot of that board. The Home Secretary warmly accepted this recommendation, which was incorporated into the Prison Rules and issued on 22nd July 1996.
Lord Harris of Greenwich: My Lords, I thank the Minister for that rather remarkable reply. However, can the noble Baroness indicate why no previous Home Secretary has even contemplated taking such a power? Will she also confirm that the members of boards of visitors, all of whom are appointed by Ministers of the Crown, are doing valuable, unpaid work for the community? In this situation, is it not quite extraordinary that Ministers are going to reserve to themselves the power to appoint chairmen and vice-chairmen? Can the Minister tell us what are the criteria for non-appointment of a recommended chairman or vice-chairman? Perhaps the noble Baroness could also tell us whether there will be any explanation if in fact a Minister vetoes the recommendation of the local board of visitors.
Baroness Blatch: My Lords, the noble Lord has asked me quite a few questions. I should tell him that it was recognised that changes within the Prison Service—for example, agency status—meant that there were increased demands on the boards of visitors and, therefore, it was thought to be appropriate that there should be a review. The review had a number of representatives on it: there were nine past or present serving board members; Her Majesty's Chief Inspector of Prisons; the governor of Her Majesty's Prison of Maidstone was co-opted; and representations were invited from groups with an interest in penal affairs, including all boards of visitors, prison governors and MPs.
I should also tell the noble Lord that one of the remarkable and unanimously agreed factors concerned the nature of the problems faced by boards of visitors and the solutions. That group of people independently came to the view that their role should be enhanced and new procedures recognising the importance of the chairman and vice-chairman were recommended and agreed. I have to say that it is very unlikely that the Home Secretary would veto an appointment. There will be a secret ballot by the board; names will be put before the Secretary of State in an order of preference decided and determined by the board, and the Home Secretary would be guided by that. But, at the end of the day, it will be given the importance that it deserves; namely, a Secretary of State approved appointee.
Lord Renton: My Lords, is it not essential that whoever makes such appointments should be answerable to Parliament? Therefore, is it not right that the system which my noble friend the Minister has explained in some detail should continue?
Baroness Blatch: My Lords, my noble friend makes an important point. The answer is, of course, yes. My right honourable friend is accountable to Parliament and it will be for him to account to Parliament for the way in which the boards of visitors are working.
Lord Allen of Ahbeydale: My Lords, we seem to have come a very long way from the arrangements which I recall whereby, at a local prison, ultimate responsibility for supervision and discipline rested with an independent panel of visiting justices. Do not the new arrangements mean in practice, to put it crudely, that if a chairman submits a report or makes comments to the media that are critical of the Home Office he will do so in the knowledge that next time round he may find that he is "for the chop"?
Baroness Blatch: My Lords, I cannot agree with what the noble Lord has just said. The members act independently and each and every member of the board has an opportunity to speak and have access to the Home Secretary and to the Minister responsible for prisons. Many hoards of governors—members and boards collectively—have been critical of the Government and the Government have not immediately responded by sacking them as boards of visitors. What we have said is that it will be for the boards, on the basis of a secret ballot, to place the names in order of preference before the Home Secretary. However, to give the process some cachet and to recognise the importance of those posts, the Home Secretary will make the appointment. However, occasionally it is just possible that a name will be put before the Home Secretary of a person who has a particular record of not attending meetings and not conducting himself or herself as they ought to, both as members, and/or possible chairmen. If there is a question of the suitability of the candidate, there will be consultation with the boards of visitors to present another name to the Home Secretary.
Lord McIntosh of Haringey: My Lords, I am sure the Minister means to be reassuring when she says it will only be in exceptional circumstances that the Home Secretary will overrule the result of the secret ballot of members of boards of visitors. Will she tell the House on what information the Secretary of State could possibly overrule the members of boards of visitors, who know about such matters as attendance and suitability when they make their judgment? It is difficult to see how anything other than a purely theoretical centralising drive makes the Home Secretary want this sort of responsibility.
Baroness Blatch: My Lords, a fairly important group of people came to the view that this should be the process for appointing a chairman and vice-chairman to a board of visitors. The Home Secretary has recognised that. He also recognises that in almost all cases the preference of the hoard, on the basis of a secret ballot, will be accepted and the Home Secretary will ratify that appointment and recommend those names for appointment. I have given one example; namely, if anything is known about a member who is recommended to the Secretary of State for one of these
1080
appointments that would deem that person to be unsuitable to fulfil that role, for example if that person had failed to carry out his duties during a recent appointment, or if he had a record of simply not attending meetings. It is unlikely that the name of such a person would be put forward in such circumstances. However, if such a person were to be proposed for these appointments, it is unlikely that the Home Secretary would appoint such a person.
Lord McIntosh of Haringey: My Lords, what will the Home Secretary know that the boards of visitors do not? That was my question.
Baroness Blatch: My Lords, I am being drawn on what could literally be a rare occurrence; namely, a case where there is reason to doubt the suitability of a candidate for the post. In that circumstance there would be consultation with a board as to why a rogue name had been proposed to the Home Secretary. The noble Lord looks puzzled. If someone has a record of simply not attending meetings it would be strange for that person to be recommended as chairman of a board of visitors. In that circumstance it would be for the Home Secretary to query why that name was proposed. However, such a case is unlikely. I hope that noble Lords opposite will concentrate on the fact that these appointments are mostly made on the basis of recommendations from boards after secret ballots are held. In almost all cases the Home Secretary will be guided by the views and preferences of the board.
Lord Harris of Greenwich: My Lords, this matter becomes more and more confusing, if the Minister will forgive my saying so. She suggests that the reason the Home Secretary would veto a name for chairman or vice-chairman is that that person did not attend meetings. Does she think that members of boards are half-witted? Why would they want to have a chairman who does not turn up to meetings? Is it not quite clear that what the noble Lord, Lord Allen of Abbeydale, has said is true; namely, that this is a new procedure to get rid of chairmen or vice-chairmen of boards of visitors who have said something to embarrass the department of the noble Baroness?
Baroness Blatch: My Lords, I profoundly disagree with the final point that the noble Lord made. If anyone is confused in this House it clearly must be the noble Lord. It is not the answers I have given that have caused confusion. The noble Lord made my point for me. It is almost inconceivable that a board of visitors, having held a secret ballot, would put forward a name of someone who was unsuitable. However, the measure we are discussing allows for the possibility that if a rogue name were proposed of someone who did not have a good attendance record or who was unsuitable in some other way, and therefore should not be appointed, at least the Home Secretary could use his veto and not make the appointment.

Gurkhas: Accompanied Service in the UK
2.55 p.m.
Lord Holme of Cheltenham Lord Holme of Cheltenham asked Her Majesty's Government:
Whether they will provide housing in the United Kingdom for the families of Gurkha soldiers reassigned here from Hong Kong.
The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, married accompanied service for Gurkhas is currently available in Hong Kong, Brunei and Nepal, but not in the United Kingdom. The forthcoming withdrawal from Hong Kong means the majority of Gurkhas will in future serve for most of their careers in the United Kingdom and the Ministry of Defence is therefore conducting a wide-ranging review of Gurkha terms and conditions of service, including the issue of accompanied service in the United Kingdom.
Lord Holme of Cheltenham: My Lords, I thank the noble Earl for that rather cautious reply. I asked the Question as someone who has served in the Brigade of Gurkhas. Therefore I suppose I should declare an interest. However, that is an interest which I suspect is shared by your Lordships' House and shared by most people outside the House as well. I am sure the noble Earl will acknowledge the unique contribution made by generations of Gurkhas over 100 years, and the loyal and courageous service they have given this country in two world wars in Malaya, Hong Kong, Borneo and in the Falklands. Does he not think that loyalty is a two-way street? Will he tell the House specifically that when Gurkhas are assigned from Hong Kong to permanent bases in the United Kingdom, their conditions of service will be in every respect as fair and humane as those of British soldiers? In particular, will he say now, in advance of any review—because I do not understand what a review is for in this respect—that they will be able to bring their families with them?
Earl Howe: My Lords, I entirely identify myself with the remarks made by the noble Lord, Lord Holme, at the beginning of his supplementary question. I believe we owe the Gurkhas a great debt. The Gurkhas have rendered unique and outstanding service to the British Army and to this country over many years.I believe that accompanied service in the UK is a legitimate aspiration by the Brigade of Gurkhas. I am confident that the review we are conducting will produce a fair and equitable package of recommendations that fully address the Brigade's concerns. However, these issues are complex, and the terms and conditions of service for Gurkhas are complicated and the process will take a little longer. I anticipate that we will be in a position to announce any changes to Parliament shortly after Christmas.
The Earl of Lauderdale: My Lords, will my noble friend assure the House that there will be nothing said,
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thought or suggested that in any way compromises the nationwide appreciation of the wonderful loyalty and support of the Gurkha regiment?
Earl Howe: My Lords, I entirely agree with my noble friend. We value the Gurkhas highly as part of the Army. The brigade's future in the Army is secure.
Lord Williams of Elvel: My Lords, will the noble Earl confirm that the Government's avowed concern for family values applies not just to British families but also to Nepalese families?
Earl Howe: My Lords, indeed yes. That is why we are devoting a great deal of thought to how we can address the brigade's concerns not just in terms of accompanied service but also in terms of the education of their children, were Gurkha families to be housed here.
Viscount Waverley: My Lords, to what extent are the Gurkhas filling in as a result of an over-calculation as regards Options for Change?
Earl Howe: My Lords, as I am sure the noble Viscount will know, three Gurkha reinforcement companies comprising some 400 men in total are to be used as a temporary means of correcting undermanning in three British infantry battalions. That, I believe, is a sensible arrangement. It is one that your Lordships found favour with in our debate on the Defence Estimates in 1995. Those Gurkhas have been assigned to the 1st Battalion of the Royal Scots in Colchester, the 1st Battalion of the Princess of Wales' Royal Regiment in Canterbury and the 2nd Battalion of the Parachute Regiment in Aldershot. I believe that we are lucky to have them.
Lord Craig of Radley: My Lords, the last point made was that the Gurkhas are filling in for British soldiers. Does that not mean that the Gurkhas should be treated in the same way as we expect our own British soldiers to be treated? Can the Minister give an undertaking that that will be taken into account when considering the issue of married quarters?
Earl Howe: My Lords, I can give an absolute undertaking that that will be taken into account. We are very anxious indeed to ensure that we make the right decisions for the Gurkhas' and their families' future welfare.
Lord Mayhew: My Lords, is the noble Earl saying that there needs to be an inquiry as to whether the redeployment should be accompanied or unaccompanied? There are cases where a deployment has to be unaccompanied, for example, where the situation is urgent or where deployment is for only a short period of time. What possible reason can there be for sending back these people without their families? Does the Minister agree that the Gurkhas are rather bad at complaining and therefore there is additional responsibility on Ministers to ensure that their needs are properly looked after?
Earl Howe: My Lords, we take these issues very seriously. I am sure that the noble Lord will be aware that until now the majority of Gurkhas' service in the Army has been spent either in Hong Kong or Brunei, and very little of it in the UK. Most of their service will now be in the UK. It is only right that we should readdress the entire terms and conditions of service of the Gurkhas and that we should consider the matter as a package.
Lord Mackie of Benshie: My Lords, will the Minister say—
Noble Lords: Next Question.
Lord Mackie of Benshie: My Lords, it is a related question.
Noble Lords: Order!
The Lord Privy Seal (Viscount Cranborne): My Lords, with the greatest respect to the noble Lord, Lord Mackie of Benshie, I wonder whether we should move to the next Question. We have under six minutes of Question Time left.

Oaks: Imports
3.2 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether imports of foreign oak seedlings pose a threat to the long-term health of indigenous British oak trees.
Lord Lucas: My Lords, the oak seedlings which are imported into Britain do not pose a significant threat to the health of our oak trees. This is because the pests and diseases which affect European oaks are very similar to those which affect our oaks. Nevertheless, certification procedures are in place to ensure that imported seedlings are healthy.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that reassuring reply. However, can he confirm that the Millennium Commission plans to finance the establishment of about 250 new woodlands in Britain to include oaks from Eastern Europe, apparently because they are cheaper than our native acorns? Might that in time dilute the genetic strength of our oaks and cause other damage to local ecologies in the areas concerned, as some botanists fear?
Lord Lucas: My Lords, my noble friend should not be too concerned. We have always imported oak seedlings and acorns. In only about one year in seven do we have enough acorns from our own trees to satisfy our demand because we are in a marginal area for the oak and it does not set seed well every year. One can go back in history to look at extensive importations in the past which have not caused us any difficulty. I do not believe that it will do so in the future. There is no evidence that wildlife will suffer
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in any way from importations. Indeed, genetic diversity in our own stock is to be valued. If more genetic diversity is to be found outside the United Kingdom, we would do better to have it here.
Lord Carter: My Lords, is the Minister aware that the alien seedlings come from oaks in central and eastern Europe which have been isolated from British oaks for 4 million years? Experts and conservation interests argue that beetles, flies, caterpillars, birds and mammals could be at risk from the changed ecology of their environment. Is this not a classic case of penny wise, ecology foolish?
Lord Lucas: My Lords, no, I do not agree with that. It is clear that the species are very close. If there is a difference it is very small compared with the difference between our two native oak species, the common and the durmast oak, whose differences are further apart than those between the common oak in England and, say, in Hungary. The danger may be that the common oak in Hungary is adapted to a continental rather than a maritime climate and, therefore, may not grow well. It may be a bad tree from a forestry point of view but it is likely to be good for wildlife.
Lord Carter: My Lords, if the growth is delayed, will that not affect all the birds which rely on the oak for their food?
Lord Lucas: My Lords, there is a great variation between the dates that English oaks come into flower and leaf. There is a two-week spread within our own species. The common and the durmast oak flower at different times, and the times vary in differing years. I do not believe that there is any danger that the variation arising from European oaks will be greater than our natural variation.
Lord Pearson of Rannoch: My Lords, is it not true that the indigenous British oak is to be proscribed by the forestry reproductive materials directive, 66/404, which proscribes many varieties of seeds and is about to wipe out some 95 per cent. of our natural varieties of tomato and many of the tastier forms of broad bean?
Lord Lucas: My Lords, the connection between oaks and tomatoes escapes me briefly. No, the European regulations make sure that seed comes from quality sources. Because of the depredations in the United Kingdom over two world wars, there are not many quality oak woods left in this country, but there are enough in good years for our requirements. I hesitate to tell the noble Lord (but I shall whisper it to him) that the English oak is actually French.
Lord Skelmersdale: My Lords, following my noble friend's supplementary question, is the Minister aware that were this Question to refer to British people we would discuss it in the context of ethnic cleansing? Is that not a pertinent fact?
Lord Lucas: My Lords, I hope not.
Lord Gisborough: My Lords, is it not true that almost all of our trees, except for the silver birch, have been imported? We have hundreds of different species, not one of which is native.
Lord Lucas: My Lords, 12,000 or so years ago we had very little vegetation in this country. Almost everything has come from the Continent. We have done very well by it.
Lord Campbell of Croy: My Lords, does my noble friend foresee any risks to existing food chains leading to reductions in the numbers of specific species, for example, the red squirrel and certain species of bird?
Lord Lucas: My Lords, it is my brief experience that "squirrel nutkin" will eat almost anything that looks like a nut and does not care from where it comes.

Consolidated Fund Bill
3.7 p.m.
Brought from the Commons endorsed with the certificate of the Speaker that the Bill is a money Bill and read a first time.

Business of the House: Debate this Day
Viscount Cranborne: My Lords, I beg to move the Motion standing in my name on the Order Paper. In moving the Motion, perhaps I may take the opportunity of drawing your Lordships' attention to the guidance on the speakers' list that speeches should be limited to nine minutes.
Moved, That the debate on the Motion in the name of the Lord Northbourne set down for today shall be limited to five hours.—(Viscount Cranborne.)
On Question, Motion agreed to.

The Family
3.8 p.m.
Lord Northbourne Lord Northbourne rose to call attention to the role of the family; and to move for Papers.
The noble Lord said: My Lords, I welcome the many speakers who have put down their names. No less than 17 other speakers wrote to me saying how much they would have liked to speak today had they not been in America or had it not been for their wives' birthdays, or something of that sort. We need to be rather grateful to noble Lords' wives for having birthdays; the list would have been daunting indeed had all those noble Lords been present.
The Motion on the Order Paper is,
"To call attention to the role of the family".
By the end of the debate I hope that I shall have persuaded the House that there is an urgent need to invest in the family.
The Dunblane disaster, the murder of headmaster Lawrence and his wife's wonderful campaign, the Bulger murder, events at the Ridings School, and other similar events have drawn the attention of the public through the press to the problems that exist in our society today; and people are concerned. The reasons can be simply summarised. The welfare state is overstretched, family structures are weakened, and the family is uncertain of its role in our society.
However one defines the family, families will be a necessary ingredient in delivering care over many decades and centuries to come. Families provide a multiplier factor of the funds invested in them. The cost invested in the family is relatively small; the expenditure saved to the taxpayer can be very great indeed. The cost of law and order in this country in 1994-95 was just over £10 billion; the cost of mental health was well over £2 billion.
Today I intend to look briefly at the history of the welfare state and the problems which it now faces. I shall look at families as they are today and I shall address the vexed question of what we mean by "a family". Finally, I shall look at the role of the family in relation to the upbringing of children, which is my particular interest.
I have set down this debate to give your Lordships' House the opportunity to consider these issues and to bring to bear on them its very considerable wisdom. I cannot, of course, influence what noble Lords will say, but I hope that this will not be a bleeding hearts debate; I hope that it will address in realistic and hard-headed terms the very real problems which our society faces.
Throughout history, families have played a key role in the support and upbringing of children and the care of the aged, the sick and the disabled. At various times the state has intervened; at various times the Church has intervened. In this country in 1942 William Beveridge, who was based at Toynbee Hall, of which I am proud to be a trustee, developed a new type of social contract. It was called the welfare state and was designed to ensure lifelong care for all those who needed it. It was not intended to supersede the family or community support but to act as a back-up and a safety net. It was an enlightened and compassionate idea. It was an inspiration to many men fighting in the forces at that time, as the noble Lord, Lord Callaghan, told me the other day. In this, Britain led the world.
Now, in the 1990s, the welfare state is under threat. It is under threat from the pensions time-bomb; from the increasing cost of residential care for the elderly, of whom there are more and more; from the rapidly increasing expectations and cost of healthcare; from the cost of family dysfunction in terms of emotionally disturbed children, juvenile crime and special education; from the technological revolution, which has led to higher education and training costs and fewer jobs; and from the increasing reluctance of taxpayers to fund what they often see as inefficient government expenditure.
However, I believe that we are still, and will continue to be, a caring society. We want those who cannot care for themselves to be cared for. How are we to fill the

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gap which may be left by the inability of the welfare state to fulfil the ever-increasing demands placed upon it?
There is still a majority of functioning families in this country, working well, loving and caring for one another, often making great sacrifices to do so. We need to build on that success. In today's complex consumer society, families need a little help and encouragement from time to time. Parents need preparation for this, the most important job in the world. We need to invest in families.
I suggest that today we look again at the role of the family, not to go back to some imagined golden age but to learn from the best of the past and the best of the present how we can re-create and re-empower the family to work in partnership with an overstretched welfare state in the future.
I want to turn for a moment to the vexed question, "What is a family?". This is important. Because there is so much difference of opinion on what is meant by the family, family policies are not being developed because people are not sure what they are talking about. Dictionary definitions of "family" vary considerably. Some stress the biological parent/child relationship; some refer to living together in the same household; others refer to "providing for its members". My own personal definition would place more emphasis on long-term commitment. For what it is worth, my definition is, "A group of people who make an unconditional commitment to love and care for one another". We need to develop a consensus on what we mean by "the family".
Today we have to accept different family structures. It is comforting to know that there have always been different family structures. The fact that one particular structure may work well in a particular case does not always mean that it should be universally applicable. I have in mind the case of the founders of Rome, Romulus and Remus, who, as your Lordships will remember, were nurtured by a she-wolf. One would be reluctant to recommend a she-wolf as a foster-mother in every case.
It is an interesting statistic that in the 19th century families included about the same proportions of children in step-families and single-parent families as today. The only difference is that in those days that situation arose due to bereavement.
What do family structures look like today? We can identify what is called the nuclear family, comprising father, mother, Jack and Jill and a dog called Rover. That was the basic kind of family which existed after the war and to some extent before it. In many cases it continues to be successful today. But it can be claustrophobic and disastrous if the adults cannot get on together or if one is too possessive or dominating.
Then there is the extended family. I have to admit to a prejudice in favour of the extended family; I grew up with two married parents, four sisters, two grannies and a whole assortment of uncles, aunts and cousins. I am happy to say—particularly as my noble kinsman Lord Hood is in his place—that I am most grateful to all those people for giving me a very happy childhood.
Families in which children still live with both parents account today for just over 70 per cent. of children. Step-families and adoptive families account for about 10 per cent. of children. Single-parent families account for about 20 per cent. of children. Of those single-parent families, only about 5 per cent. are due to bereavement; two-thirds are due to divorce or separation and just under one-third arise because the parent is single by choice. My own view is that single parents are heroes, but nonetheless a single-parent family is not usually the best solution for children. It is difficult for one person to do a job which is demanding for two. Children need different role models. There are often problems of stress, ill health, loneliness and poverty.
A great deal of heat is generated by arguments about family structures. I suggest to the House that it might be prepared to accept the following three propositions as the basis for discussion this afternoon: first, that no family structure can guarantee success; secondly, that no family structure is guaranteed to fail; and, thirdly, that some structures show a statistically better than average chance of being successful—by which I mean having successful outcomes for all the members of the family. It is the quality of the relationships between the members of the family which matters most. No structures are guaranteed to give good relationships.
I hope that other noble Lords will speak about the role of the family in relation to the aged, the sick, the disabled and the unemployed. I should like to speak for a few moments about the role of the family in relation to children.
Families are particularly important for children. Procreating and bringing up children are not totally private acts; they have significant consequences for the whole community. I intend to argue that investing in families will be less costly and provide better care for children than any of the available alternatives. As a society, we cannot afford to have more children in care; we cannot afford the economic and social costs of children who disrupt our schools and who grow up without adequate education or social values, condemned to a life of unemployment, futility and crime. Investing in families is the cheapest way to reduce the number of young people who are driven into that trap.
Children need a secure, stable and, if possible, loving environment. They need to be taught, mainly by example, how to behave, to communicate, to relate to one another and to adults and to enjoy learning. Very young children need to form a secure and loving bond of attachment with one dedicated principal carer, who is often, but not always, the mother.
There are three ways to achieve those objectives. There is direct state intervention—bringing up all children in state institutions. Few people would seriously advocate that. There is the laissez, faire attitude that we have at present—little help from the state until things go seriously wrong and then crisis intervention, at enormously high cost. Yesterday morning. I visited a school for emotionally and behaviourally disturbed children from Tower Hamlets. The cost is £26,000 a year per child; similar schools go up to as much £36,000 a year per child. Psychological treatment for a child

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costs £340 a day. We are told that the Government's new secure units for persistent offenders may cost as much as £100,000 a year per child.
Almost all parents start out hoping and intending to be good parents. But, in today's complex society, with less support from the extended family and many young people who themselves have not had the experience of a happy home, parents often need some preparation and some support from the state. This afternoon I shall look at just three ways in which the state can help. The first is education for parenthood and support for young and inexperienced parents. The second is helping to reconcile the conflicting demands of work and parenthood. The third is a coherent government policy on families and children and effective co-operation between departments of state to achieve those objectives.
I turn first to education for parenthood. It must be education not only of young women but also of young men. They need to know about the importance of a stable, loving relationship, how to form and sustain stable relationships and about the responsibilities, skills, joys and sacrifices involved in parenthood.
A recent research paper from the Family Policy Studies Centre says:
"raising the next generation in today's society is probably more difficult and unsupported than at any previous period, and it is vital that young people are adequately prepared and equipped for the complexities and responsibilities of parenthood".
It goes on to say that:
"this can only he achieved by giving preparation for family life a central place in mainstream education through the national curriculum".
I am particularly grateful to the noble and learned Lord the Lord Chancellor for speaking in today's debate. I hope that he will tell the House about some of the things that his interdepartmental working party has been doing in looking at education for parenthood and support for parents.
All children at secondary school should have the opportunity to learn about forming and sustaining relationships, including sexual relationships. They need to learn about communicating, negotiating and compromise; about the needs of children and the sacrifices as well as the joys of parenthood. In this country, 42,000 children a year are born to teenage parents. In this country, 6,000 people a week make the decision that they do not want to have a child after it has been conceived. All schools should teach citizenship and a commitment to values. But because the subject is not easy to teach, there is also an urgent need for training for teachers. I hope that the noble Baroness will draw the contents of this debate to the attention of her right honourable friend in the Department for Education and Employment.
My second investment would be a change of heart in our society about work and the family. Too many children today suffer from family breakdown and inadequate parenting because their families have either too much or too little work. Too little work—unemployment or low paid irregular work, a sense of shame, stress, poverty and often debt, exclusion from
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society—leads to family breakdown, ill health and crime. Unemployment is the most intractable family killer of all. Too much work—dual working parents, long hours, single parents—leads to stress, exhaustion and ill health, with not enough time for children. Children need parents' time above almost everything else.
Should not we, as a society and as employers, try to be respecters of people? Should not we recognise that an employee is not just a brain and a pair of hands but a person, with all the hopes, anxieties, responsibilities and obligations which that implies?
There are things that can be done and are being done to help employees and to help mothers and fathers reconcile their loyalties to their job with a healthy lifestyle and their responsibilities to their children—career flexitime, job sharing, parental and child sickness leave, and a whole range of tried and tested family friendly employment practices. I was privileged to be a judge at the Family Friendly Awards in the Parents at Work contest and was impressed to note that major firms such as British Airways and Price Waterhouse were competing for the awards.
Childcare has an important part to play. When talking about childcare, it is important to distinguish between the needs of children of different ages. Equal opportunities for mothers and fathers must not be at the expense of equal opportunities for children.
Thirdly, there is an urgent need for coherent government policies on children and for better co-ordination between government departments on matters affecting children. Fourteen different government departments are responsible for decisions which can affect the lives of children. I very much hope that those noble Lords who have any power to influence matters will support my proposal for a Select Committee of your Lordships' House on the question of government structures in relation to children and their families. I draw your Lordships' attention to a recent report on this subject published by the Gulbenkian Foundation.
I believe I have shown that the family is likely to continue and continue to be important in our society. I have shown that the enormous and growing cost of crisis intervention can be reduced and better outcomes achieved by timely support for families. I urge the next government, whatever its complexion may be, to invest in the family.
My Lords, I beg to move for Papers.
3.28 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I am extremely grateful to the noble Lord, Lord Northbourne, for initiating a debate on this most important subject, in which we look forward to three notable maiden speeches. I regret that it is not possible for me to be present for the whole of the debate. Quite a long time ago I accepted an invitation from the noble Lord, Lord Jakobovits, to address this evening a Jewish marriage guidance council on the occasion of its 50th anniversary. It is rather strange that it should coincide with a debate on the family in your Lordships'

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House. However, I look forward to studying in tomorrow's Hansard the words of those noble Lords whom I shall be unable to hear.
The role of the family is a matter to which the Government attach the utmost importance. I believe that our achievements in that area fully demonstrate our commitment to the family. Therefore, I should like to outline some initiatives in support of families which fall within my departmental responsibility. They are concerned with marriage support, Children Act cases and domestic violence.
Last year, as the noble Lord, Lord Northbourne, mentioned, I set up a marriage task force, drawn from many departments of state—an example, if I may say so, of interdepartmental co-operation—to advise me on marriage support services. The task force has carried out an extensive consultation exercise on the best ways of preventing marriage breakdown, and the results of that consultation have enabled me recently to launch two important initiatives. The first is a pilot programme of marriage support projects, which will start in the financial year 1997-98. I have invited proposals from a number of marriage support agencies, including some small, local organisations as well as the larger national bodies. I look forward to receiving some innovative proposals which will build on the wide range of services already provided.
The second initiative is a directory of existing marriage support services, which is to be published on 30th December. I believe that will be an invaluable resource, not least for those who are themselves involved in counselling or other marriage support services, but who may not always be aware of the range of services provided by other agencies. I hope to be able to update the directory regularly so that it remains valid.
The needs and wishes of children who are affected by marriage breakdown and divorce are a central concern. In my view, subject to special circumstances, children are best looked after within the family with both parents playing a full part. But the responsibilities of parenthood continue even when the relationship between the parents themselves breaks down. It is vitally important that in those circumstances everything possible is done to ensure that the children continue to have the best possible relationship with both parents.
The underlying philosophy of the Children Act 1989, unlike earlier legislation, emphasises the concept of parental responsibilities rather than parental rights. It encourages divorcing or separating parents to make their own arrangements for their future life apart, including their continuing relationship with their children, without resort to legal proceedings. When the courts need to reach a decision about a child's upbringing, they are required by the Act to treat the welfare of the child as their paramount consideration. While the Act provides for the court taking account of the views of children, giving them weight according to the circumstances, it does not put the children in a position to decide on those matters. That is an important point to underline in connection with the philosophy of the Children Act.
It is now just over five years since the Children Act came into force, on 14th October 1991. I should like to take this opportunity to pay tribute to the work of the
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Children Act Advisory Committee, which was set up at that time to advise Ministers on the operation of the Act, and which has made a significant contribution to the success of the new legislation. The committee has, in particular, performed an invaluable role in collecting and disseminating information about the progress of Children Act cases and in promulgating best practice.
During the passage of the Family Law Bill through Parliament earlier this year, I announced my intention of setting up a new advisory body to monitor the implementation of the Family Law Act and to report to me on issues arising from its implementation. With the agreement of ministerial colleagues, and of the President of the Family Division, I have now decided to extend the terms of reference of the proposed advisory board on family law to include the overall impact of Children Act work within the family courts system. The Children Act Advisory Committee will cease to exist as a separate body after July 1997, by which time the new advisory board will be up and running. To provide continuity with the work of the Children Act Advisory Committee, I intend to appoint a Family Division judge, or a Court of Appeal judge with Family Division experience, to be a member of the advisory board. I do not, however, propose to appoint a judicial chairman, because I think it is important for the chairman to be independent of the court system.
There is now a well-established network of family court business committees and family court forums to oversee the operation of the Children Act at local level. Their work will continue, and they will be able, as now, to refer any issues which cannot be resolved locally to the relevant government Minister. The Children's Services Strategy Group, which was recently set up by the Secretary of State for Health, also has an important role in co-ordinating the interests of government and other key agencies. I am confident that those arrangements will enable the interests of children involved in the legal system to continue to be properly protected.
I have emphasised the importance of keeping the family together as a unit. Sadly, there are some exceptional circumstances where that is not possible, or even desirable, because of violent situations in the home. Parliament has taken action in the Family Law Act 1996 to simplify and improve the existing civil law on domestic violence and occupation of the family home in order to offer increased protection to victims of domestic violence. The complexity and inconsistencies of the current law have been the cause of a great deal of justified complaint. Part IV of the Act aims to address that unsatisfactory situation by creating a clear, simple and comprehensive code with a single, consistent set of remedies which will be available in all courts with jurisdiction in family matters. I aim to implement Part IV in October 1997.
I should like to conclude by re-emphasising not only the Government's commitment to supporting the family, but also my own personal belief in the crucial value of a stable family unit, in which man and woman live together as one and, if they are blessed with children, together give their children a secure and affectionate home life. That, I believe, is the Christian biblical model

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which not only promotes the health and happiness of the individual, but also contributes to the cohesion and good order of civil society.
Apart from the breakdown of marriage, to which I have already referred, and the birth of children to unmarried mothers, sadly, death can also intervene. As a result, fathers or mothers can be left with the responsibility for their children without the support of a spouse. Those in that position deserve every sympathetic support we can give them. In conclusion, I suggest that support for the family is one of the most important roles that any government can undertake.
3.36 p.m.
Lord Irvine of Lairg: My Lords, a long-standing engagement as guest of the President and Council of the Law Society prevents me from remaining until the conclusion of this debate, but I shall stay as long as I can. We look forward to the three maiden speeches and not least to that of my noble friend Lady Symons of Vernham Dean whose integrity, if it were necessary to say so, is unimpeachable.
A fundamental point recognised by the noble Lord in opening this debate is that the family and the state must not be seen as rival providers for the needs of our citizens. The family is the ultimate cadre of our society; it is the bedrock on which individual happiness is built. But it cannot flourish fully unless the state plays its part in education and, where necessary, caring for the young, making adequate provision for family members when old or ill and protecting them from lawlessness and abuse of power. It is wrong therefore to set the family over and against society or the state. Society is the sum of families in our country, working together to do collectively what no family, however wise or rich, can do alone. That is why my party has been in the van of measures aimed at fostering family life.
The post-war settlement of the Attlee government enabled young people from working-class families for the first time to go to university. That enriched their lives. I am the first member of my family to have a university education, in fact two university educations. Neither of my parents had either; that was a gross waste of talent. I owe my education to two of our ancient universities, and the door it opened to my profession of the law, to the vision of the Attlee government.
I should not tempt providence, but I have been blessed with good health for all my life—so far. It is of inestimable comfort to know that the dream which led to the founding of the NHS—that medical treatment should be free at the point of need—holds good today, however diminished the NHS may have become. That is a first-class example of the state coming to the aid of the family and providing the resources which few would be able to provide unaided for themselves, even those with expensive medical insurance.
It was the Children Act 1948 which set the course for all future child care law. When the family broke down and the children failed to flourish, they were to be taken care of as an obligation of the state. The Children Act 1975 carried forward the protective role of the state. It
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introduced a new concept of freeing a child for adoption. This enabled the court to prevent the heartbreak of a child being placed in a family to be adopted, and then the parents changing their minds and demanding the immediate return of the child. Under the Act the court could order that a child should be free to be adopted before that child was placed in its future family. Of course the rights of the natural parents were fully considered before the order was made, but it avoided the tug of love heartbreak of former times. I have to say I am doubtful about the proposal of the Law Commission to abolish this provision in its draft adoption Bill.
The Children Act 1989 was given strong support from these Benches. My noble friend Lady David was particularly involved. It recognised the claims of parents to bring up their own children by denying to a local authority the right to take them away unless the child had suffered significant harm at the hands of the parents or was at serious risk of doing so. But the cost of proceedings under that Act have spiralled out of all reason and since almost all of these cases are publicly funded, the cost to the Legal Aid Board has reached unsustainable proportions. These hearings are growing ever longer. Under the Act there are now more and more parties to each case. The child is always separately represented by a guardian ad litem. That is right, but is it really necessary for the guardian to instruct, at public expense, another team of lawyers to put forward views which in most cases simply replicate the views of the local authority? Of course, there must always be a guardian, but I fail to see why the interest of the child in most if not all cases cannot be safeguarded by the guardian putting all relevant considerations before the court.
Next, I am dubious about the practice in child abuse cases of first having a criminal trial where the parents are accused of serious offences against children and then having the very same issues re-litigated before a family court judge with substantially the same outcome. All this is wrong. It is profligate of public funds. Unnecessary duplication of judicial proceedings must end.
Next, the Children Act. One problem I identify is its failure to trust the judges sufficiently. Once a care order is made, the Act prohibits any intervention by the court in the life of the child while in its care. Social workers are given a completely free hand. They do a fine job, but is the balance right? I understand that the court should not be an appeal tribunal on day to day decisions in relation to the care of the child, but the absolute refusal to permit the judge any say at all in the child's future may well be wrong. An in-coming government will wish to give serious consideration to, and consult on, restoring to our judges the ability to tailor court orders to meet the justice of particular cases.
Support for the family was the principle which informed the Family Law Act which we spent so much time considering last Session. It dealt with domestic violence and divorce reform. Of course, there would have been even greater protection from domestic violence had the Government not been constrained to

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make concessions to a small number of unrepresentative and relatively uninformed zealots in another place. But three-quarters of a loaf is better than no bread.
The reform of divorce law was fully supported on these Benches. It introduced the welcome concept of mediation which the noble and learned Lord on the Woolsack assured the House would be entirely voluntary. No one should be coerced into mediation against his will and we too are determined to ensure that mediation will be truly voluntary and that the resources which this Government have promised are applied wisely to that purpose.
Family law reform is always controversial. The noble and learned Lord on the Woolsack would, I am sure, be the first to acknowledge from his experience of the domestic violence legislation to which he himself referred—and which he and I agreed should be carried forward through our Jellicoe procedures on a fast-track on the basis that it was non-controversial in a party political sense—that it turned out to be highly controversial and was hijacked by a determined group of members of his party in the other place.
When it comes to family law we all think that our views are as good as those of anyone else. That is why family law measures always enjoy such close consideration in your Lordships' House. We all have families, therefore we are all experts, or we all think we are experts, on the family. I can assure your Lordships that support for the family will be a major priority for the next Labour Government.
3.45 p.m.
The Lord Bishop of Carlisle: My Lords, I apologise to your Lordships' House as I have already apologised in writing to the noble and learned Lord the Lord Chancellor, the noble Lord, Lord Northbourne, and the noble Baroness, Lady Cumberlege, for the fact that I probably shall not be able to stay until the very end of the debate but I shall stay as long as I can.
I should like to make four points. First, I wish to underline what I hope will be one of the strong currents running through this debate, which is to remind ourselves of the positive value of the family. The Church produced a report, now over a year ago, imaginatively entitled Something to Celebrate. For all the problems and difficulties surrounding the family I hope that we will keep that note firmly before us because that relationship of love, commitment and intimacy within which children are born and brought up is vital to our personal life, our corporate life and our life as a nation.
That experience of upbringing gives to each of us an important sense of identity. It is the arena in which we learn positive memory, personal history and tradition; in which we discover and try out moral values and skills for living. Properly experienced, the family gives us stability in a context of growth and change.
I have no doubt, like other members of your Lordships' House, that other people's experience of family life is other than I am describing because it is oppressed by cruelty, violence and abuse which is
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demeaning and destructive. But let us keep clearly before us that which there is to celebrate and which is still the experience of more people than not.
In an address to a seminar organised by the Society of Local Authority Chief Executives a month ago, the most reverend Primate the Archbishop of Canterbury said:
"In the Christian tradition, we can only fulfil ourselves as people by loving our neighbours as ourselves, by recognising the inter-dependence of individuals within the wider human society, and taking our responsibilities towards other people at least as seriously as our responsibilities towards ourselves.
"By far the most important place where these basic human and civic values are taught is in the family where the strong and grown-up live out their responsibilities to the young and inexperienced and weak; where children learn that the human love on which the psychological security of the child can be based involves faithfulness, reliability, self-giving as well as self-fulfilment."
Secondly, I want to remind us that for all its problems, the family is still good news and that a positive view is widely held even by those whose experience of family life is less than creative. In the report British Social Attitudes: Relative Values Kinship and Friendship, the family is seen as overwhelmingly more important than friendship by a margin of about 11 to one. The most dominant tie is still that between parents and children, even after children have left home.
For all that, as recognised in the debate, the family is vulnerable. Twenty per cent. of all families with children are already single parent families. As people cohabit, divorce and remarry, it becomes less and less easy to determine where family obligations really lie. That is part of the Church's dilemma. We still see quite a lot of family life at the moment of birth and baptism; we see even more at the moment of the rites of passage into eternity; but there is a growing gap in our involvement with families at the time of marriage. That we greatly regret and on it we are trying to work creatively and constructively.
Thirdly, perhaps I may return to a matter that we visited yesterday. I refer to the whole question of financial resources as provided for in the recent Budget. I understand the Government's strategy to move towards even-handed financial treatment as between one and two parent families. It certainly has the appearance of fairness and even of justice. But I hope that whichever government are in office—I crave the indulgence of noble Lords on both sides of the House who think that that is already a foregone conclusion—its working must be carefully monitored. If the consequence proves to be that lone parents, male or female, are not able to find sufficiently well paid work to meet their basic needs and their families become further blighted by increasing poverty, many thousands of children will be at risk. The noble Lord, Lord Northbourne, reminded us that experience shows that preventive expenditure is far more cost effective than that which is to remedy things which have already gone badly wrong.
Fourthly, I want to offer your Lordships a model of good practice under the nurturing project from School and Family Links which is developing in Oxford and in Hull. The programme provides immediate opportunities for intervention in the behavioural difficulties of small

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children and also carries implications of widespread long-term availability to every child as a means of learning about relationships and social skills from the age of four, and thereby begins to teach those things which implicitly eventually have a bearing on their ability as parents.
School and Family Links is a school programme. The games and the activities fulfil the language, literacy and other requirements of the national curriculum and they have a strong and firm emphasis on moral and social responsibility. Parents are involved in the 10-week programme where they learn techniques for the management of behaviour. They learn with their children a common language and a common approach and parents themselves find greater self-esteem and become more committed to their own involvement in the school community. This important development suggests a way forward for schools, for Churches and for voluntary bodies in taking their full part alongside government in positive contributions to giving family life the kind of encouragement and practical help which we believe it to need. I commend it to your Lordships.
3.55 p.m.
Lord Donaldson of Kingsbridge: My Lords, I had not intended to take part in this debate because I have spoken on these matters once or twice recently and I do not want to become someone who is always prodding at the same problem. I am grateful to the noble Lord, Lord Northbourne, who set the field very widely, and to the Lord Chancellor and other speakers. It is difficult to talk about this subject seriously without some reference to religion and so I intend to make some reference to religion. However, I wish to say that I came to speak only because my noble friend Lord Meston is unable to be here and no one else seemed ready to step into the breach. Luckily, none of us is allowed to speak for very long, so although the debate will be too long, speeches in general will not be, which is a comfort to me both as speaker and as listener.
I said that I would make some reference to religion. I had better make my position clear at once. I was brought up as an Anglican Christian and believed in God. At 89, I still believe in God, but in very little else. I hope that most of the Christianity I inherited is true but I cannot say that I believe all of it. As I read the Bible, which I do spasmodically, I find verse after verse hard to swallow, but I very much like the taste. So there you are. I speak as a Christian with much hope but with little faith.
My later education taught me to believe that the family is the biological unit of society. The noble Lord, Lord Irvine, referred to it as the bedrock. That is perhaps saying the same thing in a different, less scientific way. My teacher used to say, "The only wedding ring I accept is a baby". He was not a Christian, but was better than many. I believe that the family is one, but only one, of the ways to a happy and healthy existence.
I hope that one of our historians can tell us when monogamy first came into fashion. I do not know but would like to. I suppose it was some time before the
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birth of Christ, when it was already a national virtue. It must be easier to have a happy family with only one mother about the place. I have a friend in Thailand who would only let me meet one of his wives. That certainly seems a complication. In the past in many areas it has been perfectly normal, even if it seems rather peculiar to us.
One looks at the less well off sections of society and sees how viciously poverty increases the risk of family unhappiness. One has only to read the classics—Dickens, Trollope and many others—to see how often the dominant male in comfortable families bullied both wife and children. So it is not only poverty that works against family happiness but the beastliness of human nature by itself. Poverty makes a significant contribution to family unhappiness, especially among the poor, but it is by no means the only one.
What is the effect on the individual of a happy and healthy childhood? He finds he has to keep some rules, and if he does, life goes well. If he does not, his family, whom so far he loves, find him a nuisance and bring him into line. So he finds himself one who normally keeps the rules and within the rules can look after himself. That is in contrast to a member of an unhappy family who finds he gets bullied by his brother if he keeps the rules and by his father if he does not. So he tends to grow up a rebel who knows that if he does not look after himself nobody else will.
This may produce a number of difficult and quarrelsome children, but now and again it produces a genius. Many leading figures in the arts, science and administration have emerged from a very unhappy childhood. That is something which I cannot begin to explain, but it is a well-known fact.
So to sum up, I believe that if you come from a happy, loving family you will do no evil. You will be friendly, decent and helpful all your life, but if you come from an unhappy one you will be an awkward character, fight many battles and very likely end in prison. But in one case in a thousand you may turn out to be a genius, a world leader or a great creative artist. So as it is better to have a lot of law-keeping, nice people rather than a series of self-seeking individualists of whom one may be a genius and 99 probably criminals, we should really try to pursue the happy family as perhaps the most important element in the happiness of the nation.
The best way of doing that is to help communities to build local well-being centres with family membership and facilities for all ages—babies, toddlers, schoolchildren, youth, the middle aged and the old, so that all can mix in what they feel is their own club, of which they can be proud and which they can run themselves. I have spoken about this before and I shall not say it again, but I believe it to be the truth. There are many things that you can do to help families that have gone wrong, but about the only thing that you can do to help families that have not yet gone wrong is to give them proper facilities, which give them the things that they want to do, in the way that well-off families can go where they want and do what they want to do, so that they can meet other families at all levels and create a proper, happy family life for all.
4.2 p.m.
Viscount Leathers: My Lords, I am torn between a sense of occasion and sheer terror. I, too, thank the noble Lord, Lord Northbourne, for introducing this important and wide-ranging subject and for giving me the opportunity to make my maiden speech. The noble Lord told me that he hoped that the debate would focus on the role of the family in protecting the vulnerable in society.
I wish to concentrate mainly on one section of the vulnerable, the young and homeless, and the duty of the family in alleviating their distressing plight. I must at this stage declare an interest. My son is in a hostel for the homeless. He helps to run the Lord Clyde Hostel in Vauxhall for the Depaul Trust. The Lord Clyde is a night shelter of 36 beds, soon, regrettably, to be reduced to 26 due to lack of funds. The shelter supplies emergency provision for 16 to 25 year-olds between the hours of 7.30 p.m. and 8 a.m. The Depaul Trust, which has two other hostels, is funded through the Department of the Environment's rough sleepers initiative and through charitable funds.
Who are the young homeless? Statistically, they are aged between 16 and 25. Tragically, many are younger and for them to obtain a bed there are few options other than to lie about their age or sleep rough and therefore increase their vulnerability. They are all, of course, "homeless"—that is to say, they have no permanent home. Homelessness is not houselessness. The nomenclature implies a lack of stability and security as well as the need for a place to subsist. The atmosphere of mutual pleasures; the consolation of shared problems; the relaxation within familiar and safe surroundings—all are absent. To a high degree, therefore, homelessness is synonymous with the lack of proper family life.
Many, but by no means all, of the youth who are homeless are in that predicament through a breakdown in their family circumstances. In some cases they have been forced to leave the family environment through the poverty of, or lack of space within, the household. In others they have suffered physical mistreatment or sexual abuse and are therefore, understandably, self-evacuees from the family; others have been rejected and expelled by parents. These situations can arise equally in surrogate families; for example, in foster homes or social service care.
Children are expected to leave the family when the time is right, but preparation for this event is generally undertaken and there is usually the fallback of advice, comfort and, occasionally, financial support. Local authorities also have a duty under the Children Act 1989 to prepare children in care for adulthood and to continue a degree of care beyond the age of 16. But in practice the child is ejected at 16 and society considers itself to have completed its duty. The family in this case has a sell-by date after which it ceases to exist. Young people are cast adrift to fend for themselves without the emotional support that families give offspring leaving the nest.
So, one way or another, through fear, rejection or impetuosity, they make their way to the urban centres. Here, lacking a sense of purpose, desolate and
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frightened, they seek those in similar straits since the option of family support is no longer there. Once on the streets these young people are vulnerable through their inexperience and, often, their naivety. Because they cannot get money on which to live, in desperation prostitution becomes a source of income and petty crime a source of material needs, both of which expose them to exploitation. They are at risk of turning to drugs or alcohol dependence in a wretched attempt to ameliorate the unhappiness and misery of their lifestyle.
Misfortunes can, of course, happen in the best established families. But the miscreant has recourse to the family for succour without exposure to the public eye. The homeless and vulnerable are immediately abandoned to the unforgiving world of overt correction. Because they lack the role model through the family they lose all aspirations and expectations. Rapidly, their health, both physical and mental, deteriorates. Suicide by males aged between 15 and 24 rose from about 220 to over 380 cases a year between 1982 and 1994, an increase of 75 per cent. The most significant factor, my son tells me, is the erosion of self-esteem. Self-esteem is established through identification with a group and through the individual's role as a valued member of that group. Families are an important group.
There is no panacea for the problems I raise; I have only broad suggestions for the way forward. There is a need to provide support, to instil a sense of purpose and to promote self-esteem. Government policy on homelessness has demonstrably worked. Because of the rough sleepers initiative and hostel provision, there is now an expert voluntary sector. Volunteers have always been imbued with altruistic and Christian values. Now augmented with acquired expertise and the earned trust of the homeless, the voluntary sector is capable of acting as a temporary surrogate family until the child makes a prepared entry into adulthood. Part of that preparation must be to reintroduce the family ethos. That can be done only by breaking the cycle of inadequate parenting and homelessness. The present generation must be educated to value the family ethos. Only then can it give the next generation the opportunity to leave home prepared for adulthood.
4.10 p.m.
Baroness Young: My Lords, it falls to me to be the first to offer to the noble Viscount, Lord Leathers, the warmest congratulations of the whole House on his maiden speech. All of us have listened with great care to his moving description of young homeless families and what can be done to help them, and his comment about the importance of family ethos. We are delighted that he has chosen this debate to take part in today. We all hope that we shall hear from him on many occasions in the future. I should also like to offer my warmest wishes to the other two maiden speakers whose contributions we look forward to hearing later this afternoon.
I greatly welcome this debate on the family and thank the noble Lord, Lord Northbourne, for giving noble Lords the opportunity to debate it. At the beginning of his remarks he posed the very important question: what is the family? In my remarks this afternoon I want to

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provide a definition of the family and what government can do to support it. I define a stable family as a married couple who make a lifelong commitment to each other and to their children. They make it in public, either in church or a register office. This has been the basis of society for as long as we have known it. It is only in the past 30 years that that concept has broken down. We now live in a world in which marriage is sometimes regarded as one of a series of alternative lifestyles.
I should like to go back to some of the causes of the troubles in which we now find ourselves rather than the symptoms that we see. If my view of marriage is regarded as idealistic—I am sure that it will be—I believe that we need ideals to put before each other. Even if we fail to live up to them because we are human beings that does not excuse us from having those ideals. There are enormous difficulties. Those of us with children and grandchildren know the enormous difficulties that they face today as young parents. Let us not delude ourselves. Goodness knows that families in the 1930s must have had difficulties of poverty and unemployment on a scale that is unknown today, yet we did not have the same kinds of debates about the family.
The married family is quite different from the co-habiting couple. Of course, there are single parents who successfully bring up children, but on the whole they are the exception rather than the rule. I was interested in the remarks of the noble Lord, Lord Northbourne, about bereavement and divorce. I have read that children would rather their parents died than got divorced. Even if that is not always true it has a good deal of truth in it and it is something that we should remember. We all know that to bring up children is very hard work even in the most favourable circumstances.
I should like to make two points about what the Government might do. I believe that all legislation needs to draw a distinction between marriage and co-habitation. The law can and does influence action and the climate of opinion. It has taken 30 years of the working of the Divorce Act 1969 to get us into the position in which we find ourselves today, and I believe that it will take a similar length of time to get ourselves out of it.
I greatly welcome what the most reverend Primate the Archbishop of Canterbury has said on the important distinction between marriage and co-habitation. Marriage is declining all over the European Union. In this country it fell by two-fifths between 1961 and 1993. There is more co-habitation, which in many circles is regarded as the norm, but the evidence of the effects of the breakdown of marriage is there for all to see: the breakdown of law and order; difficulties of discipline in schools; and vastly increased social security budgets, to say nothing of the new homes required for ever more single people.
Much of the poverty of today stems from divorced couples and single parents. Co-habiting couples are far more likely to break up than married couples. They do not have a long-term commitment. When they have children and then break up, those children are far less likely to have contact with their fathers. In many ways
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co-habiting couples undervalue the role of fathers. I have even heard it said today, not as a joke, that men are in many respects irrelevant. That is a terrible statement, because all the evidence indicates that many of our troubles today stem from the fact that there is no father in the home—there is not a married couple—to act as a role model particularly for boys.
I regret that my noble and learned friend the Lord Chancellor is not in his place. I suspect that the Law Commission wants to abolish the distinction between marriage and co-habitation. At least one former member of the commission has gone on record as having said so. Two pieces of legislation, one of which has already been referred to (that dealing with domestic violence), ran into difficulties, not simply because a good number of odd people like myself were very worried about them but because they began to blur the distinction between marriage and co-habitation. There was something wrong with the legislation. It had to be amended, brought back and incorporated into the Family Law Bill, as it was then. There has also been legislation on inheritance which has blurred that distinction. I believe that to blur the distinction is to damage the whole concept of marriage and the family.
I welcome the proposal in the Budget to remove the single parent allowance for future single parents in certain circumstances. When my noble and learned friend the Lord Chancellor comes to make regulations under the Family Law Act it is important that we look at them to make quite sure that the detailed working of that Act carries through the important proposals debated at such length. I hope that the Family Law Act will save marriages. Nobody wants that more than I do.
I was asked to give evidence to the inter-departmental working party on marriage. One of the points I made was that I was rather surprised to discover that the Treasury was not represented among the government departments. One of the ways in which we can support marriage is to look again at the taxation system. I welcome the fact that in the past two Budgets the tax allowance for married couples has been improved, but the Government need to go considerably further and create a tax system in which families can prosper.
I read with great interest the report, The Taxation of Married Couples by Leonard Beighton and Don Draper which was prepared for CARE (Christian Action Research and Education). I commend that work to my noble friend the Minister. Not only would a tax change help to support marriage but it could reduce the social security budget for single parents; and it could even help with the care of the elderly. The fact is that grandparents and the extended family are so often the victims of marriage breakups. They are lost to the family. They may be brought back into the fold if the family was underpinned financially in a way that gave it the opportunity to prosper.
I believe that the tax burden on a young married couple with two children where only one parent is in work has more than doubled in the past 30 years. If that is true it is a tragic statistic. There are many areas in which government policy can and does help. I am sure that we will hear more about the welcome increased

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involvement by parents in schools, for example. Above all, we need to have as a principle the support for marriage as we have known it—the support for responsible parenthood—and policies which encourage both those activities.
4.20 p.m.
Baroness Symons of Vernham Dean: My Lords, I, too, thank the noble Lord, Lord Northbourne, for initiating this debate and for giving me the opportunity to make my maiden speech. I, too, must declare an interest, as I am a member of the Equal Opportunities Commission. I hasten to add that what I have to say is for myself alone, and is not influenced or prompted by my membership of the commission.
It is some 20 years or so since I sat, as a young civil servant, in the Officials' Box to brief Ministers on the passage of legislation in this House. The view from where I sit now is a little different, but then, as now, your Lordships rightly had a reputation for the expertise, thoughtfulness and, possibly, above all, the fair-mindedness which all sides of the House bring to bear upon debates in this House. As a newcomer to the House, I have witnessed how well deserved that reputation remains. Now I have also experienced the warmth, courtesy and kindness of those on all sides of the House in welcoming a new Peer. Members, Officers and staff have been unfailingly helpful in their advice, guidance and patience—patience that has been much needed with someone whose sense of direction has never been a strong point.
I come to this House from a long line of trade union Peers. I had the privilege to serve for nearly 12 years in the Inland Revenue Staff Federation—the union of which the late Lord Houghton of Sowerby was a distinguished general secretary for many years, and where my noble friend Lord Callaghan of Cardiff began his trade union career. When I became a general secretary some eight years ago at the Association of First Division Civil Servants, I was also lucky enough to receive the guidance of a number of eminent Members of the Cross Benches from the Civil Service in particular, foremost among whom was the late Lord Bancroft whose public service record for many years was second to none.
This afternoon's debate is on the role of the family. I was fortunate enough to grow up in a family greatly influenced by family ethos. My father was a civil servant and my mother a schoolteacher—a rather common coincidence of partners, as I subsequently discovered when in later life I came to represent civil servants. It was a family where individualism was valued and where, at the same time, mutual support for one another, both within and between the generations, was expected and received. Those values are common to most families in this country, but over the past two or three decades the structure of many families has changed. We have to come to grips with those changes to understand how the role of the family is changing, and how it can best be sustained.
The proportion of dependent children now living in one-parent families in this country has tripled over the past 25 years so that now one child in five lives with a
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lone parent. Divorce has increased nearly sevenfold over the past 30 years. At the same time, the role of many women has changed to that of breadwinner, so that the balancing act between running a family and a job is a daily fact of life for at least seven out of 10 women of working age in Britain today.
There is no one pattern for the working lives of women in this country. The sheer scale of the variation defies any such generalisation. Women are becoming a more significant part of the workforce every year; 5 per cent. more women work now than did so 10 years ago. Many commentators believe that by the millennium women will make up half of the country's workforce. Currently, 73 per cent. of married women aged between 16 and 59 are in paid employment outside their homes.
I should like to touch briefly on the role of the family in three areas: in relation to dependent children; in relation to young adults; and in relation to the elderly. First, good quality childcare is fundamental to the peace of mind of all working parents. It involves mutual trust and respect between the carer and the parent; that the carer will be dedicated to the well-being of the children concerned; and that the parent will stick to the arrangements made.
The financial implications of such arrangements can be extraordinarily difficult to deal with, but of course those arrangements vary enormously with the employment and the income of the families concerned. All such families, regardless of their financial status, need the help and the care of the extended family network of relationships if they are to thrive and prosper both as families and as individuals within those families.
Secondly, how do families sustain young adults? Compared with 40 years ago, fewer 18 to 24 year-olds now live with their parents. In the 1950s, adult children routinely remained in their parents' households until marriage and many beyond that. While about two out of three young adults lived with a parent in 1986, less than half do so now. That is a remarkable fall, given the changes in social security benefits and the type of housing and employment markets which currently prevail.
Thirdly—this is a point that I should like to stress in particular—one test of family values lies in how we deal with older and, in their own way, equally vulnerable family members. How does the role of the family help elderly relatives who live on their own? The proportion of married or partnered women seeing their mothers once a week has fallen steadily since the 1950s. In the past 10 years, contacts with all types of relatives appear to have dropped markedly, so that while in 1986 60 per cent. of people saw their non-resident mothers at least once a week, now-10 years later—only 50 per cent. do so.
My generation, particularly my generation of women, has lived through a revolution in its working life. We have seen changes in the range of opportunities open to us, which our mothers, far less our grandmothers, would hardly have dreamed about. That sort of equality of opportunity is undeniably right if we are to achieve social justice in this country, but it is also vital that we maintain our other range of opportunities outside the workplace and within our families.

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Shouldering family responsibilities, not only towards our children but towards our elderly, is part of that fabric of social responsibility and opportunity which is so fundamental to social stability and social justice. The important issue for this House, for our economy, and for our country, is how to translate that into policy and how to put that policy into practice.
Companies, other organisations, indeed governments of all political colours, must now adopt family-friendly policies—investing in families, as the noble Lord, Lord Northbourne, has already advised us—not merely to improve the position of families and working mothers—it will certainly do that—but just as much to improve the efficiency and effectiveness of our companies and our economy, and to give greater social stability to our society.
Those issues are a question of values—fundamental values. I believe in fairness, social justice and decency—in terms of the role of the family, yes, but in terms, too, of our great public services and our democratic processes.
I look forward to contributing—perhaps somewhat more robustly than conventions allow in this address—in future debates in this House in ways which reflect the values which I believe are central to the future of our family life, our society and our country.
4.28 p.m.
Lord Weatherill: My Lords, this is the first time that I have had the privilege of commending a maiden speaker. In my previous incarnation I listened to a great many maiden speeches. I recollect that all of them were good, and some were even better. Your Lordships will agree that we have been privileged to listen today to a distinguished maiden speech.
Noble Lords: Hear, hear!
Lord Weatherill: My Lords, your Lordships will know that the noble Baroness, Lady Symons of Vernham Dean, has been the general secretary of the FDA—a sort of convenor, are you'?—representing some 11,000 civil servants. I am somewhat of a convert to the Civil Service. In 1970 I was a Whip. We had a new government. I went to a briefing on Questions with Peter Walker at the Department of Industry and had what I then judged to be the complete truth when the permanent secretary leant forward and said, "Secretary of State, I think we can afford to be a little more evasive in answering that Question".
The noble Baroness's speech was far from evasive. It was a speech of great experience both as a civil servant and a commissioner in connection with equal opportunities. I know that the whole House will join me in congratulating her on a very fine maiden speech. We shall listen to her in the future with great respect.
In my alleged retirement I have been involved with a number of organisations concerned with younger people. Contrary to the view of some of your Lordships, and as a result of my experience, I have become a bit of an optimist. For instance, I am a member of the Scout
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Council. There are 500,000 boys and girls in the Scout movement and more than 120,000 leaders. There are 82,000 people in the St. John Ambulance, 82,000 of whom are between the ages of 6 and 18. They give 10,000 hours of voluntary service every day. I am also patron of the Institute for Citizenship Studies, with which I believe the noble Baroness, Lady Symons, is also associated. We were both due at a meeting today. The organisation is concerned with trying to fashion the kind of society that we would like to leave to our heirs and successors.
It is against that background that I approach the subject with rather less gloom and doom than some. I believe that on balance the youth of this country is good and perhaps even better than it was in the so-called "good old days" when we were all much younger. The noble Lord, Lord Northbourne, is right to point to the fact that previously the welfare state assumed many of the responsibilities of the family.
The good old days were certainly good for some but not so good for others. My father, who was born in 1883, contracted what was then called infantile paralysis at the age of six. His was a family of nine. There was no National Health Service in those days and food was very short. His father died some two years after he was born. Education was very sketchy. But his was a very loving family and he was put to the tailoring trade as being something that he could do. I bless him for that because although he believed in education he did not believe in higher education and I had to be apprenticed to the family business. I owe him a great debt of gratitude, and today I owe a great deal of gratitude to the National Health Service.
Nevertheless, the noble Lord, Lord Northbourne, hinted that things may have gone a little too far. I often reflect on the fact that if there is a golden age it is possible that we are living in it now. I doubt very much whether future generations will have the kind of facilities enjoyed today; for instance, subsidised travel and many other things we take for granted.
The besetting sin is that we tend to look back to the past but not sufficiently forward to the future. Absolutely "must" reading for anyone interested in the subject is the latest Demos publication entitled Freedom's Children: Work, relationships and politics for the 18-34 year olds in Britain today. It is an analysis of the world as it really is rather than as we would like it, or believe it, to be. It states that there is no turning the clock back to the rigid family and the hierarchical work patterns of the past. In the section on renegotiating relationships and parenting it states that marriage as an institution is breaking down largely for three reasons. First, women, particularly women with degrees, no longer see themselves as just staying behind looking after the family. Secondly, a wedding is very expensive. Today it costs about £8,500. Thirdly, there is a lack of confidence in the reliability of marriage. Frank Field, the Member for Birkenhead, told me yesterday that this year in a Roman Catholic church in his constituency there have been 520 funerals and only three weddings.
What is to be done? It would take a long time to indicate all the things that ought to be done, but there should be fiscal encouragement, as the noble Baroness

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said. The noble and learned Lord the Lord Chancellor has supported the concept of the cooling off period in mediation and there should be some form of marriage preparation as advocated by Relate.
The real problem arises where children are concerned. There is universal agreement that children need support and the love and protection of their parents. I believe that that is best ensured by a lifelong commitment to marriage. Some years ago in my constituency of Croydon I asked a young man aged about eight what he intended to do when he grew up. He replied, "I want to he like my dad". That is the role model which was mentioned by the noble Baroness, Lady Young.
In relation to this subject, we should not forget the wise words of Edmund Burke. He said:
"Example is the school of mankind, and they will learn at no other".
4.36 p.m.
Lord Coleridge: My Lords, I thank the noble Lord, Lord Northbourne, for initiating this important debate. I thank too noble Lords, the officers of the House and the staff for their unfailing courtesy and support. The traditional role of the family is under considerable strain in these modern times. Working mothers are hard put to maintain their matriarchal role and many fathers face the additional stress of uncertainty in the workplace. The children of the family are also under strain from new influences and temptations.
In the light of this, the fulfilling of parental responsibilities is as important as ever. The role of parents must always be to take responsibility for the children whom they bring into this world. It is only by their example, the standards they set and the support they give that they can influence their children to take their place in what is a very competitive world.
Many families cope magnificently. But some have grave problems and need extra support from outside. This is particularly the case when there is a handicapped child in the family.
I have been for the past 12 years a governor of the Royal West of England Residential School for the Deaf. These children have to suffer for the most part not only deafness but other severe multiple handicaps caused in the main by the mother contracting any one of a number of viral infections during pregnancy; for instance, rubella, CMG, or meningitis. Anorexia and drug, alcohol and tobacco abuse can also be factors.
The courage and fortitude of the children is humbling, but they do cause enormous stress on their families where, I am sorry to say, the divorce rate is above the norm. We at the school for the deaf therefore become their extended family. We give them the love and attention they crave. The staff are quite wonderful, and the work is very rewarding. Watching the children sing carols using sign language, manfully coping with the Christmas pantomine and taking part in sports is very moving. They try so hard and are invariably good humoured and courageous.
It is my experience that children and young people who do not have the support of their family suffer because of it. The number of children who experience
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social and emotional difficulties where families have separated or where there are problems is definitely higher than in the case of stable families.
In the case of the deaf child, the issues surrounding communication have tremendous implications. The deaf child of "hearing parents" finds itself in an environment that, at the outset, is less than supportive. The parents are struggling to come to terms with their child's disability. They are probably involved in a range of medical appointments to establish the cause and severity of loss, all at a time when early communication needs to be developed. This is where the parents need good support. Clearly this is the responsibility of medics, social workers, health workers and possibly educationalists in the early stages.
At schools such as the school for the deaf in Exeter, great store is placed upon partnership with parents. The school seeks to support the parents and families in a number of ways. For instance, the parents are always made to feel welcome; they are invited regularly to come to school, particularly at times of review. Secondly, the school offers signing classes to parents, and, thirdly, staff are encouraged to maintain regular contact with parents by letter or telephone. Also, parents who live some distance away can use school accommodation so that they can attend meetings or just visit to talk with the staff and observe the school in action. Lastly, where difficulties exist, senior staff or the educational psychologist will meet parents to discuss matters and offer guidance.
Throughout, it is the aim of the school to support the parents, and to enable them to provide the support that their child needs within the family. Parents are generally very complimentary about the support they receive.
Our object is to support the family, not to take the place of it. It is interesting to note that the young people who have the greatest difficulty in terms of their social and emotional behaviour are those whose families have not been able to provide the right support. That this school has achieved the correct balance between teachers and families is illustrated by just some of its recent successes. For instance, one student has been accepted by Merton College, Oxford, two students have taken part in "Operation Raleigh" and another plays cricket for Devon.
Further experience that I have had where outside support of the family is of paramount importance is in the Armed Forces. I had the honour to serve in the Army for 22 years and took my turn as families officer. I believe that your Lordships may be interested in the military system which places great emphasis on encouraging the role of the family. In fact, the regiment is the family and fully realises the importance of its welfare. A man with problems in the home quickly loses his morale and his efficiency. This support is most needful when a soldier is serving in Bosnia or Northern Ireland or on some other unaccompanied posting.
The services are a very tight community. They are independent and very proud. All ranks share a common bond of loyalty, and a sense of responsibility to protect each other. In the family support role, the wives of the senior non-commissioned officers and officers are

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always there to lean on. They are the unsung heroines and contribute considerably to the morale of the service family.
The duties of a families officer are to look after the families with regard to housing, supporting services and welfare in order that all servicemen and women, and their families, are happy to serve. He is charged with the responsibilities of liaising with welfare agencies, the family association, the wives' club, the créche, and the kindergarten and with organising or assisting family activities with a view to creating a feeling of comradeship and unity within the regiment.
For families to fulfil their role is vital. That some families will need help is inevitable. It is to them that we must give our support.
4.43 p.m.
Baroness David: My Lords, it falls to me to congratulate our third maiden speaker today, and I do so with great warmth. Indeed, the noble Lord's understanding and most interesting speech will have been much appreciated by all of us. I looked up the noble Lord's career in Dod's Parliamentary Companion and saw that he has spent half of his life in the Army and half in business. I also noted that he was governor of the Royal West of England Residential School for the Deaf. I was particularly interested in that as I am very interested in children with special needs. The noble Lord has shown that he has a great interest in that area. I hope that he will join in many debates in the future, especially those concerning children with special needs. In fact, the noble Lord inherited his title some 12 years ago. I hope, therefore, that we shall not have to wait another 12 years before he makes another speech. We look forward to hearing from him. Finally, I, too, would like to congratulate the other maiden speakers on their excellent speeches.
The commitment of the noble Lord, Lord Northbourne, to the family is well known in this House and he is to be congratulated on achieving a five-hour debate today. He has covered a very wide field. I explained to the noble Lord that I would have to leave the House at 5.30 today. I thoroughly disapprove of people missing the conclusion of a debate in which they have taken part. However, the noble Lord encouraged me to speak, so I am doing so. I apologise to all the other speakers whose speeches I shall not hear later today. Nevertheless, I shall read their speeches with great interest tomorrow.
I am sure that most of us support marriage and the two-parent family and that, in most cases, is best for the children—although it has to be admitted that there are all too many two-parent families, not suffering from any form of deprivation, who are not good parents and who do not make a good job of it. We give very little guidance on parenting and we do very little to help people acquire the skills of a competent parent, as the noble Lord, Lord Northbourne, said. We give learner drivers the Highway Code and a course of tuition before letting them loose on the roads, but we do not do the same for new parents who undertake what is really rather a harder job.
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I think that we do have to be realistic. More and more couples set up house together, have children and lead a thoroughly happy and satisfactory life. It is a trend and it has to be recognised and accepted, as indeed did the noble and learned Lord the Lord Chancellor when we were in the early stages of the Family Homes and Domestic Violence Bill.
Lone parents have a very much harder time. It may not be their fault that they are lone parents; they may be widowed or they may have been divorced or deserted. I do not believe that young women have children in order to qualify, as some critics say, for council houses. I am sure that that is very unusual. The point is the children and how they are to be brought up. To treat the parent badly, as Mr. Lilley has done in cutting benefit, is to deprive the children of a decent and tolerable background. The problem is that the concept of "family" these days includes more or less everybody. The sharper focus we need—both in Parliament and in government—is on children. Of course children need families, but too often the family agenda turns out to be an agenda of adult needs. There are also those who use rhetoric about "family values" to promote policies which could, possibly, make children's lives more difficult.
I want to speak today of a Gulbenkian Foundation inquiry into effective government structures for children in which the noble Lord, Lord Northbourne, and I have both been involved as members of the advisory group; indeed, the noble Lord mentioned it in his speech. The inquiry's report was published on Monday. It provides a prescription, worthy of detailed consideration by all political parties, for ensuring that government pay proper attention to the needs of children.
I do not believe that any government consciously set out to treble the proportion of children being brought up in poverty, or to escalate school exclusions, or to design a juvenile justice system now described by the Audit Commission as "wasteful and ineffective". But these things happen—indeed, they have happened—not because politicians do not care about children, but because government do not care effectively about children.
Children make up almost one quarter of the population, but, having no vote, they seem to be politically of no great relevance. In this country there is no overall strategy for children. There is a damaging lack of co-ordination among the 14 government departments—I repeat, 14—responsible for policies which deeply affect children. Children—the real lives of children—remain largely invisible to government. There is no requirement to assess the impact of government policies on children, no systematic collection of statistics or annual report on the state of UK children and no analysis of government budgets to assess the proportion spent on children.
The report of the Gulbenkian Foundation sets out the justification for a high political priority and special structures for children—the moral justification, and the practical one—and our growing knowledge of the huge costs of failing children. The report provides a list of key functions of government for children and a detailed

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blueprint of structures within government to fulfil them, including a Cabinet Office children's unit led by a Minister for children, a standing cross-departmental committee on children—this is something for which I think the noble Lord, Lord Northbourne, asked—and, outside government, an independent office of children's commissioner to act as a watchdog for children.
The cost of implementing these proposals is infinitesimal compared with the continuing costs—economic and social—of failing children. It is the united view of the professionals and organisations that work with and for children that we must have more effective structures in government. Some 140 organisations recently signed a broadsheet addressed to all MPs and Peers calling for a Minister for children and an independent commissioner.
I shall now give a plug for the all-party group for children. That group is meeting next Wednesday and its agenda is the consideration of this new report. I hope very much that many of your Lordships who are here today will come to discuss it and to let your views on it be known.
4.51 p.m.
Baroness Macleod of Borve: My Lords, I am grateful, as are other noble Lords, to the noble Lord, Lord Northbourne, for introducing this subject at this particular time when we are about to celebrate—those of us who are Christians—the birth of Christ. To discuss children at this time is most opportune.
I take this opportunity to thank the noble and learned Lord the Lord Chancellor for all the work he did on the Family Law Bill. I was in hospital for two-and-a-half months at that time and was unable to take any part in the Bill. However, I followed its progress from my hospital bed. I thank the noble and learned Lord not only for the end product, but also for all the work that he put into that Bill.
We must declare an interest—if we have one—when we speak in your Lordships' Chamber. My interest is only that I was a small child at one time. I am now a step great great grandmother to three children. I am also an aunt.
Families all over the world are varied. However, I wish to speak primarily of those who are of the Christian faith; in other words, the majority of the people in this country. I am fortunate enough to be a Christian. I follow, as far as I can, what the Christian faith tells us to do. One of the laws—at times they are unwritten—laid down is that a man and a woman can marry and have a family. I refer especially to a man and a woman because I feel strongly that a father and a mother must be of two different sexes. In my view two people of one sex should never be allowed to bring up a child. I know that some noble Lords may not agree with me on that point; and I know that in America there is a growing tendency for two people of the same gender to live together and to be allowed to bring up a child.
However, I wish to concentrate on what constitutes a happy family. From what other speakers have said today and from our own experience, we know that, unfortunately, there are many unhappy families and
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therefore unhappy children. However, there is a great number of happy children and happy families. What makes them happy? First, I suggest that the example set by parents will remain with their children throughout their lives. Whatever parents do—not through training, or through teaching, but by example—will be absorbed by their children. Secondly, there is the concept of love. Love is absolutely fundamental to a happy family. I refer to the showing of love and a child's knowledge that he has the love of the two people who gave him life. That is vitally important.
Further, there is the concept of communication. Communication has not ceased but has deteriorated to such an extent that one wonders sometimes if parents talk to their children and discuss their children's lives and their own as much as my parents did when I was a child. I was fortunate enough to have that experience and I hope that other noble Lords were fortunate enough to be brought up in that sort of environment. If one does not communicate, how on earth can one tell one's children how to behave, what standards are expected and to tell them about anything that one has been brought up to believe in?
The concept of back-up is also vitally important to making children happy. By back-up I mean a home in which children are welcomed by their parents. If they do not have a happy home to which to return, they will not return to it and we shall lose them. A great many children are now lost and cannot be found. The tragedy of those children is well known to many of us who try to help them.
Another aspect of family life is sharing activities. I was fortunate in that respect because my father and my mother were good games players. They shared that activity with me. They were not good horse riders whereas I was, so I was one up on them in that regard. However, they took me to tennis matches and played tennis with me. They also included me in other activities such as playing tiddly-winks in the evenings, because of course in those days there was no television. In my view the lack of television was a great bonus.
The other day I found a newspaper cutting which featured an article by the late Roald Dahl, who knew so much about children. Some children may be fortunate enough to read his books. He wrote:
"The most important thing we've learned,
So far as children are
concerned,
Is never, NEVER, NEVER let
Them near your television set
Or better still, just don't install
The idiotic thing at all".
I do not know whether any families take notice of that warning but I doubt, unfortunately, whether many of them do.
I received today a helpful leaflet from the NSPCC. It recommends strongly that there should be a statutory requirement that the subject of family life should be taught as part of the national curriculum in all schools. It would be a large subject to include in the school curriculum, but I believe that it would be of enormous benefit to children when they grow up and have their own families.

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Last, but by no means least, is the aim to bring children up as Christians. If children have the Christian faith as a basis, they will have that faith to turn to.
Unfortunately my papers have become entangled. However, I wish to conclude by saying that children are the future of our country. It behoves us to do unto them as we would have done unto us. The harder we work today at bringing up children, the better one hopes that the country will be in the future.
5.1 p.m.
Lord Simon of Glaisdale: My Lords, not for the first time, your Lordships have been put deeply in debt by my noble friend Lord Northbourne. He started, valuably in my respectful opinion, by concentrating on the family as a mini welfare state. Both Bakunin and Marx declared that the overriding principle should be: from each according to his capacity to each according to his need. That has proved a disastrous error when applied, as it has been sought to be applied, in the nation and empire state. It worked to a measure in the traditional village where the village idiot was as significant a figure as the village Hampden. But it works best of all in the nuclear family.
My noble friend emphasised the family's role as a nursery for children. That has been valuably developed in a number of speeches during the debate. I do not wish to say anything on that aspect because it has been so well said by others. However, I should like to draw attention to another role of the family, sociologically considered.
It is inevitable, it is fundamental, it is innate that men and women perform a different function in society in bringing up future citizens to full citizenship. It can be performed only in a family based on a monogamous lifelong union. It is grossly unfair to the married woman in particular if, without cause, she can be repudiated as soon as times become difficult and there is a prospect of their becoming easier in the future. That is an important aspect of the nuclear family as a monogamous lifelong commitment.
There has been a general intellectual movement this century doubting the value of the family. I suppose that it started with Butler's The Way of all Flesh, marked strongly by Shaw's preface to Getting Married, and in the life and literature of H.G. Wells. I feel that the tide is now turning. It went on strongly in the swinging sixties culminating in the Divorce Reform Act 1969. However, I believe that the tide may be turning.
Even during the Family Law Bill debate of last Session, although the Bill remained a provision whereby a spouse against whom nothing substantial could be alleged could be repudiated without cause, undoubtedly a number of provisions were proposed and accepted by my noble and learned friend the Lord Chancellor which strengthen the family in the sense that I seek to indicate.
That is the first factor. The other factor is more recent. Party leaders are now vying against each other to proclaim their faith in family values. Rochefoucauld described hypocrisy as the tribute which vice pays to virtue. I do not accuse the party leaders of hypocrisy but
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at this time, on the eve of a general election, politics tend to be populist. If the party leaders find it expedient to voice their faith in family values, I think it probable that the tide has started to turn.
My noble friend Lord Northbourne begged us in the debate to be practical. I think that he will be pleased with the speeches made so far. We welcome with admiration the administrative measures that my noble and learned friend the Lord Chancellor indicated. I believe that more needs to be done. We need to put legal sinews into the institution of the family. A crying scandal is the fact that a wife can only acquire a right in the matrimonial home, which is after all her sphere of living, either by becoming divorced or a widow. Virtually two decades ago the Law Commission drew attention to that anomaly, but nothing has been done. I hope that the noble Baroness who will reply to the debate will tell us that something will be done.
Undoubtedly, the property regime which best reflects the cohesion of the family is community of goods. I am sorry that my noble and learned friend cannot stay until the end of the debate. There is a large measure of community of goods in Scottish law. I do not know if the noble Lord, Lord Irvine of Lairg, feels entitled to bear me out on that. But one need not go so far as that. For example, our law of testate succession gives unbridled testamentary licence. Scottish law is more reasonable in that respect and is geared to preserve what was formerly a feature of English law; namely, that the estate of the deceased was divided into three parts, one being the widow's part, the second being the bairns' part and only the third part being subject to testamentary disposition. Surely that reflects much better the concept of a family as a legal and social institution?
There is then the tax aspect, to which the noble Baroness, Lady Young, referred. I will not repeat what she said, but there is another fiscal aspect. There is a good deal of dissatisfaction at the moment with the inheritance tax. It is subject to the very grave fiscal disadvantage that it is not tapered. If we substituted a succession duty whereby members of the family could be benefited by being in a position of privilege compared to strangers, we should have a fiscal regime which very much better reflected the family as a social unit.
5.12 p.m.
Baroness Perry of Southwark: My Lords, I, too, should like to thank the noble Lord, Lord Northbourne, for having introduced this very wide topic. The speeches we have heard so far have indicated how wide-ranging are the concerns of this House with regard to the role of the family. It has sparked three quite remarkable maiden speeches.
Within this wide range, I should like to address particularly the role of the family in their children's education, not so much in relation to children of school age but more in relation to children before they arrive at school, when they are wholly in the care of the family.
Most of us recognise that the role of the family in children's performance in educational and academic terms is absolutely crucial. I wonder how many of us

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realise, as psychologists tell us, that the average child has completed 40 per cent. of its academic learning by the time it is five. In those first five years children learn language, the most complex of all skills; they learn numbers; they learn spatial awareness; they learn a very wide range of social skills. You only have to watch the average four year-old winding their parents around their fingers to realise how advanced those social skills have become and to realise how much learning goes on in those early years. Everything that children learn afterwards in school is only the remaining 60 per cent.
But that is the average child. Ask any reception class teacher in an infant or primary school and she—and it usually will be she—will tell you what enormous ranges of learning those young five year-olds and rising fives bring with them into the classroom. The experience that they have had in their homes is the base on which all their future time in school will be built. That base can be very slim indeed. When I say "slim", I reflect on some of the children I have seen arriving in the reception classes of schools, who come from backgrounds so deprived that they have literally never heard, let alone taken part in, any sustained conversation. They are incapable of understanding whole sentences because they are very rarely spoken to at home in whole and rounded sentences. They come from homes where there are no books, so they have never seen books before. They have never taken part in travel and visits; they have never been taken to the theatre or to hear music. They have almost no experience of any place other than the very small area of their home.
A head teacher of a school in Penge, which most of us would consider a three-minute drive from this House, told me that the most exciting thing that they had done for the children was—as they called it—to take them up to London. The children, who had been on an expedition to the West End, said, "This is the first time we have been in London".
Those are children from extremely deprived backgrounds. I should like to reflect for a moment on how important it is to help those children by helping their families. I should like to say some positive things about some projects which try to help those families to help their children. There are, thank God, thousands of such projects. I believe passionately that the best way to help children is by helping their parents. I shall talk about three specific projects which help perhaps the most difficult families, some of them with only one parent.
One such project is the Partners Programme in the town of Andover, largely sponsored by the Mercers' Company. There are a range of partners. The parents themselves are crucially and centrally within this partnership. The school itself, an infant school, is a partner. Other partners are social workers, health workers and almost anyone concerned with the welfare of very young children. With the help of financing from the Mercers' Company, the school has reached out to the parents of children who will be coming to the school in three or four years' time, in some cases before they even reach the age of one. These are families from a very deprived council estate. The parents are brought
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into the school and are given some exciting and interesting materials so that they and their children can play together, join together in learning, have some benchmarks for what a child should be able to do by the age of one, what one can reasonably expect at the age of 18 months, what one can be working towards at the age of two, and so on. The parents arc brought in and helped from the very start, when the children are only a few months old. People work with them, they work through the materials, they give them materials to take home to enable rich play experience with their children. The difference in the performance of those children when they come to school is quite remarkable; they come with that 40 per cent. of their academic learning already firmly in place.
A second project I should like to mention briefly is the WelCare Project, with which I am very proud to be associated. The patron of the project is the right reverend Prelate the Bishop of Southwark. It is a south London project to help mainly single mothers, many of whom are themselves in extremely desperate circumstances. I have heard one of these very brave mothers stand up in a group which included some quite formidable patrons of the charity and admit that she herself had had a drugs problem and had been drawn into prostitution, and yet she said, with great emotion, "I love my child and I was determined I would make myself better in order to make my child different from me". The WelCare Project works with such mothers, mothers who have sunk almost as low as can be. But working on their love for their children and their determination to help them, they are brought into centres and given opportunities to play with their children, talk over their problems with counsellors and help their children learn to become different.
A third project which I shall mention briefly is called Home House. It is run by a further education college in Stockton and helps young children's fathers who are in prison. The further education college staff, again with some of their colleagues in other services—the Prison Service and the social services—once a week go into the prison with the small children. The fathers are brought into a play area or a playgroup situation and are helped to help their children, particularly with literacy skills. Fathers and children work together. The fathers say that the project means more to them than anything else, "because our children are not going to live the life that we have lived."
Finally, I pay tribute to the often much maligned pre-school playgroup movement, which helps right across the social spectrum—not only deprived parents but middle-class parents who are just as much in need of help in parenting skills. I am a great advocate of pre-school playgroups, not just because of what they do for young children before they go to school—I myself have seen the confidence with which a child who has had two years of playgroup enters the reception class—but also because they have much to do with parent education. The mothers who are involved in pre-school playgroups—which is a precondition of their children being in a playgroup—are themselves educated and

1117
helped to see how children learn through play and how they may carry on the good work of the playgroup in their own home.
So there is light on the horizon. There are projects and ways of breaking that awful cycle of parents and children not knowing how to speak to each other or to communicate being passed on from generation to generation. Intervention can be successful and it can work.
5.22 p.m.
Baroness Gould of Potternewton: My Lords, I wish to add my thanks to the noble Lord, Lord Northbourne, for introducing the debate today. I hope that he will forgive me if I follow the theme of his speech. In the words of Leo Tolstoy:
"All happy families resemble one another, but each unhappy family is unhappy in its own way".
But it is not simply a matter of the presence or absence of one parent in the family which is significant in a child's life and in creating a happy family; it is the quality of parenting. Because of that, I hope that the noble Baroness, Lady Young, who is just leaving the Chamber, was not implying that a single parent family did not deserve to be called a family. It is the relevance of parenting that is important. That has been recognised by the tremendous growth of interest in parenting, in the need for parent education and in the consequences of bad parenting. That view is supported by the Home Office study, Young People and Crime, which states:
"It is the effects of relationships within the family that have a great bearing on whether an individual commits a criminal offence".
There is ample evidence that the interaction of social and economic pressures and inadequate parenting produces fertile ground for delinquency.
But turning the tide of delinquency means looking at the early years of people's lives, their upbringing, and the way that parental responsibilities are discharged. Being a parent can be more difficult than any other job. It brings joy, heartache and frustration. Children grow up and develop at an alarming rate. They are part of a culture which is often radically different from that of their parents and they grow up at a time when their parents' relationships are likely to come under stress. All those factors can cause communication problems and conflict, ultimately creating an atmosphere in which parents and children can drift apart. It can then become increasingly difficult to restore family relationships.
The 1989 Children Act acknowledges that the prime responsibility for children's upbringing lies with the parents. The legislation identifies a role for the state in helping parents meet that responsibility. It would, of course, be extremely difficult and probably wrong to prescribe all those responsibilities in the law. Family privacy has to be respected. But the breadth of the term produces its own problems in defining what is expected of parents.
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Twenty years ago Mia Kellner Pringle, in her book The Needs of Children, said, and it is still applicable today, that,
"modern parenthood is too demanding and complex a task to be performed merely because we have all once been children".
Reading her book made me realise that our own experiences are not sufficient. Parents should no longer have to rely on neighbourly and family advice and, more often than not, on instinct.
The level of support provided by local authorities is variable and dependent on local initiatives and the work of many voluntary organisations, such as Homestart UK, the Family Nurturing Network and Parentline, as well as the extremely valuable but small and varied mixture of parenting programmes. Those programmes vary in the tasks they undertake but they are all working to the same goals: to develop greater self-awareness; to improve parent-child communication; to make family life more enjoyable; and to provide useful information on child development. However, there is such a low level of investment in parenting skills in this country that, unfortunately, few parents in need benefit. The number is estimated at only 28,000 out of the 12 million parents in the UK with dependent children. That is at a time when there is an increasing amount of family breakdown, greater poverty and uncertainty concerning employment.
A recent Eurobarometer study found that in the United Kingdom only 24 per cent. of respondents saw "bringing up and educating children" as the most important purpose of the family, compared with six in 10 Portuguese, Italian, French and Spanish respondents. In the United States, where there have been parenting education programmes for some time, it is generally accepted that every dollar spent means six dollars saved on the costs of family breakdown, juvenile delinquency and criminal activity.
The National Children's Bureau in its Agenda for Action on parenting education, rightly called for government departments to develop a coherent national strategy; for parent education and support to be available to all who wish to take advantage of it; and for a more co-ordinated approach by local authorities, health authorities and voluntary organisations. Equally, young people—the nine out of 10 children who will become parents—have to be prepared and equipped to deal with the responsibilities that they will face in parenthood. That can start in schools.
Recognition of the problem has led to growing calls for the introduction of parenthood education in the school curriculum. Two years ago the Children's Society launched a teaching pack of materials entitled Education for Parenthood. The materials identified the basic components of a parenthood curriculum as including health and development; safety and security; financial and budgeting skills; and relationships. Early results show that the project which is under way in five schools in the Greater Manchester area is having a positive effect on young people's attitudes to parenting and that it would be a valuable addition to the mainstream curriculum. But we should not ignore the

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valuable contribution of nursery education, which can give the best possible start to children and the best opportunity for successful parenting.
Equally, we must make it easier to reconcile parental and work responsibilities. During the past decade there has been dramatic structural change in work patterns; continuing high unemployment, casualisation, loss of full-time jobs and the growth of part-time work for both men and women. Yet, overall, British men work the longest hours in Europe. One third of fathers work over 50 hours a week, compared with the EU average of about 10 per cent. One in three men work a six or seven-day week. And more than a million people have two or more jobs. Such long hours, accompanied by growing competitive pressures at work, place great strain on family life and are a real obstacle to equal parenting.
The interests of the family would be better served if more employers operated family-friendly employment structures, structures which would benefit fathers as well as mothers. That is essential if we genuinely believe in family values and the stability of the family. But it is not only up to employers. Government have a role in establishing a legislative framework for family life, a framework that provides for quality, flexible work, family leave, including parental leave, career breaks and a reduction in working hours. I am sure that there is no better argument for supporting the EU working time directive.
Unemployment, as well as over-employment, can also jeopardise men's involvement with their children. Time is not the problem. But loss of the role as the breadwinner can make it psychologically harder, not easier, for them to take part in the running of the family home.
The Family Policy Studies Centre, in its survey Parenting in the 1990s, illustrates the multiple disadvantages suffered by families where both parents are unemployed. Those parents would benefit enormously from the full implementation of Section 17 of the Children Act by providing a comprehensive network of family services in all areas.
In conclusion, successful parenting requires better co-ordination of resources. We need a labour market which is no longer an obstacle to parenting. We need sufficient childcare provision and parents equipped with the necessary life skills and knowledge to face the challenge and responsibility of parenting and with the time to meet the children's needs for emotional security, stability and affection. Good parenting is an investment for the future which society cannot afford to neglect. As the noble and learned Lord the Lord Chancellor said, support for the family is the most important role any government can undertake.
5.30 p.m.
Baroness Strange: My Lords, we are all grateful to the noble Lord, Lord Northbourne, for initiating this debate and, moreover, at such an auspicious moment. I too have an interest to declare, like my noble friend Lady Macleod. I am a granddaughter, daughter, niece
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and sister. I am also a wife, mother, aunt, great aunt and grandmother. I therefore have some experience of families.
We have heard three splendid maiden speeches this afternoon and I should like briefly to congratulate the noble Baroness, the noble Viscount and my noble friend. I should also like to apologise that I may have to leave the House shortly before the end of the debate, though I may not.
The last time we discussed the family was in 1989, in a debate introduced by Lady Ewart-Biggs. We were then allowed 12 minutes to speak; today we have only nine. Lady Ewart-Biggs said:
"It would be difficult—indeed impossible—to find a substitute for the family … Marriage provides economic, social and psychological support of a kind which is difficult to substitute, acts as a first line of defence in times of crisis and provides a small society in which human values are preserved against the pressures of mass living".— [Official Report, 29/11/89; col. 426.]
In a debate of some 20 speakers, we all followed, in our own ways, the same line. That is because it was true and there is no substitute for truth. Since then, my husband and I have had two children married, one engaged and one niece married. We have gained four grandchildren and we have celebrated our Ruby Wedding.
There are several ways in which a government could help the family. They could, first, provide tax relief in order to make it more attractive to be married than to cohabit. Secondly, they could provide tax relief within the family for carers and an adequate income replacement scheme for them. Caring for the disabled, ill or frail relatives or friends is still a significant part of family life in Britain. There are an estimated 6.8 million carers in Britain, who save the state an estimated £34 billion a year through their caring responsibilities; 3.7 million adults bear the main caring responsibility for the care of someone; 30,000 young people under 18 care for someone else in their household—some can be as young as eight. Only around 4 per cent. of the frail elderly are looked after in institutional care. The main carers of older people, therefore, are families. Nearly one in three carers-29 per cent.—who care for sick, elderly or disabled people for more than 20 hours a week also have children under the age of 16. Some have given up work but there are over 3 million carers aged between 16 and 64 in paid employment. Thirdly, the Government could help widows who, through no fault of their own, find themselves in one-parent families.
I read through what I said eight years ago and everything I said then, I believe now. It is rather like the pelicans:
"Plumpskin plushkin Pelican Jill. We think so then and we thought so still".
The family trinity is the basis of all life and all civilisation—test-tubes, in-vitro fertilisation and grandmothers having their children's babies have done very little to alter that. Families provide shelter and refuge from the harsh realities of the world. Families teach us to live with other people. The family is the most secure and happy way of bringing up children. The heart of the family is where love resides. And where love is, there lies healing and safety from all hurt.

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Now, with apologies to the noble Lord, Lord Northbourne, I am going to do my "bleeding heart" bit. Which of your Lordships watched the Lawrence family on television on Sunday night and saw that brave little boy unveil the plaque "To my Daddy" without tears in their eyes or a lump in their throat? Certainly not me.
Christmas is, above all, the time to think about families. We pray together; we eat together; we share gifts together—and some of them are not wrapped up in fancy paper and sellotape, but are gifts of the spirit. I do not know if the lion quite lies down with the lamb—it always seems to me rather unfair to the lamb. But there is certainly an armistice. Angels sing in the trenches and we all sing carols.
We think back to that long-ago Christmas—that two millennium ago Christmas—when Mary, Joseph and the donkey were hastening towards Bethlehem to become a family (they were an "almost-family"). I am sure the night was cold. We know there were stars and the donkey was certainly thinking, as donkeys do, of a warm stable, of hay and thistles and perhaps even carrots. I am sure his feet were killing him because goodness knows what he was carrying on his back. But he was determined to get there because he wanted the shelter for Mary and Joseph and the coming baby as well as for himself. After all, they were his family.
5.37 p.m.
Lord Jakobovits: My Lords, I join in the acclamations directed towards my noble friend Lord Northbourne for his invaluable initiative. I regret that, due to having been confined to bed for the past six days with a feverish flu, I could not attend the opening speeches this afternoon and missed, above all, his own opening address, though I did see his preparatory notes, which I read with enormous interest.
I am sure that no one can quarrel with or fail to be impressed by my noble friend's argument that, as the cost of the welfare service escalates and demands continue to rise—particularly in an increasingly elderly population—there will be a growing reluctance or inability on the part of taxpayers to meet those spiralling costs and the need will become ever more urgent for the family to resume its traditional role in providing relief for its dependent members.
One statistical item will illustrate how intractable the problem has become. I am told that at the largest Jewish home for the elderly, Nightingale House, with over 400 residential places, the average age of admission is now 88 years. This means, with ever earlier retirement, that the reduced number of wage earners now have to take care of two generations of pensioners. Clearly the imbalance between givers and takers or contributors and beneficiaries is becoming ever more acute. It is absolutely right that we should expect the family to help to assume some of these extra burdens, but the truth is that the family itself is in a state of disintegration. Its fractured constituents are themselves often in need of social assistance by the state. We therefore come back to the fundamental question: how can we strengthen the family against further erosion?
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No doubt the greatest piece of modern legislation in this sphere is the Family Law Act, which the noble and learned Lord the Lord Chancellor piloted through this House with such immaculate skill—perhaps I should say with such "Mackay-ed" skill. It is far too early to estimate how far the new law will stem the tide of marriage disintegration and its rising toll of human misery.
The greatest danger is that we shall take the current state for granted and no longer feel alarmed by it. Some efforts made to stem the tide of failed marriages were soon abandoned for the flimsiest of reasons. When the Prime Minister boldly initiated his "Back to Basics" campaign, he soon scuttled it because of a few moral offenders in high places. The whole moral climate today is a disincentive to the controls which are essential if marriages are to last. The common philosophy is: have a good time now and pay later—a kind of credit card mentality which is pernicious and blunts all responsibility.
On another subject of current concern, it is commonly believed that only minors have to be protected from the excesses of sex and violence in the media, and that after nine o'clock everything goes. You do not have to be under 16 to be corrupted by moral filth or to be rendered insensitive to the refinements of decency. The recent spate of mass murderers from Dunblane to Tasmania, possibly influenced by violence in the media, were not committed by children but by adults. If anything, adults are even more prone to be perverted than children, who have a certain natural defence against such perversion. What is not healthy for under-16s is not healthy for over-16s either.
In many ways we have lowered our natural defences against moral decay. One of the most powerful safeguards against unacceptable lapses used to be a deep sense of shame. Shame is to moral health what pain is to physical health. If physical pain did not alert us, we would never go to a doctor or a dentist to have some serious damage repaired. Without shame, moral decay passes unnoticed and becomes accepted. Our age wants to tell us that shame and guilt are unhealthy, when in fact they are indispensable conditions for moral health. We ought to encourage the cultivation of moral shame and disgrace in the face of deviant behaviour which is unacceptable.
I believe that the threat to the stability of the family is now real enough to warrant a proper in-depth inquiry into analysing the factors contributing to the catastrophic decline of the nuclear family as the bedrock of a healthy society. Perhaps we should consider a Royal Commission to study the present trends with expert witnesses, and to come up with practical proposals to reverse these trends.
The state, through Parliament, cannot abdicate its role as the guardian of our most cherished values—without which there will be no social security, no national stability, and no one left to care when we are too old or infirm to care for ourselves.
5.46 p.m.
Baroness Seccombe: My Lords, I wish to add my congratulations to the noble Lord, Lord Northbourne, on initiating this debate. The number of speakers indicates the deep level of interest.
I wish to refer to one particular facet of this very wide subject. Certainly I do not claim to have an answer to the problems facing families today, but I wish to share a few thoughts with your Lordships. It is often said glibly that children grow up in spite of their parents. But what kind of adults do they become? I believe it is the basic teaching in the home from the very first days which makes the person. So family life is, for me, paramount.
I should also like to ask what we mean by a family and declare my own thoughts. I am passionately and unashamedly supportive of the traditional family in which two people of opposite sexes make a commitment and then together raise children. Some will be more skilful at parenting than others, but having two heads around is almost always better than one. No doubt difficulties will occur along the way, but so will all the joyous times, and the shared pleasure gives an extra dimension. Sadly, for some, married life can suddenly end. One parent may die, or insoluble problems may result in divorce.
My father died leaving my mother with two young children. I always felt that as a result we became an even closer family. I was therefore horrified when one of my sons, at a difficult stage of his adolescence, told me, "You just don't understand because you had a deprived upbringing". I could not believe it. I had only known love and affection in spite of my being very trying at times. But we knew where our home was and together we faced the challenges of coping with wartime life on very limited resources.
I become very uneasy when the suggestion is made that more money will make life better for families. It may make life more comfortable, but we should never feel that affluence brings happy families. In fact it can bring many more problems.
My experience as a magistrate sitting in the domestic court gave me a knowledge of family violence, but it also taught me one thing very clearly: children like to be living under one roof with both their parents. Divorce is obviously traumatic for parents, but for children it is a great tragedy. Sometimes they are put in a position where they have to choose with whom they will live. Some children are split up, with some living with the mother and others living with the father. How impossible it must be to make such decisions.
I heard a so-called child expert say quite recently that his children spend exactly half their life with their mother and half with him and it works wonderfully. I spend my life in two parts; here in London and at my home in Warwickshire. As a consequence, I feel I live out of a suitcase. But I just cannot imagine how difficult it must be for a small child. The situation is, of course, exacerbated when both parents remarry and have other children. I feel that it is an intolerable strain on everyone.
I do not wish to take a moral stance—that is for others—and I do not wish to comment, least of all because I think I am a good parent. But I want to point out that
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there are practical difficulties surrounding divorce. I understand that everyone sets out wanting a marriage to work, but sometimes that is just not possible and after much heartache people decide to part. In that situation there are, however, still two parents responsible and caring for their children even if it is from two bases. This is a very difficult area for anyone involved in politics so I am only giving your Lordships my personal views.
There is another group, who have live-in lovers or (that awful word) partners—some being longstanding relationships but others just passing by. Children from the latter group face huge problems. Very often the mother is young and has no experience of life, perhaps just out of school, but then is expected to bring up a child on her own. This may not be with her mother and father but in her own accommodation with only state benefits to support her and no father to assist in discipline and care.
Parenting is jolly hard work. It demands patience, understanding, subtlety and a knowledge of what life is about. I feel desperately sad for anyone trying to cope alone. I believe there is a great distinction between those people who start out on marriage, even if it ends in disaster, and those who make no such commitment. The wording in the marriage service "till death us do part" is an important pledge, even if it cannot he achieved. But some relationships outside marriage appear not to look that far ahead. In fact they could be interpreted as "until rows do us part".
I find it unacceptable that single parents are lumped together in one group. I wish we could find better words to distinguish between the various groups. As I see it, there are three. First, there are widows and widowers who battle on without their spouse; secondly, there are divorced parents who may live separately but who are both involved in paying and caring for their offspring; and thirdly, there are those who have no intention of building a family unit with a father living at home. I reiterate that I do not wish to make any moral judgment but I think that, as a result of the experience we have gained over the years, if we truly believe in marriage it is our duty to pass on our views.
We have to draw on our personal circumstances. I have indeed been fortunate to share 46 years of my life with my husband. The message we send out to our young people should be clear. I cannot agree that the third group that I have just mentioned should be treated more generously than two hard-working parents whose total income can be well below that of a single woman on benefit.
Marriage has served us well as the basic unit in society for many generations, giving stability and security to children. They are the future of our nation. If we fail them by giving wrong and permissive messages, we shall pay the price.
5.55 p.m.
Lord Rix: My Lords, like many of your Lordships, I am most grateful to my noble friend Lord Northbourne for originating this debate on what is undoubtedly the most important building block in our

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society—the family. In your Lordships' House, family may be associated with centuries of public position and public service, and with some associated privileges and benefits. Perhaps not unsurprisingly, as chairman of MENCAP, I want to draw your Lordships' attention to a substantial number of families who certainly render a public service, but who lack position, privileges—other than the privilege of extended caring—and benefits—other than the modest benefits allocated by a frugal state. I refer, of course, to families who have a child with severe learning disability, or, as some of your Lordships prefer, mental handicap.
Nearly all children, and most adults, with learning disability live, and have always lived, in the community with their families. In the general population, children reach adulthood, leave the parental home and establish independent lives. For most families with children with learning disability, this does not happen. Their sons and daughters continue to live with them until well into adulthood—sometimes for the rest of their lives. Around 60 per cent. of MENCAP members, many of whom are over retirement age, still have adult sons and daughters living at home.
As part of its 50th anniversary, MENCAP looked at the experiences of parents whose children were born in the 1930s and 1940s and parents whose children were born in the 1980s and 1990s. The resulting report shows that, though services have improved, families still experience many of the same fears and anxieties that their predecessors experienced 50 years ago.
They are still fighting the same battles. Despite new legislation and improved opportunities—partly brought about by the campaigns of organisations like MENCAP—modern expectations are not being met. Families find themselves in the battlefield: fighting against professionals' attitudes to disability; fighting to get fair assessments or education statements or respite care; fighting to get the right education; fighting to get the right support and housing; fighting against cuts and charges. Battles which seemed to have been won have continued because legislation has been enacted but not implemented, or structures or resources have proved totally inadequate. Family life is in some ways no easier, where there is a disabled family member, now in the late 20th century than it was after the war; and people with learning disability are still denied equal opportunity.
This is the pantomime season, and the scene designers will be delighting us with rapid switches from the dark forest to Aladdin's cave. Life for a family with a disabled child also has its light and dark; and I need to refer to both good and bad in order to tell it as it is. The good things are often modest by conventional standards, but they are real and important: the 15 year-old from a special school who climbed a small Swiss mountain on the first day of his school trip, and then packed to go home, so proud and happy that he could not believe more was to follow; the eight year-old so excited by success in the swimming pool that he spoke for the first time—just one word, but what a breakthrough; the 16 year-old girl with not long to live, because her disease is progressive, who managed a smile during a
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long and difficult feeding time; the 31 year-old with severe learning disability who was asked in a Christmas quiz only last Sunday what word began with "X", and said "xylophone"!
However, families have much heartache, frustration and cause for anger. The news that the baby is disabled is broken to the mother on her own with a description of a large tongue and big hands and funny eyes, leaving the new mum to imagine a monster. The playgroup leader says, "We can't cope", leaving one to wonder how the family copes for 24 hours a day. School turns into a nightmare as the inability of staff to manage let alone educate is converted into a reflection on the family's "failure" to make the child more manageable and educable, and the case notes say "problem parents". When school is over, the message is not about further progress and continuing learning. For some families, and often the families whose son or daughter has the greatest needs, the message is about part-time attendance at a day centre, and a bill to pay for this.
How do we support the family in carrying the main burden and heat of the day? How do we move on from the kind of negative experiences my wife and I had 45 years ago and which I thought others would now be spared? Let me mention just a few ways forward. First, families need accurate information and impartial advice so that they can make the best of whatever is available locally or nationally. MENCAP is developing a network of family advisers supported by a comprehensive information data base, to fulfil precisely this role. This is based on a partnership between ourselves, our generous supporters and local authorities.
Secondly, families need strategic planning across the range of children's and adult services, and between the one and the other. Children's services plans and community care plans are gradually moving in that direction. Thirdly, they need someone who can act as co-ordinator to bring together what is needed by that family at that time, not leaving the family to find its way around a mystifying assortment of apparently unrelated and, occasionally, warring professionals. Fourthly, and not least, families need a family policy at national level spanning all Whitehall departments, including the Treasury.
We cannot rely on the family unless the family can rely on us; and we cannot rely on myths about nuclear families and extended families, which are cosy, but unrelated to the reality of our lives. If we want a society rooted in the family, we have to work to make it happen. In pantomimes magic is what the children see, but the transformation scene depends on months of planning and rehearsal, detailed professional input, and a lot of sheer hard work. The same is true of social policy.
I like the concept of parent partnerships and parent contracts under the Children Act, the Education Act, and in other contexts, but always provided that the expectations and the support go hand in hand. What will not work is a one-sided contract in which parents are expected to deliver and everyone else is free to criticise. By the time the school takes over the day, some parents have already changed two beds, given two baths, and cleaned up the mess in three rooms—all for a son or

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daughter who is distressed, who cannot speak to explain his distress, and who does not understand about toilets, bathrooms and personal hygiene.
In a highly successful play in 1938, "Dear Octopus", Dodie Smith wrote lines, which in this more cynical age might seem sentimental and bathetic:
"And so 1 give you our toast … to the family—that dear octopus from whose tentacles we never quite escape; nor, in our inmost hearts, ever quite wish to."
In our inmost hearts, I am sure that all of us taking part in this debate believe that Dodie Smith was probably right. But for families with a son or daughter, a sister or a brother, who has a severe learning disability, "escape" is not a word which springs readily to mind.
The vast majority of families wish to go on caring, or be involved in caring, for their disabled offspring or sibling for the rest of their lives. But unless society as a whole acknowledges that in social policies and personal behaviour rather than just trading on it, we shall be saying to families—some of them at breaking point—the same uncaring words of 50 years ago: "You're on your own". That, my Lords, would be a denial of responsibility and a betrayal of trust.
6.3 p.m.
Lord Monkswell: My Lords, I, too, would like to thank the noble Lord, Lord Northbourne, for introducing this debate to call attention to the role of the family. It struck me: what is the role of the family? To me, it is to provide a mutual support mechanism to nurture succeeding generations. It is important, even essential, that the family is supported. I also go along with many speakers who said that the family can take many and varied forms and that is not necessarily a bad thing.
Perhaps I may give noble Lords the benefit of my own experience. In my formative years I had two mothers, two fathers, a full brother, two half-brothers and a half-sister, along with uncles, aunts, cousins, etc. I believe that we all had what was mostly a very happy time. In later life my own experience has been to marry and have three children. I have gone through marital difficulty following redundancy at work but, happily, I am now re-established with my wife. So families can take different forms. When one asks the ordinary man on the Clapham omnibus, "What do you think is meant by the family?" the image that is conjured up is the nuclear family; the mother, father and children.
The noble Lord, Lord Northbourne, said that the welfare state was a contract with society. He also mentioned that the welfare state is under attack. I have the feeling that one of its essential pillars—the commitment right across society to move towards full employment—has in fact been withdrawn. Therefore, it is not so much that the welfare state is under attack but that it has been virtually destroyed in the form in which it was set up by the post-war Labour Government of Clem Atlee. It is interesting to think of that feature.
The salient contribution I want to make tonight is to reinforce what the noble Lord, Lord Northbourne, said about unemployment being the most intractable killer of families. I believe that he got it very right. I believe that one of the things that we can do in these debates, apart
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from bringing our own experience and knowledge to them, is to learn from other people. We can learn from social statistics and studies which have been made. I would like to flag up two revealing studies carried out recently. The first is a review of statistics and people's living circumstances going back over, I believe, three or four centuries. The review identified the fact that the proportion of the population getting married was higher in good times than it was in bad times. The investigation also revealed that the incidence of illegitimate births did not go up in bad times. It was not as though men and women carried on being sexually active and procreating and got married when there were good times but that they got married in good times and had a family. In bad times they did not. They might not get married at all or might just postpone it.
The statistics for this century show that during most of it unemployment has been pretty horrendous. However, for 30 years, from roughly the mid-1940s to the 1970s, we had a period of full employment. The emphasis placed on government action by all political parties was to ensure full employment.
It is interesting to reflect on the proportion of the population which was married or co-habiting. In the latter part of the 20th century co-habitation and marriage have become almost synonymous. Many people do not want to have that bit of paper, but they do wish to have a commitment to each other.
One interesting statistic is that the proportion of the population marrying was highest during the period of full employment. If we can repeat the consensus in which the object of social policy, government policy and opposition policy—the object of everyone—is to have full employment, it would provide an amazingly beneficial tonic for the family. It would be a marvellous commitment for the next century to ensure that families could be nurtured by the existence of full employment, economic stability and well being which they could pass on to succeeding generations. One of the reasons I shall support my party in the next general election is that it has a commitment to work towards full employment. I believe that that would be the best thing that could happen to the family.
6.10 p.m.
Lord Ashbourne: My Lords, I too thank the noble Lord, Lord Northbourne, for introducing this debate. He has been a champion of issues affecting children and the family for many years. I welcome his thoughtful and practical contribution.
Since I have been a Member of your Lordships' House I have tried to speak in most debates where there has been a possibility of influencing the Government on matters affecting the family. There have been a few hard-won successes but many disappointments. For example, I recall the many hours in Committee on the Human Fertilisation and Embryology Act 1990. That Act sanctioned new fertility treatments, including the donation of gametes, which in recent months have come back to haunt us. Together with others, at the time I warned that any Bill which had special clauses to define the meaning of "mother" and "father" was bound

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to cause problems. It was very hard work. Eventually, a minor change was secured in the other place to the effect that a woman should not receive licensed fertility treatment unless consideration had been given to the need of a child for a father. Unlike the 1990 Act, I have no doubt that at the beginning of their lives children have fathers and mothers. They need two parents if at all possible throughout the rest of their childhood and beyond. Furthermore, I believe that we can support the Christian norm of family life—namely, the extended family of mothers, fathers, brothers, sisters, grandmothers and grandfathers—without stigmatising lone parents.
I suggest that the Government should adopt two objectives, the first of which is to support marriage. I was heartened by the speech of my noble and learned friend the Lord Chancellor at the beginning of this debate. Secondly, support should be given to parenting. Expressed in this way no one is excluded, but the priority of helping people to stay together in marriage is clear. I am convinced that the ideal secure family life to which most people aspire depends upon the exclusive love and commitment of a man and a woman for and to each other. That is what gives children security, affirmation and good role models to follow.
It is known that in many parts of the country the lack of men at home is beginning to reap trouble for youngsters, especially adolescent boys. We had the opportunity to cover some of this ground last year when we debated the Family Bill. I disagreed with some of the Government's thinking in respect of that Bill, but it left the Houses of Parliament in rather better shape than when it began. However, I commend the Government in following through their commitment to put more money into marriage preparation and counselling projects. Perhaps my noble friend the Minister can update noble Lords on that matter when she replies.
I particularly enjoyed the speech of the noble Lord, Lord Jakobovits. He said that what was bad for the under 16s was also bad for the over 16s. He is right. The truth of the matter is that children have lost their innocence and adults have lost their shame.
I turn to law and order in this country which I find deeply disturbing. For example, I will not allow my wife to travel on London Underground after 10 p.m. That is an appalling situation. I believe that the fundamental cause of all the law and order problems in this country is the breakdown of the family. It seems to me that the Government have never analysed the cause of the law and order problem. One puts either a fence at the top of the cliff or an ambulance at the bottom of it. The Government always appear to put an ambulance at the bottom of the cliff to take away the dead bodies. That might not be a bad thing in certain circumstances but they could do so much better if they tried to find the fundamental cause of the problem.
We ignore the health of the nation's families at our peril. If we play down the importance of marriage our children will suffer. If we fail to support parents in their difficult task—perhaps one that becomes more difficult with each passing year—future generations
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will reap the consequences. Perhaps truly the sins of the, father will be visited on the children. That is a quotation from Deuteronomy: chapter 5, verse 9. The Government cannot do the job of the family but they can encourage and support family life and help pick up the pieces when it is not working. I urge the House to send out one clear message today: prevention is better and cheaper than cure, and there is need to support both marriage and parenting.
6.16 p.m.
Baroness Dacre: My Lords, the role of the family in our society is clear to me. It is to provide for children and to prepare them properly to take their place in society, and also to look after the older generation when they can no longer look after themselves. It is my belief that the traditional framework of the family has been altered to the detriment of society in both respects. We must encourage a return to the general principle of mothers caring for their children, at least during their early years, and fathers working to support their families as a whole, including the older generation.
Children who are married should care for their elderly parents just as they were cared for by them when they were young. Members of the family should care for each other right to the end of their lives. This would happen in a perfect world, but we do not live in a perfect world. In many neighbourhoods unemployment and real poverty are prevalent. To enable families to fulfil their role in society the state must help them. Special allowances should be given to these families to encourage them to care for elderly parents and relations in their homes. Surely, this should lead to a less selfish society than we have today where care can never be as loving as it is in the family home. Moreover, it would have the added benefit of being more cost effective.
At the other end of the age scale, sadly all too often we hear about latch key children. Children return to empty houses because their parents through necessity are out at work. This is now thought to be one of the principal causes of juvenile crime. Mothers should be at home teaching their children right from wrong. I am sure that the terrifying increase in illiteracy is in part due to parents not being there to aid their children in early reading. Schools need the backing that parents can and should give in this way.
Mothers are made to feel that it is politically incorrect to be at home with their children. That is divisive. I do not feel that it is beneficial for a very young child to be sent to nursery school while the mother goes off to work. Here, the state should increase family allowances for mothers who stay at home with their children. They should be rewarded and made to feel that they have a vital role to play in bringing up their children, but it must be made cost effective for them to do so. Less money should be spent on nursery schools and more on the family. If we are to save our society—I believe that it needs saving—we must encourage in every possible way the role of the family in this cause. I believe that the future of this country lies in investing greater faith in the family.
6.20 p.m.
Baroness Park of Monmouth: My Lords, first, perhaps I may apologise most sincerely to the noble Lord, Lord Northbourne, and to my noble friend the Minister, because I may have to leave before the debate ends. I have an engagement which was fixed a long time ago. I speak in this debate with some hesitation since I know that the intention of the noble Lord, Lord Northbourne—entirely typical of him—was that we should discuss what practical things could be done to solve the difficulties families, young and old, face today. I am not familiar enough with the workings of the welfare state to be able easily to identify effective solutions and remedies.
However, I feel especially strongly about two problems—how to recreate a full family, and how to meet the need for the support of a family, which is so widespread among the young.
I spent my childhood with loving parents in a remote part of Africa until I was sent to England to school at the age of 11. Because my parents were poor and could not afford to travel home, and the war intervened, I did not see them again for 15 years. But I had another loving family in England—my two remarkable great aunts—and I had a surrogate family in my excellent state school.
Today families are scattered, and there are many single-parent households where the young mother, quite as much as the child, needs family support—not money, but warmth, love, practical help and a framework for living and someone to be there with.
I should like to see tax and other measures taken to encourage several generations of families to live together. Think how much society would benefit from that in terms of the costs to the community of our present arrangements. The Henley report on housing futures, to be published this week, forecasts, I understand, a return to the large, multi-generation house where grandparents and children will live together under one roof. The report is said to comment that that will help:
"to prevent grannies from using up their inheritance money on care costs".
It would be an excellent thing to make it worthwhile for grandmothers and grandfathers to be able to play a valuable part in family life again—to be needed and to be there. There is often a happy and close affinity between the very old and the very young, and if it means waiving council tax on a granny flat, and freeing the old from the spectre of having to sell their home which is often their only asset after a hard working life, that would be thoroughly worthwhile. It would make good common sense.
In my time at Somerville, I could almost be sure of identifying undergraduates who came from broken homes; I should passionately support anything that could be done to give the young the broad and confident support of a family, and the old the chance to give some of that support by being there. Young, vulnerable people need and want to belong to something. We must provide them with something to which they can belong otherwise they are left with just one choice; that is, to join a gang.
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There is one other thing that I should strongly advocate as would, I think, my great friend Lucy Faithfull. I refer to more support for such childcare centres as the one shortly to open in Pilton, a poor and deprived area of Edinburgh, about which I learnt when European Committee C, of which I am a member, visited the Pilton Partnership during a review of the third phase of the EU poverty programme.
The women of the community, many of whom were single parents, were working to raise money and support to establish a childcare centre which would not only bring different age groups of small children together but would provide jobs and training for the local people. The mothers themselves were taking turns to go to be trained in order to return to work in the centre themselves as qualified childcare workers. The object was to enable them to take up employment, training and educational opportunities which they had hitherto been denied for lack of affordable childcare. The object was also for them to build something worthwhile by their own efforts.
The centre is to open early next year, which is a wonderful triumph. That initiative, linking work, training and childcare will do much to raise the whole quality of family life in that deprived area. I can only say how sorry I am that the UK and Germany, when it came to the point in Brussels, did not feel prepared to support the next stage of the poverty programme which originally helped to launch the scheme.
When we come down to essentials, what is needed for the family to flourish again as a vital part of the country's life is to give children and their mothers the extended family which can be provided by living under one roof, or creating such things as good childcare centres and excellent community schools, like Craigroyston community school, which we also saw on that visit. That could give children a great deal.
The Armed Services too, always supposing that we are left with any soldiers, sailors or airmen by the end of the endless cuts, provide a wonderful family for the young.
My second point is that we need to give old people (I will not use that hateful phrase "senior citizen") the opportunity to live in a family again and to be known, honoured and valued, so that the past can nurture the future.
The family is a very powerful secret weapon. As all noble Lords will be aware, defence is one of my interests. The need for counsellors and all the paraphernalia of institutional care and support will be much reduced if vulnerable people have a family behind them. Those young Army wives whose husbands in the Welch Fusiliers were taken hostage in Bosnia two or three years ago, gave that answer loudly and clearly when the press demanded to know what counselling was being provided. They said that they had the regimental family to support them.
We must do what we can to convince successive governments that that secret weapon, with very little practical help, could release many resources into the community.
6.26 p.m.
The Earl of Longford: My Lords, there is no one in this House better qualified to speak about the education of young people than the noble Baroness, Lady Park of Monmouth. She will forgive me if, in the time available, I do not follow her line of discussion. We are all grateful to the noble Lord, Lord Northbourne, for giving his inspiring lead this afternoon. He is backing up the lead given in July by the most reverend Primate the Archbishop of Canterbury.
I am afraid that I am a man of less sensitive feeling than the noble Lord, Lord Northbourne. I know that he is a good Christian. I am given to understand that he is a better Christian than I am, but he does not make a parade of it. I am speaking explicitly as a Christian without prefix or suffix, as have other noble Lords, including the noble Lord, Lord Ashbourne.
If one asks oneself what that amounts to, one surely starts with the thought that the essence of a Christian family is mutual love among all members of the family. Mutual love involves trust. Trust involves fidelity, and the enemy of fidelity is adultery. I know that it is considered rather bad form these days to use that word. It is rather as though one had used a four-letter word. People might say that it is hardly parliamentary. I am sorry, but until I am ruled out of order I shall go on saying that that is the real curse of our society today.
Adultery is much too common. It is commoner than it used to be. It might be said that it is a difficult subject. It is. We all admire, I suppose, a number of famous people who have committed adultery, beginning with King David, who combined it with a bit of murder, if one knows one's Old Testament, as Members of the House of Lords do. Many of us are admirers of the late President Kennedy. I had the temerity to write a short laudatory book about him, but his sexual mores are a painful memory which one tries to exclude. So one must be careful there.
We remember what Jesus Christ said to those who tried to stone the woman taken in adultery:
"He that is without sin among you, let him first cast a stone".
None of us is without sin, even if our sins do not take that particular form. We must be very careful.
Nevertheless in this country sexual mores have declined, in any Christian sense at any rate. There is far more sex outside marriage that there was in past years. Divorce has rocketed. Crime is 10 times higher than it was at the end of the war. No one will convince me that there is no correlation between those developments. On the other hand, I am not one of those who says that the whole country has gone to the dogs since my time. I believe that we are a more caring society, as was said earlier. There are many good points in our favour, but those developments are damaging, and running through it all is this sexual licence. The question that arises of course, for anyone who is keen on the family, is: what do we propose to do about it? Exhortation is a good thing. We should support Ministers or religious leaders who denounce immorality. They do not do it wholeheartedly at all times but, on the whole, they come down against it. We must support them in that respect.
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What steps can we take? Perhaps I may tell two stories to illustrate the nature of the problem. Not long ago a taxi driver told me his life story. Briefly, he had been married with four children, had left his wife and set up house with a partner with whom he had two more children. The question arose of whether he proposed to marry the lady. I tried to persuade him to do so. However much we dislike divorce, because divorce would be involved, I hope that the House believes that I was right in saying that it was essential for the two small children by the partner that he should marry the lady.
He pondered on the issue and said that the question was one of economics. He thought that after five years it would not be as expensive as it would be after two years. Clearly, the economic factors weighed upon him. I entirely agree with noble Lords who have said that it should be made more advantageous for such a person to marry. That is not a very idealistic calculation, but perhaps we can agree that extra married allowances help and that he should be assisted.
As regards the second example, I was recently involved in a television programme. A girl aged nine—a simple soul, I think—wrote to me under the impression that I was a man of good will and someone who might help her and her mother. She wrote:
"Mummy and I are living in a dreadful flat. Daddy left us recently. There is no carpet on the floor and we have no money. Mummy says that we are looking forward to a horrible Christmas".
That is a lone mother. Whatever we do to try to make marriage more profitable we must always realise that many people are victims of sin through no fault of their own.
I return to my main point. We must above all discourage adultery, but at the same time we must follow St. Augustine; we must condemn the sin and love the sinner. That is hard work but it is what governments and we, as humble citizens, are for. We must support those who give us a lead in this direction and I believe that the noble Lord, Lord Northbourne, has given us a lead today.
6.32 p.m.
Lord Elton: My Lords, first, I must apologise to your Lordships not for any intention to break the conventions of this House by leaving before the end of the debate but for being absent for an hour in the middle of the debate in order to chair a meeting upstairs on a related subject. I shall read with great attention the speeches of noble Lords which I missed.
The danger of asking to have one's name put down late in a debate such as this is twofold. First, everything that one wants to say will have been said already; and, secondly, all those who said those things will have gone home. I am partially the victim of both calamities. The noble Earl, Lord Longford, is notably present and said a great deal which I no longer need to say.

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I shall begin my contribution with a remark which might otherwise seem somewhat startling, but to me it is as plain as the nose on my face, which is very plain. If all of us recognise the plain truth that God is love, that our first duty is to love him with all our strength, hearts, minds and souls and that our second duty is to love each other as ourselves, it would not be necessary to have this debate because all the consequences which the noble Earl, Lord Longford, pointed out would flow therefrom. But I am not here to lecture nor preach on that subject. I say merely that everything I say is subordinate to that one hypothesis.
A good point to continue with is to ask what marriage, and hence the family, is for. The Anglican Book of Common Prayer is quite clear. It states that marriage:
"was ordained for the procreation of children, to be brought up in the fear and nurture of the Lord, and to the praise of his holy Name".
A little later it describes the proper relationship between the parents in that marriage; that it will be their children's home in a even more effective sense than the building in which they are to live. The book describes it as:
"the mutual society, help, and comfort that one ought to have of the other, both in prosperity and in adversity".
That is a description of one aspect of love in action, which is at the centre of the Christian faith. Looking back it is easy enough to see that the quality of that relationship is the first gift with which parents can endow their children. It brings with it the second and more directly important gift of a dependable, loving and directive relationship between each parent and each child.
In seeking to protect and sustain marriages as a secure and enduring structure to save adults—and more especially children—from the agonising calamity of divorce, we must pay close attention to the quality of those relationships. They are necessary not only to sustain the marriage but to raise the children of it in the secure and law abiding character rightly sought by the state and the secure and God-fearing character rightly sought by the Church.
Providing firm but loving guidance on how to behave is part—and a crucially important part—of what we now call "parenting". Without it a child is without the essential reference points for life. We must not assume that in providing the means for a couple to stick together in a conventional marriage we have done our job any more than a joiner can provide a table with four legs of any old length and say that it will not fall over.
The point is made in a telling sentence. It is always comforting to turn to statistics in a debate such as this because if one's theoretical points are not well taken at least the demonstrable ones are. Research Study 145 of the Home Office, Young People and Crime, by Graham and Bowling, is concerned with looking at criminal behaviour in children. They trace a clear link between criminal offending and family background. But the link is not quite what popular wisdom leads one to expect. They state:
"The difference in offending rates between those brought up by two natural parents and both those brought up in single-parent and step-parent families was statistically significant for both males and females".
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We settle comfortably back in our seats accepting what We have heard before. But they go on to state:
"However… once the quality of relationships with parents and their capacity and willingness to supervise their children are taken into account, the influence of family structure disappears".
That Home Office research was recently undertaken and published. Graham and Bowling go on to quote other researchers who have come to the same conclusion.
In short, if we take criminal offending as one indicator of unsuccessful parenting we find that belonging to a single-parent family is not, surprisingly, the ultimate disaster. The ultimate disaster is the family of however many parents which does not deliver a proper relationship between one generation and the next. Having a really good relationship with a single parent, whether mother or father, is actually better than having a bad relationship with either or both parents in a whole marriage. The authors do not define a good relationship very closely, but other works by educational researchers endorse common sense and identify dependability, consistency and fairness as essential, and extreme harshness and permissiveness as harmful both at home and in the classroom.
What is needed, therefore, is a relationship that is dependable, loving and directive. Having two parents may be the ideal but it is very far from being enough. That is the point that I wish to make. Those parents need also to have the willingness and the capacity to supervise them. Willingness springs from love and capacity depends in part on circumstances. But even the best circumstances are useless without skill.
Ninety per cent. of everything any of us ever learns throughout our lives is learned, I regret to say, in the first three years of life: essential things like how to read the emotions on another's face; what results to expect from different ways of treating others; what are successful and what are unsuccessful means of getting our way; the meaning of guilt, of forgiveness, of punishment and reward; and, underlying all, the difference between right and wrong. It is, therefore, almost impossible to exaggerate the importance of parenting during those years.
However, parenting itself is a skill. It is not inherited; it is learned. We cannot expect the child of a teenage mother, herself born of, and neglected by, a teenage mother somehow to absorb the moral sense, civic duties and social skills with that mother's milk. Good behaviour is taught, both consciously and unconsciously. I once described it as a golden chain built link by link by succeeding generations. It is built by parenting. If a link is missing, the chain is broken. We must find a way to replace the missing link.
Eight years ago, a committee of which I was chairman recommended that parenting should be a subject in the National Curriculum. It is there, but not as a subject, only as a cross-curricular theme—the first victim to pressure for time to teach core examination subjects. Her Majesty's Government should look urgently at ways of promoting it in the timetable. They should also consider that the moment when parents are most aware of their responsibility, most uncertain of their ability to meet it, and most apt to accept some help is at the time

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of first pregnancy. That is the moment when lessons in parenting should be offered—and urged—by local health authorities.
Being a good person does not necessarily make one a good parent. Anyone doubting that should see Roger Grad's notable film on difficult children, and their parents, being helped at an outstandingly successful unit at Marlborough House, Swindon, where the referrals all come from the local education authority and the unit is actually supplied by the department of my noble friend on the Front Bench, the Department of Health. That directs me straight to the question of structures of government help for children.
I have much further information with me about which I should like to speak, but the central point is that in moral, not theological, terms, all this turns on love. Where children are deprived of love they go wrong. We must try to put it right. It also depends in part on the skill of parents in transmitting those standards when they actually have them themselves. We have to teach them to do this, or that resource will be fatally wasted.
6.42 p.m.
Lord Henderson of Brompton: My Lords, there was a time—about 50 years ago—when I actively believed that a kibbutz was a better alternative way of living than the family. I have not felt that for a very long time. I suppose I then took that view for what has subsequently been expressed by the poet, Philip Larkin, about "your mum and dad". As I said, I now think quite differently and believe, like the rest of your Lordships, that the family is the proper building block (the term used, I believe, by my noble friend Lord Rix) for family and for society.
Society has been much mentioned in today's debate, despite the famous expression to the contrary made by the noble Baroness, Lady Thatcher. I believe that society is a proper context in which we should discuss the family. However, I believe most strongly that the family should not be allowed to live in poverty—which, unfortunately, is only too frequent in our society today. Nor should the family be allowed to exist as a homeless family. I was much moved by what my noble friend Lord Leathers said about homelessness in his notable maiden speech. It is unthinkable that the family should be allowed to exist in poverty and be homeless. I am afraid that there are far too many families which exist both in poverty and in a state of homelessness. That really illustrates the expression, "the bottom of the heap".
That leads me to consideration of what is quite frequently called the "underclass", though I believe that it is better described as those whose social status is such that they suffer from social exclusion. That is another and rather powerful way of expressing the plight of those who live on low incomes and one which I believe is gaining currency both in government circles and in circles which encompass those most interested in poverty.
In 1992–93, 4.3 million children were living in families in that category; that is, about one third of all the children in this country. Is it really right and proper
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that we should allow one third of the children in our families to live in poverty suffering from "social exclusion"? Can we expect that huge proportion of our society to bring up families in the ideal way that we have been talking about today? That seems to me to be an overriding consideration. We must get those children out of that particular category of deprivation.
After having attempted, if I may say so with reference to the noble Lord, Lord Northbourne, to bleed the heart, I should now like to chill the blood. How many of this one third of the population will remain content with their condition? Is it not a lethal prescription for society? For such serious poverty breeds crime and in the end revolt. In this social climate, it is not proper or sensible to spend so much of our resources on law and order and especially on prisons. I suppose everyone knows that prisoners mostly come from families in that lowly category—except for the odd Peer or two, so kindly announced to us every now and again by the noble and learned Lord the Lord Chancellor.
I turn now to the Home Secretary's expression that prison works". I am afraid that prison can disastrously disrupt the prisoners' families and it hardly deters them from reoffending. I concede, of course, that prison keeps offenders out of circulation for the duration of their sentence, but it does so only at huge cost to the nation. I would say that that money would very often be better spent on ameliorating their condition and that of their families.
While I am on the subject of prisons, I might as well mention that a huge proportion of female prisoners are still debtors which, I maintain, is a scandal. It takes the woman away from the family and there is, therefore, a family disaster. Most of these fines are, I would say, piddling fines for the non-payment of television licences and could quite easily be docked from family benefits. I sometimes wish that we lived back in the 17th century when Mrs. Godolphin (a most pious lady at the Restoration court—a kind of Frank Longford of those days) used to visit the debtors prisons, pay off the debts and release the prisoners. It would certainly be cheaper to the taxpayer as well as less disruptive of family life if we were allowed to do what Mrs. Godolphin did in the 17th century.
We must be both mad and bad to gaol poor mothers for such small sums of money these days. I remember that the noble and learned Lord the Lord Chancellor was going to do something about the situation when I last raised the matter two or three years ago. However, I am horrified to find that there is still such a large number of debtors, especially female debtors, in prison.
I am happy to say that within prison much effort is now been made to encourage family visits, which are less of a nightmare than they used to be. The need for families to keep in touch with prisoners is recognised. Unfortunately, the reception facilities for such families in some prisons are pretty disgusting and not conducive to maintaining good family relations. It is especially important for families to keep in touch with young offenders, many of whom have girlfriends or wives with babies and who are nowadays taught in prison the rudimentary skills of parenting. That can only be an

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advantage. Much of this work can and is being carried out by voluntary bodies, at least one of which was founded by the noble Earl, Lord Longford.
In the short time that remains in which I may speak I wish to say a few words about families in the rest of the world. As far as I can recall, that subject has not been touched on so far in the debate. The fact is that all our lives depend to a certain extent on the world population. It is a great credit to this nation that great work is now being done—I refer to the noble Baroness, Lady Chalker, in this respect—by the United Nations, by voluntary bodies and by many nations on this essential matter. It is too big a subject to embark upon now. However, a sustainable world population, and a "children by choice" policy and universal, integrated reproductive healthcare are the essential ingredients of our future happiness and of the welfare of the family worldwide.
6.51 p.m.
Viscount Brentford: My Lords, I, too, wish to thank the noble Lord, Lord Northbourne, for initiating this debate. I congratulate the three maiden speakers on their admirable contributions. We certainly all look forward to hearing them again.
Last night a lecture was given in this building which set out three current attacks on the family. The first constituted plain hostility from a few academics, but by no means all, and from other people such as Hugh Hefner, of Playboy fame, who has said,
"Family is a drag: marriage ties you down".
The second attack is the eroticisation of western Europe which is all too obvious all around us on television, hoardings, advertisements and in other areas. The third attack is what the lecturer referred to as the therapeutic attitude often seen in, for example, our liberal media where feelings take priority over everything else. All one has to do is to share one's feelings. One does not have to enter into any commitment or obligation; it is what one feels that matters. All that seriously knocks the family. However, the family survives. Lenin tried to abolish it but 20 years later Stalin had to reinstate it. There is a divine aspect to all our discussion on the family. I believe it was Jean-Paul Sartre who said something to the effect, "I do not believe that any god exists but everything in my being cries out for God". That was a conflict for that unhappy man.
I wish to refer to three words which I feel are important in connection with the family and the need to have stable relationships and good parenting, as has been mentioned by several speakers. My first word has been mentioned quite often. It is "commitment". The husband needs to be committed to the wife, the wife to the husband, and both of them to the children. I emphasise the need for fathers as well as mothers to spend time with their children. My son who is now aged 25 lives overseas. Two months ago I spent four days alone with him. I believe that whether our children are teenagers, children or young adults, it is good for us to spend time with them. When I refer to time, I mean quality time and not just quantity. It is no good being with one's child if at the same time one is talking to
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someone else on the telephone. Our children need our attention. It is crucially important for all of us to concentrate on devoting time and love to our children and others in the family group with whom we live.
Companies and other employers need to recognise that employees who are parents of children need to spend time with their families. They should not be required to work 12 hours a day, seven days a week. I make a plea that companies should recognise the need for fathers as well as mothers to be at home to build family relationships. When I consider the concept of commitment today I am encouraged to note that an increasing number of adults are committed to the care of elderly family members. It is good that interest in the extended family is re-emerging.
The second word I wish to mention is "communication". My noble and learned friend the Lord Chancellor has said:
"Communication is the essential foundation on which a marriage is built, extended and maintained in good repair".
I heartily endorse the sentiments of that quotation. Communication between husband and wife, and between them and their children is essential. I make a plea for parents to communicate with their children's teachers. It is important that families should eat together to enable them to talk with each other. I make a plea for family members not to take their meal out of the microwave and go off to their room on their own to watch television but to sit down at a table and talk together. That is an important aspect of family life, but too many families miss out on that. Unless children receive time, attention and love—as my noble friend Lord Elton said a moment ago—and a sense of security, how can they possibly convey those concepts to the next generation?
The third word I wish to mention is "support". I am glad that my noble and learned friend the Lord Chancellor has given us an update on the work of his interdepartmental committee on the support of marriage and the family. Today we need to have professionals to whom members of a family can turn for support. I am glad that there are many marriage courses which people can attend to obtain support. I endorse what my noble friend Lord Elton said on the need for courses in schools to educate pupils on personal relationships and the moral context of sexuality. Much attention can be given to those subjects in schools. Can consideration be given to schools remaining open until six o'clock in the evening so that children who have both parents at work can stay at school to do their homework and play games and not go home to an empty house? For children to go home to an empty house again knocks the concept of the family. I do not wish to impose any more responsibilities on teachers who are stretched beyond capacity now. However, is there not some way in which we can work out a method whereby children do not have to return to an empty home after school?
I am happy that the majority of our children today live with both their parents. It constitutes a falling proportion but it is still a substantial majority. It is important that we work to halt the downward slide and get the proportion up again. Parenting needs both parents. It is a difficult enough task even when there

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are two parents living with their children. Anything which knocks the family—poverty, mentioned by the noble Lord, Lord Henderson, one-parent families or divorcing parents—increases the risk of children suffering psychological or emotional problems, becoming pregnant as teenagers outside marriage, being subjected to sexual abuse, becoming delinquents, finishing school at the minimum age and not going on to A-levels and higher education, and, as has been said, developing a tendency towards crime.
I believe that the Government, the Church and every noble Lord in this Chamber this evening, and those who have been present earlier, must be positive and creative in all that we say and do to support the family.
7 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, just under a week ago your Lordships debated the moral, ethical and practical issues concerning in vitro fertilisation—issues concerning life and death. Today we have been debating not so much the artificial making of a family, but its role in society.
Both those debates have been of the highest quality and when your Lordships' House is under threat surely these two occasions alone show what an important contribution your Lordships' House makes to the Government of this country.
I join in congratulating the noble Lord, Lord Northbourne, for initiating this debate and for his clear exposition of the issues. I salute him, as I do my noble friends Lady Young and Lady Seccombe for defining "the family". I have been tussling with the definition for some time and I agree with them that the emphasis must surely be on the long term commitment to love and care for one another.
We have been privileged to have had three maiden speakers. I find it rather charming to have had three maidens in a family debate. Through the columns of the Daily Telegraph I understand that the Chief Whip has recently given advice to new Members of your Lordships' House: do not speak for too long; do not speak when the hour is late; and, do not speak too often. All three maidens excelled in complying with the first two virtues and it is my fond hope that they will ignore the third.
The noble Viscount, Lord Leathers, spoke with experience and insight about the Lord Clyde night shelter and the plight of young people who are homeless through no fault of their own. He is right to say there is no single panacea for the problems that he outlined, but I am grateful to him for paying tribute to the Government and our homelessness initiative which has in his words "demonstrably worked".
It is a delight to welcome the noble Baroness, Lady Symons, to this House. After her eventful and interesting career I wonder whether she will find exchanging the Civil Service for your Lordships' House a similar experience to that of Mrs. Patrick Campbell who on marriage described,
"exchanging the hurly-burly of the chaise-longue for the deep, deep peace of the double bed".
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But the noble Baroness will already be aware that noble Lords when roused are far from peaceful.
I warmly welcome my noble friend Lord Coleridge and his perceptive and interesting contribution. As a governor of the Royal West of England Residential School for the Deaf he is well placed to explore the issues of hearing impaired children and the needs of their parents. He may be interested to know that we are currently funding a project to help support deaf parents of hearing children and another to provide support and advocacy for Forces' families with children with special needs.
The Government's commitment to family life and family values is in the context of a pluralistic society. It is founded on three convictions. The first is that the family is the essential source of love and respect between individuals and their development as people and as members of society. Secondly—to reflect the views of my noble friend Lady Young—it is a critical economic unit. It should be almost a mini welfare state where the members of the family care for each other not only in times of extreme adversity but when support is required—the extended family. The third is that family relationships and family values are, and must be, essentially private. They should not be the subject of intrusion by the state or its agencies except where there is manifest need for help or protection.
Following from this commitment, and these convictions, the Government have four duties, the first of which is to ensure a framework of law, through which family relationships are expressed properly and which reflects social values and modern conditions in society. Their second duty is to offer protection and help where for one reason or another individual family relationships do not provide the support that they should, or even present risks to individuals, particularly children. The third is to ensure that the relevant public agencies play their part in preparing children and young people for adulthood in a balanced way that supports, rather than undermines, the responsibilities of parents; and the fourth is, in all other respects, to acknowledge the privacy of family life and to keep the state out of private family matters.
In his customarily thought-provoking speech, the noble Lord, Lord Donaldson of Kingsbridge, suggested that families work best when they are independent and self-sufficient and, I would add, even a little proud. Then family members can more easily provide love and support to each other without worrying about the next financial crisis.
That is why this Government set so much store by giving families economic security. Our present economic prosperity, a hard-won prize, is helping. Daily, more jobs and hence more breadwinners for families are being created. Not only will families be better off, but more children will grow up with the role model of a hard working parent. And for the tough times, the spread of home and share ownership has given millions of families a nest-egg to fall back on.

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The noble Lords, Lord Northbourne and Lord Rix, were concerned about having a coherent government policy. The Government start from the premise that every aspect of government activity has implications for families. The Government's view is that separating family issues into one department would not be an effective way of ensuring that the interests of the family were taken into account in every aspect of government. Experience shows us that rather than setting up separate departments for particular interest groups, it is far more effective to ensure that the necessary government structures for cross-departmental consideration and communication are in place. With regard to family policy, decisions remain a collective Cabinet responsibility. Views about all family policy decisions that affect other departments are sought from members of EDH, the Government Cabinet Sub-Committee which deals with social policies. In addition, my right honourable friend Stephen Dorrell has a special responsibility for the presentation of family policy.
The noble Baroness, Lady David, mentioned the Gulbenkian Foundation inquiry report. We shall study that report, but we do not see numerous new bureaucratic structures as the way to progress the special needs of children. Many mechanisms, formal and informal, are already in place to ease co-operation between government departments and organisations concerned with children. We believe that these arrangements work well, especially as they have recently been expanded by forming the children service strategy group, mentioned by the noble Lord, Lord Rix.
I wish to start at the very beginning—with responsibility in childbirth. I have been very involved in a major government policy called Changing Childbirth. It is important because one of the main issues is to instil in parents a sense of responsibility. We feel that this should start with birth. We believe that we should give women and their families more control over the care that they receive. We urge professionals not to take over this event but to enable, support and encourage rather than assume all responsibility. Six hundred thousand babies are born every year, each one a living symbol of expectation, but each one also a huge responsibility for the parents involved.
The Government are unstinting in their support for young parents through health visitors who provide a valuable and valued service. Few other countries have specially trained nurses committed to health promotion and family support. It is the largest professional group working with parents of young children. Along with social workers, they are the people who work away on our behalf with those who are the most deprived and often the most broken.
Parents want their children to flourish. I am sure that the noble Baronesses, Lady Symons and Lady David, and my noble friend Lady Perry, will recognise that the Government's commitment to pre-school education has been considerable. It is an important area. Today families are smaller and children do not have the same opportunities to grow up with brothers and sisters. They need the company of other children. My noble friend praised the pre-school playgroup movement in which I started my public life. I am very encouraged by the
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nursery voucher scheme, which will help playgroups and nursery schools and give children the opportunity to learn at an early age to be sociable and tolerant.
I am grateful to my noble friend Lady Perry and to other members of your Lordships' House for citing some of the excellent community schemes which support parents. The Government, too, contribute through funding to many of these schemes.
The noble Lord, Lord Northbourne, advocated that all schools should teach citizenship and commitment to values which care about the welfare of children. My noble friend Lord Elton felt that there should be greater emphasis on teaching values within the school curriculum. It is, of course, a statutory requirement that all schools must teach religious education to all children other than those withdrawn by their parents. Most schools teach personal health and social education, not always as a discrete subject but as a vein which runs through many subject areas.
The noble Baroness, Lady Gould of Potternewton, referred to the very difficult period between childhood and adulthood. We recognise that more needs to be done to help parents bring up their children to be law-abiding. That is why the Home Secretary set up a ministerial group to help identify new strategies for early intervention with young children most at risk of offending, and their families, to help divert them from crime. The group will publish a Green Paper this autumn.
It comes back to parental responsibility. The courts can now require parents to attend court with their child, pay their child's fines and be bound over to look after their child properly and ensure their child's compliance with a community sentence. I am sure that the noble Lord, Lord Henderson, will be encouraged to know that some imaginative and innovative schemes are already being put in place. He mentioned schemes in prisons. A great deal is being done to help at a local level with children who have become involved in crime and with their families. For example, family group conferencing is being piloted in a number of areas. This approach aims to encourage young people and their families to accept responsibility for problems and for putting them right. It encourages young people to face up to the harm they have done, an approach I am sure your Lordships will agree with.
I do not think we should be too despondent. As the right reverend Prelate the Bishop of Carlisle told us, even when children do leave home they keep in touch with their families. Recent research shows that nearly half of all the adults in this country visit their mothers once a week and most of them speak to them on the telephone at least once a week. As my noble friend Lord Brentford said, it is good to talk. It is interesting that only 3 per cent. never make contact.
The noble Baroness, Lady Symons, rightly said that one of the positive challenges in modern life is how to balance work and family. We believe that these choices are personal ones but we want all people to have the opportunity to exercise those choices. As the noble Baroness, Lady Dacre, said, it may well be right for mothers to stay at home if that is their wish. On the

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other hand, we do not feel that we should exclude women from the workforce. Bored, lonely, housebound young mothers do not necessarily make better parents; and the nation loses out on the talent, intelligence, energy and economic benefits of a large percentage of the workforce.
My noble friend Lord Brentford is right to say that families also need time. If families are to combine both work and home, we need to have a flexible labour market which allows women and their menfolk to work the hours that suit them. When I have been involved in family-friendly employment policies, I have seen them work to the benefit of men as well as women. People in the workforce have come up to me and said, "For the first time ever, I have been able to put my children to bed." I welcome that. It also helps employers to recruit and retain high quality employees. Flexible family policies make good sense commercially as well.
Many of your Lordships, including the noble Lord, Lord Northbourne, have pointed out that the family is altering. But I wonder if there was ever really a golden age. I agree with the noble Lord, Lord Northbourne, that it is difficult to know whether the Victorian family was no more or no less child-friendly than today's. Family life in the home could then be very harsh. Family life today in tower blocks can be miserable; family life in the suburbs can be lonely; family life in towns and cities is under great pressure.
Many of your Lordships have pointed out that divorce is easier and more frequent, but we should also look at the total figures which show that, as a nation, we marry more than some of our European counterparts—Italy and Spain, for instance. It is therefore perhaps not surprising that we have a higher divorce rate. We have no means of measuring whether life within families is better or worse, happier or more wretched. Maybe the greatest strength—love—has remained constant throughout.
The noble Earl, Lord Longford, the noble Lord, Lord Weatherill, and my noble friends Lady Young and Lady Strange were concerned about fiscal policy. Of course, they are right. My noble friend Lady Young paid tribute to my right honourable friend the Chancellor of the Exchequer for his Budget this year. It is interesting that in the Budget, on average, a family on average earnings gained £120 a year from tax changes, including changes to indirect tax, compared to an average for all households of £70. Both child benefit and the married couple's allowance were increased in line with prices in this year's Budget. A family with two children will receive an extra £23 in child benefit. The married couple's allowance is now worth £274.50 a year. Families will also benefit from extra spending on key public services such as the health service, education and law and order. However, I agree with my noble friend Lady Seccombe that a prosperous family is not necessarily a happy family. We all know that relationships are much more complex than that.
I listened very carefully to what the noble Lord, Lord Jakobovits, had to say. I greatly respect not only the noble Lord but also the strength of Jewish family life. Many of us of different faiths will agree with much
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of what he said. I can assure him that the Government have no intention of abandoning the role of protector of the weak.
Many of your Lordships, including my noble friends Lord Elton and Lord Ashbourne, and the noble Earl, Lord Longford, with conviction and clarity, based their views on strong Christian convictions. I respect and indeed share many of those views, but I think they will agree with me that happy families can be based in many faiths and cultures; and the Government cannot, of course, legislate for happiness.
The noble and learned Lord, Lord Simon of Glaisdale, in a very interesting and wide-ranging speech, pursued an issue which he raised several times during the progress of the Family Law Act; namely, the issue of matrimonial property. I understand that the noble and learned Lord has been in correspondence about this matter with my noble and learned friend the Lord Chancellor, who has invited the Law Commission to consider whether a review of matrimonial property law could be included in a future programme of law reform.
I strongly agree with my noble friend Lord Ashbourne that prevention is better than cure. My noble friend asked for an update on our plans to invest in families. The Lord Chancellor's Department contributes to the funding of six major marriage and support agencies. Total expenditure in the current financial year will be about £2.3 million. On 6th November the Lord Chancellor announced a pilot programme of marriage support projects, including marriage preparation, as well as counselling and support for married couples. Successful bids will be announced in February or March 1997. Total expenditure on the programme will depend on the number and scope of projects accepted.
There is, of course, much other investment through government sources. Only last week I visited some out-of-school clubs. We have the Family Fund, which is supported by the Health Department, and many schemes are sponsored through the single regeneration budgets.
My noble friend Lady Park of Monmouth highlighted the need for children to experience the care and love of their extended family. I agree. If we marginalise grandparents or discard the wealth of knowledge and assistance that they can give, we do so at our peril. The importance of the relationships between generations is crucial.
A number of other subject areas were discussed, not least the question of men and their role in the family, a point which was raised by my noble friend Lady Young. I could go on at length about men—I share my life with four: a husband and three sons. I married my husband at 17 and I have to say that it is the best thing that I ever did. But what we know from a recent study by the Family Policy Studies Centre is that 84 per cent. of children live with their natural father. We also know that family life is much more of a partnership today, especially if both parents are working. Men and women increasingly have to share the tasks of earning a living and rearing a family.
We acknowledge that families face problems. But, as my noble friend Lady Macleod suggested, we should celebrate their success. In today's society children grow

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up taller, heavier and healthier than ever before. Their achievement at school is greater. A larger percentage leave school to go into either further or higher education, or indeed into jobs. Wider home and car ownership has given millions of families more freedom.
But what I find most encouraging at a time when some would have us see only doom and gloom is the belief of young people in the value and importance of their parents and families. The recent British Social Attitudes Survey showed that only 13 per cent. of 18 to 24 year-olds would rather spend time with their friends than their family and that 76 per cent. of the same age group thought that their family was more important than friends.
Perhaps if we listen—not obey but listen—to young people, they will listen to us. Trust them and they will show responsibility. Love them and they will love their neighbour. I believe that if we could only live up to their ideals, we should be a better society and a finer country in a cared for world.
Lord Elton: My Lords, before my noble friend sits down perhaps I may say that she made an important announcement to the effect that the Home Secretary's group would be publishing a Green Paper this autumn. Can she please help us by saying when we can expect winter?
Baroness Cumberlege: As a farmer's wife, my Lords, I can say that we are quite flexible about seasons.
Lord Simon of Glaisdale: My Lords, before she sits down, can the noble Baroness not say anything beyond the fact that there has been correspondence about the absurd discrimination against married women whereby they can only get ownership rights of any kind in the matrimonial home either by becoming widowed or divorced? There are now three outstanding Law Commission reports, two of which are very long outstanding.
Baroness Cumberlege: My Lords, I am aware of the noble and learned Lord's impatience. However, I feel that this is a matter for my noble and learned friend the Lord Chancellor. I know that he is working with the Law Commission to try to expedite matters.
7.25 p.m.
Lord Northbourne: My Lords, I was impressed and delighted by the enormously high standard of the debate, for which I am grateful to all noble Lords who took part. It seemed to me that there was consensus on the huge cost to society of failing families and children; consensus on the need for families and the importance of the family; consensus on the importance of parenting and the need for education and support for parents; consensus that intervention can be successful; and consensus on the desirability of lifelong commitment and that the two parent family, if it works, can be the best vehicle. There was consensus also on the need for holistic employment practices and attitudes, including childcare which respects the equal opportunities of
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children as well as parents; and consensus on the need for a coherent government policy among all speakers, except for the noble Baroness, which is understandable.
There were differences about marriage. There were clear differences of opinion on how we should celebrate that long-term commitment that we all want and how we should encourage it and give it a formal status. Those who are opposed to marriage or inclined to treat cohabitation as equal to marriage ought to think quite seriously about that. So ought those who support marriage. If so many people do not want to get married, we must ask ourselves why. Is it because they are not prepared to make the long-term commitment? Is it because it costs £8,500 and they feel that they must have a tulle dress, get themselves up in funny clothes and pay a lot of money for a feast. It is very nice to have a feast but that is not the point of marriage; that is not what marriage is about. In that context, what is marriage about?
Today, too many young people probably see cohabitation and marriage as an extension of a relationship. The research, from One Plus One in particular, suggests that there is a need for young people to learn to think about entering into a formal partnership to bring up a family as entering not into a relationship which will have ups and downs hut into a partnership to do a job, a partnership in which the children will be involved as powerless partners and therefore their interests and concerns must be respected. Therefore there must be a determination to make it work.
Your Lordships did not entirely agree on the whole question of how a balance between work and family can be achieved. It is a complex issue and we still need to give much more thought to it. While respecting the right of women to go out to work and have equal opportunities, we also must consider how we can achieve equal opportunities for the children and secure, so far as possible, the solidarity of the partnership.
I feel that it is a mistake to talk about a Golden Age. I do not think that any of us believes in a Golden Age. We should not be thinking about turning the clock back. We should think positively. We want to see how we can go forward and make sure that we do not go forward blindfold. We must make sure that we are indeed looking at society today and at the problems and we must at least try to make a plan to achieve the maximum success within the parameters on which we all agree.
I omitted to mention in my opening remarks that there are many other things which are being done and could be done. I shall deposit in the Library a "wishlist" which has just been published by the Parenting Forum (of which I have the privilege to be chairman) of some of the things that the 300 members of that organisation feel ought to be done.
I want particularly to thank and congratulate the maiden speakers. The noble Viscount, Lord Leathers, made an extraordinarily interesting and important contribution on homelessness and the noble Lord, Lord Coleridge, was equally eloquent on the school for the deaf, which 1 had the privilege of visiting the other day when I was in Exeter. The noble Baroness Lady Symons

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of Vernham Dean, gave an immensely impressive speech. I see, too, that we have another great fighter for equal opportunities on the Opposition Benches. I just hope that she will fight as hard for equal opportunities for children and men as for women. If not, she will find herself crossing swords with me. I believe it was the noble Lord, Lord Elton, who said that the role of men is a major problem in our society today.
The noble Baroness, Lady Perry, said something very close to my heart when she said that the best way to help children was to help parents. She mentioned pre-school playgroups. That leads me to one other small matter, which I omitted to mention earlier; namely, the very low cost of certain forms of support for parents.
Homestart costs only £510 per family served and that is for a trained volunteer to visit parents in their home for six months or more. Pre-school playgroups, which now call themselves the pre-school learning alliance, costs £320 per child, per year, per half a day. After-school provision of the Kids Clubs network costs £15 a week and £35 in the holidays.
The noble Viscount, Lord Brentford, referred to the importance of schools as part of the community and helping with the stresses of parenting. In that context it is important also to think of schools as a centre for lifelong learning and help for parents so that they can contribute too and be involved with their children's learning. All the evidence suggests that the strongest single factor in a child's success at school is parental involvement.
I am grateful to my noble friend Lord Jakobovits, in his absence, for his support of my Select Committee. The noble Lord, Lord Elton, was bold enough to speak the word "love". It made me think of the phrase I intended to use in relation to the effectiveness of investment in the family. Investment in support of families multiplied by natural love and affection equals personal good quality care at low cost to the taxpayer.
The noble Baroness, Lady Cumberlege, mentioned a number of the many excellent things the Government have done and I praise them for that. In the area of support and help for families and also in ensuring that agencies are playing their part, all governments need to think not merely in terms of sustaining what is there at the moment, which has been greatly cut back in the past 10 years, but also in terms of putting more resources and energy into support and help and into ensuring that agencies are doing their job. It means investing in families.
Finally, I thank all those who have spoken this evening. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Education (Special Educational Needs) Bill [H.L.]
7.32 p.m.
Lord Campbell of Alloway: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Campbell of Alloway.)
On Question, Motion agreed to. House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Burnham) in the chair.]
Clause 1: [Special educational needs: rights of children]:
Lord Pearson of Rannoch Lord Pearson of Rannoch moved Amendment No. 1:
Page 1, line 8, after ("child") insert (", excluding a mentally handicapped child.").
The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendments Nos. 3, 5, 7, 9, 11, 13, 15 and 17, which are all in my name.
I should start by declaring an interest as the father of a mentally handicapped 16 year-old daughter. I should like also to congratulate my noble friend Lord Campbell of Alloway on his introduction of the Special Educational Needs Tribunal in our last education Bill. The very existence of that tribunal in the background has done much to encourage local education authorities and others to pay more heed to the real needs of special educational needs children and to the wishes of their parents.
Furthermore, I share the general sentiment expressed by my noble friend the Minister in a Written Answer in yesterday's Hansard at col. WA82 when he welcomed the tribunal's annual report for 1995-96 and applauded its work. It may be that I have not had time to read the report with sufficient care, but the tribunal does not seem to have found that the present status of the child, which this Bill seeks to change, has caused any great difficulty.
The purpose of the amendments is to remove, from mentally handicapped children only, the Bill's proposed new rights for children at all three stages of the tribunal procedure; that is, assessment, the tribunal itself and appeal. It should be clear that I am talking of statemented children with severe learning difficulties, who make up around 6 per cent. of the tribunal's workload, according to its annual report.
I tabled the amendments because, with the best will in the world, it cannot be helpful to the tribunal's activity to involve children such as my daughter in these processes. Such children will nearly always say what they believe they are required to say. If their parents are active on their behalf, then those parents' wishes should normally—indeed, almost always—be paramount. If their parents or a relative are not present, it should be for the tribunal to decide on behalf of the child.
I noticed that at Second Reading my noble friend Lord Campbell of Alloway had some difficulty with the definition of when a child might be of

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"sufficient understanding" to understand the new responsibilities proposed in the Bill. Indeed, such was that difficulty that my noble friend proposes in Amendment No. 2 to leave out from the Bill the expression, "if of sufficient understanding". If my noble friend's amendment is successful, as far as I can see it will mean that all children would become involved directly in the tribunal's processes, even though they were clearly not of sufficient understanding. That cannot be helpful, which is why I trust the Committee will accept my amendments.
Before concluding, I should mention the wider problem which lies behind the need for my amendments this evening. The problem stems from Clause 316 of the Education Act 1996, as it now is in its amalgamated form. The clause creates a qualified duty to educate all children with SEN in mainstream schools and not in special schools. When the Bill which introduced the clause was going through your Lordships' House, I did my best to resist it and to exclude mentally handicapped children from its scope. Indeed, there was a good deal of sympathy from all sides of your Lordships' Chamber for my view. I mention the issue now because there are signs that the clause is having the unfortunate effects which I foresaw at the time. It is relevant to this Bill because it is pushing too many mentally handicapped children towards ordinary schools which their parents often do not want and which therefore brings the tribunal into action.
The problem does not only affect mentally handicapped children. I understand that some 23 per cent. of the children at the troubled Ridings School in Yorkshire have special educational needs, including 5 per cent. with statements. However, this is not the time to debate the wider problem; perhaps we may do so when the new Education Bill reaches us. In the meantime, I beg to move.
Lord Campbell of Alloway: The interest declared by my noble friend Lord Pearson of Rannoch is understood with total compassion. The Committee will be grateful for his contribution which, as he said, is much based upon the situation of his daughter. But, on objective examination and on the advice of the noble Lord, Lord Rix—the Chairman of MENCAP—and that of my noble friend and sponsor Lord Renton (I am no expert) I am unable to commend Amendment No. 1 or its series of grouped amendments as being well conceived in the interests of mentally handicapped children.
This series of grouped amendments qualifies the effects of Clause 1 as proposed to be amended by Amendment No. 2 and the series of grouped amendments which stand in my name. It would curtail the intendment of the Bill according to its Long Title which, under Clause 1 as proposed to be amended by Amendment No. 2 and its group, confers on every child—my noble friend is quite right—with SEN the right of representation as it applies to all other child-related matters by excluding children with SEN who are also mentally handicapped. This exclusion is an exclusion from the core moral principle of Clause 1 as proposed to be amended by Amendment No. 2. It is not the basis on which this Bill was given a
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Second Reading. The basis on which this Bill was given a Second Reading was that the amendments which stand in my name and that of the right reverend Prelate the Bishop of Lichfield, should be carried into the Bill at Committee stage upholding the core moral principle, closing a loophole in the law and ensuring protection of the rights of every child with SEN. I am informed by the right reverend Prelate the Bishop of Lichfield and the right reverend Prelate the Bishop of Carlisle, who was in your Lordships' House today, that such is the view of the Church which supports this Bill as proposed to be amended, so that all children with SEN may be represented on assessment by the LEA, on appeal from the tribunal or to the High Court, by a friend or professional person in sympathy with the needs of the child.
The exclusion of children with SEN who are also mentally handicapped is totally unworkable. The range of mental handicap is extremely wide. It belies definition. There is no definition. There is a broad overlap. Many children with SEN have various degrees of mental handicap, so there is no logical or practical basis upon which the exclusion sought to he introduced by this amendment and the series of amendments may be implemented. Perhaps my noble friend may wish to consider whether this amendment, and in due course the series to which he spoke, may be withdrawn.
Lord Addington: The noble Lord's group of amendments is trying to address a problem with which we have already dealt, at least in principle: the idea that inappropriate, dogmatic reasoning should not guarantee the sort of help that is given.
However, the Bill seeks to ensure that all children have a chance of being given the appropriate type of education. With the noble Lord's amendment going through, we are aiming at a group who may not be obtaining help from their parents in the correct manner. It is the child's rights we are talking about here.
"Learning disability", to use the more currently favoured term of mental handicap, covers a wide group. There is no way any group in this field can be covered at one stroke without removing the vast majority who are not affected by the type of problems to which the noble Lord referred. I hope that he will be able to withdraw.
I accept that he may perceive a problem here, but I am absolutely sure from what has been said from the Dispatch Box and supported by many others in this House and in another place that the correct type of help being provided for individual needs will address most of the problems and fears to which the noble Lord referred.
7.45 p.m.
The Minister of State, Department for Education and Employment, (Lord Henley): At an earlier stage I gave reasons why Her Majesty's Government cannot support my noble friend's Bill in principle. I do not think it is necessary for me to rehearse those particular arguments, but I would like to say a word or two about this amendment.

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Again, the amendment down in the name of my noble friend Lord Pearson is one that I cannot support. I believe that the amendments themselves are possibly impractical and divisive and there would be problems of definitions in law as to how one defines mentally handicapped, how one chooses the definition and who shall determine this. The amendment itself gives no definition for that, but perhaps that is something to which my noble friend Lord Pearson will want to return at a later stage.
I also have to say to my noble friend Lord Campbell that I think his arguments about the practical difficulty of allowing appeals by mentally handicapped children would command wide support. But the very arguments that he has been putting forward show the flaws in the Bill's proposals to extend the right of appeal to children. That, for the reasons I gave at Second Reading, is one of the reasons why we could not support the Bill, but it is also one reason why we could not support these particular amendments to the Bill.
Lord Pearson of Rannoch: I am most grateful to all noble Lords who have spoken although I did not, in fact, agree with much of what has been said. For instance, I see no difficulty in defining a mentally handicapped child, as I said in my opening remarks, as one who has a statement saying that he has severe learning difficulties or, as some people prefer, learning disabilities.
It seems to me that the only objection to my amendment would concern mentally handicapped children whose parents, for one reason or another, are not available. I do not believe that that is a good enough reason not to accept these amendments. I think that these children are completely different from all other kinds of special educational needs children. Special educational needs is a very broad church: it includes the blind, the deaf, even the very gifted, although, of course, our local education authorities do not seem to pay an awful lot of attention to them.
But at this stage of the evening, and in order to advance our proceedings, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 2:
Page 1, line 8, leave out ("if of sufficient understanding").
The noble Lord said: In moving Amendment No. 2, I also beg leave to speak to all other amendments grouped in my name, which shall be formally moved as spoken to.
As mentioned when speaking to the previous amendment and the series, this amendment has the support of the spiritual Benches. It has the support of the noble Baroness, Lady Darcy (De Knayth) who alas, is unwell. She telephoned me this morning and is unable to be here. It has the support of the noble Lord, Lord Addington, who speaks for the Liberal Party. It also has the support of the noble Lord, Lord Morris of Castle Morris who, it is understood,
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may now be speaking for the Labour Party. It also has the support of many noble Lords on these Back Benches.
When speaking to the previous amendment, I also mentioned the reasons given by the right reverend Prelate the Bishop of Lichfield for the support of the Church, which he hoped might be acceptable to Government. The concept of this amendment and the series to which I speak was conceived on legal advice received and accepted at Dean's Yard.
Every child with SEN in his own right should be entitled to participate at the assessment stage, at the appellate stage before the tribunal and in the High Court and in his own right to be represented by a friend or professional person in sympathy with his needs. Restoration of such entitlement to the situation which obtained before the introduction of this regime may not be described as it was described by my noble friend Lord Henley as "inoperable" or "impracticable". I cannot quite remember what he said today but his opposition seems to be at this stage fairly entrenched.
The justification for this sole exception is simply not understood. He suggested at Second Reading that a situation of general application, which pushes a child with SEN into the spotlight of pursuing cases in the teeth of parental opposition and into the forefront of the appeal system, cannot be well conceived. That is nonsense. The reality of the situation is that in many cases there will be no dispute between the child and the parents. However, that in no way derogates from the principle of entitlement.
In this regard—I say this with respect to my noble friend Lord Henley—hope springs eternal that the Government may be prepared to think again and may be prepared to think again without care and without preconception. A statutory bar which disenfranchises the child so that only the parent may invoke the jurisdiction of the tribunal must be removed. As the noble Lord, Lord Addington, put it, the child has a right as an independent unit and not merely as an adjunct to the parent. As the noble Lord, Lord Morris of Castle Morris, put it, this lies at the very heart of the Bill.
This statutory bar operates, albeit in a few cases, where the child is adult having maintained majority. It is not only absurd; it is unacceptable. There is no legal aid before the tribunal. It could only be granted on appeal to the High Court to a next friend, which could include the parent, only if the Legal Aid Board considered there was a reasonable prospect of success. No amendment to the Legal Aid Act or the regulations is required.
This anomalous two-stage dispensation tilted only against children with SEN must end. On appeal to the High Court the child would appear—if not an adult with a parent or some other next friend—on a non means-tested basis as is the case with all other child-related matters. This group of amendments removing the qualification of "if of sufficient understanding" in Clause 1 with a consequential amendment to delete Clause 2 entirely disposes of the objection to the problems of definition and legalistic submissions in a user-friendly and informal

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environment. There is no way that this amendment or this group of amendments could undermine the concept that, as far as possible, the regime should be kept lawyer free.
The Government, having set up a statutory tribunal subject to appeal on a point of law which by judicial decision affords the same relief as judicial review, must assuredly recognise that this simply is not a no-go area for lawyers. It has also to be recognised that decisions of the tribunal have been reversed in the High Court. It is accepted that the grant of legal aid on counsel's opinion, given on inaccurate or inadequate instructions, has been fairly criticised in your Lordships' House. This is a general problem of serious concern which has already been referred to on the Floor of the House by my noble and learned friend the Lord Chancellor. It affords no ground for opposition to this amendment.
Lord Henley: Again, I do not think there is much I can add to what I said at an earlier stage in terms of my views about the Bill as a whole. For that reason I think my noble friend would accept that I cannot support any proposals which open up the right of appeal to the child in the way that my noble friend suggests and which could have considerable cost implications. That said, I believe that the amendments would remove a potentially very difficult issue; that of determining whether a child is of sufficient understanding.
For those who think that the proposals set out in the Bill and as amended by my noble friend's amendment—I stress that though I cannot support the amendment I have no intention of opposing an amendment to my noble friend's Bill—would restore an entitlement that existed before the establishment of the SEN tribunal, Ishould point out that things have changed considerably. What has changed is that we have replaced a two-tier bureaucratic system with an independent informal tribunal with expert members—my noble friend knows that tribunal and knows how expert it can be—that puts the needs of the child at the heart of its considerations. That is certainly very much a move for the better.
My noble friend implied that allowing appeals for children was very much a moral question. I have considerable sympathy with my noble friend's views. That is a very important point. The fact is though that we should bear in mind practicality when legislating. For the reasons given so clearly by my noble friend Lord Pearson, many—probably most—children with special educational needs are not so placed as to be able to respond independently to the statutory documentation of a statement. To ask them to do so would place them under unfair pressure. The approach of the tribunal that we have created under the 1993 Act to encourage various ways of hearing the child's views is the appropriate, right, proper and sensitive way to tackle this matter. To place the weight of statutory involvement on the child is not the right approach.
I wish to make one further point. My noble friend referred to the support of the right reverend Prelate the Bishop of Lichfield. It would be right for me to put on record that I received a letter from, if I may call him this, my own bishop—the bishop in whose diocese
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I live—the right reverend Prelate the Bishop of Carlisle to say that he was hoping to speak in favour of the right reverend Prelate's amendment, but, sadly, was not able to be here this evening as a result of having to return to that far outpost of the north west. I thought it right to put that on record so that all involved in the Bill would know that both the right reverend Prelate the Bishop of Lichfield and the right reverend Prelate the Bishop of Carlisle wished to speak and wished to offer their support, even if it was not in my interest, to my noble friend Lord Campbell of Alloway.
Lord Campbell of Alloway: I thank my noble friend for that concession. I have the letter from the right reverend Prelate the Bishop of Carlisle but I think it was very fair of my noble friend to mention it. He says that it is a moral problem. We all have a sense of morality. I did regard it as a moral problem and still do, but I am much comforted that a couple of bishops of my Church think it is too. I do not feel so alone any more.
Lord Addington: The noble Lord may well have won the moral argument. The Government seem to be objecting to the Bill on the grounds of cost and administration. The noble Lord's amendment clears everything away and gives us a good view of it. We can take some heart from what has been said. I hope that the Bill is taken forward and that it, or something similar, reaches the statute book very soon.
Lord Henley: I rise to speak just for the sake of the record because I object to what the noble Lord has just said. I did not base all my arguments on cost and administration. I based my principal arguments, if the noble Lord had listened to me, on the interests of the child. That is very important indeed and I want to get that on record. Having said that, obviously questions of cost and administration are also important. But the first interest—the interest of Her Majesty's Government and all other speakers—should be and quite rightly is the interest of the child.
Lord Addington: If I misinterpreted the noble Lord, I, of course, apologise. However, I think that further intervention rather emphasises the point I was trying to make.
8 p.m.
Lord Morris of Castle Morris: As convention requires, I begin by reminding the Committee that this is a Private Member's Bill, that the Labour Party takes a neutral stance on all such legislative proposals, and that I can only speak, therefore, on my own behalf and not on behalf of my party. But
"lest out of ignorance and infirmity, or out of malice and obstinacy it be misconstrued or depraved",
let me assure the Committee that my party takes the issue of special educational needs and this Bill very seriously indeed. My honourable friend the Member for Sheffield Brightside, made this absolutely clear in a recent speech to the London Special Needs Books

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Conference outside the confines of the Houses of Parliament, and therefore I may quote from it. He said:
"The degree to which our education system is able to meet the challenges that learners with special education needs present is a crucial measure of the effectiveness of our education system. Children with special educational needs form a large proportion of the children in our schools … they must be able to access the most up to date information technology alongside good quality printed material. They must be offered the best possible policies to work with the best possible materials".
It is with that degree of serious commitment that we on these Benches approach this Bill and the amendments before us.
I am happy to give my full support to Amendment No. 2, and to the other amendments in this group. It removes what some of us felt at Second Reading was an imprecision, and it clarifies the main thrust of the Bill. Legal argument about what is to be understood by a phrase like "of sufficient understanding" might perhaps have burgeoned and flourished, and introduced unnecessary distraction into tribunal proceedings. It seems to me that nothing substantial is lost by omitting the entire concept from the Bill, which will be the better and clearer as a result.
On this Bill—as on every other Bill that comes before us—Members of the Committee will have received a fair amount of briefing, some solicited and some unsolicited; some helpful and some less helpful. I must confess that my thoughts on Amendment No. 2 were greatly assisted by papers which I received quite unsolicited from Simone Apsis who wrote that she had,
"survived 10 years at a special school",
and added:
"I would have welcomed the opportunity to represent myself at the special education needs tribunal. My parents forced me to attend a special school against my wishes. I would have liked the opportunity to make my views known and to put pressure on the local educational authority to send me to a mainstream school".
It is precisely that situation which this amendment (and the Bill as a whole) proposes to address.
I cannot for the life of me see that the acceptance of the amendment would involve the Government in any financial consequences worth talking about. Neither can I believe that herds of wild, ravenous and starving lawyers are going to make a Gaderene rush to get their feet into this particular trough if the Committee were able to accept this amendment today.
In the nature of things, there are not going to be many cases of this kind. It seems only equitable that all children should be entitled to the benefits of this Bill, and the amendment is fully in accord with what I take to be at the heart of this Bill, namely, that the interests of the child must be paramount.
I am happy to support the amendment and I still hope that the Minister will, sooner or later, feel moved to accept it even if there is "trouble at t'mill" in Carlisle which deprives him of the presence of his bishop.
Lord Pearson of Rannoch: Before my noble friend replies, I simply repeat that if these words were taken out of the Bill then children who are clearly not of sufficient understanding will be entrusted with all these processes. I do not believe that that is acceptable.
Lord Campbell of Alloway: I do not believe that it is reasonable to reply.
On Question, amendment agreed to.
Lord Pearson of Rannoch Lord Pearson of Rannoch moved Amendment No. 3:
Page 1, line 10, after ("child") insert (", excluding a mentally handicapped child,").
The noble Lord said: This is a very brief probing amendment, of which I tried to give my noble friend notice this morning. Again, it is only aimed at mentally handicapped children. I am told that one of the disadvantages of the tribunal's procedure is that it is confined to considering educational issues, such as curriculum matters and so on, and cannot sufficiently consider the social aspects of the child's needs.
For most mentally handicapped children the social environment of their school is likely to be more important than more strictly curricular considerations. Most of the children of whom I am talking would be unable to attempt the national curriculum, for instance. So I am really asking my noble friend the Minister whether he agrees that the tribunal's remit might be widened accordingly to allow it to give more consideration to the child's social needs and general environment. I am not advocating that the composition of the tribunal should be altered in any way to achieve that and certainly not by the addition of any statutory social worker, for example. I am simply advised that the tribunal might sometimes reach a conclusion more sympathetic to the needs of mentally handicapped children and their parents if it could give more weight to social considerations. I beg to move.
Lord Campbell of Alloway: I happen to be in charge of this Bill. Perhaps it would be appropriate that, before my noble friend the Minister replies, I should very briefly say that I am advised, again by MENCAP and the two previous chairmen, that this amendment is not well conceived as in the best interests of mentally handicapped children. I have to rely on their advice.
Lord Henley: My noble friend Lord Pearson asks a general question as to whether the tribunal can go wider than simply the educational needs of the child. I would hope that the function of a tribunal should not be bound by the rigid nature of legal procedures and so on. The tribunal should consider the widest possible interests of the child. Obviously, as a special educational needs tribunal, the first interests will be educational. The extent to which other interests impinge on the educational needs of the child are matters which the experts on the tribunal will take into account where appropriate. The tribunals have worked very well indeed, as I believe most will accept, since 1993. With

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that explanation I hope that my noble friend will be satisfied. We are aware of his concerns, and the tribunal itself will consider such matters.
Lord Pearson of Rannoch: I am most grateful to my noble friend for that reply, which I believe may give encouragement to tribunals to widen their consideration in precisely the manner I hoped this amendment would achieve. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 4:
Page 1, line 10, leave out ("if of sufficient understanding").
The noble Lord said: I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 5 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 6:
Page 1, line 12, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
[Amendment No. 7 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 8:
Page 1, line 13, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
[Amendment No. 9 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 10:
Page 1, line 17, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
[Amendment No. 11 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 12:
Page 2, line 5, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
[Amendment No. 13 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 14:
Page 2, line 12, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
[Amendment No. 15 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 16:
Page 2, line 14, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
[Amendment No. 17 not moved.]
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 18:
Page 2, line 18, leave out ("if of sufficient understanding").
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Campbell of Alloway: I oppose Clause 2 standing part of the Bill as consequential upon the amendments that the Committee has made to Clause I.
Clause 2 negatived.
Clause 3 agreed to.
On Question, Whether Clause 4 shall stand part of the Bill?
Lord Pearson of Rannoch: I have already spoken to this matter in the group of amendments. I shall not speak against the Motion.
Clause 4 agreed to.
Clause 5 agreed to.
House resumed: Bill reported with amendments.

UK Art Market: Effect of EU Directives
8.12 p.m.
Viscount Blakenham Viscount Blakenham rose to ask Her Majesty's Government what they expect the combined effect of the European directive harmonising VAT and the proposed directive on the harmonisation of artists' resale rights to be on the United Kingdom art market.
The noble Viscount said: My Lords, the Question before the House was originally tabled by my noble friend Lady Rawlings. She has asked me to take her place this evening because unfortunately she is unwell and cannot attend. The House will be pleased to hear that she is making a good recovery. The views that I put forward are my own but I hope they will reflect the spirit of what she might have said.
First, I declare an interest in that I am a director of Sotheby's Holdings Inc. which is the US parent company of Sotheby's in London. The intention behind the Question is to air the problems that are likely to face the art market in the United Kingdom and the rest of Europe if harmonisation measures are pursued in the manner as currently proposed. The art market in the European Union is estimated—it can only be an estimate—to be worth approximately £3.5 billion to £4 billion a year. Of that, approximately £2 billion of sales take place within the United Kingdom. The UK therefore is by far the largest individual market and on it depend jobs, foreign exchange and, to a lesser extent, tourism.
The market has been built up painstakingly over the years, and it is one that can be quickly destroyed because art objects are international and highly portable, valuable and sensitive to the terms and conditions of the market in which they are sold. The seller has a choice. The levelling of the playing fields of the European Union—if this means harmonising them at rates higher than elsewhere in the world—will result in the owners of valuable art works selling those objects elsewhere.

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This could be described as cutting off one's nose to spite one's face. It is simply short-sighted. One ends up requiring spectacles without a nose on which to place them.
There are signs that since the imposition of value added tax parts of the art market are already beginning to shift from London to New York. Currently, through derogation, London is paying less VAT than other European countries, but if the logic of harmonisation is pursued the likelihood is that that situation will not persist beyond 1998. The proposed directive on droit de suite will worsen the position.
What can be done? As a first step, I believe that the European Commission should be forced fully to appreciate the scale of the problem and a serious study of the consequences of the proposed measures should be undertaken, as has been promised. The ideal outcome would be a decision to turn back the clock and remove value added tax which would otherwise discourage works of art from entering the country from overseas and encourage UK and other European owners of art to sell outside the Union, effectively eliminating our source of supply.
If our art market does not have access to the tools it cannot do the job. If total abolition is not practical at least the European playing fields should in due course be harmonised at the lowest possible level rather than the highest, which tends to happen in such matters. Exchequers would have little to lose as they could take their tax share in the normal way out of the additional annual profits of the commercial enterprises concerned.
Droit de suite is more complicated. I have sympathy for the principle, particularly if it can be administered more cheaply and effectively than it is now in the countries where it operates. Like other forms of copyright, I believe that the approach to the problem should be an international rather than a European Union issue. The situation is currently covered by the Berne Convention to the extent that on the one hand the convention gives strong encouragement to it but on the other states that it should be left to individual national signatories to determine how and whether it should be applied. Pressure should be exerted for an international solution; otherwise, once again, works of art will tend to gravitate towards markets where this does not apply. Artists and their families will therefore be deprived of any benefit.
At the beginning I declared my connection with Sotheby's. I conclude by pointing out that it is not the international auction houses that will suffer most if the worst happens. Art that does not come to Britain can be sold through their bases in New York, Switzerland or elsewhere. It is the art market of the European Union that will be the big loser, in particular the United Kingdom art market because of its size and importance. I believe that Her Majesty's Government are fully aware of the seriousness of the problem and are doing all that they can to influence European colleagues. I am also clear that the future of our growing market is dependent on their success.
8.20 p.m.
Lord Strabolgi: My Lords, I am sure that we are grateful to the noble Viscount for tabling this Question to the Government and for initiating this debate. What the Commission is proposing concerning droit de suite and VAT will have a drastic effect on the sales of 20th century art not just in London, which is the most important European international centre, but on the whole of the EU. The proposal that every time a contemporary work of art is sold a certain percentage should go to the artist is superficially attractive, with the idea that young artists will be helped at the outset of their careers, but that will not work out in practice.
The percentage is levied on the resale, not on the initial sale. A young artist usually sells at, say, £1,000 to £2,000 a work, with a resale value of about half that if it is sold fairly quickly. Even at £1,000 all he will receive at 4 per cent. will be £40, less the cost of collection, which is 40 per cent., thus leaving some £25 in all.
Those who will benefit will be the heirs of the early 20th century painters of the Ecole de Paris, whose paintings fetch enormous sums at auction making their heirs, who are already extremely rich, even richer. The tax is on a sliding scale, starting at 2 per cent. for the larger sums, thus the droit de suite on a £1 million painting, which is not unusual these days, will be £20,000 to the heirs. That has to be paid every time a work is sold for the whole of the 70-year copyright period.
I believe that in France 75 per cent. of the suite collected went to just six families—the heirs of the great painters of the Ecole de Paris of the earlier years of this century. They are the people who will benefit so enormously, not the poor young artist. It may be asked: does it matter? Well it does matter, because of the effect on the market, particularly the London market.
The noble Viscount said that London is the leading centre for the market for 20th century works of art, mainly because of our favourable rates. If we are obliged to levy droit de suite in addition to the other charges and VAT, the market will move elsewhere outside the EU to New York, Geneva or Tokyo. The proportion of sales brought to London from outside the EU is, I understand, 45 per cent. Many of those works go out again after the sale, back to New York, Geneva or Tokyo, thus earning valuable foreign currency.
The cost of transport to the USA, for example, is less, I understand, than the payment of droit de suite on large sales. London is the only EU capital where that happens. In Paris, for example, at Drouot (the French auction house) the sales, including the top sales, that take place at the Hotel George V, are almost entirely of the French domestic heritage that has remained in France, and are not international in this sense.
Top contemporary works from American collections are sold either in New York or they come to London. They do not go to Paris or to other western European capitals. If London loses out, the loss will be to the EU as a whole, because American collectors will cease to consign here, and Swiss collectors will send their paintings to New York.

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Europe should look therefore at its competitive position with the rest of the world. The proposal is that droit de suite should be levied on all sales of contemporary works, not just auction sales. That will affect every art dealer, both large and small, throughout the country, who will have to account for every transaction. The collection costs will be 40 per cent., which is a very high proportion, and I suspect that the collection agencies in Europe have a large vested interest which they would like to see extended to this country.
The Commissaires-Priseurs, who are the officially accredited auctioneers in France, have suggested that the lowest rate of droit de suite should be reduced from 2 per cent. to 1 per cent., and that that should be paid only to heirs who are in the direct line, or to close relatives such as spouses. That compromise would at least limit the amount on the larger sales and their range. I shall be interested to hear what the Government have to say about that when the noble and learned Lord replies.
I understand that the directive can be passed by qualified majority voting. On the other hand, it is held—the noble Viscount mentioned this—that if any member state considers that it is suffering because it has droit de suite, it could abolish it under the terms of the Berne Convention. I should be grateful if the noble and learned Lord the Minister would clarify the position when he comes to reply. I hope that the Government continue to stand firm, as they stood firm last April when we had Questions on this subject, against these well-meaning but misguided proposals.
8.26 p.m.
Lord Freyberg: My Lords, I, too, should like to add my thanks to the noble Viscount for giving us the opportunity tonight to debate these two important issues. What is worrying about these two measures is that they ignore, and perhaps even penalise the UK's pre-eminence as an art market. Alone in the European Union, the UK has a fully international art market—accounting for 60 per cent. to 70 per cent. of the total EU art market, with an annual turnover of more than £2 billion. This will be seriously threatened by the imposition of restrictive practices already long operating in some other European countries in which a quite different, more local market exists, and which have, over the past two decades, shown no growth.
These extra charges are not exacted in other major international art centres outside the EU such as New York and Switzerland and, if the UK starts to apply them, we shall lose our competitive edge and share in the market. It is to New York and Switzerland rather than anywhere in the EU that the market will move.
I should like to register my concern at the disturbing reduction in the number of works of art imported for sale into this country from outside the EU since the imposition of the temporary 2.5 per cent. VAT levy on the dealer's commission.
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The levy came into effect on 1st June 1995. A year later the DTI reported that imports of works of art from non-EU countries had fallen by 17 per cent. As Laura Suffield wrote in the European:
"If this were part of a general slump, exports would be similarly down. but they are not."
As she went on to say, the levy makes it increasingly likely that owners of works of art in Switzerland and the United States—both of which have no import tax—will from now on send their possessions for sale outside the United Kingdom. The major auction houses will simply relocate sales at the top end of the market and London will lose to New York.
As a higher rate of 5 per cent. has been suggested, it is extremely important that the Government realise the detrimental effect even the lower rate has had and will continue to have on such an important market. The effect is so serious that it threatens to undermine the UK's position as Europe's leading art market. I am anxious that the Government should impress on our fellow members in the EU that a further increase to 5 per cent. will be disastrous.
The European Commission agreed, on 10th February 1994, to re-examine the directive's impact on the competitiveness of the Community art market and to report those conclusions to the EU Council by 31st December 1998. I urge the Government to take steps in this direction and seek to minimise, if not abolish, the VAT levy on works of art, collectors' items and antiques. It serves no benefit, but makes us uncompetitive with the rest of the world and a great many jobs depend on it.
Before talking about the proposed artists' resale rights, I should like to declare an interest as a sculptor and a potential beneficiary, provided, of course, that I am able to re-sell works above 1,000 ecu—currently approximately £757. The proposal for a directive to harmonise national regimes over artists' resale rights was put forward on 13th March 1995 by the European Commission. Resale rights, or droit de suite, entitle the author of a work of art (or his heirs) to receive a percentage of the price of a work when it is resold by public auction or through an agent.
The EU wants Britain to impose this levy to eliminate differences or distortions in resale laws throughout the European Union which currently exist at different levels in 11 out of 15 countries, although only eight enforce them. Only the UK, Ireland, Austria and the Netherlands have no form of resale rights.
The proposed measure will do little to help struggling artists, but will add substantial sums to the coffers of the well-established big league or their estate. Furthermore, less established artists will be seriously disadvantaged by the diminution of the art market in the UK, as influential dealers will be encouraged to move their business out of Britain and out of the European Union to less financially punitive markets such as New York.
The levy proposed is between 2 and 4 per cent. If a painting costs £100,000 a 3 per cent. levy would add £3,000 to the price. The cost of shipping the painting to New York would be in the region of £500, but could

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often be reduced by sending a quantity of lots in a container. What dealer could resist choosing the latter alternative? Thus, non-European Union sellers will be discouraged from sending their top works for sale to the UK (or anywhere else in the EU) while EU sellers will themselves benefit from exporting their works for sale outside the Union.
The proposed directive affects the contemporary art market, involving works by artists whose death occurred after 1926. The estimated 1995 figure of such works sold in the UK totals some 395 million ecu (over £300 million), of which over 50 per cent. of the vendors were from outside the EU but had elected to sell in Britain (usually in London).
A recent British Government survey estimated that if the proposed directive is agreed in its present form there would be a loss of revenue of £68 million, leading to job losses of up to 5,000 for which there would be no compensation. There can be no justification for such deliberate damage, which would result in no gain either for Britain or for the EU art market.
Moreover, the charge would benefit only the top artists and their estates. A painting resold even for £1,000 would make its artist a mere £40. A huge number of resales would have to result to improve a struggling artist's livelihood. Collection charges alone would be likely to reduce this substantially. When Sweden introduced resale rights last year, some 68 per cent. was swallowed up in collection costs; in Denmark the charges are 40 per cent. Professor John Merryman of Stanford University recently estimated that out of the thousands of artists active in the United States, only 1 per cent. are active in the resale market; that is, would be eligible for resale rights.
At first sight, the artist's resale rights appear to benefit artists and are supported by some artists' groups in the UK and throughout Europe. But even they acknowledge that the European market will be disadvantaged as long as the US and Switzerland do not impose similar charges. One group, the National Artists Association, naively states that:
"implementation must be followed up by implementation in the US and elsewhere".
The extra cost to people who buy works of art—namely, collectors, museums and the art trade—will ensure that they buy less than previously. And most works will remain a once only sale, which is why a thriving art market is so important. This is not an adequate reason for destroying just such a market.
Then there are the practical difficulties. European countries which have introduced some form of artists' levy have found that collection costs are high. In France, one of the main collecting agencies, SPA-DEM, has filed for bankruptcy as the amount collected was insufficient to meet its own running costs. As currently drafted, the directive states that the artist should receive a percentage of every transaction even if the work sells at a loss.
Whether there is a moral case for artists' resale rights is more debatable. I was amused by the comments of Patrick Cox MEP to the EU Commission a few months
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ago. He maintained that the idea is illogical: why should not an architect get a reward every time a house he had designed changed hands? And, as for the EU's assurance that the market in living artists would not flee from Europe, he said:
"It's a bit like saying that Newton's Law of Gravity means that in Europe the apple drops, while in the rest of the world it goes up".
London is Europe's major representative in the world art market, equalled only by New York. It has taken centuries to build up, but will disappear quickly if it operates on disadvantageous terms. And once lost it will be extremely difficult to win back. We want it to stay strong and attract buyers to London and to Europe as a whole. The directive must be reconsidered.
8.34 p.m.
Lord Hindlip: My Lords, I am extremely grateful to my noble friend Lord Blakenham for tabling this Question, in which I must declare an interest as chairman of Christie's. Somewhat naturally, my own livelihood depends on the London art market, as does that of the thousand people my firm employs in Great Britain. I have estimated that some 20,000 others are directly employed in the British art market. I shall be interested to hear any reassurance that the Minister can give us, but it is a sad fact that the British art market will suffer hugely from VAT and droit de suite. I am afraid that that illustrates the limitations of ministerial powers when dealing with European directives.
I joined Christie's 34 years ago and have seen the London art market rise to pre-eminence, leaving both Paris and New York behind, and sadly fall back again, despite the dominance in the world market of two firms; one is my own, which is still British, and the other is our rivals, which is now American with a strong London presence.
The British art market rose in the last century and remained dominant well into the 1970s. That occurred for two reasons: its efficiency and its freedom. It had freedom from both import taxes and bureaucratic restrictions which were afforded it by a succession of sensible governments. That freedom has been eroded since Britain joined the EC.
In 1973 we at Christie's held an exhibition which was opened by the then Prime Minister, my right honourable friend Sir Edward Heath, who spoke of the British art market as having become,
"the main marketplace for art objects not only from Europe but from all over the world".
The late Lord Goodman, in his introduction to a catalogue, wrote of London's unchallenged position in the art market of the world, achieved by commercial acumen, scholarship and integrity that had inspired the confidence of the world for generations. Little could he have known that the very institution which was being celebrated, the EC, would be so destructive.
However, Mr. Heath's Government reassured us and to begin with all went well. We negotiated that VAT would be payable only on the auctioneers' commission and on dealers' profits, and, above all, that works of art could enter Britain free of VAT on import. Then, after 15 years of discussion, came the harmonisation of VAT.

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The Government were forced to accept VAT on works of art imported from outside the EU. Thanks at present to a compromise arrangement, as mentioned by the noble Lords, Lord Strabolgi and Lord Freyberg, it is only 2.5 per cent. but is set to rise in 1999 to a minimum of 5 per cent. I have in my hand Commission Document 328.96 from Brussels, dated 10th July 1996. Page 30 sets out a proposal to increase the minimum rate to 15 per cent. But even at the present rate there are signs that VAT is undermining London's ability to attract business from overseas. The trade statistics for 1995 show a decline in imports from outside the EU, the first time that that has happened in a period when trade as a whole has risen.
London is also threatened by droit de suite, as so eloquently pointed out by the noble Lord, Lord Freyberg. That will add between 2 and 4 per cent. to the cost of selling in London for 20th century works of art. It is interesting to note that it would have affected £70 million-worth of goods which we alone sold last year, half of which come from outside the EU.
Parliament has looked at the system of artists' resale rights in the past and rejected it. It is inefficient, it is bureaucratic and again, as has been pointed out, it overwhelmingly benefits a tiny minority of well-known artists and their heirs. I should like to underline the fact that 75 per cent. of droit de suite levied in France goes to only six families; and, of course, it benefits the agencies that collect it. But it does not apply elsewhere in the world where there is an international art market. The consequences of having it here are entirely predictable: the market will simply move away.
To sustain the art market in London at its present level we need to attract some £200 million worth of business from outside the EU. Given the perception that the American market is stronger than our own, this is already difficult. However, it is not impossible; we have done it before. London as a market place has much to offer. It still has the integrity to which Lord Goodman referred. It has its language and its location. But what we cannot do is compete with a tax and droit de suite burden which will soon rise to three-and-a-half times the commission that we charge on the business we need to secure.
Let us picture the following conversation with a potential Japanese seller of a Picasso worth, say, £2 million—the bread and butter of our business. He probably knows our charges because they are published but he asks me to repeat them. I tell him that our charges are 2 per cent. and that we will charge him expenses at a further 0.5 per cent. He says, "So, I will have to pay 2.5 per cent. to sell my picture in London?" "Not quite", I have to reply, "There is the question of droit de suite". When I explain this his face clouds over and he says, "So it is 2.5 per cent. to you and 2 per cent. to the artist's heirs?" I reply, "Yes, that is right". However, I add, "If it is bought by a European, there would be another 5 per cent."—and that could be 15 per cent. I have to say that it might be bought by a European because the last expensive Picasso sold by our rivals in New York was bought by a European. He says,
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"That would be another 5 per cent., and what in America?" "In America, it would be 2.5 per cent". He then asks, "And nothing more?" "Nothing" I reply.
Noble Lords will see that that is the end of the discussion about sales in London with a Japanese client. It will also be the end of the London art market as we know it. I say that because, as other noble Lords have pointed out, it will not shrink by 30 per cent. or 40 per cent. because the loss of the third that comes from outside Europe will also make European sellers look elsewhere and take advantage of the larger market place in New York.
We have argued our case vigorously in Brussels. But the sad fact is that we are trying to defend something the Commission has made little attempt to understand and which does not, as the noble Lord, Lord Freyberg, pointed out, exist in other European countries. This market must look beyond the bounds of the European Union for its future success and growth. That is the nub of it. You cannot fence in and tax something like the art market. Works of art are much too easy to move and there are too many eager rivals to London and Europe generally to make the harmonisation of VAT anything other than a pyrrhic victory.
I thank the Government for their support in the past but I urge them not only to resist measures which will irreversibly damage the market but also to try to promote a proper understanding of our market both in Brussels and with other member states. An opportunity exists, albeit at the eleventh hour. The European Commission is obliged to review the effect of VAT on the art market by the end of 1998. It is surely sensible for a halt to be made on droit de suite, and any other measures that will undermine the market, until a proper and well-informed review has taken place. It may—and almost certainly will—be the last chance.
If the EU is intent on driving the art market out of Europe, the very least the Commission should do is to understand what it is destroying. At this late hour it may be possible; indeed, I hope so. We in the art trade will certainly give every assistance to the Government in their efforts to do so.
8.45 p.m.
Lord GilImore of Thamesfield: My Lords, I, too, must begin by declaring an interest. I am chairman of LAPADA (the Association of Art and Antique Dealers) and that association is also a member of the newly-formed British Art Market Federation (BAMF). Self-evidently, the association and the federation have a keen interest in the two subjects under discussion tonight. I should also like to add a word or two of gratitude to the noble Viscount, Lord Blakenham, for raising the issue. At first glance it may appear to be a minor matter of small importance alongside other contentious debates on European issues which preoccupy your Lordships' House and the other place but, as has been demonstrated by other noble Lords this evening, that is not the case.
As the noble Viscount, Lord Blakenham, said, the UK market is by far the largest in Europe and, indeed, second only to that of the United States in the world.

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The British Art Market Federation, to which I referred, alone represents 5,000 businesses and collectively employs 20,000 people. Aside from employment and taxation, the British art market provides substantial other benefits to the British economy both through indirect employment—that is, employment of restorers, shippers, framers, insurers, valuers and so on—and through indirect earnings, for example, in the tourist and hotel business. In sum, the British art market is a large contributor to our national wealth and, more intangibly perhaps, to the quality of our life.
I shall not detain your Lordships at this late hour as other noble Lords have made many of the points that I wanted to make and, indeed, have done so more eloquently than I could. I have no wish to duplicate what has already been said. However, I strongly endorse the point made by the noble Lord, Lord Freyberg, about the British art market being truly international in character—a fact that does not apply to any of the other markets within the European Union. It is, therefore, self-evident that any changes in the regulations which would put the British art market at a disadvantage vis-a-vis its competitors, especially the United States, would jeopardise the position which, as the noble Lord, Lord Hindlip, said, has been built up over many decades, and place it in great danger.
However, the risks inherent in ill-considered tampering with the existing regulations go wider than that because, as has been pointed out, the danger does not only affect the United Kingdom. Changes in the rules will affect all members of the European Union, but because our market is the largest, ours will be the most affected. The risk that the proposed new directives will have the effect of pushing the European art and antiques market to the United States and Switzerland is not fanciful; indeed, that is what occurred in the early 1970s with the imposition of purchase tax on jewellery. Since that time, major European sales of antique jewellery have, for the most part, moved and now take place in Geneva.
I turn now to the specific details of the two proposed measures under discussion tonight. First, I shall deal briefly with VAT. The background is well known to your Lordships. Prior to 1994, the importation of works of art, antiques and certain collectors items was free of VAT. That was a fact which did much to ensure the growth of the British art market. As the noble Lord, Lord Hindlip, pointed out, under pressure from our European partners, the British Government were forced in that year to concede the principle of VAT on imports but negotiated a derogation which held the effective rate at 2.5 per cent. until 1999. At that date the level of VAT will rise, at least to 5 per cent., possibly more, unless a Commission review, scheduled for 1998, recommends otherwise. As has already been pointed out, that situation is further muddled by a new proposal for across-the-board harmonisation of VAT within the European Union. It is not clear whether the review of VAT on art and antiques would or would not be subsumed in this new proposal.
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The damage to the United Kingdom market, and indeed to the European market as a whole, of which, as we have heard, there is some circumstantial evidence already, will get worse unless this rise in VAT can be prevented. Vendors of art and antiques in the Union will be encouraged to make their sales, for obvious reasons, in the less onerously burdened markets of New York or Geneva. There would, in short, be an inevitable, and in my submission irrevocable, decline in the British art market. Furthermore, while it is true that for the larger auction houses it is possible to switch from the United Kingdom to, for example, New York, that possibility is open only to a few of the larger dealers.
Similar but not identical considerations apply to the second subject, the proposal to harmonise resale rights for artists throughout the Union on the basis of the droit de suite convention. Like the noble Viscount, Lord Blakenham, one can have some sympathy with the intentions which lie behind this idea. Just as 20 years ago public lending rights for authors were introduced in this country, so it is legitimate—although the issues are different—to consider ways of rewarding artists whose work passes from hand to hand, sometimes (but actually very rarely) at increasing value to the successive owners but without benefit to the artist. The problem is that this proposal to harmonise practice within the European Union is excessively unlikely to do that. The droit de suite is an international convention, not a European one. As has been pointed out, it imposes no obligations on states party to that convention and indeed allows those states which consider that their market could be damaged to abolish it or not to apply it. As the noble Lord, Lord Freyberg, has pointed out, there is a whole range of variations in the way the droit de suite is applied.
It is a messy situation. However, the Commission's proposal—this passion for harmonisation—is likely to have the same effect as those related to VAT. The Commission, for whatever reason, looks only inward, seeking to eliminate a distortion which it perceives within the European Union, ignoring, for whatever reason, that the modern art market is international. So, just as with VAT, the proposal to impose standardised resale rights throughout the Union—a levy which would then exist in the Union but not in the other markets such as New York—will simply mean that business will move away from the Union to our competitor markets.
Furthermore, the proposed system is staggeringly inefficient. I shall not repeat the points which were so eloquently made by the noble Lords, Lord Freyberg, Lord Strabolgi and Lord Hindlip, but the fact is that this droit de suite proposal cannot be said to serve the poor and struggling artist. In short, the existing practice under the droit de suite is not a significant enough distortion within the European Union to warrant this proposal for harmonisation with all its consequent dangers for the European, and particularly British, markets. If, as I believe is the case, the intention is to secure financial rewards for poorer artists, this is quite certainly not the right way to do it. Finally, the administrative costs of operating a system of this kind are grotesquely out of proportion—we have heard figures this evening—and in the end would be damaging to European artists in that

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the proposed measures are likely to reduce not only the number of outlets for their work but also the price paid on initial purchase.
The Government have so far been commendably robust in defending British interests on both of these issues—a fact which the British market, I know, recognises with gratitude. I hope that the Minister will be able to confirm again tonight that Her Majesty's Government will continue to stand for good sense and for the interests not only of the United Kingdom but of Europe as a whole.
8.55 p.m.
Lord Pearson of Rannoch: My Lords, after five such erudite contributions from other speakers, there is not much more I can say about the disturbing details of these pieces of European legislation. I hope I am wrong but the situation may perhaps be more serious than some of your Lordships appear to have appreciated. I fear that the Government's room to manoeuvre may be somewhat limited.
The Question of my noble friend Lord Blakenham asks the Government what they expect the combined effect of these directives will be. From the debate so far it is hard to imagine that my noble and learned friend the Minister when he replies will say anything else than that he agrees their effect looks pretty disastrous for our art market if the directives cannot be removed. My question for him therefore, as in relation to so many other British interests which have been damaged or are threatened by European legislation, is this: given the terms of the Treaty of Rome, what can the Government do about it?
I should remind your Lordships that under that treaty we have ceded large areas of sovereignty to the qualified majority vote in Brussels. Those areas include our agriculture and fisheries, the environment, transport, European culture and everything covered by the single market which embraces our industry and commerce. I imagine—my noble and learned friend on the Front Bench may correct me if I am wrong—that since we have already signed up to the sixth VAT directive, which was supposed to take full effect from 1997, that is, next year, any derogations we may have under that directive will come to an end, at the latest, in the year 2004. So it is not easy to see how we can escape from that directive for much longer. As I recall, this would force us to impose VAT at between 15 and 25 per cent. on such items as food, public transport, books and newspapers, and children's clothes. Will my noble and learned friend tell the House whether this understanding is correct, and when the Government believe that this VAT directive will bite on our art market, and to what extent? In other words, can we escape, and if so, for how long?
I now turn to the proposed directive on artists' resale rights which I imagine is being brought as a piece of single market legislation, and is anyway subject to the qualified majority vote. Assuming this is so, it is worth recalling how the qualified majority voting system works in order to appreciate how difficult it may be to escape from this, and from so many other directives.
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The 15 member countries have 87 qualified majority votes between them; 62 are required to carry a motion and 26 to block one. The UK has only 10 votes and can seldom muster enough support from the other countries either to carry or to block a Commission proposal. My noble friend Lord Blakenham mentioned the Berne Convention in this respect. No doubt my noble and learned friend on the Front Bench will tell us if there is any comfort in that. If so, perhaps this directive will be a happy exception. Perhaps my noble and learned friend can tell us that we shall get enough support to block this one, which would of course be good news. But as I understand it we would still be left with the VAT problem, which looks more serious to an outsider.
Listening to your Lordships this evening, I once again could not help wondering whether our membership of the European Union is really worth while. According to a publication in October from the prestigious Institute of Economic Affairs entitled Better Off Out? we would be rather better off if we left the Treaty of Rome or the European Union as such and merely retained access to the single market. The authors have not been challenged on their analysis as to how we could easily arrange some amicable parting of the ways. Even if we left in bad odour, and the others did their worst against us, the authors show how the loss to our economy would be minimal. In case any noble Lord feels that I am straying from the Motion, I respectfully submit that he may be wrong. I am suggesting that the only way to escape from the damaging effect of these directives, as with so many other directives, may be to be prepared to leave the treaty.
The Government now justify all these iniquities by saying that 60 per cent. of our exports go to the European Communities, with the implication that we therefore cannot afford to upset them.
But we trade in deficit with Europe and in any case the figure of 60 per cent. is much exaggerated. May I ask my noble friend on the Front Bench to take note that the Central Statistical Office says that something more like 40 per cent. of our exports go to Europe? Of course, that is still an important figure but not one which should be allowed to subject us to the sort of problems that we have been debating tonight.
There are, of course, dozens of other industries which are similarly affected. To get our relationship with Europe into better perspective, 80 per cent. of our overseas investment is outside the EU and only 9 per cent. of our overall trade is with the European Community. Another 9 per cent. is with the rest of the world, which means that some 80 per cent. actually takes place within the UK.
So I fear the time has come to ask whether the Government accept the harmonisation inherent in the single market legislation too easily. What is the point, I must ask my noble friend, of being forced to play on the level playing field of Europe if its rules force us to lose out to our competitors in other far more vibrant economies? That seems to me to be the question now facing the United Kingdom art market. I shall he most relieved if my noble friend can give the House a satisfactory answer and show that my fears are groundless.
9.1 p.m.
Lord Haskel: My Lords, I congratulate the noble Viscount on his Question. It is an important matter affecting not only our commercial life but also our cultural life.
As all noble Lords have said, the proposed European directive harmonising VAT and artists' resale rights is a threat to the art business—a business we must do what we can to retain.
It seems to me that noble Lords have raised two main issues: harmonisation, and the ability of Europe to compete in the world art market. As the noble Viscount, Lord Blakenham, pointed out, we are in a single market with the objective of a level playing field. As a result we shall see harmonisation of VAT on all products and services within the European Union unless we withdraw, as the noble Lord, Lord Pearson, suggested. This applies to all businesses, and many have prospered. The noble Lord, Lord Pearson, spoke of room to manoeuvre. I believe that this is a commercial matter and, under Clause 100(A), the directive will be settled by majority voting.
I find it difficult to understand why our partners in Europe should agree to our having a competitive advantage so far as concerns VAT. The noble Lord, Lord Gillmore, told us that we have these advantages, and a derogation for two more years. During that time we have benefited and we shall continue to benefit. But people in the art market must realise that this is an artificial situation which will be changed eventually. However, we have undoubtedly used this time to build up other competitive advantages. The noble Lord, Lord Hindlip, told us about the advantages of language, location and probity. We can build on other advantages: service, connections with artists and collectors, and new galleries. I am sure that we can benefit from all those in the future. In future dealers will also have to compete on the basis of their margins, as many other businesses have had to do when faced with more competition.
Of course there is a mixture of advantages and disadvantages. For instance, harmonisation has opened up the French market. I am sure that with open competition and full access, British artists will thrive and British art dealers will be able to compete in Europe.
I hope that the Minister will press for this harmonisation of VAT to lead to a simplification of VAT. We are told that there will be a review at the end of 1998, and I hope that by that time the cumbersome system of different rates for art of different ages and from different sources will be harmonised and simplified. A complicated VAT regime only encourages the VAT avoidance industry.
The noble Lord, Lord Gillmore, told us that artists' resale rights is an international not just a European matter. I agree with him. If we are to argue that on the international stage, it is probably best done at this time through the European Commission rather than by Britain on its own. I do not agree with the noble Lord, Lord Pearson. This could be a social rather than an economic matter. The Government might argue that the issue should be brought forward under the social
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chapter. It is certainly treated as a social measure in Germany, presumably because pictures and works of art are not always sold at a profit. However, as other noble Lords have said, the Minister may prefer harmonisation because it is a relatively minor matter and not worth getting into a fight over. Again, harmonisation will ensure that our artists and dealers have equal access to markets in other parts of the Union.
Harmonisation of artists' resale rights may well benefit established artists and not the younger emerging talent, as the noble Lords, Lord Freyberg, and Lord Strabolgi, pointed out. As they also pointed out, the cost of collecting and distributing this money is far too high. Somehow that needs to be altered. I wonder whether the Minister has given some thought to slotting it into the benefits system.
This is obviously an emotional matter of concern to artists, and the system of collecting and distributing the money for artists' resale rights is probably best left to local custom. It is perhaps a clear case for subsidiarity.
On competitiveness, the noble Viscount, Lord Blakenham, is right. When considering the level at which to harmonise VAT and artists' resale rights it is obviously important to consider the competitive position of Europe as against other centres such as New York or Zurich, as noble Lords have mentioned. It is no use levying a tax which destroys the business.
However, the proposed resale rights levy is on a sliding scale from 4 per cent. to 2 per cent., as other noble Lords have mentioned. This is to help deal with the more expensive works of art. In addition, the proposed VAT is at the lowest possible level, which is 5 per cent. Surely a lot of other factors will also apply, not least where the buyers are and where they would like to be. As the noble Viscount, Lord Blakenham, suggested, first consideration must be given to the buyers. There are many good social, commercial, political and other economic reasons why they would like to be in Britain and within the European Union.
The noble Lord, Lord Hindlip, and my noble friend Lord Strabolgi mentioned the United States. Of course, there are taxes in the United States, too. There is a state tax of between 6 and 8 per cent., which is tending to go up and not down. Comparisons are therefore difficult, and I agree with noble Lords that more investigation needs to be done. When discussing the level of VAT and artists' resale rights, the Government should point to the success of the British art market as proof that VAT should be nearer our levels than the higher levels which apply elsewhere.
I agree with other noble Lords that it is important to get this harmonisation right, but it is important for cultural reasons as well as for commercial reasons. Obviously, artists and dealers need each other. New artists are the seed-corn of the business and a successful art market can support new art and new artists. This will also attract buyers, and the galleries will follow the buyers. As other noble Lords have pointed out, this will lead to further economic activity.
In recognising that the new directive will have a major impact on the art world, perhaps one way of making sure that it has a lesser impact on the British art

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market is to play a much more positive role in shaping European cultural policy. For example, it is important to play a much more positive part in the monthly meetings of European culture ministers. I am told that the Government often do not even bother to attend. Labour shadow Ministers have raised this matter in another place and explained that we need to match the enthusiasm of our European partners for cultural policy in Europe. I am sure that that is an important way of reducing any damage which might be done to art in Britain by this directive.
I congratulate noble Lords on demonstrating that this is not a minor matter. It is important for cultural and commercial reasons.
I leave it to the Minister to respond to the point about withdrawing from the single market raised by the noble Lord, Lord Pearson.
Lord Pearson of Rannoch: My Lords, I did not suggest withdrawing from the single market; I assumed that we would retain access to the single market. I suggested that we should start thinking very strongly about withdrawing from the Treaty of Rome.
9.11 p.m.
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, I am grateful to all noble Lords, but particularly to my noble friend Viscount Blakenham, for giving this very important issue an airing. I am grateful to all noble Lords who have contributed for applying a most helpful expertise to the issue.
Of the many speeches that I have made at this Dispatch Box, in some respects I would regard this as the most redundant one that has been required of me. It has been perfectly obvious to me that every argument I would have sought to deploy has already been deployed. However, at the risk of being repetitive, let me set out the Government's position. I hope that, if nothing else, it will indicate to those noble Lords who have contributed the seriousness with which we take the issues that they have raised. They are all, without exception, absolutely right.
The United Kingdom art market is unique in Europe, not only because it is international but because of its size. Much of London's business is devoted to importing and selling works from third countries, particularly the United States of America and Switzerland, and re-exporting them.
The Government take very seriously concerns that value added tax and artists' resale right could damage that competitiveness. We recognise that introduction of artists' resale right into the United Kingdom could lead to sales of art subject to the right switching—this is the critical detail—not to other European capitals, but to third countries. The noble Lord, Lord Freyberg, and other noble Lords were absolutely right that the beneficiaries of this are likely to be New York, Switzerland and possibly the Far East.
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I would say to the noble Lord, Lord Haskel, that I thought that in some respects what he said was disappointing in failing to grasp that this is not an issue between member states of the European Union. The issue is what will happen vis-a-vis third countries.
Sellers look to markets offering the best deal. The United States Copyright Office has already considered and rejected the idea of introducing artists' resale right into the United States. They have done so because of experiences in Europe and in California—the only state in the United States to have such a right. Switzerland, too, has decided against the introduction of that right. Why? Specifically because it wishes to build up its international art market.
The Government are well aware that the British art trade believes there is growing evidence that the seventh VAT directive is already beginning to have an adverse effect on the balance of trade in works of art and that introduction of artists' resale right into the United Kingdom would make matters worse.
In the brief time available to me, let me seek to address those issues more specifically. In reaching agreement on the seventh Value Added Tax Directive, the United Kingdom was anxious to ensure that VAT on the importation of works of art from third countries did not jeopardise the competitive position of member states in the global fine art market. Resolution of these concerns was integral to the terms on which the UK agreed to the directive. In recognition of that and of the particular position of the London fine art market, the United Kingdom was allowed—as a number of noble Lords mentioned—to apply an effective VAT rate of 2.5 per cent. until the end of June 1999 on art imports which were formerly exempt instead of the minimum 5 per cent. otherwise provided for in the directive.
What is important to appreciate, even without the 2.5 per cent. imposition, is that the Commission is committed to providing the Council with a report before the end of 1998 on the impact of that seventh directive on the competitiveness of the Community art market compared with third countries' art markets. I can assure your Lordships that the United Kingdom will take part in that review. I say to my noble friend Lord Hindlip and the noble Lord, Lord Gillmore, that we shall ensure that the views of the British art market are properly represented and any detail that can be provided to the Government will be very helpful.
I turn to artists' resale right. Eleven member states have artists' resale rights in their legislation. The interesting thing is that in practice it is not applied by all of them. The right does not exist here nor does it exist in Ireland, the Netherlands or Austria. I say to the noble Lord, Lord Strabolgi, that he is right. There is provision for this under the Berne Convention but the critical detail is that under that convention it is an optional right rather than one that is mandatory.
It would appear that the majority of member states favour harmonisation. The noble Lord, Lord Strabolgi, will recall that in April, when I replied to a question on this right from my noble friend Lady Rawlings, I indicated that the Government were far from persuaded that there was a case for the introduction of

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artists' resale right into the United Kingdom. Not surprisingly, consultations since then have shown a sharp polarisation of views. The art trade wants the Government to oppose the proposal outright, whereas a significant number of artists are in favour. However, I understand that some well known artists believe that the proposal will lead to first sale prices falling, with no royalties materialising to compensate. I say to the noble Lord, Lord Gillmore, that I was grateful for his confirmation that that is a widely held view.
The independent Whitford Committee, in the run-up to the Copyright, Designs and Patents Act 1988, considered whether artists' resale right should be introduced into the United Kingdom. It concluded that the right was not necessarily fair or logical and that the lesson to be drawn from experience abroad was that the right was not practical either from the point of view of administration or as a source of income to individual artists and their heirs.
The truth of those words appears to have been borne out pre-eminently in France, a country where the right exists. As a number of noble Lords mentioned, one of the French societies responsible for collecting and distributing artists' resale royalties has got into such financial difficulties that it can no longer continue. A representative of the other society—again, a number of my noble friends mentioned this point—has admitted that most of the royalties collected by that society go to a small, wealthy elite—some six families. It is the heirs of Picasso who are successful, not the starving artists in Parisian garrets. I am grateful to noble Lords for dispelling with their arguments the romantic nonsense that such a measure would significantly assist young artists. The demolition job done on that particular argument was so well done that I can add nothing to it.
The experience bears out studies made earlier this year by two distinguished economists. The studies warn against the Commission's proposal, arguing that sales of works of art subject to that right will switch from the European Union to third countries, with the majority of artists ending up worse off.
My department has submitted to Parliament its own studies on the impact of the Commission's proposal on the United Kingdom art market. They reveal that introduction of the right could, as others have said, lead to the British art market losing earnings of up to £68 million with some 5,000 jobs going. That is, if all sales of works of art in London susceptible to the right migrated to third countries. Artists would receive nothing and everyone would lose.
Even on the benign assumption of no sales switching to third countries, application of the right would yield royalties of something like £9.8 million at the most. The significant part of that would be consumed by collection and distribution costs. What remained would have to be shared between British and other European artists. The majority of British artists would probably receive little if anything. In the Government's view, the risk of the
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introduction of the right into the British art market is disproportionate to and outweighs any conceivable benefit to artists.
We can only speculate at this stage on what the combined effect of VAT and the introduction of such a right would be on the United Kingdom art market. The impact of VAT will be clearer once the Commission produces its report. However, we are convinced that the introduction of the artists' resale right would do irreparable damage. There is no evidence whatever that British artists have to date been disadvantaged through the lack of that right.
We entered a general reservation on the Commission's proposal at its first reading in June. We pointed out that the art market is not internal to the Community but is world wide. We invited the Commission to provide a full cost-benefit analysis of its proposal and it has been informed of my department's studies, which I mentioned. We see no reason why member states who have chosen not to have the right should be obliged to introduce it merely because others have done so. Different countries have different needs. A better way of harmonising, in our view, would be to abolish the right altogether.
I was asked a number of detailed questions about how we might approach negotiations on the matter. Our position at the present time is this. We take a robust stance. We are not interested in discussing detail to achieve a compromise; what we are in the business of doing is persuading and explaining to our European partners that it is an ill-directed exercise that will not benefit those whom they seek to benefit.
I am conscious that I have had to rattle through my closing speech in some measure and I hope that I answered most of the questions put to me. What I am at pains to stress is that we are in a stage of argument at the present time. We do not accept the directive and we believe that the force of the arguments advanced this evening are of such a character that it would surprise me if anyone were not persuaded by the importance of maintaining the present position.
I know that on some occasions in debates such as this those who have interests to declare may do so a little reluctantly in making their contribution. This is a specific occasion where that expertise has been extremely helpful and I trust, as we go forward in advancing our arguments, that the force of the arguments addressed to your Lordships' House this evening will persuade those elsewhere in the European Union that this measure is ill-directed and the sooner it is confined to some dusty shelf for eternity the better.

Channel Tunnel Rail Link Bill
Returned from the Commons with the amendments agreed to.
House adjourned at twenty-five minutes past nine o'clock.

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