Sitting of 6 June 1996

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

    KING'S COLLEGE LONDON BILL [Lords] (By Order)
    Order for Second Reading read.
    To be read a Second time upon Thursday 13 June.

Oral Answers to Questions
  HOME DEPARTMENT

    Private Security Industry
    Mr. Barry Jones: To ask the Secretary of State for the Home Department if he will make it his policy to implement the recommendations of the Home Affairs Committee in its first report of Session 1994–95, HC17, regarding regulation of the private security industry. [30261]
    The Minister of State, Home Office (Mr. David Maclean): The details of our proposed scheme for access to the criminal records of potential employees in the private security industry are well advanced and I hope to announce the details shortly.
    Mr. Jones: Why has the Minister taken so long on this important matter to respond to the excellent report of the Select Committee on Home Affairs? Does he agree that, alongside many excellent companies, there are charlatans who give bad advice for a fee? Why can we not have quality personnel, vetting procedures and statutory regulations?
    Mr. Maclean: This is an important matter and it is vital that we get it right. We must bear it in mind that, although the hon. Gentleman can put up a fairly honest plea for the controls that he wants, many Labour Members have consistently opposed the private security industry, do not like it and would like to regulate it out of existence. Some of the controls for which they call would enormously damage the industry. We want to ensure that it can continue the generally excellent service that it provides, with the proper safeguards.
    Sir Ivan Lawrence: Although Conservative Members are whole-heartedly behind the Government's deregulation policy and a first glance might show that the recommendations of the Select Committee on Home Affairs went in the opposite direction, is not the strength of our report this: that this regulation is being called for
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    by the industry itself and that, far from expecting that it will be a burden on the taxpayer, the industry is prepared to pay for it?
    Mr. Maclean: My hon. and learned Friend's report from the Select Committee was a valuable contribution to the debate on regulation and control of the industry—there is no doubt about that—but he would be the first to admit that his report, although it made some valid suggestions, did not provide the detailed blueprint that one would require if one were to have proper safeguards in place without damaging the industry, and without heading down the road that many Opposition Members call for, which involves excessive regulation, training, hours of work and every single iota of the private security industry's work.
    Mr. Michael: The Minister did not answer the question and he ignored the recommendations of the Select Committee, whose Chairman has just questioned him. The Minister tells us about plans to vet staff, but runs away from the need to regulate the private security industry as a whole, despite the calls of the Labour party, the Select Committee, the police and the private security industry itself. Why will the Home Secretary not face up to the fact that the Government's refusal to legislate is allowing his friends, the crooks, to masquerade as private security firms?
    Mr. Maclean: That carefully rehearsed harangue would be much more believable if it came from someone with a credible record on voting on law and order issues, but this is the hon. Gentleman who argued that someone should be given bail if locking him up was bad for his health, and who voted against giving courts powers to impose longer sentences on violent and sexual offenders. He voted against reforming the right of silence, against increasing penalties for people who are cruel to children, against life imprisonment for hard drug dealers and for people who take guns to crime, and, seven times in a row, against the prevention of terrorism Act. If the House had agreed with him and had implemented the policies for which the Labour party voted, serious criminals would be walking the streets today instead of languishing in gaol. No wonder Labour's own Front Benchers described their policies as absolutely ridiculous and complete and utter nonsense. The fact is that one cannot trust Labour on crime.

    Metropolitan Police
    Mr. Carrington: To ask the Secretary of State for the Home Department what additional resources he is planning to give to the Metropolitan police in 1996–97. [30262]
    The Secretary of State for the Home Department (Mr. Michael Howard): I have approved a budget for 1996–97 that will allow the Metropolitan police to spend £29.2 million more this year than last—an increase of almost 2 per cent. and some 90 per cent. more in real terms than in 1979.
    Mr. Carrington: Will my right hon. and learned Friend find time to visit Fulham and Hammersmith police stations, both of which have been rebuilt at a cost close to

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    £10 million? Does that not show the Government's strong commitment to the Metropolitan police, whose 90 per cent. increase in spending in real terms is starting to pay off in the increasingly successful war against drugs, muggings, burglaries and auto crime?
    Mr. Howard: I would like to visit my hon. Friend's constituency, and I shall do so when a suitable opportunity arises. My hon. Friend is absolutely right to be as pleased as I am with the performance of the police in the Fulham division, where there has been not only a fall in overall crime but a substantial increase in the clear-up rate, and a fall in auto crime—the theft of and from vehicles—on the most recent figures of no less than 20 per cent. year on year. I join my hon. Friend in congratulating the police in Fulham division on their excellent performance in fighting crime.
    Mr. Tony Banks: What additional support and resources are being made available to the Metropolitan police in connection with Euro 96? Our police, unfortunately, have acquired the best expertise in dealing with hooliganism and one wants to see them given all necessary support. Have any additional resources been requested, and what steps has the Home Secretary taken to make sure that the police have adequate support?
    Mr. Howard: Again, as so often happens, we see Labour Back Bencher after Labour Back Bencher getting up to ask for more money to be spent. We have made generous provision for the Metropolitan police, and out of it they are making available resources to deal with Euro 96—as are other forces throughout the country. Only the antediluvian Opposition Back Benchers think that more money is the answer to everything.

    Drugs
    Mr. Congdon: To ask the Secretary of State for the Home Department what assessment he has made of the response by the police and courts to those possessing and using drugs. [30263]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Tom Sackville): All police forces have specific drugs strategies covering rigid enforcement, with co-operation on rehabilitation and the reduction in demand for drugs. The courts have a wide range of discretion, from fines to life imprisonment.
    Mr. Congdon: Given the real dangers of drug taking, does my hon. Friend agree that it is important that the police and courts continue to take a tough line with people who take drugs? Is it not important to get across the message to all young people that taking drugs is wrong and will seriously damage their health?
    Mr. Sackville: I can reassure my hon. Friend that this Government will have nothing to do with calls for going soft on drugs, legalisation, decriminalisation or anything else. My hon. Friend may be interested to know that the prison population of persons convicted of drug offences has increased from 3,500 to 5,500 in two years. He may be interested to know also that I recently spent a day and an evening with Amsterdam police, when I witnessed the full absurdity of drugs being delivered to the back of
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    so-called coffee shops illegally, then being supplied legally to customers inside. Because the socialists in the coalition that is in power in Holland have absurd policies, that country's police and customs have been undermined and Holland has been turned into the distribution centre for Europe of cocaine and heroin and the source of almost all the amphetamines and Ecstasy that comes into this country. We will not see such policies from this Government, but we would see them from the woolly liberals on the Labour Front Bench.
    Mr. Ronnie Campbell: I congratulate the Northumberland police on their work on drug trafficking in our area. Is the Minister aware that my local authority in Blyth Valley has implemented a policy according to which anyone caught trafficking drugs from a council house will be evicted? I understand that the first case under that policy will go to the High Court.
    Mr. Sackville: On the hon. Gentleman's suggestion, I visited his local authority, and I congratulated it on bringing that case. I commend this tough line on drug dealers in council estates to all other local authorities.
    Mr. Allason: Is my hon. Friend aware that the eight years' sentence on a convicted drug dealer in Torquay has sent a chill through the illicit underworld in that town? Is he also aware that the police have welcomed this stiff sentencing? It is perfectly clear from events after the conviction of that woman that drug dealing has become very limited in Torbay, forcing drug dealers to go elsewhere.
    Mr. Sackville: I congratulate the local police on what they have achieved. There is concern about sentencing drug offenders, which is why my right hon. and learned Friend the Home Secretary has introduced proposals under which all persistent drug dealers will go to prison for a very long time, and they know they will.

    Probation
    Ms Quin: To ask the Secretary of State for the Home Department when he next intends to meet representatives of the probation service to discuss probation issues. [30264]
    Mr. Sackville: My right hon. and learned Friend expects to meet representatives of the Association of Chief Officers of Probation on 10 July and of the Central Probation Council on 23 July.
    Ms Quin: Will the Minister take the opportunity of paying tribute to the work of the probation service and give a commitment to an enhanced and secure role for the service in the future? In the discussions in July, will the Minister respond to the probation service's concerns about the Government's action in removing training qualifications from the probation service? Will the Government also respond fully to the probation service's concerns about the Government's White Paper and the work of the probation service as set out in it?
    Mr. Sackville: I am glad to be able to say that Baroness Blatch will meet people in the profession to discuss the new training arrangements. I ask the hon. Lady to request that her allies in politics and in the trade unions desist.

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    They have been seeking to delay those negotiations in a rearguard attempt to keep the outdated social work degree as a necessary part of training. Any further delay will damage the profession.
    Mr. Nicholas Baker: Does my hon. Friend think that representatives of the probation service will recommend to him a curfew of children under 10, as recommended by the hon. Member for Blackburn (Mr. Straw)?
    Mr. Sackville: The hon. Member for Blackburn needs to get his house in order and decide exactly what he is recommending to the House. We have heard three different versions of that plan in as many days, which typifies the totally muddled and confused attitude to law and order on the Opposition Benches.
    Mr. Alex Carlile: Will the Minister explain to the House how his right hon. and learned Friend proposes to persuade probation officers that that there will be an improvement in penal policy by a 15 per cent. reduction in probation staff this year? Will he also tell the House how the Government will justify the removal from prisons of seconded probation officers, who make an important contribution to the release of prisoners from prison, so that it can be shown—if at all—that prison works?
    Mr. Sackville: I do not know where the hon. and learned Gentleman gets his figures, because spending on the probation service has remained constant in real terms. As to prisons, a great deal more work is being done on rehabilitation in prison by prison officers and by drug rehabilitation services, which are now working in prison. A great deal of work is being done.

    Immigration (False Documents)
    Mr. David Evans: To ask the Secretary of State for the Home Department how many false documents were discovered per week in 1995 in the United Kingdom being used by people trying to enter the United Kingdom illegally. [30365]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Timothy Kirkhope): During 1995, a total of 4,486 forged or falsified travel documents were detected by immigration officers at United Kingdom ports and airports of entry, an average of 86 detections each week.
    Mr. Evans: I thank my hon. Friend for his reply. Is he aware that the British people are sick and tired of immigrants who pay nothing and take everything? Does he agree with me that it is time that immigrants paid tax for five years before they can use the health service or take social security benefits? After all, students have to take out loans and pay for their education. Why cannot immigrants do the same? We know that the lot opposite, if they ever got into power, would let everybody in, and the taxpayer would foot the bill.
    Mr. Kirkhope: I congratulate my hon. Friend on his robust remarks. It is important to remember that people who come to this country legally find it highly offensive that some people use bogus documents to try to enter the country and thereby take social security benefits and jobs
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    that should be available for those who are here legally. I also congratulate members of the immigration service's national forgery section and the national intelligence section on their work. Many people come from all over the world to see how they work because we have an excellent detection service to prevent abuses of the system.
    We are concerned about forged credentials of all kinds. Indeed, we should all be concerned about the Labour party's forged credentials on crime, because, frankly, with such credentials, no one can trust it.
    Mr. Henderson: Does the Minister not think that there is a contradiction between his stated desire to get rid of bogus documents and his reply to the hon. Member for Welwyn Hatfield (Mr. Evans), and the Government's policy in the Asylum and Immigration Bill, clause 8 of which introduces provisions that mean that employers will have to recognise up to 40 new documents when they make their checks? Will that not create a forgers charter, in that all the people who are currently making money out of preparing forged immigration documents will now be forging employment documents? The Government should withdraw clause 8 if they genuinely want to get rid of forgery in the context of immigration.
    Mr. Kirkhope: If only the hon. Gentleman and his colleagues had been a little more supportive of the Government in this vital aspect of legislation, we might be able to deal with some of the abuses rather more effectively. We want to ensure that people who do not have the proper documentation that entitles them to work should not benefit from the economy of this country. I hope that the Labour party will start to think more carefully about what benefits from the economy should be available to people who are in this country legally and to good employers.
    Mr. Whittingdale: Does my hon. Friend agree that it will be possible to detect people who are attempting to enter this country using false documents only if we continue to check such documents at the point of entry? Will he confirm that the Government will not in any circumstances accept any attempt by the European Commission to remove our border controls?
    Mr. Kirkhope: I agree entirely with my hon. Friend. We are extremely effective in detecting forged documents, but it is vital that we maintain our present controls to make sure that illegality is stamped out.

    Leicester Prison
    Mr. Janner: To ask the Secretary of State for the Home Department if he will pay an official visit to the Welford Road prison, Leicester, to discuss conditions of prisoners and staff. [30266]
    The Minister of State, Home Office (Miss Ann Widdecombe): I will be making a routine visit to Leicester prison on 27 June.
    Mr. Janner: Is the Minister aware that, since the Conservative party came to power, crime in Leicestershire has trebled and the population of Leicester prison has risen from 207, which is permitted, to 324? When she

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    makes her routine visit—which will be very welcome as she has a well-earned reputation for gentle, quiet and caring compassion—will she be kind enough to consider the terrible effect that such overcrowding has, not only on inmates and their rehabilitation but especially on those who are in charge of them and whose life's work it is to work in prison?
    Miss Widdecombe: Despite the earnest expression on the hon. and learned Gentleman's face, I think that he must be having a little joke at his own party's expense. He seems to be suggesting that we are responsible for overcrowding in prisons, but, during the Labour party's previous term in office, the prison population was rising by 15 per cent. and the party responded by cutting the prison capital programme by 20 per cent. That was how seriously the Labour party took overcrowding.
    In contrast, we have built 22 new prisons, eliminated the practice of trebling, eliminated the use of police cells since last June and reduced the percentage of prisoners sharing two to a cell designed for one. That should make the hon. and learned Gentleman very happy about our compassionate policy on overcrowding. Will he stand up and congratulate us and apologise?
    Mr. Garnier: Before my hon. Friend makes her routine visit to Welford Road prison in Leicester, will she ignore the routine rant of the hon. and learned Member for Leicester, West (Mr. Janner)? As it happens, crime in the county of Leicestershire—I am sorry about the city of Leicester—has fallen quite markedly. Will my hon. Friend also make a special visit to Gartree prison, which is on the way to Leicester, which she will find is well run and not overcrowded?
    Miss Widdecombe: I can absolutely agree with my hon. and learned Friend. Crime in Leicestershire fell by 5.5 per cent. last year. I congratulate him on giving his constituents the good news and the facts, in comparison with the hon. and learned Member for Leicester, West, who wants nothing more than to depress his constituents and paint the worst possible picture. I shall of course be delighted to visit Gartree, although I cannot, of course, guarantee to visit it before I visit Leicester. When I visit both prisons, I shall congratulate the prison staff on a magnificent achievement that is always belittled by the Opposition.

    Identity Cards
    Mr. Dunn: To ask the Secretary of State for the Home Department what progress has been made on his evaluation of the introduction of identity cards. [30267]
    Mr. Howard: We are making good progress in our assessment of the responses received to the Green Paper on identity cards. I hope to be able to announce our final decision shortly.
    Mr. Dunn: Although my right hon. and learned Friend is awaiting a report from the Select Committee on Home Affairs on the matter, does he agree that one use of a national identity card would be to provide proof of identity by those about to vote in elections? An ID card would prevent wide-scale abuse and impersonation, which is taking place in national and local elections.
    Mr. Howard: There is almost no limit to the number of uses that might be made of an identity card. We evaluated many of them in the consultation document that we issued. I know that my hon. Friend is sympathetic to the view that we should await the report of the Home Affairs Committee. I hope to be able to announce our proposals shortly thereafter.
    Mr. Beggs: Will the Home Secretary give an assurance that, in the event of an identity card being introduced, it will apply throughout the United Kingdom? Will he take account of the widespread forgery of documents that facilitate personation in elections in certain areas of Northern Ireland? That could be overcome by a single document and enable a greater number of people who have been disfranchised due to arriving to vote with only one part of a driving licence, an out-of-date passport, or whatever, to be entitled to exercise their vote? I exhort him to give that assurance today.
    Mr. Howard: The hon. Gentleman will know that whether our proposals extend in due course to Northern Ireland is a matter for my right hon. and learned Friend the Secretary of State for Northern Ireland. I shall ensure that the views that the hon. Gentleman has expressed with characteristic forcefulness are drawn to my right hon. and learned Friend's attention.
    Mr. Budgen: Does my right hon. and learned Friend agree that the smartcard, which is required from people who are applying for payment under social security rules, is a form of voluntary identity card? Could not that smartcard principle be applied to a host of other circumstances in which the citizen comes into contact with the agencies of the state?
    Mr. Howard: That is indeed a possibility. My hon. Friend has identified one way in which identity cards might develop. The smartcard technology might not be available for general-purpose use for some time, but we shall clearly bear it in mind.
    Mr. Straw: Crime has doubled in the past 17 years, which represents the worst record of any British Government since the war, and the worst record among the Governments of 16 western countries surveyed by the Home Office. Against that background, we can all understand the synthetic hysteria that we have heard from the Government Dispatch Box this afternoon. On 1 April last year, the Prime Minister, opening the Conservative party's local election campaign, said that compulsory identity cards would
    "deter crime and make it more likely that we will catch criminals".
    May we now have a categorical undertaking from the Home Secretary that that remains the Government's policy?
    Mr. Howard: I am surprised that the hon. Gentleman talks about synthetic hysteria, because he is an expert in the real thing. The shadow Chief Whip says that his proposals for a curfew are unworkable, the hon. Member for Barking (Ms Hodge) says that they are ridiculous, and the Association of Chief Police Officers' spokesman says that they would give rise to huge practical difficulties. The only curfew that the Labour party is ever likely to impose is a curfew on the hon. Member for Blackburn (Mr.

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    Straw) himself. It all goes to show that the Labour party cannot be trusted on crime. [HON. MEMBERS: "Answer the question."] The hon. Gentleman began his question by talking about crime, so I am answering about crime.
    As for identity cards, the hon. Gentleman will know that we have always made it plain that we are considering the range of identity card proposals, voluntary and compulsory, and we shall make our decision known in due course.
    Madam Speaker: Order. Perhaps I might at this juncture refer the Secretary of State to answers that I gave yesterday to points of order concerning the answering of questions. They are recorded in column 609 of yesterday's Hansard.

    Prisoners (Reform)
    Mr. Harry Greenway: To ask the Secretary of State for the Home Department what recent action has been taken to make prisons better at reforming prisoners. [30270]
    Miss Widdecombe: It is central to the Prison Service's mission statement that it helps prisoners to lead law-abiding lives both in custody and after release. Recent action to reduce reoffending and reform prisoners includes the introduction of a scheme of incentives and earned privileges, an increase in the number of hours that prisoners spend in purposeful activity, mandatory drugs testing, and strengthened offending behaviour programmes.
    Mr. Greenway: I thank my hon. Friend for that reply. Bearing in mind the low level of education of many prisoners, does she agree that every penny spent on education for those in prison is well spent, and is especially helpful in reforming them and in enabling them to lead useful lives after prison?
    Miss Widdecombe: My hon. Friend is absolutely right, which is why we have brought about a massive increase in education spending in our prisons, and in the amount of education spending per prisoner, and why the number of student hours in our prisons is nearly double the number that we inherited from the Labour party.
    Mr. Pike: Despite what the Minister says, is it not important that the opportunities offered at prisons such as Risley for prisoners to be trained into jobs, and to be able find employment when they leave prison, should be available to every prisoner in every prison, so that there is a real possibility of reducing crime and prisoners do not have to end up back in prison?
    Miss Widdecombe: Proper employment opportunities for prisoners do indeed play an important role in rehabilitation, and preparation for employment in outside life is certainly part of that role. That is why there has been a vast increase in employment opportunities for prisoners, and such a substantial increase in the number of hours of purposeful activity spent by prisoners and in the number of national vocational qualifications and other qualifications gained by prisoners. The hon. Gentleman was right; he merely failed to congratulate us on what we are doing in that respect.
    Mr. Ashby: My hon. Friend outlined improvements in the Prison Service and in the welfare of prisoners in answer to an earlier question. Is she aware that, in evidence given to the Home Affairs Select Committee yesterday, it was noticeable that the privately run prisons were at the forefront of those improvements, and that the welfare and well-being of prisoners was better in private prisons than in the public sector? Does that not show that our policies are the right policies?
    Miss Widdecombe: My hon. Friend is absolutely right to say that private sector prisons have an excellent record of achievement, with one being praised by the chief inspector of prisons as a model of good practice. My hon. Friend did not mention that that has been achieved with more cost-effectiveness and greater value for money than we currently achieve in the public sector. But there are also excellent examples in the public sector and it is in the interests of the Prison Service as a whole that good practice should be disseminated, no matter where it originates. I hope that the Opposition will bear that in mind when pouring scorn on private sector prisons that have achieved so much.

    Closed Circuit Television
    Mr. Rendel: To ask the Secretary of State for the Home Department what criteria he has used to decide on the allocation of Government grant to closed circuit television schemes. [30271]
    Mr. Maclean: Bids made under the CCTV challenge competition are being assessed against the criteria set out in the bidding guidance issued on 22 November. Copies of the guidance have been placed in the Library. We shall be announcing the results of the competition in early summer.
    Mr. Rendel: In the first round of grants, we had the absurd situation of a grant being offered to the then Conservative-led Wokingham district council, which then refused to take up the scheme, while no grant was offered to Newbury—then led by the Liberal Democrats—which went ahead with the scheme anyway because it was determined to push ahead with crime prevention. Will the Minister assure us that the criteria will not allow such a ridiculous situation to arise again and that, this time, grants will be given to the authorities that want to use them?
    Mr. Maclean: The hon. Gentleman is being rather careful in his use of language. Throughout the country, Liberal Democrat and Labour-controlled councils have been consistently hostile to CCTV. Those councils may now be queuing up to take money from a Tory Government to set up CCTV schemes, but they have been hostile to its use in the past. We will judge all bids for CCTV fairly and honestly. If a council does not make use of the money, it will lose it and the money will go into the Treasury coffers. If a council can use the money allocated to it, it can hang on to it. Newbury will be treated the same as the other applicants—they will all be treated fairly. But the hon. Gentleman should not pretend that the Liberals have liked CCTV, although they are keen to take our money now.
    Mr. Tracey: May I commend to my right hon. Friend the grant application from the royal borough of Kingston upon Thames? Kingston has one of the most vibrant and successful shopping centres in the south of England, but that centre provides opportunities for crime. CCTV would ensure that the crime rate in Kingston fell, as it should.
    Mr. Maclean: Of course, the police in Kingston have been successful in ensuring that the crime rate is reduced. I repeat that all applications for CCTV funding from the extra money that we have made available—an increase from £5 million to £15 million—will be carefully considered before we come to a decision.
    Mrs. Ewing: We all recognise that CCTV is an innovation and that its success in the prevention and detection of crime has yet to be proved. The Minister, who knows my constituency, may realise that there is a danger that the application of CCTV may drive organised criminal gangs out of city centres and into rural areas. What action will he take to ensure that rural areas are not subjected to increased crime as a result of what is happening in city centres?
    Mr. Maclean: The hon. Lady's question would have been better directed to the Scottish Office, but I can refer her to Scottish Office and Home Office research which shows that the displacement that she fears has not occurred. I can speak with authority for England and Wales on this matter, as I am the Minister responsible. The latest crime figures in those countries show that the police in rural areas have been every bit as successful in cracking down on crime as the police in metropolitan areas. In 1995, crime fell even more in rural or non-metropolitan areas than in metropolitan ones. I cannot give the figures for Scotland.

    Schengen Agreement
    Mr. Dykes: To ask the Secretary of State for the Home Department when he next intends to discuss developments in the Schengen agreement treaty procedures with his EU counterparts from the relevant participating member states. [30272]
    Mr. Howard: I frequently discuss developments in Schengen when I meet my European Union counterparts, and I make it plain that the United Kingdom has no intention of signing the convention as it would be inconsistent with the maintenance of our frontier controls.
    Mr. Dykes: Will my right hon. and learned Friend bear in mind the fact, that, once we have the strict original entry control procedures for the common Community frontier and the proper Europol arrangements for intelligence information sharing, he will have no reason to have such a lack of self-confidence in his attitude to the excellent Schengen agreement? This country should keep an open mind about the agreement and join it. Pending that, will my right hon. and learned Friend reconsider the bureaucratic, cumbersome and slow entry procedures for many entrants at our ports, especially Dover, where it is much slower for foot passengers than for motorists?
    Mr. Howard: I certainly disagree with the first part of my hon. Friend's question. We have natural advantages in frontier control because we are an island, and we have absolutely no intention whatever of dismantling those controls or doing away with them, whatever improvements may be made in the external frontier of the European Union. Our intention is in sharp contrast with the policies of the Liberal Democrats especially, and also with the Labour party.
    On the second part of my hon. Friend's question, the present procedures that are in place in Dover are no more than are necessary to ensure the existence of effective controls.

    Prison Education
    Mr. Ian Bruce: To ask the Secretary of State for the Home Department when the Minister of State last visited a prison in the south-west of England to discuss prison education. [30274]
    Miss Widdecombe: I have visited a number of prison establishments in the south-west, including of course the Verne and Portland in my hon. Friend's constituency. My most recent visit to a prison in the south-west was on 8 January and I will be undertaking a further series of visits to the south-west in September. I discuss a wide range of issues, including education, whenever I visit a prison establishment.
    Mr. Bruce: I thank my hon. Friend for that answer and for her welcome visit to my constituency. Does she feel that the greater link between prison education and local education facilities—for example, Weymouth college in my constituency—has been beneficial in ensuring that the education that prisoners receive is in line with that received by the community, so that qualifications can be transferred when they re-enter the community after their sentence?
    Miss Widdecombe: Indeed I can confirm that. Further, the arrangements that we have made to contract out education locally give greater flexibility and greater clarity and have generally been welcomed as an initiative by governors and staff.
    Mr. George Howarth: The Minister may be aware that I visited the young offenders institute in the constituency of the hon. Member for South Dorset (Mr. Bruce) yesterday. I have visited a number of prisons, as has the Minister. Is she aware that a recent survey, which covered the south-west and the rest of the country, revealed that on average 14.5 per cent. will be cut from prison service education—in some prisons, the figure is as high as 83 per cent. —which will lead to the loss of 300 jobs and 16,000 prison education hours? Is that what the Minister means when she says that she is committed to rehabilitation through education? The reality is that there will be fewer hours, fewer teachers, less education and less chance of education stopping reoffending. Is the Minister not ashamed of that record?
    Miss Widdecombe: As ever, the Opposition are totally incapable of distinguishing between quality and quantity. I will give the hon. Gentleman some of the facts. We inherited from the last Labour Government—

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    [Interruption.] The House is going to hear this. We inherited a real-terms expenditure of £17,800 per prisoner and we have increased that to £26,000 per prisoner. That is what we have achieved, and that shows the callous neglect of prisoners by the Labour Government. They neglected overcrowding, they neglected purposeful activity, they neglected education—
    Mr. Henderson: This is a world record.
    Miss Widdecombe: As the hon. Gentleman suggests, I could go on for a long time detailing the Opposition's neglect. By contrast, we have reduced overcrowding, increased purposeful activity, increased education, increased qualifications and introduced and increased offending behaviour programmes. We actually care about rehabilitation because it protects the general public. You cannot trust the Labour party to protect the general public.

    Crime
    Mr. Amess: To ask the Secretary of State for the Home Department if he will make a statement on his latest initiatives to combat crime. [30275]
    Mr. Maclean: We are taking a wide range of effective action to reduce crime and create safer communities. Record funding for the police, money for 5,000 more officers, the encouragement of closed circuit television and crime prevention partnerships and changes in the criminal law have already cut crime by more than 8 per cent. over the past three years. Our new sentencing proposals will create safer communities in future.
    Mr. Amess: In my right hon. Friend's efforts to combat crime, does he intend to introduce a curfew for children up to the age of 10 after 9 o'clock at night? If so, will he consider extending it to members of the shadow Cabinet in view of their many public embarrassing disagreements?
    Mr. Maclean: The shambles that now passes for Labour policy creation has given us three different policies in three days on the issue, and I suspect that if President Clinton made another speech tomorrow we would see a fourth version of the policy proposed by the hon. Member for Blackburn (Mr. Straw). A fourth curfew policy will probably also be imposed by the Labour Chief Whip, stating that the shadow Cabinet team should not be let out in public after 2.30 pm.

  PRIME MINISTER

    Engagements
    Mr. Michael: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30291]
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Michael: Will the Prime Minister join the Secretary of State for Education and Employment in rejecting the idea of sixth form vouchers, or will he give in to the chairman of the Conservative party who has been telling newspapers that the right hon. Lady should be sacked?
    The Prime Minister: No, he has not. [HON. MEMBERS: "Oh, yes he has."] No, he has not. I know that the Opposition are a pantomime and I am tempted to say, "Oh no he hasn't." I saw the story in the press this morning and fair old nonsense it was.
    Mr. Walden: Does my right hon. Friend agree that our overriding attitude towards Europe should be to persuade our partners against further integration? If so, does he think that his tactics on beef enhance or diminish our powers of persuasion?
    The Prime Minister: I am delighted to have my hon. Friend's support against further integration of a federal nature in the European Union. That is right. The issues are dealt with on their own merits.
    On the question of beef, I very much welcome the decision taken yesterday by the Commission, which is a first step. My right hon. and learned Friends the Foreign Secretary and the Minister of Agriculture, Fisheries and Food have had a series of constructive meetings, including meetings this morning, on the issue. I hope that we shall be able to make progress by agreement.
    Mr. Blair: With reference to what the Foreign Secretary described as a turning point in the beef crisis, have the Italians simply agreed—as I understand it—to try to use their best endeavours to secure agreement with other European Union countries, or have the Italians now agreed to support the lifting of the ban and the British position?
    The Prime Minister: No—the Italians, who have the presidency, have now seen the framework document that we have produced and are using their best endeavours to see whether we can reach an agreement in advance of Florence. We have not finally discussed every aspect of that agreement with the Italians—that is happening at the moment, as it is with others. I hope that, as discussions continue over the next few days, we shall be able to reach an agreement. It is not certain, but I think that we have made a good deal of progress in the past few days, which is encouraging.
    Mr. Blair: May I then ask the Prime Minister whether it is still his clear policy and expectation that by the Florence summit there will be a firm agreement to lift the ban completely within a specified time scale?
    The Prime Minister: As I indicated when I announced the policy at the outset, we required two things before the ban is lifted completely. The first was the removal of the ban on beef derivatives, which has been obtained, and the second was a framework so that we were aware of precisely what needed to be done before the ban was lifted entirely. I very much hope that that will be achieved before Florence, but it is not solely in my hands. We can

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    advance the case, and we are doing so; we need the agreement of the Commission and our partners across the European Union, which is what we are seeking to obtain.
    Mr. Blair: I am sure that the Prime Minister will correct me if I am wrong, but I gather from what he is saying that a time scale is not necessarily part of the negotiation.
    I return to the question of cost that I put to the Prime Minister on Tuesday. He said then that it would not be part of the negotiation because of the refunding mechanism from the European Union. Will he confirm that the refunding in respect of the 30-month cattle slaughter scheme will come mainly out of the British rebate and that the net cost to Britain will therefore be some £2 billion, with several hundred million pounds extra for all sorts of other items? May I put it to the Prime Minister that, if the negotiation neither has a time scale nor an improvement in compensation, on any basis the price that this country will be paying for the beef crisis will be with us for many years to come?
    The Prime Minister: The beef crisis is a very serious crisis. There is no doubt that it is expensive for this country. That has been the case from the outset. We set out what the costs were at the beginning. To reassure people on public health, there is a substantial price to be paid, and we see that in the destruction of animals and in the consequent compensation to farmers. We wish to get rid of bovine spongiform encephalopathy, first, on public health grounds; secondly, to restore consumer confidence; and, of course, for the overriding reason that we wish international confidence in British beef to be fully restored.
    As far as the negotiations on time scale are concerned, we are seeking not an arbitrary calendar date but the steps that need to be taken—
    Mr. Skinner: A retreat is on the way.
    The Prime Minister: This is what I said at the outset. The hon. Member for Bolsover (Mr. Skinner) does not understand very much. If he understood a little more, he would probably interrupt a little less.
    As I said at the outset, we are seeking a framework—that is to say, the steps that must be taken to enable us to remove the ban. That is what I stated here when the ban was introduced. That remains our policy and it has not changed one whit.
    Mr. Lamont: Does the Prime Minister recall that, during the Napoleonic wars, Samuel Whitbread, the founder of the modern business, was always predicting defeat and urging the Government to open negotiations with Napoleon? Will the Prime Minister ignore the successors to Samuel Whitbread in the Confederation of British Industry who want to throw in the towel and who seem so indifferent to the plight of small businesses and farmers? Will he tell the chairman of Unilever to stick to cream cakes and detergents?
    The Prime Minister: My right hon. Friend puts the point with great clarity and precision. As he rightly says, there are a large number of small businesses—650,000 people are dependent on the beef industry, and it is in the
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    interests of the people whose livelihoods are in the beef industry that we need to reach a satisfactory conclusion to this affair and restore the confidence in the international beef trade, which has been lost because of the lack of confidence and, frankly, the rather over-exaggerated response to the problem that we have had in the past. My right hon. Friend is entirely right to say that that is the priority.
    Mr. Hoyle: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30292]
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hoyle: Has the Prime Minister seen reports in the Daily Express that his predecessor, Baroness Thatcher, is calling for non-payment of bills to the European Union? Will he condemn that bizarre, foolish and reckless attempt at law breaking?
    The Prime Minister: I responded to that point several Question Times ago, and my response would not change today.
    Mr. Ian Bruce: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30293]
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Bruce: Will my right hon. Friend confirm that gas bills, electricity bills and telephone bills have been slashed since privatisation? Does he welcome today's news that there will be a windfall rebate of £38 for gas consumers? Did he welcome the £50 rebate for electricity consumers? Does this not show that the regulator has already altered the proposals for a windfall tax of £3 billion into a shortfall tax?
    The Prime Minister: My hon. Friend is entirely right: privatisation and the regulator are reducing the prices of a large number of utilities. There has been a rebate of £50 on electricity bills and there will be a rebate on gas bills. The regulator is blowing to pieces the prospect that there might be resources for an artificial windfall tax to fund putative expenditure by any other political party. Opposition Members below the Gangway may not know that the Labour party's industry spokesman is claiming that his party should embrace competition. I will not comment on the look of horror on the faces of the Opposition Members below the Gangway after hearing that.
    Mr. Gunnell: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30294]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Gunnell: Does the Prime Minister agree with me that it is totally unacceptable for Yorkshire Water to show a profit of £162 million when it had a dreadful record on water supply, on leakage, on charges to customers and on investment during that period? Does

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    the Prime Minister not think that it is time to revisit that regulator for tougher sanctions so that we can slake the fat cats and their thirst for profits? It is time that we had tougher regulations.
    The Prime Minister: In that case, the hon. Gentleman will support the water regulator, who took action against Yorkshire Water to cut its prices earlier this week.
    Mr. Viggers: May I ask my right hon. Friend to spare a moment during his busy day for the plight of people involved in a small section of the beef industry, the cow head de-boning sector? Is he aware that this small industry, which is made up of about a dozen mainly family-owned companies, has been driven out of business by the Government order of 28 March banning head meat? I ask my right hon. Friend to take the modest step of authorising the Ministry of Agriculture to discuss the amount of loss with the industry involved.
    The Prime Minister: I will invite my right hon. and learned Friend the Minister of Agriculture to examine that matter and then to contact my hon. Friend.
    Mr. Mullin: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30295]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Mullin: Is it not time that the Prime Minister put a stop to the hypocrisy of the Tories being the party of the family? Perhaps he could take a tip from my hon. Friend the Member for Blackburn (Mr. Straw) and impose a curfew on his Ministers in the hope that they might sleep in their own beds rather than someone else's.
    The Prime Minister: The policy of the hon. Member for Blackburn (Mr. Straw) —which does not seem to carry the support of his Chief Whip—is for a curfew for people under the age of 10.
    Sir Fergus Montgomery: Has my right hon. Friend seen the advertisement in today's paper supporting a new political party in this country? Will he take the opportunity to confirm that he will always heed the views of the British people to stay part of the European Union so long as it is a part of a Europe of separate states and never part of a federated super-state of Europe?
    The Prime Minister: Yes, I did see that advertisement this morning and I am happy to confirm that no Government that I lead will enter into a federal Europe. I have argued for a Europe of nation states and I shall continue to do so. I am delighted to see that there seems to be some support for that in other quarters as well, as was highlighted by the advertisement.
    Mr. Ronnie Campbell: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30296]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Campbell: If money is available for tax giveaways in the next budget, will the Prime Minister guarantee that it will be put into the health service and the education service of this country?
    The Prime Minister: We have increased the resources for the health service above the level of inflation year after year after year. I shall not make any projections about what will happen in the Budget some months hence, but I note the hon. Gentleman's expectation that the economy is doing well enough to mean that it might place us in a position to reduce taxes or increase expenditure. I am grateful for that unsolicited commendation of my right hon. and learned Friend the Chancellor's management of the economy.
    Mr. Thomason: Has my right hon. Friend noted that the Rover Group, which is based partly in my constituency, has put in figures for the first quarter of this year showing an increase of 10 per cent. in production, and that the group's exports are up even more? Can he confirm that it is his policy to encourage enterprise, and that that sort of improvement would be severely damaged by the Labour party's policies?
    The Prime Minister: I can certainly confirm that. I can also confirm that, in terms of growth, inflation, falling unemployment, investment and many other areas of economic management, this country is now leading any of our competitor countries in Europe as a result of decisions that the present Government have taken in recent years.
    Mr. Bayley: To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [302971
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Bayley: Does the Prime Minister recall that the Labour party proposed an amendment to the Criminal Justice Bill to tighten up on the sale of handguns by mail order? In view of the evidence given at the Dunblane inquiry that one of the guns used to kill those children was sold by mail order by a firm in my constituency, will the Government reconsider their policy and introduce legislation to tighten up or even to ban the sale of handguns by mail order?
    The Prime Minister: As the hon. Gentleman will know, the Government have indeed strengthened firearms controls in recent years. Most self-loading and pump action rifles have been banned and a range of other changes have been made. As the whole House knows, we have given Lord Cullen a very wide remit and he may make recommendations to the Government. We will consider those very seriously, discuss them with other parties in the House and then decide what action needs to be taken.

Business of the House
3.31 pm
Mr. Jeff Rooker: Will the Leader of the House please set out the business for next week and the week after?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows:

MONDAY 10 JUNE—Remaining stages of the Community Care (Direct Payments) Bill [Lords].

Remaining stages of the Arbitration Bill [Lords].

TUESDAY 11 JUNE—Opposition Day [14th allotted day].

Until about 7 o'clock, there will be a debate on standards in education, followed by a debate on the prior options review. Both debates will arise on Opposition motions.

WEDNESDAY 12 JUNE—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.

Remaining stages of the Criminal Procedure and Investigations Bill [Lords].

THURSDAY 13 JUNE—Consideration of Lords amendments to the Northern Ireland (Emergency Provisions) Bill.

Motion on the Appropriation (No. 2) (Northern Ireland) Order.

FRIDAY 14 JUNE—The House will not be sitting.

Provisionally, the business for the following week will be as follows:

MONDAY 17 JUNE—Remaining stages of the Family Law Bill [Lords].

TUESDAY 18 JUNE—Opposition Day [15th allotted day].

There will be a debate on an Opposition motion, subject to be announced.

WEDNESDAY 19 JUNE—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.

Until about 7 o'clock, there will be a debate on sentencing policy on a Government motion, followed by a motion on the Northern Ireland Act 1974 (Interim Period Extension) Order.

THURSDAY 20 JUNE—A debate on the European Union-the usual six-monthly debate-on a motion for the Adjournment of the House.

FRIDAY 21 JUNE—A debate on a motion for the Adjournment of the House, subject not decided.

The House will also wish to know that on Wednesday 12 June, there will be a debate in European Standing Committee A on the conservation of wetlands.

[Wednesday 12 June: European Standing Committee A—European Community Document: 8564/95, Conservation of Wetlands. Relevant European Legislation Committee Reports: HC 5I-xiii (1995–96) and HC 51-i (1995–96).]
Mr. Rooker: I thank the Leader of the House for outlining two full weeks' business. That is very helpful.
Consideration of the remaining stages of the Family Law Bill is set down for Monday 17 June. First, I plead with the Leader of the House to help hon. Members to
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take a considered view of that legislation. It will have a very direct and personal effect on our fellow citizens and we owe it to them and to their families to consider it in a grown-up manner. I ask the Leader of the House to arrange for a note to be placed in the Vote Office listing all the amendments that the Government seek to maintain or to overturn, along with any Government amendments for the Report stage.
It would be quite wrong to publish amendments only on the Friday—which is a non-sitting Friday—before a key debate on the following Monday. In the normal course of events, those amendments would not be put down until Thursday and then published on Friday. That is quite unacceptable in this case, and the House should receive advance notice of the Government's views.
Secondly, does the Leader of the House accept that the 58,000 families living in Ministry of Defence married quarters have a legitimate interest in knowing the nationality of the would-be purchasers whom Defence Ministers are lining up to buy their homes for lease back? As it will not affect commercial confidentiality, will the Leader of the House arrange for a Ministry of Defence statement about the nationality of the unknown bidders—information that was yesterday refused to the Defence Committee?
Finally, I refer to an issue that was mentioned in passing during Prime Minister's questions. Has the Leader of the House noticed the community interest in the proceedings of the House next Tuesday as evidenced by the extensive advertising in today's newspapers regarding the ten-minute Bill, the Referendum Bill? While not wishing to discuss the pros and cons of that proposal, I ask the Leader of the House to arrange for a debate about the need to set financial limits on national political advertising.
It cannot be right that people such as Sir James Goldsmith can seek to invent a political party, buy up a democracy and spend a fortune either trying to influence or to replace hon. Members outside the financial limits that are imposed by the Representation of the People Act 1989. There is no legal limit on national political advertising, and the House should address that matter.
Mr. Newton: On the last point, it is difficult to see how the hon. Gentleman's proposal would work in practice. I add also—I hope without too much barb—that, in the light of the amount of trade union advertising that sometimes appears during general election campaigns, it is a rather odd point for an Opposition Front Bencher to raise.
As to the hon. Gentleman's second point about the Ministry of Defence houses, I cannot add to what was said or not said during the recent meeting of the Select Committee. However, I draw the hon. Gentleman's attention to the fact that my right hon. Friend the Secretary of State for Defence is due to answer questions on Tuesday.
As to the hon. Gentleman's first point—which he made in a serious and a considered way—I shall ensure that it receives the serious consideration that it deserves from my right hon. and noble Friend the Lord Chancellor and those concerned with the Bill in the House.
Mr. John Wilkinson: When my right hon. Friend considers whether Ministers should

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make ministerial statements to the House in the next two weeks, will he bear it in mind that a great opportunity has been missed in not announcing the success of British diplomacy at the recent North Atlantic Treaty Organisation ministerial council, in enabling France to rejoin the military organisation of NATO? Therefore, can we have a wide-ranging debate on foreign affairs at the earliest possible date or, alternatively, a ministerial statement to rectify that rather sad omission?
Mr. Newton: I cannot promise either a debate—certainly not of a dedicated kind—at an early stage or a statement. I draw attention once again to the fact that the matter could be raised during Defence questions next Tuesday and Foreign Office questions next Wednesday. There will be the usual debate on defence estimates later in the Session, but I cannot predict when that might occur.
Mr. Simon Hughes: May I also thank the Leader of the House for giving us two weeks' business, and associate myself with the points made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) about the Family Law Bill and the need for proper consideration of any amendments to what is clearly a controversial measure? On the debate that the Leader of the House has announced for a fortnight today, which he describes as the routine six-monthly debate on the European Union, why, for the third time in a row, are the Government not willing to have a debate on anything controversial on anything other than a motion for the Adjournment of the House? We had such a debate on the common agricultural policy and the Scott report, and we still have not debated the big European issue—the Government's non-co-operation policy. Why cannot we have a debate on a substantive motion so that the House can declare its view on whether Parliament supports the Government's policy?
Mr. Newton: On the points about the intergovernmental conference and the Scott report, I have been over the arguments endlessly in the House and elsewhere. On the normal six-monthly debate on the European Union that the House expects to take place before each European Council meeting—there is nothing new about that—I can say only that, since 1993, all such debates have been on a motion for the Adjournment. Of the six that I have looked at, four have been on motions for the Adjournment. It is the sensible and normal way to consider such matters.
Mr. Bob Dunn: Could we arrange for an early and urgent debate on the impending postal strike? Many of us may wish to have the opportunity to condemn the damage that such a strike would cause our constituents privately, commercially and industrially. We would condemn the strike from the Conservative Benches, but would expect silence from the Labour party.
Mr. Newton: I hope that my hon. Friend will understand that the Government still very much hope that a strike can be avoided. It would clearly be damaging to industry and to the Post Office itself. I was the Minister at the time of the last such strike, which was undoubtedly damaging to the Post Office. The Post Office management has made it clear that it sees scope for further progress through negotiation, and I would prefer to concentrate on whether that negotiation will be successful.
Mr. David Winnick: May we have a statement next week on the latest position in respect of the millennium festival? In that statement, will the Minister explain to the House why, regardless of the difficulties in Greenwich, under no circumstances will Birmingham be able to stage the festival? Why are the Government waging a persistent vendetta against the west midlands? People in the west midlands will certainly have their say about that at the next election.
Mr. Newton: I understand why the hon. Gentleman, as a west midlands Member, chooses to use such language, but I do not accept the suggestion that there is any such vendetta. Both my right hon. Friend the Deputy Prime Minister and my right hon. Friend the Secretary of State for National Heritage, who are members of the Millennium Commission, met business leaders yesterday with Sir Peter Levene, who now has until the end of June to continue his negotiations with private sector investors. We should await the outcome of that work.
Mr. Harry Greenway: May I ask my right hon. Friend for a debate next week on the upbringing of children, so that we may debate the punishment of children where it is necessary, including parents' right to smack without regret, having acted properly? Could we note the importance and the value of restoring corporal punishment in schools and that the Leader of the Opposition voted against corporal punishment in schools when it was last debated in the House, despite his weasel words yesterday?
Mr. Newton: I recall that the last time the Opposition told us that they were having a debate on standards in education, as they are planning for next Tuesday, they changed it to another subject at a very late stage. Perhaps we shall see a change to the subject that my hon. Friend has in mind.
Mrs. Gwyneth Dunwoody: Will the Leader of the House find Government time next week for an urgent debate on the growing trade whereby tour operators lease foreign aircraft to carry British holidaymakers without being able to check on the airworthiness of those aircraft? Is that not an urgent and worrying problem, particularly at the beginning of the holiday season?
Mr. Newton: If I may, I shall draw that serious question to the attention of my right hon. Friend the Secretary of State for Transport and express the hope that the hon. Lady might get the opportunity to ask him about the matter directly and personally on Monday.
Mr. Bill Walker: Can my right hon. Friend arrange for an early debate on the problems created by new age travellers, especially the untold damage among sheep caused by their marauding dogs, the hygiene risks and the fact that their girocheques seem to chase them around the country? When they are not where they are expected to be, they cause no end of trouble, as they did yesterday.
Mr. Newton: My hon. Friend knows well that the problems arising from some of those incidents have, in recent years, been the subject of concern and action by

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both my right hon. Friend the Secretary of State for Social Security and my right hon. and learned Friend the Home Secretary via the Criminal Justice and Public Order Act 1994. I shall bring my hon. Friend's continuing concern to their attention.
Rev. Martin Smyth: Could the Leader of the House alter this Monday's order of business as, on that day, the Scottish Grand Committee is meeting and, we understand, the negotiating body in Northern Ireland is meeting, which would affect hon. Members? May I press him on the business on Wednesday 19 June? Will there be an hour and a half or longer for the Northern Ireland Act 1974 (Interim Period Extension) Order? Will it be possible on that occasion, for the Leader of the House to introduce a motion to allow the Northern Ireland Grand Committee to move from place to place and to allow us to speak in plain English?
Mr. Newton: Having had an engaging little debate last night on Welsh, I do not think that I wish to add to what was said then, including in an intervention by one of the hon. Gentleman's hon. Friends. I cannot undertake to change the order of business on Monday, having only just announced it. On the Northern Ireland Act 1974 (Interim Period Extension) Order, the debate would normally last an hour and a half. I am considering the possibility of providing a bit more time, and I might take the hon. Gentleman's words as a representation to that effect.
Mr. Nigel Evans: Could my right hon. Friend find time for a debate on transport policy, so that I could raise two issues? One is the increased prioritisation of resources for bypasses in rural areas such as my constituency of Ribble Valley, and the second is the policy of the European Transport Commissioner Neil Kinnock, who was wisely rejected by the British public, but who is now intent on having a European integrated transport policy, which means that he would be doing a smash and grab on British sovereign policy and power. He must be told clearly that he will not be allowed to do so.
Mr. Newton: Obviously, I shall bear in mind my hon. Friend's request for a debate. He, in turn, will know of the United Kingdom Government's clear position on suggestions about the Commission negotiating on behalf of the whole European Union in respect, for example, of airline access agreements.
Mr. Dennis Skinner: Now that the question of Goldsmith's money has been raised in the run-up to the general election, if we are to have a healthy democracy, would it not be wise to have a public statement by the Government on the funding of all political parties, so that such funding became transparent, as it is in the Labour party—every trade union penny is recorded for the public to see? Every donation over £1,000 should be recorded by all political parties. Why is it that the Tory party was £19 million in debt last year and is now £26 million in surplus? Where has the money come from? Has it come from overseas? We would like to know, because, if the Government can sort out their own finances, why is the public sector borrowing requirement going through the roof?
Mr. Newton: I imagine that you, Madam Speaker, were able to discern a request connected with the business
724
in that. In so far as I could discern anything, it was a request for a statement and I can say only that I have no plans for such a statement.
Mr. Jacques Arnold: Could we have a debate next week on youth discipline, because we have just found unexpected support for corporal punishment for unruly youths from the Leader of the Opposition? As far as I understood it, the only caning that he supported was for unruly Labour Back Benchers.
Mr. Newton: I have already commented on that matter, and clearly my hon. Friend would support any request to change the subject of next Tuesday's debate.
Mrs. Margaret Ewing: May I gently pursue with the Leader of the House the business on Monday relating to the Community Care (Direct Payments) Bill? The right hon. Gentleman will be aware that the Scottish Grand Committee will be meeting in Ayr that morning. I have been advised that the most critical vote on the Bill will occur at about 6 o'clock. It would be impossible for many of my colleagues in Scotland of all political parties to return to the House to vote at that time. We shall also be seeing the start of what we hope will be the peace process talks in Northern Ireland. I ask the Leader of the House seriously and genuinely to reconsider Monday's business and to ensure that no vote is taken early.
Mr. Newton: It is not for me to attempt to dictate the pattern of business. I appreciate why the hon. Lady felt it necessary, as she put it in her usual kindly way, gently to pursue me, but I cannot add to my earlier remarks. We cannot, because of meetings elsewhere—whether in Scotland, Northern Ireland or, when appropriate, Wales—become what would amount to a two-day-week Parliament in Westminster.
Mr. John Marshall: Will my right hon. Friend arrange an early debate on early-day motion 943?
[That this House notes with sad regret the fatal shooting of Stelios Panayi, a 19-year-old Greek Cypriot soldier who had left his post as a friendly gesture to exchange military hats with a Turkish soldier on the dividing 'Green Line' in Cyprus; further regrets that this shooting is just one more in a long series of such murders; is saddened by the fact that after 22 years of division it is still necessary, for the security of the indigenous people of Cyprus, for a UN peacekeeping force to keep vigil on the border, whilst 30,000 Turkish troops in the occupied area pose a threat to all Cypriots; wishes Britain's special envoy, Sir David Hannay, a successful trip to Cyprus in his efforts to advance towards an agreement which will result in a free united Cyprus on a federal basis, a solution which has thus far been hindered solely by the reluctance and refusal of the Turkish side in negotiations to display any sign of political will; and calls on Her Majesty's Government to redouble its efforts to find a lasting and just settlement.]
That would allow the House to welcome the appointment of Sir David Hannay to try to sort out the problems of Cyprus, which have lasted far too long. Does my right hon. Friend accept that it is intolerable that

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hundreds of thousands of people should have been deprived of the right to live in their own homes since 1974?
Mr. Newton: I am grateful to my hon. Friend for his support for Sir David's appointment, which is intended to strengthen the efforts that the British Government have continuously made to help the process of achieving a peaceful settlement in Cyprus—which is clearly the only permanent solution to the problem to which my hon. Friend referred.
Mr. Eddie Loyden: I appreciate the assistance that the Leader of the House has given in the past in respect of MV Derbyshire. The view is widely held among hon. Members of all parties that the families affected by that tragedy have not received a fair deal from the Government. It came as a shock to learn that the marine technologists who made the first visit to MV Derbyshire are being precluded from joining the assessors on the next voyage, which is an absolute scandal. I would much appreciate it if the right hon. Gentleman conveyed the feelings of many hon. Members that the Secretary of State for Transport should seriously reconsider that matter.
Mr. Newton: I am grateful for the way in which the hon. Gentleman prefaced his question. In the spirit in which I have always approached him previously on the matter, of course I shall convey his remarks to my right hon. Friend the Secretary of State—who will be in the House to answer questions next Monday. I take the opportunity to mention, I hope not indiscreetly, that I have already had a word with my right hon. Friend the Secretary of State, following my conversation with the hon. Gentleman earlier this week.
Dr. Robert Spink: Is it not time that the House again debated the funding of the BBC? Is my right hon. Friend aware that the 1991 consolidated licence fee regulations state that a licence is required to install and use television receivers at a single place specified on the licence? Could the House debate the circumstances in which one licence could be used for two different addresses in particular circumstances?
Mr. Newton: I cannot promise a debate on that matter, but it may be in order to raise it in relation to the Broadcasting Bill, which is in Committee and will return to the Floor of the House in due course. I shall bring my hon. Friend's remarks to the attention of my right hon. Friend the Secretary of State for National Heritage.
Mr. Ken Purchase: Is the Leader of the House aware of the dismay and confusion caused by the decision of the President of the Board of Trade to nod through the American bid for Midlands Electricity? Will the right hon. Gentleman arrange for the President to explain to the House his policy in regard to mergers and takeovers, because the industry is currently in total confusion? There seems to be no rationality behind the President's decisions on those matters. One week he will refuse a merger or a vertical integration, but, soon after, he will approve an American takeover of Midlands Electricity. Will the Leader of the House bring the President of the Board of Trade to the House to explain his actions?
Mr. Newton: I cannot promise to bring the President of the Board of Trade to the House in quite the manner
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that the hon. Gentleman suggests, although I can say that the President is due to answer questions in the House on Wednesday 19 June. The only other comment that I shall make, in view of the anti-American flavour of the hon. Gentleman's question—I do not know whether it was intended—is that it is important to remember that this country has huge investments in America, and it has generally benefited from incoming overseas investment and from our investment overseas.
Mr. Tony Banks: Does the Leader of the House recall that recently I asked him for a debate on the Dangerous Dogs Act 1991? Since then, Jessie—a bitch that was lame and had no teeth—has been destroyed, and Buster has been on dogs' death row for approximately five years. Can we please have a debate on that Act? It is costing the police hundreds of thousands of pounds in kennelling, and it is causing a great deal of suffering for pet owners, and for dogs that are waiting to be destroyed.
Magistrates have no discretion in that matter, although they would like to exercise it. Perhaps we should have a debate with a view to getting an agreed amendment to the Act, through the usual channels, before we rise for the summer recess. That would be greatly welcomed by all hon. Members, and it would certainly be greatly welcomed by animal lovers across the country.
Mr. Newton: I recall the hon. Gentleman's previous question, and I think—although I cannot recall exactly—that I made the point that that was a good subject for a Wednesday morning Adjournment debate. That is certainly my view, and he might like to consider it.
Madam Speaker: I call Mr. Paul Tyler—I am sorry; Mr. Paul Flynn.
Mr. Paul Flynn: Thank you, Madam Speaker.
Mr. Banks: Say it in Welsh.
Mr. Flynn: No, I dare not.
Has not the case been made that we need to have a debate on the issue of national spending on elections? The Leader of the House has just admitted that he does not know how we could introduce national spending limits. If we had such a debate, we could explain to him the result of my Bill—it will be debated on Second Reading on 12 July—which will reintroduce the national spending limits that operated until the mid-1970s.
If we do not have such a debate and if we do not introduce spending limits, any person, country or malign organization—overseas or in this country—could spend unlimited millions of pounds on influencing our elections and buying votes. The Government have refused to introduce limits in the past, to protect the integrity of our democratic system. Will they now do it in their party's self-interest?
Mr. Newton: Perhaps I should make the point that the suggestion by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) appears to be related not to election periods but to preventing people from advertising their views on an on-going basis—if I understood his

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suggestion at all. I have no doubt that I, in common with other hon. Members, will examine with customary fascination the Bill introduced by the hon. Member for Newport, West (Mr. Flynn), provided it is in English and not in Welsh.
Mr. Andrew Mackinlay: Could we have some Government time for a debate on the interests of and disadvantages for the Britons who occupy the Rock of Gibraltar? Is the Leader of the House aware that the people of Gibraltar are currently enduring inordinate and unreasonable delays on the border? That is unacceptable. Those are Britons and, ultimately, this is their Parliament. There is a democratic deficit because they have no representation in the House. Every hon. Member therefore has an obligation to the people of Gibraltar, who are not represented in this place. Is it not time that we had a debate about their future, their complaints and the disadvantages that they suffer because of the Spanish authorities?
Mr. Newton: As usual, I shall bear in mind that request—as I do other requests—for a debate. I hope that the hon. Gentleman will agree that my right hon. and learned Friend the Foreign Secretary and the Government have consistently made clear their desire to do the best for the people of Gibraltar.
Mr. Brian Jenkins: Could the Leader of the House find time in the next few weeks to debate the performance of Premier Health NHS trust in my constituency, which is proposing to close a residential mental health unit less than 12 months after it was opened? We understand that there are financial difficulties but, although the area health authority is conducting a consultation, the contractors are already implementing the decision to close the unit before the public have had a chance to express their views. The public are understandably incensed and wish to re-establish their rights in the consultation process. It would do a great deal of good if the House were to re-establish those rights before any action was taken.
Mr. Newton: The hon. Gentleman will appreciate that I am not in a position to comment off the cuff from the Dispatch Box on a particular case of which I was not hitherto aware. However, it is clear that I should—and I will—bring it to the attention of my right hon. Friend the Secretary of State for Health, who is the Minister with the relevant responsibility in respect of social services overall, although not individual departments, and—certainly—health.

Points of Order
4 pm
Mr. Hugh Dykes: On a point of order, Madam Speaker. I gave your office notice this morning that I would seek to catch your eye about a matter on which I seek your guidance.
I am perplexed, and perhaps other hon. Members are too, about a Bill that is still at its preliminary stage. I must emphasise that I have not yet had a chance today to notify my hon. Friend the Member for Stafford (Mr. Cash) that I would raise the matter. As the House knows, my hon. Friend is the promoter of a ten-minute Bill that is due to be introduced next Tuesday. It deals with referendums and other matters related to our membership of the European Union.
However, I noticed—I am sure that other hon. Members have, too—the text of the Bill in the newspapers, yesterday and today. Of course, the ten-minute Bill procedure means that a Bill is not printed until after its formal First Reading—
Mr. Andrew Mackinlay: Leave is granted merely to "bring in" a Bill.
Mr. Dykes: Indeed; the hon. Gentleman reminds me of the correct wording. Prima facie, it might seem a breach of parliamentary privilege that a Bill is given to the press before hon. Members have had the opportunity to see the text. That might be especially awkward in this instance, as those who support the eccentric ideas expressed in the Bill are most anxious to preserve the sacred sovereignty of the House.
Madam Speaker: The Government are frequently encouraged to print Bills in advance so that their contents may be widely known and circulated. Also, many hon. Members apply to introduce a ten-minute Bill and give details to the press. I can see no objection to that. Such Bills are simply in draft form at that stage, and I take no exception to the practice in this instance.
I must tell the hon. Member for Harrow, East (Mr. Dykes) that he should have taken all necessary steps to inform his colleague that he was going to raise this matter this afternoon.
Mr. Simon Hughes: On a point of order, Madam Speaker. It was announced in the Queen's Speech that there was to be a state visit by President Mandela, which I understand is to take place next month. I also understand that it has been announced that he is to address us in a session of both Houses, as is now the convention when a Head of State visits. So far, the venue has not been announced. I appreciate that the responsibility is shared between you and the Lord Chancellor. Is it still possible to make representations about the venue, as many people believe that, given the importance of the visit and the recognition that we want to give President Mandela, it should be Westminster Hall rather than the Royal Gallery?
Madam Speaker: I do not think that any lobbying is necessary, as the House is sensitive to the importance of

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the occasion. However, I see that the Leader of the House wishes to say something further to that point of order, which I shall allow him to do.
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I was not quite sure of the protocol—I did not know whether it was for you, me, the Lord Chancellor or, indeed, for the Lord Privy Seal to reply. However, if it helps the hon. Gentleman, I can tell him that it is intended—rightly, in my view—that the venue should be Westminster Hall.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 101(4) (Standing Committees on Delegated Legislation)

HOUSING
That the Rent Officers (Additional Functions) (Scotland) Amendment Order 1996 (S.I., 1996, No. 975) be referred to a Standing Committee on Delegated Legislation.—[Mr. Newton.]
Question agreed to.

SCOTTISH GRAND COMMITTEE
Motion made, and Question put forthwith, pursuant to Standing Order No. 94H(1) (Scottish Grand Committee (Sittings))
That, notwithstanding the Order of the House [29th January] relating to the Scottish Grand Committee, the Chairman shall interrupt the proceedings on Monday 10th June at half-past One o'clock.—[Mr. McLoughlin.]
Question agreed to.

Royal Air Force
[Relevant document: Minutes of Evidence on the Royal Air Force taken before the Defence Committee on 1st May 1996, House of Commons Paper No. 215-ii.]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]
4.4 pm
The Minister of State for the Armed Forces (Mr. Nicholas Soames): I greatly welcome this opportunity to open our debate on the Royal Air Force on what is a very appropriate day to review its activities and achievements over the past 12 months.
As you, Madam Speaker, will remember, 52 years ago today—6 June 1944—the Royal Air Force was in action over Normandy helping to ensure the extraordinary success of the D-day landings and the ultimate liberation of the occupied countries of western Europe. On D-day itself, the RAF flew more than 5,500 sorties in an allied total of nearly 15,000. The contribution of the allied air forces ensured air supremacy, to such an exceptional effect that the Luftwaffe succeeded in flying fewer than 100 sorties in opposing the landings that day.
Mr. Dennis Skinner: They were great days.
Mr. Soames: They were indeed great days.
The task did not, of course, end with D-day. Throughout the summer of 1944, the RAF continued to make a major contribution to the battle to free Europe. That effort was not made without great sacrifice. Bomber Command alone lost nearly 300 aircraft in June—the vast majority in operations in support of the invasion. Such heroism and determination has inspired, and will continue to inspire, successive generations of young men and women to serve their country with distinction.
Air power today is as important a component of military operations. It exercises an often decisive influence over the broadest spread of operations. In the increasingly unpredictable strategic setting we face, we need forces capable of reacting quickly, boldly and effectively to a broad range of contingencies. The RAF is just such a force. Its speed of deployment, reach and inherent flexibility, and the very punch of air power, ensure that it is ideally positioned to make a formidable contribution to deterrence, or, in the event of conflict, military success.
The House will need no reminder of the key role of air power in the Gulf campaign in ensuring unquestioned mastery and command of the skies, and in greatly degrading the fighting ability of the Iraqi forces. The relatively light casualties—thank God—sustained by coalition ground forces was in no small measure due to that air campaign and its effect. That is, perhaps, the traditional perception of air power and its application. It remains as valid as ever, and we continue to shape our forces to meet the critical demands of high-intensity operations.
It is also clear that air power has great potential in the new scale and scope of the nature of the operations we face. Good examples of that, of course, are low-intensity operations, such as peacekeeping, which require a precise and measured application of force to achieve very specific and clear objectives. There is also a heavy demand for air

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transport—for deployment to the theatre of operations and mobility in the theatre. Helicopters are crucial in the latter respect. Peacekeeping activities often also require sustained operation from deployed and sometimes ill-found positions, imposing strains on people and equipment alike.
In the former Yugoslavia, the RAF has been engaged from the start of the international community's efforts to bring about peace and stability. An RAF Hercules flew the first relief flight into beleaguered Sarajevo, and, appropriately, an RAF Hercules flew in the last relief flight before the siege was finally lifted. Over that airlift's life, the RAF delivered 26,500 tonnes of vital food, medicines and other supplies to the population in nearly 2,000 sorties—some of them extraordinarily hazardous.
In August, when NATO aircraft were ordered into action to deter the Bosnian Serbs from further attacks on UN safe areas, Harrier and Jaguar ground attack aircraft from No. 4 squadron and No. 6 squadron, together with the Royal Navy's Sea Harriers and supported by E3D early warning aircraft, tankers and Tornado F3 air defence aircraft, flew some 270 highly successful bombing missions against Bosnian Serb targets. Of the 19 targets allocated to the Royal Air Force, 16 were destroyed and the remaining three gravely damaged. In addition, the Royal Air Force's information-gathering capability has been vital to the success of allied operations in the former Yugoslavia.
That demonstration of the potency of air power was enough to convince the Bosnian Serb leadership of our capabilities and our intent. It was decisive in bringing peace within the grasp of the international community. When the Dayton accords led to the creation of the NATO peace implementation force—IFOR—the Royal Air Force was again heavily involved in action, transporting about 7,000 troops and 1,750 tonnes of freight, including 500 vehicles from Germany and the United Kingdom.
The Royal Air Force is also doing exceptional work daily over northern and southern Iraq, monitoring compliance with United Nations Security Council resolution 688. To date, Royal Air Force combat aircraft and their supporting tankers have flown about 14.500 sorties, amounting to more than 36,000 hours of operations. I was delighted to see something of that effort in October, when I accompanied the Commander-in-Chief, Strike Command, Air Chief Marshal Sir William Wratten, and visited Incirlik in Southern Turkey and Dhahran in the Gulf, from where operations are mounted. The House should be under no illusion; those are extremely demanding missions, and I was greatly impressed by what I saw and heard.
The quality of support for such deployed operations is extremely important, and I would like to pay a tribute to the Tactical Supply Wing, which provides supply and specialised aircraft refuelling services to national, NATO and UN forces, and to the Tactical Communications Wing, which provides support communications in the Gulf, Turkey and former Yugoslavia. Personnel from those two very specialist units spend much time away from home, carrying out those vital, but obviously often unseen, tasks. They do not get enough credit for the hard work they do, and I am especially pleased to mark them out for special recognition today.
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Even more than in the past, we now perceive United Kingdom forces as required to operate on a joint basis, with land, sea and air elements integrated within a single command structure. The House will recall that we have introduced new structures to improve our ability to respond rapidly and cohesively, with force elements drawn from all three services, notably the permanent joint headquarters—PJHQ—at Northwood, and the joint rapid deployment force.
Responsibility for joint exercises, for existing operations such as those in Bosnia and the middle east, and for new operations overseas, will be transferred to permanent joint headquarters over the coming months. Air power will provide a key component within the joint forces, which we can expect permanent joint headquarters to command.
In addition to the heavy involvement in operations that I have already highlighted, the Royal Air Force has over the past year been actively involved in training and collaboration with our allies, both old and new. Air and ground crews have only recently returned from the United States where they took part in Exercise Purple Star, the first exercise involving the permanent joint headquarters.
The exercise was the largest combined United Kingdom/United States deployment since the Gulf war. It involved 12,000 personnel from the United Kingdom, including elements of the joint rapid deployment force, and 45,000 from the United States. A total—[Interruption.] Would the hon. Member for Warley, West (Mr. Spellar) like to intervene?
Mr. John Spellar: I merely said, "In some very dodgy foreign ships."
Mr. Soames: What an inspired intervention. It has added a great deal of light to our deliberations. Perhaps I may continue.
There were 45,000 American troops involved, and a total of 56 Royal Air Force aircraft took part, including Harrier GR7s and Tornado GR1s, VC10 tankers, Nimrod maritime patrol aircraft and Hercules C130s, which were engaged in the largest parachute drop since the second world war, involving more than 5,000 United States and British paratroopers.
Eight Royal Air Force Pumas and seven Chinooks participated in a variety of support helicopter operations, including comprehensive cross-training with the United States 2nd Marine Expeditionary Force and 18th Airborne Corps. Two Royal Air Force Sea King search and rescue aircraft from 202 Squadron participated for the first time in a major exercise in the combat search and rescue role. The airlift to the United States involved some 2,550 hours of flying by aircraft of the air transport fleet. The exercise, which was on a gigantic scale, was a tremendous success. It provided fantastic training opportunities for all air and ground crews.
Mrs. Margaret Ewing indicated assent.
Mr. Soames: The hon. Lady will have heard about it from her constituents. The exercise provided training for maritime strike and anti-submarine warfare aircraft, and for Tornado and Harrier aircraft in support of their offensive counter-air, battlefield air interdiction and

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close-air support roles. Many lessons have been learned about large-scale combined joint operations and these will be incorporated in future tasks.
Many exercises, of course, are on a rather smaller scale. As we debate today, RAF Jaguars and Harriers, supported by VC10 and Tristar aircraft, are in Alaska to participate in the Cope Thunder exercise series with US and Canadian forces. They will practise operational low flying, weapons firing and electronic warfare procedures.
The RAF has participated in nine major NATO exercises within Europe in the past 12 months, including deployments to Germany, Portugal, Spain, Turkey and Norway. UK participation in such exercises demonstrates our tangible support for the alliance. It affords valuable practice in combined training, while operating alongside forces of other nations in an often unfamiliar environment. It allows the RAF to practise and assess the deployment, sustainment and recovery of our reaction forces declared to NATO.
Collaboration with our allies has also continued within the Western European Union. In particular, the Franco-British European Air Group, announced at the Chartres summit in the autumn of 1994, became operational during the past year. The air group, based at RAF High Wycombe, was formally inaugurated by my right hon. Friend the Prime Minister and President Chirac on 30 October 1995.
The group, which aims to improve the capabilities of our respective air forces to carry out combined operations in pursuit of shared interests, has only a small permanent planning staff and has made excellent progress. It is showing tangible results in increased combined training and personnel exchanges, and work is progressing on contingency planning for joint humanitarian operations. We indicated that, after a settling-in period of at least a year, the group might expand to include other WEU nations. We will soon be considering further the possibilities of such an expansion.
Mr. Peter Hardy: The Minister refers to our co-operation with France. Will he devote some time to the implications of President Chirac's announcement about the future large aircraft, which could be serious for the RAF? Will the Air Force have to look elsewhere for an even larger heavy lift capacity?
Mr. Soames: The hon. Gentleman knows that these difficult and complex matters are dealt with by my hon. Friend the Minister for Defence Procurement—the brains sitting to my left. My hon. Friend will refer to that matter later. [HON. MEMBERS: "Does he mean the hon. Member for West Derbyshire (Mr. McLoughlin)?"] The answer is that both my hon. Friends know more about it than I do.
In November, three Hercules aircraft participated in Exercise Bright Star in Egypt, operating alongside contingents from France, the United States, the United Arab Emirates and Egypt. Nimrod maritime patrol aircraft have been deployed to the Gulf for joint exercises; to Malaysia to participate in the five power defence arrangement exercise Starfish; to South Africa and, most recently, to New Zealand, where two Nimrods have been training alongside anti-submarine warfare forces from New Zealand, Australia and Canada. Finally, a Nimrod
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and crew from 120 Squadron have just completed co-operative training with the joint international task force east in the Caribbean.
Mr. Roy Thomason: My hon. Friend referred to Nimrods, which are due to be phased out in the near future. Will he confirm that there will be an early announcement—hopefully, before the House rises—on whether the Government intend to order replacements for Nimrod or to update it? Will he confirm that the MOD will look at the life expectancy and value of any replacement, and that he will consider the total British components of any replacement?
Mr. Soames: I can confirm none of those things, because, as I have said, I only use the equipment when it has been bought. My hon. Friend the Minister of State for Defence Procurement has those difficult decisions ahead of him, and I have no doubt that he will wish to turn to that important and expensive procurement in his extensive and already brilliant speech.
Mrs. Anne Campbell: Will the Minister ask the Minister of State for Defence Procurement to look carefully at the Valkyrie when he visits my constituency, especially Marshall's, tomorrow? The Valkyrie has been developed with a view to replacing the Nimrod as the maritime patrol aircraft, and it has the lowest cost, the best export potential and a high content of United Kingdom production.
Mr. Soames: The hon. Lady is a formidable ambassador for the Valkyrie. I have studied her during the debate. She has looked like a wise owl on her Bench, and I knew that she was pregnant with question. I am sure that my hon. Friend the Minister of State will have heard what she said and will pay attention to the excellent opportunities that Marshall's have at present and will have in the future.
Mrs. Ewing rose—
Mr. Soames: Oh my God!
Mrs. Ewing: The Minister seems to be concerned by interventions from women. The replacement of Nimrod is critical, because many small and large businesses may be involved in the result of the decision. Can the Minister give us any information about when the decision will be taken and announced?
Mr. Soames: I am doing my best to explain to the House that I am here to speak this afternoon about the operational matters of the Royal Air Force. My hon. Friend the Minister of State for Defence Procurement will, I am sure, address such questions. I do not wish to make light of the matter, not only because those aircraft are important to the overall operations of the RAF and the defence interests of the United Kingdom, but because the programme carries many commercial implications, as the hon. Member for Cambridge (Mrs. Campbell) said. I know that the decision will be taken with great care.
The RAF contributes both to NATO's partnership for peace initiative and to the United Kingdom's outreach programme. Last October, Tornado F3s took part in the first ever partnership for peace flying exercise,

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Co-operative Jaguar, which was held in Denmark. Those exercises, together with the essential preparatory work on flight safety, language proficiency and effective airspace management, are excellent opportunities to reap the benefits of co-operative training, as well as to build confidence and familiarity with potential allies.
The past year has seen a great expansion in bilateral contacts with the countries of central and eastern Europe under the outreach programme, many of which form the basis for successful participation in partnership for peace. It is a testament to the extraordinarily high standards and professionalism of the RAF that we receive daily requests for advice from countries in central and eastern Europe, covering topics from flight safety and airspace management to aviation medicine. The Chief of the Air Staff plans to visit his counterparts in Poland, the Czech Republic and Hungary later this year, and I greatly enjoyed the discussions that I had with the Hungarian Chief of the Air Staff a few weeks ago.
The RAF has also been active in providing assistance to the civil community both at home and abroad. Last year, RAF Hercules aircraft carried humanitarian aid to the dependent territory of Montserrat and neighbouring Antigua to help set up evacuation centres and to airlift those local people who chose to leave the island. With the volcanic activity continuing in Montserrat and elsewhere, the RAF stands by to provide whatever further assistance may be required.
Closer to home, personnel from RAF fire rescue teams, who usually provide crash cover at RAF airfields, were deployed to Merseyside, where they helped to provide emergency fire service cover during the industrial dispute. The RAF is ready to provide similar assistance elsewhere if required. Earlier this year, when bad weather isolated many parts of the country, helicopters took emergency supplies to villages that had been cut off, and ferried people with emergency medical conditions to hospital.
The yellow helicopters of the search and rescue teams continue to be a welcome sight to many an imperilled or incompetent yachtsman or stranded mountaineer. Although established to rescue downed military airmen, the RAF's search and rescue fleet, stationed at eight different locations around the country as well as in Cyprus and the Falkland islands, also provides assistance to the civil community. With the mountain rescue teams, the search and rescue teams were responsible for saving more than 1500 lives during 1995.
By July, the last remaining Wessex helicopters on front-line squadrons will be replaced with the much more capable Sea King, which will increase still further the RAF's ability to help the civil community.
A rather less eye-catching, although nonetheless essential, service to the civil community is air traffic control. My Department co-operates closely with the civil authorities in providing air navigation services to all aircraft in United Kingdom airspace. Last year, some 230,000 military and 82,000 civil flights were provided with air navigation services by military air traffic controllers. In addition, 1,400,000 flights were provided with ATC services at military airfields. The close co-operation between military and civil air traffic controllers is truly essential to the maintenance of this country's safe, efficient and effective air traffic control arrangements.
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In Northern Ireland, the RAF continues to fulfil an important role in the support provided by our armed forces to the Royal Ulster Constabulary. At present, approximately 1,100 RAF personnel are deployed in the Province, operating Chinook, Wessex and Puma helicopters, and an RAF field squadron, which provides security at RAF Aldergrove, the Province's main military airhead.
As in the rest of the United Kingdom, the RAF also provides invaluable assistance to the wider Northern Irish community in times of emergency. RAF aircraft have often been called out to help rescue people, either at sea or on Northern Ireland's inland lakes, or to airlift the injured to hospital. The RAF will, like the other two services, continue to assist the police in countering terrorism until all terrorist organisations make a commitment to end violence permanently.
Before I leave the subject of operational activities, the House would, I know, wish me to say something about the recent spate of aircraft accidents, which has seen the unfortunate loss so far this year of nine RAF aircraft. Flight safety is a fundamental part of operational effectiveness. While there has been understandable concern about the recent spate of accidents, there has also been much unfounded, and some wholly irresponsible, speculation about their potential causes.
There have been suggestions that those accidents are connected with the reduction in the size of the RAF following the end of the cold war. Nothing could be further from the truth. The reductions in the number of aircraft and personnel have been carefully planned, and they are consistent with the RAF's commitments. They do not—nor would they ever be allowed to—compromise either RAF training or safety.
Mr. John Wilkinson: Does not the incorporation of the prestigious, and hitherto separate, Queen's flight, no less, into an existing RAF squadron—32 Communications Squadron at RAF Northolt in my constituency—demonstrate the high level of flight safety that the service maintains? If RAF Northolt were required to become a civil airport and a satellite of Heathrow, as the Select Committee on Transport proposes, would that not be incompatible with its royal duty, and its communications role in flying Ministers and senior offices—roles which are important, in both peace and war?
Mr. Soames: I am grateful to my hon. Friend, who rightly wishes to raise an important matter. I confirm that no decisions have been taken on the recommendations in the report of the Select Committee on Transport on airport capacity. I reaffirm to my hon. Friend the Ministry of Defence's continuing requirement to fulfil its core tasks through the use of the facilities at RAF Northolt. My Department currently has no plans to change either the status of the station or the nature of its operation.
I was saying that it would be folly to compromise either training or safety, and we would never countenance it. It is arrant nonsense to suggest that we would do anything to jeopardise the safety of aircrew by allowing an unserviceable aircraft to fly. No aircraft is permitted to leave the ground unless it is judged entirely safe to do so. The ground crews that service RAF aircraft are dedicated professionals, and are amongst the best in the world.

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At the same time, the RAF continues to maintain the most rigorous training standards, which every other country in the world wishes to come and learn from. Average fast jet flying hours are well above minimum NATO levels. Operating levels and skills remain at an exceptionally high standard.
There is no reason to believe that there is any fundamental problem in the way in which operations are conducted or supported, or that this is anything other than a truly, deeply and very unfortunate coincidence. It would be premature to infer that the overall accident rate for 1996 will reveal any new or disturbing trend. There have been similar clusters of accidents in the past, but they did not reveal any new trend. Overall, the general accident rate has continued to decline since the early 1980s.
I assure the House, nevertheless, that there really is no complacency. As the House will know, boards of inquiry are set up to examine the circumstances of each crash. Those investigations are extremely thorough and exhaustive, and although the work is still in progress, I can tell the House that there is no definite pattern to link any of these accidents.
Mr. Bill Walker: Those who put about the scaremongering stories should be reminded that one should look at the number of accidents per 10,000 flying hours rather than just the number of accidents, because in the 1950s we had hundreds of accidents—and I mean hundreds—in a year. In one year, 1956, there were 156 aircraft accidents, of which more than 100 were Hunters and Meteors. Again, those accidents had to be measured against 10,000 flying hours. The RAF operates the finest and safest military operation anywhere.
Mr. Soames: Plainly, as I said at the beginning, much of the comment on these accidents has been extremely ill informed, and on one or two occasions comments from the Labour party have been downright irresponsible.
The RAF is and always has been a forward-thinking operation. I have spoken of its achievements and activities over the past year, but the House will also wish to hear of the heart and spirit of the service, and how they are being sustained through a period of profound structural change and reorientation.
In last year's debate on the Royal Air Force, my right hon. Friend the Member for Kettering (Mr. Freeman), who was then Minister of State for Defence Procurement, explained the effects of rationalisation and restructuring following the "Front Line First" and "Competing for Quality" initiatives. The RAF is now well on its way to completing these processes of change, and although clearly it has been an unsettling and worrying time, it is greatly to the credit of all RAF personnel that they have accommodated these changes while continuing to do their jobs in the excellent way we have all come to expect.
One of the most painful aspects of the changes has been that the RAF of the future will undoubtedly require fewer people. In 1990, the RAF's trained uniformed strength was 83,500 people; today, it is 62,500. By April 1999, it is planned to be 52,200. Sadly, 8,300 redundancies have been necessary over the past and current financial years, although fewer than 1,000 have been compulsory.
I can assure the House that the redundancy programme is being very carefully and sympathetically managed to ensure that the RAF retains the best mix of skills and
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abilities to meet its future commitments. The needs of those who are being made redundant are also being given high priority. People chosen for redundancy are given every assistance to prepare themselves for life as civilians, including retraining and careers advice. I am glad to say that we do not expect to need any further redundancies to meet our current manpower targets.
Mrs. Ewing: All hon. Members with RAF bases in our constituencies are concerned about these issues. Will the Minister give further evidence, perhaps in a written answer or information placed in the Library, as to how this will impact on particular bases, because in my area, at RAF Kinloss and RAF Lossiemouth, people just do not know what will happen to them. That causes a great deal of uncertainty, not just for them but for their families and for the local economy. Will he give us further information beyond that which appears in the 1996 defence estimates?
Mr. Soames: I will see what I can do for the hon. Lady. I thank her for the great support that she has always given the Royal Air Force. I think she will find that, in the bases to which she referred—indeed, in all the bases of the RAF—everyone knows what their future is following the announcements made in early March. I do not know whether I will be able to give her the figures she requires, but I will try to give her a note to that end.
Mr. Hugh Dykes: I am grateful to my hon. Friend for keeping in close touch with me over recent months about the closure of Stanmore Park and the plans arising from that. I ask him to keep up that excellent record. I thank him for the close consultations that we have maintained. Will he now keep in touch with me about the projected changes, bearing in mind that he wants to avoid compulsory redundancies and we want to maximise the redeployment effort?
Mr. Soames: I was grateful to my hon. Friend for taking the trouble to see me to ensure that we were carrying out the restructuring operations in the correct way. I assure him that we will keep in touch with him about the restructuring that is taking place in his constituency.
The Government recognise that morale is extraordinarily vulnerable during a period of restructuring and redundancy. The higher command of the Royal Air Force deserves a great deal more credit that it gets for piloting the service so successfully through what has been an extraordinarily difficult time. I utterly reject the criticisms that have been voiced that the Royal Air Force is a demoralised force, lacking direction and feeling, abandoned by its military and political masters. That is a gross and unfair distortion.
It is true that the Royal Air Force has experienced a great deal of turbulence, and it has, like the other two services, had to get to grips with profound change. However, it is also true that it is a force of immense professionalism, which has responded in a good spirit to the challenges it has faced. There is no evidence to link any change in working practices with a degradation in skills in the air or on the ground.
Mr. William Ross: A few moments ago, the Minister said that the Royal Air Force was a forward-looking body. Will he learn from

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experience? Does he remember that, during the Gulf war, we lost a number of aircraft because they had to overfly the airfields that they were attacking? Will he give us an assurance that he will look carefully at the provision of stand-off weaponry for the future?
If he does that, will he look carefully at the team put together by Shorts for the stand-off weapons programme, which includes British Aerospace, British Aerospace Systems and Equipment, Royal Ordnance, Lucas Aerospace and MSA in Scotland? We believe that it creates a unique opportunity for us to tie in the skills that are being developed in the United States in relation to its stand-off equipment and for the United Kingdom to reap a considerable transfer of technology and high-quality jobs.
Mr. Soames: That was a formidable intervention from the hon. Member. Mr. Deputy Speaker, the only thing that can gladden your heart and cause your spirits to rise is that it means that he will not have to make a real speech during the debate. I have tried to persuade the hon. Gentleman that these are matters for my hon. Friend the Minister of State for Defence Procurement, and I am sure that he will deal with them.
I correct the hon. Gentleman on one point: the aircraft losses during the Gulf war occurred because the Royal Air Force was charged with dropping munitions of a certain type, which caused it to have to undertake the most dangerous and difficult missions—during which, very sadly, a number of aircraft were lost. They were not lost because they did not have the weapons to do the business; they were lost because they were delivering the weapon of the moment, which required them to be positioned right over the runway.
Our main concern, of course, must be to ensure the health and fighting efficiency of the service. We have an active recruiting campaign, and training that is among the best in the country. These are not hollow words. I saw some excellent training under way when I visited RAF Cranwell, RAF Honington and RAF Shawbury recently.
The Government have announced a number of important decisions on equipment procurement and upgrading—a matter that my hon. Friend will deal with at much greater length later—which is a measure of our firm support for the Royal Air Force and our determination to maintain its position in the premier league. We continue, and will continue, to drive down overheads through rationalisation and restructuring. We are making use of competition from the private sector in the delivery of support services—as is every other air force in the North Atlantic Treaty Organisation. As part of the search for greater efficiency, we shall continue with this search for savings. My hon. Friend the Minister of State for Defence Procurement will have more to say about that when he replies to the debate.
However, I am pleased to announce that, following a competition, a five-year contract has been placed with Brown and Root and Marshall Aerospace Ltd.—BRAMA—to provide support services at Royal Air Force Valley, including Hawk aircraft maintenance. After an extended implementation period, this contract will come into effect on 31 March 1997. It will result in savings of
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£25 million during the contract period, and will provide 400 new civilian jobs at the station—a welcome boost to the Anglesey area.
Mr. Ieuan Wyn Jones: I thank the Minister for that announcement, and for his co-operation and courtesy during the time that we have been discussing the issue with him. Now that he has been able to make the announcement that BRAMA has secured the contract, can he confirm, first, that it is aware of the requirements—of which it has been informed informally by ourselves and others—to ensure that the maximum number of local people are employed at Valley in the 400 jobs announced, and, secondly, that it will co-operate with the agencies and the Welsh Office to ensure that, where those skills are not currently available, training programmes will be put into place and it will co-operate with us?
Mr. Soames: I thank the hon. Gentleman for his kind words, for representing so clearly the views of his constituents and for being so positive at what has been a difficult time. I am happy to give him the assurances he seeks. I know that the consortium has been closely in touch with all the agencies concerned, and I believe that obviously this will be an astonishing success and will bring great benefit to Anglesey and the wider area. I know that it will be welcome news to local people who were worried about the future of the station.
The terms of the contract ensure that the very high standards set by the Royal Air Force for the provision of support services will continue when BRAMA take over. To that end, BRAMA intends to set up training arrangements to equip personnel with the necessary skills and to establish a long-term training programme to provide individual development and continuity of supply of qualified personnel. Initial discussions with the local training and enterprise council and college regarding provision of training began during the tendering process, and will now be pursued further.
Mr. Spellar: Does the provision with regard to training apply only to upgrading skills of existing trained personnel, or is there provision for apprentice training to ensure a continuing throughput of skilled personnel?
Mr. Soames: I am not able to answer that question, but I will happily let the hon. Gentleman have a detailed note later.
Following the implementation of this contract, Royal Air Force Valley will still employ more than 300 Royal Air Force personnel. I am fully confident that they will, in partnership with BRAMA, continue to deliver advanced fast jet training to the high standards for which they rightly have a fantastic reputation.
We are pressing ahead with the work following on from Sir Michael Bett's independent review of the armed forces' manpower, career and remuneration structures. Good progress is being made. I emphasise again that this is not a savings exercise. Rather, it will lead to better structures and better management of our people. I hope to make a further and more detailed announcement on this subject later in the summer.
Changes following "Front Line First" have highlighted the vital role performed by our reserve forces, and we have been looking closely at how we can make better use

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of the tremendous enthusiasm and great array of skills that people bring to the Reserves. As I announced on Third Reading of the Reserve Forces Bill on 20 May, we have now decided to form a Royal Auxiliary Air Force support helicopter squadron at RAF Benson in October. I hope that this will prove an innovative concept for the wider use of reserves, and I hope to give the House further details later in the year.
Before leaving the subject of reserves, I mention in particular the members of the Royal Air Force Volunteer Reserve currently called out for service in the former Yugoslavia and Turkey. I have seen the exceptional service and support they give to our regular forces in the provision of intelligence, photographic interpretation and meteorological forecasts. We are extremely fortunate to have such high-quality people on the reserve list.
The Royal Air Force is emerging from a period of great change. This process has inevitably imposed strains and tensions on individuals and the organisation alike. It says a lot for both that these changes have been carried through in a period of exceptional operational activity. I am extremely conscious that we all owe them a debt of gratitude.
I am very proud of the Royal Air Force. It is equipped with modern, capable aircraft, and manned by professional, extraordinarily skilled and dedicated people. It enjoys a superb reputation at home and abroad, and anyone who has the honour to travel in the name of the United Kingdom on defence business knows that that is no idle boast. It is one of this country's great assets, and we intend to ensure that the means are made available to retain and enhance that asset for the future.
4.44 pm
Mr. John Spellar: I thank the Minister for a comprehensive report on the current operations of the RAF. I convey to the House the apologies of my hon. Friend the Member for South Shields (Dr. Clark), the shadow Defence Secretary, who is today out in Bosnia, meeting our troops, and of my hon. Friend the Member for Motherwell, North (Dr. Reid), who is in Camberley, meeting other troops.
I am sure that we were all shocked this afternoon by reports in the evening paper that the beating retreat ceremony in Horse Guards parade was disrupted by a raucous party of hooray Henrys in the Office of the Secretary of State. I am sure that the Minister of State for the Armed Forces deplores that as much as the rest of us, and I was slightly surprised that he did not take the opportunity, on behalf of the Department, to issue an apology for those unfortunate events.
Mr. Menzies Campbell: Would it not be appropriate to ask Mr. Terry Venables to investigate and to conclude that the doctrine of collective responsibility should apply?
Mr. Frank Cook: Offside!
Mr. Spellar: Or, in line with certain civilian air companies, that perhaps handcuffs should be provided for the occasion.
This is the third and last of the services debates in this Session. Like others, it provides a fitting opportunity for the House to pay tribute to the illustrious history and valued
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current role of our troops. Since the last RAF debate in the House, we have had the 50th anniversary of VJ day, which was so memorably and dramatically highlighted by the Lancaster bomber dropping a million poppies. Recently, we have had a tremendous display of Spitfires, reminding us of another epic period in the last war.
As the Minister mentioned, by chance or good parliamentary management, today's debate is on the anniversary of D-day, when the domination of the air by the allied forces played such a considerable part in the success of that operation. Those events reminded us graphically of the key front-line role played by the RAF in the defence of these islands and our liberties.
As the Minister said, the RAF is still very much in the front line. In former Yugoslavia, it has played a full part in the campaign to restrain the Bosnian Serbs, in a variety of roles including successful bombing missions, combat air patrol and reconnaissance missions. For four years it has been part of the longest humanitarian airlift in history. That humanitarian role has been to the fore again in the continuing flights from our base in Turkey over northern Iraq as well as flights over southern Iraq.
Closer to home, as the Minister said, the RAF has played a valuable role in Northern Ireland, and we all hope that the current talks and engagements in the political process will lead towards a normalisation of the position. We must not take too much for granted and, as the Minister said, must maintain our preparedness.
This year also marked a major break in a long tradition when it was announced that the Tornado squadrons at RAF Bruggen were being redeployed to existing operational bases in the United Kingdom. We all recognise the logic behind that decision, but we should also take the opportunity of paying tribute to the vital role they played in maintaining the peace during the long era of the cold war.
We should also use the opportunity of this debate to pay tribute to the work of the Reserves, which was covered in much more detail during the extensive debates on the Reserve Forces Bill.
The Minister mentioned, and undoubtedly other hon. Members will also discuss, the considerable concern that has been expressed at the spate of crashes earlier in the year, with the loss not only of aeroplanes but of human life. Thankfully, that appears to have abated slightly, but we all recognise that any service can have a run of bad luck. The RAF had a similar spate in 1994. I understand that the United States navy has recently had a similar experience with Phantoms. There will be individual inquiries into the crashes and no one would want to pre-judge their outcomes. However, we are asking for a broader inquiry in order to consider the crashes collectively and see whether there are any common factors and any lessons to be learnt.
We must ask whether aircraft availability and the cost of flying are restricting pilot training. When I asked the Minister on 12 March what was the current average period for completion of fast jet training, I received the astonishing reply that it was 259 weeks and that that would be reduced to 109 weeks by the end of the year. When my hon. Friend the Member for South Shields asked on 25 March about the average air crew training hours for Tornado aircraft, he was told that the monthly average for 1991–92 was 17 hours 45 minutes and that that had been reduced to 13 hours 55 minutes in 1995–96.

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I do not pretend to be an expert on pilot skills. There are those in the Royal Air Force—and indeed some in this place—who are better qualified to make an informed judgment in that regard.
Mr. Keith Mans: Perhaps I can assist the hon. Gentleman. The difference results from the fact that, in the last year that he mentioned, there was more operational flying and less training. In the first two years that he mentioned, there was less operational flying and more training.
Mr. Spellar: I think that the hon. Gentleman would agree that the Royal Air Force is determined to retrieve those training hours precisely because it perceives the difference between training experience that is aimed at particular tasks and skills and operational experience. There is concern that the disparity should be redressed, and the RAF's appearance before the Defence Committee last month reinforces that point. I believe that the Select Committee was correct to press the RAF about the issue, and we await the outcome of its deliberations.
Mr. Soames: I must clarify that point. Is the hon. Gentleman calling for another review over and above the individual crash inquiries, which obviously do the same thing as would an overall review?
Mr. Spellar: I hoped that I had made it clear, but I am happy to reinforce that point. I said earlier that proper, individual inquiries are conducted into each crash. We are asking for a broad review that examines features common to those crashes rather than simply looking at each case in isolation. We ask the Minister to undertake that review to see whether there are common faults and lessons to be learnt. I hope that I have clarified my request.
I hope also that the Ministry of Defence will look more critically at contracting out training. We would be alarmed at the prospect of extending civilian training schemes to fast jet pilots. Even in areas of greater compatibility, we should be concerned about eroding the RAF training base. The RAF cannot be simply a project manager: it must have strength in depth and retain an all-round competence. It is important that the RAF provides a proper career structure for its personnel while delivering continuity and security.
The same considerations apply to the maintenance side of the RAF in logistics command and the many skilled civilian staff. We are concerned about the retention of trained personnel in these rather turbulent times to which the Minister referred. For example, 11 out of 12 Tornado flight commanders in Germany intend to exercise their option to retire early at the age of 38. It is from that officer pool that the future station and squadron commanders are drawn. Perhaps the Minister will say what measures the Government intend to take to correct that worrying problem.
In spite of the Minister's bluster on such occasions—we all accept that the Minister in full bluster is quite an impressive sight—the fact remains that people inside and outside the forces cannot understand why billions of pounds are spent on redundancy, including compulsory redundancy, while hundreds of millions of pounds are
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spent on recruitment and the armed forces remain undermanned. Only last week I received a letter from a man who asked why his son was to be made compulsorily redundant from the RAF next year while it continued to advertise for new trainees.
That is not only a great waste of training and experience—I am not sure whether those factors carry much weight with the Government—but the worst possible advertisement for new recruits. When major international companies such as the Rover Group—which announced its profits today—proudly proclaim their job-for-life concept, does the Minister believe that the RAF, with its hire-and-fire mentality, will be able to compete for the best recruits? That is a real problem for the RAF.
Mr. Soames: Although the hon. Gentleman has extremely limited experience in such matters, he should realise that the services have never been job-for-life organisations. The question of recruiting balance and structure is a matter for the Royal Air Force. It must decide what staff age profile it wants and needs. It must constantly refresh its staff and bring in new and younger blood at all levels and in all ranks. Finally, we cannot compel people to join the Royal Air Force, the Army or the Navy. Therefore, we must spend a great deal of time, money and effort ensuring that we get our message across.
Mr. Spellar: I thank the Minister. I am not entirely sure how long he served in the armed forces. Perhaps he will tell us whether he served as long as Lord Craig, who expressed concern yesterday in another place about flight commanders. The Minister should move away from cheap personal abuse and answer properly the questions that are asked not only by the Opposition but by many in the forces and by their families. They are extremely concerned about the uncertainty of careers in the forces and they are not impressed by the large-scale handing out of compulsory redundancies.
Mr. Bill Walker: The hon. Gentleman is correct to refer to the views of Lord Craig, who has considerable experience in that area. He will know from his own service that flight commanders of that age often leave the forces in order to enter the civilian field and earn large salaries working as captains for major airlines. We must recognise that the reduced size of the Royal Air Force means limited opportunities for flight commanders to become station commanders and air chief marshals.
Mr. Spellar: I thank the hon. Gentleman, but I think that he would accept that 11 out of 12 is a high proportion.
The Government do not seem to have time for continuity and competence in maintenance. How else can one explain the decision to contract out the Tornado repair work at RAF St. Athan, whatever the cost? Hon. Members have questioned the Minister about that matter, but he will not come clean about how much damage was done and what the final bill will be. Perhaps the Minister of State for Defence Procurement, who knows more about such things, will expand on that issue when he replies to the debate. If he does, we shall be able to evaluate the effect of that decision on the alleged savings to be derived from contracting out.
The Government are also considering contracting out maintenance work elsewhere in Wales at RAF Sealand and RAF Valley. The Minister made an announcement to

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that effect this afternoon. However, he did not answer the question that I put to him regarding longer-term training and apprentice training. Contractors will be able to use redundant RAF personnel to fulfil the contracts and they will be able to bid on that basis. If we are to retain long-term competence through the contracting route, the real question is what training efforts will be made to ensure that we have the skills in this country.
That is the difficulty that the Minister faces, and we must continue to press the Government on that point. When we asked whether contracts would include the requirement to ensure proper training, we received no reply. There has been mention of additional funding to the local training and enterprise council to provide conversion training. That is most welcome, but we still need to look to future competence.
The danger is that such measures could lead to a hollowing out of the logistical capability of the RAF. We are concerned about the potential weakening of our surge capability, particularly if we became involved in two theatres of operation at the same time. We are also concerned about the reduction in the RAF's benchmarking ability, which enables the proper evaluation of bids for contracted work. We firmly believe that any decisions on contracting work must be determined by pragmatism not dogmatism and we shall impose a moratorium on new contracts while we evaluate the schemes that are currently in the pipeline.
In that context, I shall move on to the story of the sale of the married quarters estate—a quite extraordinary saga that is drawing increasing public attention. Frankly, there have been some problems with the estate over the years, particularly with the high number of voids for long periods and the condition of some of the properties—mainly Army properties, but to a lesser extent in the Navy.
It was sensible and pragmatic to examine the forces' long-term requirements and to consider whether all the properties involved were suitable and whether, due to their location or for other reasons, some were surplus to requirements. That process seems to be continuing separately from the overall sale. However, the main sale of the married quarters estate does not appear to be driven by any of those considerations or by anything other than a desperate attempt to fill the Treasury coffers for a pre-election giveaway. It is a "live now, pay later" deal. The Chancellor of the Exchequer will be living it up and the service men and women and their families will be paying—not only in money, but in the loss of mutual support between families in the service community.
The purpose of the scheme cannot be to introduce private sector skills because the management of the estate will continue to be carried out by the defence housing executive, as will the repairs. Only this week The Times carried a substantial advert for positions in the defence housing executive to deal with the management of the estate. The problem has been identified as follows by one of the losing bidders, Johnson Fry:
"If this is viewed as a purely financial transaction then problems will emerge if there is not serious housing management experience in the team".
The only housing management side seems to be with the defence housing executive.
Nor can the scheme benefit the troops of all services. Under the current review, they are faced with rent increases between 10 per cent. and 25 per cent. this year
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alone, with worse to come as they move up towards market rents. As the MOD pays market rents to the new landlords, there will be increasing pressure to make up the deficit. Individual service men and their families will be paying for that and financing this dubious deal.
We should also recall that service personnel will have lost their rights to the discounted sales scheme that was of considerable benefit to those leaving the service. They are also concerned that the better-quality property—much of which is with the RAF—will be sold and service personnel will be moved into the less desirable properties. Some hon. Members may wish to draw attention to that during the debate.
Nor can it be to the benefit of the services in general. I mentioned earlier the return of Tornados from RAF Bruggen, and the services are obviously considering the return of other units. The sales may close that option. Perhaps that is why the sale is not only unpopular with the service men and families, as was shown by the recent evidence of the Army wives to the Select Committee, but of concern among those in the higher ranks of the forces who are planning for the future.
Looking to the future, will the Minister tell us what will happen after 25 years? According to the prospectus:
"At the end of the 25 year period MOD will be able to renew its leases, subject to a specified right for the landlord to obtain vacant possession for redevelopment or on provision of comparable"—
that is an interesting word—
"alternative accommodation."
Where will that leave the MOD and individual service men and women and their families? What certainty does it give them? That is also why it caused such uproar in the other place earlier this week when peers from all parties expressed serious concerns and reservations about the scheme.
What is the driving force behind the sale? It is fair to say that in some of the press publicity some chaff has been dropped to suggest that it is to pay for repairs. If that is the case, perhaps the Minister can say in his reply that the total proceeds of the sale will be devoted to upgrading service houses over and above current expenditure. That seems to be causing some humour in the ranks, so I presume it is not the answer. If he cannot say that, will he tell us what percentage of the money made from the sales will be spent on upgrading the properties? Perhaps he would like to intervene now.
The Minister of State for Defence Procurement (Mr. James Arbuthnot): This is such drivel that it is hardly worth intervening. If the hon. Gentleman were not in a position of supporting the sale, would he find the money to upgrade the properties which need upgrading from somewhere else? In other words, will he commit himself now to spending more on the defence budget?
Mr. Spellar: When Ministers are slightly short on argument, they resort to personal abuse.
Mr. Soames: Certainly not.
Mr. Spellar: "Drivel" seems to me to fall into that category. It is interesting to note that, although the Minister put up a smokescreen, he did not answer my

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question. I shall answer his question, but I would be interested in an answer to mine. What percentage of the overall sale will be spent on upgrading the property?
Mr. Arbuthnot: As the hon. Gentleman should be aware, it is not possible to know what percentage of the overall sale proceeds will be spent on the property because we do not yet know what the sale price will be. As I told the Select Committee yesterday, the defence housing executive has estimated that it will cost £100 million to upgrade the property to grade 1 standard. Therefore, the overall sale expectations will be more than the defence housing executive could possibly spend on any property. That was why I described the hon. Gentleman's remarks as drivel.
Mr. Spellar: I thank the Minister for that reply. That figure makes it quite clear that the money that could be released by the sale of surplus properties—much of which is taking place at the moment—could easily cover the cost of repairs. Therefore, the overall sale is unnecessary because repairs could be paid for at the margin. That gives us a clue as to the real business of the sale.
Mr. Arbuthnot: How would the hon. Gentleman pay for it?
Mr. Spellar: There is a problem of communication here.
The MOD has already given instructions for the sale of a number of surplus properties. Undoubtedly, more properties will be declared surplus to requirement. The proceeds would go a considerable way towards paying for the repairs. I said earlier that we accepted the need for the sale of surplus properties. If the Minister believes that the sale of surplus properties will not raise sufficient funds, perhaps, instead of hiding behind commercial confidentiality, he will tell us how much was raised from the sale of surplus properties. However, the number of properties being sold suggests that the MOD might not be getting a very good deal if it had not managed to raise £100 million.
Mr. Frank Cook: It might help my hon. Friend if I were to inform him that—as I understand it—11,000 voids are available. If they were sold for £10,000 each, which is not a great deal at today's market values, that would raise £110 million, perhaps allowing an extra £10 million for the Conservative party election fund.
Mr. Spellar: My hon. Friend has put some figures on that, but I would not want to give the Government ideas, as we wish to retain some flexibility within the system. Certainly my hon. Friend has clearly identified that the sale of surplus properties would be sufficient to pay for the rolling programme of repairs.
Let us get down to the real reason for the sale. Its handling gives us a clue. Why did the Secretary of State make a surprise announcement in November and why, with Christmas and the new year intervening, did he require replies by 25 January? That seems an extremely short period. How could one seriously expect considered replies on such a complex project over that period? The sale comprises 60,000 properties over 800 sites. Who would have the resources to evaluate it in that time?
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The sale of individual properties is a sweetener, but the real attraction for any bidder is rent payments. The prospectus talks of a guaranteed payment or aggregated market rents, whichever is the higher, and we know what the Government have been doing to market rents. It appears, however, that even that is not enough. Reports in the Financial Times show that the MOD has been asked to consider index-linked payments. And the reason? It is believed that that will enable it to raise the upfront price.
So there we have it in a nutshell. This is not a proper privatisation or a service agreement using private sector skills. There is not even any competing for quality. It is a straightforward sale and lease-back scheme. If it were happening in a company, we would immediately conclude, unless there was a proper reinvestment strategy, that it had cash flow problems. It is a live now, pay later, deal.
I gather that the Minister seemed reluctant yesterday at the meeting of the Select Committee to say who was buying, which is surprising as it has been in nearly every business section of the quality press in the past couple of weeks. It informs us—who knows if it is right, but I suspect that it might be close to the truth—that Nomura bank, Morgan Stanley, Lehman Brothers and ING are buying. A couple of weeks ago, another Secretary of State created considerable fuss about flying the European flag over public buildings for a day. Now, without a murmur from those Ministers, the stars and stripes or the rising sun will be flying over our married quarters estates, airfields, camps and naval bases. It is an extraordinary and disgraceful situation. A previous Tory Prime Minister, Harold Macmillan, talked about selling the family silver. This lot are taking out a second mortgage on the house.
Some procurement decisions need to be mentioned. My hon. Friend the Member for Wentworth (Mr. Hardy) drew attention to the future large aircraft project, which I know is of considerable concern to my hon. Friend the Member for Alyn and Deeside (Mr. Jones). We are receiving confusing messages from across the channel. We and the aircraft industry hope that the Minister can shed some light on the subject, especially the French Government's attitude on development and production of the aircraft, and on their intention to purchase.
I am sure that the Minister heard last week that Volker Rube, the German Defence Minister, was speaking encouragingly about the FLA' s development. We have also noticed heavy advertising in the defence press from German industry about the FLA. I hope that the Minister will give us further encouragement on that important project and on working more closely generally with the French air force and industry, which is to be welcomed.
We all recognise that, after some difficulties, Eurofighter 2000 is increasingly emerging as a success story, especially in terms of its capabilities. It is a tribute to British and to European industry, but the Government can also take some credit, not only over the work-share issue, but over the partnership with industry.
Since taking on this portfolio and more recently on a visit to Warton, I have been impressed by the substantial co-operation and collaboration between the RAF and equipment manufacturers at all stages. The result seems to be an extremely pilot-friendly aircraft. The Government should be claiming more credit for their role, but perhaps this level of Government sector collaboration is slightly politically incorrect in this Administration and they feel constrained from doing so.

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Finally on detailed procurement, will the Minister comment on what appears to be the successful thermal imagery airborne laser designation update on the Jaguar aircraft? We have all read reports on a rapid and cost-effective update. It appears that, again, pilots are heavily involved in the process through the Defence Evaluation and Research Agency. Again, we could be looking at a significant breakthrough in methodology. The House will be interested in such a report from the Minister.
More generally, all Governments must recognise the impact of purchasing decisions on the size and configuration of the defence industry. The joint Trade and Industry and Defence Select Committee report outlined that succinctly. Let us note that report's conclusions:
"Since the Government is the only significant UK purchaser of defence equipment, it cannot ignore the impact of its decisions on the UK's defence industries. We welcome the changes in MOD's attitude towards procurement, such as the greater willingness to take account of the future of MOD's supply base, the move towards partnership relationships with suppliers, the increased emphasis on dual use technologies and the greater emphasis on collaboration within Europe. However, these changes are tending to be reflected in procurement decisions in an ad hoc way, chiefly in the major decisions. Our recommendations are designed to change this, particularly through taking account of industrial interests more systematically, a longer term approach to the retention of capabilities and leading-edge technology, an increased emphasis on the technology base of the defence industries and related civil industries, and recognition of the importance of the defence industries and their technology and skills to the UK economy."
I would especially emphasise the phrase
"particularly through taking account of industrial interests more systematically".
That is reinforced by the recognition in the defence estimates, which state:
"The Department is British Industry's largest single customer. Our procurement decisions can therefore have a significant impact on the shape of the Defence Industry. We recognise the need to take defence industrial factors fully into account in our decision-making and have reviewed our procedures to ensure that this is done systematically as part of our programming and project evaluation process."
That and the paragraphs that follow are all reminiscent of last year's Labour party document "Strategy for a Secure Future" and a considerable move away from previous Government doctrine.
As the MOD moves towards making key decisions on both aircraft and missile purchases, it must start to develop a view of how those will impact on relationships and the corporate structure of the British and European aerospace industry, as well as our relationship with the United States defence industry. It appears that there may be some divergence of opinion between the MOD and the Department of Trade and Industry on the question of vertical or horizontal integration, but, if it is accepted—and it should be—that there is some urgency about rationalisation, the resolution of this becomes imperative, especially in the light of the rapid consolidation of the United States industry. Labour's policy document "Strategy for a Secure Future" points the way ahead to a more positive and realistic policy.
In that context, I suppose it would be churlish not to congratulate the Government on the decision to proceed with the Tornado upgrade rather than following the option that was trailed of leasing F16s from the United States, but the question that we must ask, as with the
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extraordinary saga of the Army field ambulance and the contest between Land Rover and the Austrians, is simple: why were those options considered in the first place? It is no wonder that, when defence manufacturers were giving evidence to the joint Select Committee, they said:
"The UK MOD's procurement policies are seen as verging on the hostile to the indigenous industrial base".
Can we imagine that being said in all seriousness about the American, French or defence ministries and their industrial structures? Perhaps that explains the Minister's facile response on the unsuitability of foreign chartered ships for Operation Purple Star, one of which was a Ukrainian ship which, after it arrived in America, was tied up, and then substantial fines had to be paid to get it repaired.
The industry could have gleaned some hope on 23 May 1995 when the then Minister of State for Defence Procurement, the right hon. Member for Kettering (Mr. Freeman), said:
"The Ministry of Defence needs to continue to give due consideration to the possible consequences of procurement decisions for the defence industrial base."
With his departure, however, we seem to have slipped back again to relying on two legs of the stool—operational effectiveness and price—rather than also considering the third leg of industrial capability.
Let us be clear. When we buy abroad without proper reciprocation, we pay twice: once for the equipment and then for the people thrown out of work. Then we pay again because of our reduced ability to sell into third markets, so any national purchasing policy should be mindful of the industrial implications.
That is shown by the case of the defence helicopter flying school. Let us leave on one side whether the privatisation is a good idea and concentrate on the procurement process. It appears evident that all the aircraft options would be from abroad. I accept that that seems to be for straightforward availability reasons. When I asked the Minister what level of offset or industrial participation we would be seeking, I was informed that it was being put out to tender, so industrial participation was not appropriate. I pointed out that the formalities of the contractual relationship would not have deterred the Minister's French counterpart.
I am pleased that the position has been reviewed and that bidders have been advised that industrial participation will be sought. Obviously I am pleased about that, and the Minister can take credit for being open-minded and receptive. The question remains why that was not done in the first place. Why do not the MOD Procurement Executive and Ministers get into the frame of mind to buy British first wherever possible?
Will the Minister take the opportunity to make a statement about the replacement helicopters for transporting the royal family? Will the Westland EH101 be chosen, or will we once again be advertising another country's wares? It is bad enough having Lady Diana charging around in a BMW, without providing a flying advertisement for our competitors.
The Minister's opening speech was vintage Soames—full of detail, and rightly proud of the RAF's record through history and in the past year. However, the hon. Gentleman was a little light on analysis and future vision. We need to examine the new role and priorities of the armed forces in the wake of the ending of the cold war.

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Is not that just what the Joint Chiefs of Staff are doing, in developing the doctrine for our component of the joint rapid reaction force?
Mr. Soames: I am grateful for the hon. Gentleman's kind words—and I mean that. I fully appreciate that he had to write his speech before hearing mine, but did not the hon. Gentleman listen to my points about the changes to air operations, adjustment to peacekeeping operations, creation of the permanent joint headquarters, rapid deployment force and the new range of joint and combined operations?
Mr. Spellar: Certainly I did, and rightly drew attention to the re-examination by the Joint Chiefs, particularly with regard to the joint rapid reaction force. However, a broader analysis is needed than the Minister described. We must evaluate where our troops might go, how they would get there, what they would do when they got there, the back-up that they would need, how and at what point they would come home, and the role that aircraft would play in the projection of power. We owe such an evaluation not only to our forces but to equipment manufacturers, who need a clear indication of our future intentions. The Minister may believe that he has produced such an evaluation, but that is not clear to outsiders—particularly in industry.
Dean Acheson said that Britain had lost an empire but not yet found a role. Over the past 50 years, our role has been defined by the raw realities of the cold war. We no longer face the single unified threat, but the world is still a dangerous and difficult place. We have the opportunity to redefine Britain's place in that world and the role of our armed forces.
It would be of considerable value to the country if, in arriving at that redefinition, we could maintain broad national consensus on defence policy objectives—which we had in the past under Labour and Conservative Governments. Such consensus would not stifle political conflict or debate. We will still argue about the effectiveness and competence of Ministers in implementing the policy. I am sure that next year, Conservative Members will make such criticisms of us, but less effectively.
We need consensus on broad objectives and policy outlines. That sentiment will find an echo in all parts of the House, apart from the hon. Member for Crawley, and throughout the country. That is the challenge facing us. I hope that the Minister is big enough to rise to it, and I hope that the rest of us will—because that is what the country needs and the forces require.
5.23 pm
Mr. Michael Colvin: The part of the speech of the hon. Member for Warley, West (Mr. Spellar) that I liked best was his opening remarks about the Spitfire, which were appropriate on a day like today. Some of the Schneider trophy races that took place during the Spitfire's development were held in my constituency, at Calshot Point. Mitchell worked at Southampton university; Spitfire prototypes were flown from Eastleigh, which is close to my constituency; and during the war the Spitfire was made at North
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Baddesley, which is in my constituency. It was appropriate for the hon. Gentleman to begin his speech with references to that fine and romantic aircraft, but then he lost the thread, and my support for many of his other remarks.
I want to put on record the name of Tom Paravicini, who served on our district council with me for many years. He was a modest man and a good councillor. We knew that he had something to do with Rolls-Royce, but we were never sure what it was until we buried him the last year. From the funeral oration, we discovered that Mr. Paravicini was a leading engineer at Rolls-Royce and was given responsibility and credit for making the Merlin engine more powerful, enabling the Spitfire and Hurricane to fly 30 knots faster. We pay credit to pilots and ground crews, but we often forget the people who designed the aircraft and gave our pilots the leading edge in combat. I am glad to use this opportunity to digress from the general theme of the debate to pay tribute to that remarkable man.
I share the view of my hon. Friend the Minister and of the hon. Member for Warley, West that it is appropriate to hold this debate on 6 June, which is the anniversary of D-day. I pay tribute to my hon. Friend for his opening remarks, and give him credit for being a Minister who is more enthusiastic about his Ministry and the armed forces he serves through the MOD than any other Minister of State that I have known during my time in the House.
The only unfortunate thing about the timing of the debate is that the Defence Select Committee is halfway through one of its regular inquiries into the Royal Air Force. It is a bit too early to quote any conclusions that we may reach, but we have been given plenty of indicators that are worth mentioning without risk of upstaging our report. I will concentrate on two fundamental components of any successful armed force: manning and morale.
I acknowledge that, although the RAF may be the youngest of our armed forces, during and since world war 2 it has been the key to winning battles and wars. My hon. Friend the Minister mentioned D-day. Air supremacy—I use that word rather than "superiority"—was vital to that victory. Air supremacy is often difficult to achieve, but it was achieved in the latter part of world war 2 and in the Gulf war—when it undoubtedly led to the low loss of life on the allied side. Air supremacy was not so easy to achieve in the Falklands war, which meant that it was always going to be a close-run thing. Argentina should have achieved air supremacy, but did not—largely due to the vigilance and efforts of the sentinel ships, which ensured our control of upper air space and denied the Argentines the one vital advantage that they could have possessed, being so near the Falklands.
Air power is involved much more in all aspects of the United Nations "Agenda for Peace", in both peacemaking and peacekeeping. The ability to precision-bomb military targets without harming civilians is a useful political weapon: a big stick to back up soft talk. United Nations operations may occur anywhere in the world, but often it is not until they become NATO operations that they are effective. We have seen evidence of that in the former Yugoslavia and then in Bosnia.
It is particularly good news that, at the recent NATO council meeting in Berlin, agreement was reached in principle between the United State of America and its European allies on the proposed joint task force. That

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must bring France closer to full NATO membership, because French forces will be included in the task force. France may also be signed up to NATO's military committee, which would be extremely welcome.
Since 1989, we have seen the advent of the so-called "new world order". The other day I spoke to people at Jane's Defence Weekly, who described the new world order as world disorder. They said that we are entering the most dangerous decade of human existence, a sentiment which I believe is shared by analysts and political scientists on every continent. Almost a decade after the Berlin wall fell, the world is still gripped by conflict, tension and mistrust. There are 17 major conflicts under way around the world, and a further 20 areas of special concern in which conflict could break out at any time.
Our armed forces still have very important roles to play, and they are currently being deployed in 33 countries worldwide. They must be mobile to meet today's requirements. That is why I am pleased that so many references have already been made to the need for heavy-lift air transports. I see in the statement on the defence estimates that, on the future of large aircraft, the Secretary of State said:
"We continue to work with partner nations and industry to establish a satisfactory basis for the United Kingdom to rejoin the European Future Large Aircraft project, to meet the requirement for the balance of the Hercules replacement programme."
In his closing remarks, I very much hope that my hon. Friend the Minister will bring us up to date on the European future large aircraft, on exactly who our partners are likely to be and on whether there will be sales to third countries.
When the hon. Member for Warley, West referred to procurement matters, he said that we must as a priority buy British. I support that in principle, but buying British need not necessarily mean buying a primarily British product. It may be better to have a share in a bigger project that will enjoy wider world sales than to buy a product that happens to be British but will not sell anywhere else in the world.
Mr. Andrew Hargreaves: As my hon. Friend and other interested colleagues know, the subject of the maritime reconnaissance aircraft replacement is currently very much on everyone's minds. I wonder how he would fit what he has just said into that framework. There are obviously a number of contenders. We perhaps have access to the Minister's ear, and decisions may soon be made. Does my hon. Friend accept that the most important matter when considering that project is that there should be the maximum amount of British involvement, that the overall lifetime cost should be a primary consideration and, obviously, that the best equipment for the job should be procured?
Mr. Colvin: I am delighted to have given my hon. Friend an opportunity to intervene to make that good constituency point; there will no doubt be headlines in his local paper this weekend.
I am not in the business of trying to prejudge the outcome of these contests because I acknowledge that, despite what my hon. Friend the Member for Hall Green said, many of the projects are collaboratory. In the case of the Nimrod proposal, Boeing is very much a partner in
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that exercise and may well help to sell the British Aerospace proposal to third countries. One must bear that in mind, which is why I think that the decision to replace our aging Hercules with the C130J aircraft, built by Lockheed, was the right decision.
I am particularly pleased that the 100 per cent. offsets that were provided for in that contract—the so-called "industrial participation"—are being honoured. Now that the C130J has successfully made its maiden flight, it would also be of interest to the House if the Minister would tell us how many third countries are likely to buy that aircraft and what the world sales might ultimately amount to. Bearing in mind the very large British component in that aircraft—which is ostensibly an American aircraft—the prospects for British jobs are very good. Thus, while I accept the proposition of the hon. Member for Warley, West that it is a good idea to buy British, that does not necessarily mean always buying British aircraft.
Mr. Mans: My hon. Friend mentioned the C130J. I wonder whether he is aware that Lockheed has decided to review its subcontractors for any export orders that it may obtain for that aircraft. It may well be that the British contractors that are working on the C 130J for the Royal Air Force will not be those selected if other exports are produced. That should be borne in mind when a decision is taken on the project that he mentioned.
Mr. Colvin: I am grateful to my hon. Friend for that intervention. A certain amount of rumour is going around and there are press reports to that effect, but again the Minister must have better knowledge about this matter than we have. I have certainly been told by Lockheed that the provision for British work on that aircraft will be honoured for sales to third countries, which is why we would like to know to whom those sales will be made. Obviously every country buying the aircraft will also fight very hard for its own offsets. There must be some flexibility, but we would like to know what the C130J project will ultimately deliver in terms of British jobs.
It has never been more important to have an air force that is fully manned—recruitment is currently not bad, according to the RAF—well trained, with high morale and with the best equipment that money can buy. To my mind, leading edge technology equals the killing edge in battle.
RAF manpower has dropped from 83,000 in 1992–93 to 63,000 next year. It will descend even lower thereafter, to 56,000. On 13 March this year, which I have referred to as "brown envelope day", RAF service men and women received the news about redundancies or premature voluntary retirement. Reportedly the terms were very generous, but slightly more than 3,000 people who asked to leave under the voluntary redundancy terms were not fortunate enough to be granted it. They wanted to leave and were told no. I should like to know what will be the effect on morale of their having to go on serving and how they are regarded by their unit commanders, superior officers and warrant officers.
Morale is very important. Out of a total reduction of 8,300, there are to be 5,500 redundancies this year, of which 1,000 will be compulsory. What about the promotion prospects for those who remain? That question is often asked of the Select Committee by airmen when we visit RAF stations—as are questions on the

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consequences of contractorisation. When the Committee took evidence from the assistant chief of the air staff on 1 May, he said:
"over the last few years there has certainly been a dip in promotion opportunities as a result of the turbulence that we have gone through. That dip is now coming to an end and we are now returning to the historic levels of promotion opportunity across the board for airmen and officers."
The Committee has for some time taken note of the turbulence that the RAF has been through. Over the years we have been increasingly concerned about the stresses and strains experienced by service personnel and their families. Last year, in our report on the statement on the defence estimates, we said:
"The development and publication of detailed measures of turbulence in the RAF is long overdue; we will expect such measures to be available by the time of publication of SDE 96."
We now have SDE 96, but we have no reference to the RAF's objectives or targets on turbulence or tour intervals. That is a worry. The Army has managed a target, as has the Royal Navy, and I really think that the Royal Air Force should be able to do so. That would have a marked effect on morale.
I should also like to know the effect on morale of the Government's plans for the sale of married quarters, a subject mentioned by the Opposition spokesman. When the Minister of State for Defence Procurement gave evidence to the Select Committee yesterday, he was batting on a very sticky wicket but he carried his bat and carried it well and he managed to allay some of the fears expressed. I hope that he will be able to tell us today that the Treasury is not going to plunder all the proceeds.
The Minister issued to his parliamentary colleagues a letter which states:
"In defence terms, our need is to provide the services with the right housing, in the right places, at the right time."
I would also suggest that it should be at the right rent. The letter goes on to say that there are two key misapprehensions:
"Misapprehension number one. It has been suggested that recent rises in Married Quarter charges are somehow linked to the Sale—almost as though there were some 'hidden agenda' to discourage Service families from living in married quarters …
Misapprehension number 2. It has been suggested that the Sale will lead to the break-up of Service communities, and the introduction into Service housing 'patches' of undesirable neighbours."
I hope that the Minister will take the opportunity to allay such fears today, as he did yesterday when giving evidence to the Select Committee. That, too, would have a marked effect on the morale of our armed forces.
Germany has now taken over responsibility for the defence of German air space. Two Phantom squadrons have already been disbanded, withdrawal is planned from RAF Bruggen which is closing in the year 2002, when four Tornado GR1 squadrons are to move back to the United Kingdom. The other station, at Laarbruch, is due to close in 1999. What savings will be made as a result of those closures and of those squadrons returning to this country? A figure of £25 million has been mentioned, but is that the gross figure—simply the expenditure saved in Germany—or is it a net figure for the savings made after the provision of additional facilities for the squadrons in this country has been taken into account?
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The changes will mean, for example, that 2,500 RAF staff and their families will return to the United Kingdom. Where will the squadrons be based? Will an adequate number of married quarters have been retained in close proximity to the bases to enable them to be manned at an appropriate level?
I am sorry to ask a barrage of questions, but that is what these debates are for. Are we negotiating with our German allies for the use of their airfields in the event of our participation in NATO or United Nations operations, even if Germany may not be involved in them?
Reference has already been made to the difficulties experienced with spares and the support for aircraft. The Committee has visited stations and talked to ground crews to whom the Minister has already paid proper tribute. The ground crews are working longer hours, especially on Tornados. Surely it is just as important to ensure that they do not get over-tired as it is to ensure that aircrews are not over-tired. The ground crews complain about a lack of spares and about having to rob other aircraft for spares to keep the front-line aircraft flying. Perhaps "borrow" would be a better word than "rob", but, however one describes it, it involves double labour costs—crews have to take the spare part off one aircraft, put it on another and then replace the part on the first aircraft. At some stations we heard the expression the "rolling rob" because it is a continuous process. Why is it necessary?
In spite of these and other difficulties, we still have the world's finest Air Force, which is looking forward to a period of greater stability so that it can get on with the job of defending the realm, as it did with such valour exactly 52 years ago.
5.42 pm
Mr. Eric Martlew: I am surprised to be speaking in today's debate on the Royal Air Force, but I am pleased to do so. I have always enjoyed contributing to what is usually an interesting and informative debate. I am glad to see that the usual suspects are here, plus one or two others. It is an important debate and we should have as many contributions as possible. I congratulate my hon. Friend the Member for Warley, West (Mr. Spellar) on his excellent speech. I do not wish to detain the House for long, but I have a serious constituency problem that is entirely the Government's fault, and it is my duty to bring the matter to the attention of the House.
During the 1992 general election, the Conservative candidate in my constituency claimed that a Labour Government would close RAF Carlisle, but that, if the electors voted for him and there were a Tory Government it would be kept open. Just as the Conservatives broke their tax pledge, they broke their promise about RAF Carlisle, and it is to close in March next year.
Mr. Hargreaves: The electors in Carlisle voted for you.
Mr. Martlew: Yes, but I did not decide to close RAF Carlisle; it was the Minister's decision. The blame lies not with the Labour party but with the Tories. However, as the Chief Whip has just reminded me, we must not get too excited.
The Government then undertook a sham consultation. It started in December 1993 and finished in June 1994. During that time, the trade unions suggested some very good alternative proposals that would have saved 50 per

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cent. of the jobs and still have provided the Ministry of Defence with the savings that it required. The Government rejected those proposals, but delayed the decision until the week after the European elections for political reasons. The Tory candidate in those elections was heavily defeated anyway, so it made no difference.
During the consultation process, several delegations went to see Ministers, who said that, if it was decided to close the base, they would help to provide alternative employment and to make the best use of the site, which is very large and in a prime area next to the motorway.
I remind the House that, in November 1994, the Select Committee on Defence said of site disposal that criteria other than the highest price should be taken into account, and the Government accepted that aspect of the Committee's report. The Government therefore accept the importance of community provision. Nevertheless, we have a major problem with RAF Carlisle.
After the decision to close the base was taken, the local authorities, although they were very angry, decided to work with the Ministry of Defence and English Partnerships to develop a scheme to market and manage the site. There was talk of creating a joint venture company. It appeared to be working and the MOD was very enthusiastic. Four major companies are interested in moving to the site.
This spring, however, a bombshell was dropped. The Government decided to pull out of the joint venture and to sell the site in one go to the private sector. This has created tremendous problems in my constituency. At the very least, it will mean serious delays in getting businesses on to the site. It will mean the loss of European money and a loss of money from English Partnerships. I have grave doubts about whether the whole of the site will be developed, because the private sector will cherry-pick, selling the good parts of the site and leaving other parts derelict. That is not a sensible way to develop the land.
I informed the Minister that I would be asking this question and I am hoping for a reply this evening. Will he reconsider the decision to market-test the site, so that we can return to the previous plan, whereby the local authorities, the Ministry of Defence and the private sector will work together to get the best deal for my constituents and to make up for some of the 800 jobs that we have lost?
As if all that was not bad enough and my constituency had not suffered enough, the Government suddenly came along with a new idea. I accept that they have problems with the culling of cows due to bovine spongiform encephalopathy, but I blame them for the BSE problem. They had originally decided to store bonemeal and the end product of the rendering of cull cows at a former RAF base, RAF Quedgeley in Gloucester, but the decision was then changed. One wonders whether it was changed because Gloucester is an extremely marginal Tory seat and the idea was not very popular with the people there.
Will the Minister confirm that, instead, hundreds of tonnes of bone meal will be sent to RAF Carlisle? He must realise that not only will there be a smell in Carlisle that we do not want, but we shall have a terrible job trying to market a site with hundreds of tonnes of stinking waste in its hangars. In his winding-up speech, will he give Carlisle some good news for a change—first, that he will reconsider his decision on market testing of the site and, secondly, that the bonemeal will not be sent to RAF Carlisle?
5.50 pm
Mr. Hugh Dykes: I should like to follow my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) in saying many things about the Royal Air Force, of which we are all very proud, but I shall not, with reluctance, because of the amount of time that I promised to speak. I am very grateful for catching your eye, Mr. Deputy Speaker, so early in the debate. Although I would be very glad to follow my hon. Friend in his argument, I shall refrain from doing so, and will concentrate on two local matters that affect the RAF and are connected with the forthcoming closure of a local base.
In echoing what other hon. Members have said, I am very proud of the RAF and rightly regard it as the greatest air force in the world. It does not matter intrinsically if it is not necessarily the biggest. I am full of admiration for the way in which it has coped with its retrenchment, the inevitable reductions following the end of the cold war, and its changing role.
As I said in an intervention, I am grateful to my hon. Friend the Minister of State for the Armed Forces for keeping closely in touch with me on the forthcoming closure of RAF Stanmore Park, on which I shall concentrate my remarks. I apologise to my hon. Friend the Minister of State for Defence Procurement and the House—it is another reason for my deliberate brevity—for being unable to be present at the tail end of the debate due to constituency meetings. I shall therefore read the debate in Hansard carefully. I would not expect my hon. Friend to respond to the questions I ask if I am not present. Perhaps they can be answered later by letter and I hope that he will keep in touch, as I shall with my hon. Friend the Minister of State for the Armed Forces.
It is obviously very sad for us to accept that, as has been expected for many years, RAF Stanmore Park is to close. It is to close on 1 April 1997, although it will function in a residual way for at least a few months after that, with some RAF and civilian personnel carrying on working there, as it is gradually run down. The closure is sad for all sorts of reasons. The base has a 60-year history since it was created in 1936, which has been a most wonderful period. All the people who have worked there over many years—RAF personnel and civilians—are rightly proud of what has been done, but, again, I shall not go into detail. The greatest sadness is caused not only by the sentimental history of the base, although that is important, but by the loss of jobs, even though the number may seem small in comparison to what has happened in the private sector over many recent years and in other RAF facilities and installations.
My hon. Friend the Minister of State for the Armed Forces wrote to me on 23 May to confirm the most recent stage of the plans, having considered all the options and having taken option 3B. The reality, even in an area that is considered traditionally prosperous—the outer London borough of Harrow—is daunting. We have had enough job losses in all respects and do not want any more. In his letter, my hon. Friend the Minister said:
"In addition to the closure, and in keeping with the RAF's overall manpower plans, we propose to contractorise that catering function at RAF Bentley Priory and RAF Stanmore Park while it remains in use. The total number of posts assigned to RAF Stanmore Park is currently 146 Service and 62 Civilians. Of these 57 Service and 25 Civilian posts would transfer to RAF Bentley Priory, RAF Northolt and RAF Uxbridge".

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Although I am glad that some of my hon. Friends will benefit from those changes, naturally I am sad that the emphasis, changeover and shift of physical and human resources will not concentrate overwhelmingly and exclusively on RAF Bentley Priory. My hon. Friend goes on to say:
"36 Service and 20 Civilian posts would be subject to contractorisation and 53 Service and 17 Civilian posts would become entirely surplus to requirements."
My hon. Friend said that RAF Stanmore Park will officially close as an independent unit, but Bentley Priory will be expanded, in a modest way, but at least creating some additional RAF and civilian jobs. New facilities are also to be built for NCOs and other ranks in respect of catering, accommodation, and so on.
I naturally welcome that. Since RAF Bentley Priory is the not only primordial base of the two bases concerned but one of the main important bases or sub-bases in the entire RAF panoply—at least in southern England, if not nationally—I welcome the fact that it is not only to be preserved but enhanced.
My hon. Friend the Minister said that a period of consultation with trade unions and other interested parties is beginning. I should very much like to keep closely in touch with him and his colleagues in the Ministry of Defence as the stages unfold. I am willing to assist in any way in the painful process to ensure that we minimise as much as possible compulsory redundancies—I hope that there are none at all—and create the most enhanced redeployment so that everybody is placed elsewhere. Indeed, I am more optimistic about that possibility than I was a year or 18 months ago.
I should be grateful for regular and intensive consultation and contact as the matter unfolds and I am grateful to my hon. Friend the Minister for the contact so far. Even though I am unable to be present for the end of the debate, for which I apologise again, I would be grateful for anything that can be said, and shall keep in touch.
This is a good opportunity to put on record another local matter that is of great concern, even though it is proceeding out of the hands of the MOD and the RAF to other Government Departments and local agencies—mainly the Department of the Environment. I mention it in this debate because one of the principal buildings on the site concerned, Government Buildings, in London road in Stanmore, was the old RAF directorate of recruiting building, which dealt with a considerable number of personnel about five years ago and is now closing down, like all the other buildings. The site has become surplus to requirements and available for redevelopment.
Naturally, there is enormous anxiety among residents in the area about what will happen. As the Member representing their interests, who is in regular and frequent touch with them and the newly created residents association in the north-eastern corner of Stanmore, I should like to make a plea. Since the Ministry of Defence has a residual involvement and there are connections with the Department of the Environment and consultations between officials about the site, I very much hope that any redevelopment will be kept to the very minimum. It would be right to return most of the site to its original green belt designation. Since it has such a designation, there cannot be other than a marginal change of use under the regulations.
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It is very important that the public agencies responsible for the disposal of the land ensure that the wishes of the local residents are the most important. It is quite legitimate, regular and important for me to request that of the relevant Government officials in this debate. If there is any development, I hope that it will be extremely marginal, only at the southern end of the area, and that the rest of the site will be returned to its original green belt usage.
There is no need for the Treasury to become over-obsessed with the apparent possibility of maximising every disposal to the detriment of local residents, who want only marginal, high-quality housing that is consonant with the existing housing provision. That would be right and proper for all concerned.
I thank you, Mr. Deputy Speaker, once again for your indulgence in calling me early in the debate.
5.58 pm
Mr. Menzies Campbell: I begin with a proposition that I believe will enjoy support in all sections of the House—that the Royal Air Force needs a period of stability. Even the bald numbers by means of which the Minister explained the changes in Royal Air Force personnel at the beginning of the debate are themselves sufficient to justify that argument. In 1990, when "Options for Change" was first discussed—at almost exactly this time of year, if my memory serves me correctly—there were 90,000 people in the Royal Air Force. As the Minister told us, by 1999 that figure will have been reduced to 52,500.
By reason of "Options for Change", the defence costs study and other minor reviews, those in the Royal Air Force must sometimes have felt as though they were engaged in a perpetual cultural revolution—and it is a revolution that still has three years to run. The "turbulence"—the euphemism that is sometimes used to describe such change in the services—has a long time to run before we shall be able to say that it has been overcome. In that context it is reasonable to say that, to manage those changes properly, a period of stability is required.
As well as the reduction in personnel, there has been substantial restructuring of the Royal Air Force itself. There has been the merging of 11 Group and 18 Group, the moving of 1 Group headquarters to High Wycombe, and the total disbanding of 2 Group. If we considered the effect of changes of that sort on any comparable civilian organisation, we would not have to think for long before realising that they must have consequences affecting efficiency, capability and morale.
When those changes are coupled with the commitments that the Minister explained in detail—commitments to the implementation force in the former Yugoslavia, to the force keeping guard over Kurdistan and northern Iraq and to that engaged in connection with southern Iraq, plus our continuing commitment in the Falklands and other places—it is hardly surprising that this has been a period of perhaps unprecedented change for the Royal Air Force.
In such a debate it is important to recognise those difficulties, and not simply to pretend that they do not exist, or that they would not in any circumstances have serious consequences. One consequence has certainly arisen. Questions have been asked about the readiness of

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Tornado squadrons in particular. We are told that, on one day in September last year, only six of the 36 GR1 Tornados stationed at Bruggen were serviceable.
For many of us that raises eerie recollections reminiscent of the state of British armoured units in Germany at the time of the Gulf war, when we were able to meet our requirements in the Gulf only by substantially cannibalising the tanks and other armoured vehicles left behind in Germany. The capability of the Royal Air Force is right at the centre of the justification for its existence, so in such a debate it would be wrong not to recognise that the present situation gives rise for concern.
We know that Royal Air Force NATO inspections have been suspended during the transitional period, as have what are called tacevals—tactical evaluations of particular units. RAF Leuchars, a front-line air base in my constituency, used to be subject to regular tacevals, but they have been suspended in an attempt to reduce the burdens on Royal Air Force personnel dealing with the dramatic changes that I have already mentioned.
That is understandable, but inevitably it affects our degree of knowledge about the state of readiness of those units. If we take away regular assessment, we cannot know which areas of activity or potential activity are up to standard and which are not. That is why I say that in such a debate we should not conceal the difficulties. Difficulties can be managed properly only when they have been acknowledged.
Our natural admiration for the Royal Air Force, which has been expressed by almost every hon. Member who has spoken, and I guess will also be expressed by everyone who speaks later, should not lead us to conclude, rather after the manner of Voltaire's "Candide", that everything is for the best in the best of all possible worlds.
I remain, as I suspect does the whole House, wholly committed to Eurofighter 2000. It is vital for the Royal Air Force, and unquestionably vital for the United Kingdom aerospace industry. It is a matter of some relief to many of us that the work-share agreement now appears rather more firmly based than previously, and that the co-operation and agreement, between ourselves and Germany in particular, appears to be at a much more acceptable level than it has seemed to be on some of the more fraught occasions since 1992.
As others are, I am attracted by the idea that there may be an additional purchase for the Royal Air Force of up to 70 more Eurofighters than those for which we are presently contracted. I understand that that would mean that, by about 10 years into the next century, the fast jet fleet of the Royal Air Force would consist of the Eurofighter and the Tornado GR4. I can see economies of scale arising from that arrangement. We would not have to retain such a wide range of spares, and we would also have the advantage of specialisation. There would be a whole range of advantages for us if the fleet were configured in that way.
However, there might also be disadvantages in terms of operational capability. If the fleet consisted only of Eurofighters and Tornado GR4s, the flexibility that we presently enjoy would be prejudiced. I therefore hope that, when we think about whether to purchase a further tranche of Eurofighters and to proceed as I understand is under consideration, serious attention will be given to the effect that such a decision could have on the operational capability of the service.
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The single big procurement issue of the moment is the replacement maritime patrol aircraft.
Mr. Arbuthnot: No, there are lots of issues.
Mr. Campbell: In the minds of those who are beating a path to the doors of members of the Defence Select Committee, the RMPA, and perhaps CASOM—the conventionally armed stand-off missile—and the anti-armour weapon, are the three issues of the time.
It is generally accepted that the RMPA has long been needed, and clearly the resolution of the three competing bids will take great sensitivity and require very careful and accurate decision-making. One of the difficulties is that all three bids, in different ways, have substantial United Kingdom components. In that sense, they all involve our national interest. As we have already heard, for some Members they involve acute constituency interests, which have conditioned and coloured some of the contributions that we have heard today.
When dealing with such an issue, it is relatively easy to state the principles; it is in the application of those principles that the difficulty arises. The first principle is that the Royal Air Force should get the best aircraft for the job. The second principle is that that should be done at reasonable cost, and that acquisition cost and through-life costs should both be considered. The third principle is that we should support United Kingdom industry.
Again, I doubt whether there would be much dissent from those statements of principle. It is when we come to make the decision, and to decide how much weight to attach to any one of the principles, that the difficulties arise. The same principles apply to the CASOM and the air-launched anti-armour weapon.
I do not know what other Members' experience is, but, as I have hinted already, I do not think that any projects have ever produced such intensive lobbying of those of us in the House who have an interest in defence matters. That is no reflection on the companies involved, because they have a clear and legitimate interest in trying to put their agenda before those Members.
However, if we do not have access to the information that is normally considered commercially confidential, much of that lobbying, however sincere it may be, has little significance. Unless one has access to the detailed acquisition and through-life costs of the project believed to be the most economical, how can one make a judgment? That is an advantage that the Minister enjoys—perhaps it is a burden that he carries—that is simply not available to others.
I share the reluctance of the hon. Member for Romsey and Waterside (Mr. Colvin), the Chairman of the Defence Select Committee, on the matter. How can those of us who do not have access to all the information make informed and intelligent judgments about decisions which, by their nature, are extremely complex? Therefore, like the hon. Gentleman, I have avoided making a commitment in any direction. Of course, I have the good fortune not to have a direct constituency interest, and that has rather assisted me to adopt this purist position.
I do have an interest, in that RAF Leuchars is based within my constituency. Two squadrons of F3 aircraft are based there, and I had the privilege of being flown in the back seat of one of those aircraft nearly 12 months ago.

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It was a remarkable experience that I recommend to you, Mr. Deputy Speaker, although the white knuckles that you find yourself subject to during the flight are likely to stay with you for some time after.
I am sorry that the Secretary of State is not here at the moment, because I wished to offer him my personal and uninhibited congratulations on the fact that he was responsible for an outbreak of common sense in the Ministry of Defence. We have now put aside what many people regarded as the wholly intolerable suggestion that we should not have the mid-life update of the F3, air-to-air missiles and avionics, and that we should embark upon what most of us thought was the improbable course of action of leasing from the United States F16 aircraft, some of which would have to be updated anyway.
In addition, these aircraft were not in any way compatible with the existing tanker capacity of the RAF. We would have appeared peculiar if, while being the landlord and leasing F3s to the Italian air force, we were simultaneously being the tenants by leasing F 16s back from the United States. More seriously, that would have raised substantial doubts in the minds of many people about our commitment to the Eurofighter. I congratulate the Government and the Ministry of Defence on the entirely sensible decision, although I have the suspicion that it was more than a little influenced by the attitudes of hon. Members.
The Minister of State for Defence Procurement has received so many requests to respond during his reply that it may end up being of almost marathon length—if I can say that within three or four weeks of the opening of the Olympic games. Will he tell me, however—either now or later—the precise state of the Jaguar upgrade? When will the thermal imaging and laser designator be brought into service? Will he confirm that the Hercules replacement is still on schedule? In particular, what is the position with regard to the EH101?
Some reference has been made to the married quarters estate. I do not presume for a moment to try to anticipate the conclusions that the Defence Select Committee will reach on that matter, but the Minister may feel that the questioning on it was not so much friendly fire as intensive cross-examination. I have not been persuaded that the Government's proposed scheme is appropriate.
There is some attraction in the proposition by the hon. Member for Warley, West (Mr. Spellar), who is no longer in the Chamber, that the Government consider selling those properties and those parts of the defence estate that are superfluous to requirements, and applying the sums raised to the rehabilitation of the existing housing stock. That would bring about the required improvement and would reduce the burden of management that the MOD bears in relation to the overall defence estate. In addition, it would have the advantage of placating those wives who have been fired up by the proposals, and who may make a formidable enemy for the MOD.
More seriously, there is no doubt that the proposals have caused a great deal of apprehension in all three services, and the Government should be slow to proceed unless they can satisfy themselves that that apprehension has, in all substantial parts, been alleviated. So far, I do not feel that the Government have reached that state of grace.
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I also offer my congratulations on the decision to withdraw the RAF from Bruggen. As recently as the previous RAF debate in May last year, the Minister of State was making a most robust defence of the need to maintain RAF Bruggen because of the political and military significance of the base. Not much has changed in politics or in the military in the past 12 months, but the arguments in favour of retaining the RAF presence at Bruggen have long since been diluted. In particular, the fact that low flying is inhibited in Germany—meaning that the aircraft had to return to the United Kingdom anyway—raised substantial questions in the minds of many people about the utility of maintaining the RAF presence at Bruggen. It will be the end of a remarkable historical connection, but, in my view, it is entirely justified.
Two questions were asked by the hon. Member for Romsey and Waterside on the matter. First, where will the squadrons go? That is, obviously, a matter of some concern. Secondly, from a tactical and strategic point of view, what facilities will be available to UK aircraft in Germany if the squadrons are required for operational reasons in the future? Germany is our partner in NATO and is taking an increasing responsibility within it. It also has an increasing ability to support UN operations because of the views taken by its constitutional court. There is nothing difficult about that, but it is clearly an important matter when considering the consequences of the withdrawal.
On an occasion such as this, it is right to look ahead. The issue of procurement is one about which we should have some concern, as it relates to the future of the RAF. Remarkable though it may seem—as the first Eurofighter is not due to come into service until 2000—we must now consider what will replace the Eurofighter, and we should certainly consider the replacement for the Tornado GR1, or GR4 as it is to become. The Government have signed a memorandum of understanding with the United States to participate in the JAST programme.
I have been gratified by some of the observations made by the Secretary of State, who has now joined us, about a greater recognition of the need for a coherent European defence industry. In my judgment, the European defence industry will shape and will be shaped by the procurement decisions of European air forces, particularly the RAF. I hope that the conclusion reached by the Trade and Industry and Defence Committee, to whose report reference has been made, and the greater recognition of the European component on the part of the MoD will apply when decisions are taken about which aircraft are to replace Eurofighter and which are to replace the Tornado.
The matter of capability is one for the future. In my judgment, we must try as far as we can to maintain an all-round range of capability so that the RAF is able to operate at high, medium and low levels. Some people appear to believe that if we acquire the conventionally armed stand-off missile, it will be a substitute for low-level operations. In my judgment, that is a wholly flawed analysis.
Those who believe that CASOM will bring to an end the requirement for low flying simply do not understand the purpose of the acquisition of this weapons system. It is not a substitute for our ability to press home low-level attacks, if those are necessary, but an additional capability. Its acquisition should be seen as a supplement, not a substitute. I hope that those who are so enthusiastic

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in their support for CASOM—justifiably, in my judgment, because we require such a weapons system—will understand that it will not mean a reduction in low flying or the capacity to press home attacks at the lowest level. If we are to maintain an all-round range of capability, we must be able to operate at high, medium and low levels.
We who legislate on such matters bear a moral obligation. On occasion, we ask the Royal Air Force to meet the worst case and to operate under the most stringent and acute conditions. We may need to deploy our forces against some of the most advanced weapons systems in the world.
If we compromise on the capability of our air force, two problems may result. We may be unable to contribute to United Nations or NATO operations at the level that we would prefer, and it may also result in casualty rates to Royal Air Force aircrew that are politically unacceptable. That is the argument for ensuring that capability is maintained at the highest level, because we cannot legitimately ask those who put their lives at stake to fly in inadequate aircraft with insufficient weapons systems and inadequate defence systems. We talk here blithely about the contribution that the Royal Air Force makes and is likely to make, but we bear a moral obligation not to ask our young men—and perhaps our young women in the future—to put themselves at risk unless we are certain that we have provided them with the best possible equipment for the job.
Contractorisation is an issue for the future, but it contains a substantial element of risk. If there were a change of Government in 12 months' time, most people probably accept that there would not be a wholesale reversal of contractorisation. The Labour party's defence team has not confirmed that and I doubt whether it will, but if we have started down the road of contractorisation, the likelihood of a reversal is remote. The question that cannot be answered until an emergency arises is whether the private sector will be able to respond rapidly. That question may be unanswerable now, but we are entitled to be determined to ensure that when contractorisation becomes part of the support for the Royal Air Force, it is at the highest level available.
Those companies that are now under contract to provide many of the services previously performed in house—especially engineering—are currently using the skills of fast-jet mechanics, most of whom are former Royal Air Force personnel. That is fine, reasonable and a piece of good fortune for those companies, but those skills will degrade over time. The quality of training provided by the Royal Air Force will no longer be available.
We must ensure that the most stringent standards are written into the contractual arrangements between the Ministry of Defence and those who become contractors. The hon. Member for Warley, West suggested apprenticeships and there may be other ways to impose those standards, but we are entitled to insist that the terms of private contracts are sufficiently rigorous to give us the same standard of performance as we might have expected if the operations were carried out in house.
I have little doubt that the future of the Royal Air Force is most likely to be assured by increased European defence co-operation, although that opinion may be unpopular with some—not all—Conservative Members. The hon. Member for Romsey and Waterside, the Chairman of the Defence Select Committee, referred to
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the return this week of the prodigal France into the bosom of the family and the recognition by the United States that combined joint task forces should be more than a concept and capable of implementation. Those decisions make it clear that there will be continuing pressure to recognise that the effectiveness of defence in Europe is best achieved on a combined and joint basis.
The Minister's opening speech referred to the Franco-British air group as an important example of the open-mindedness of the Ministry of Defence, and the Royal Air Force in particular, in such matters. I understood the Minister to say that the expansion of that group to other members of the WEU was being considered. That is the direction for defence policy, and the Royal Air Force will have an important and significant role to play in the evolution of concepts of defence that recognise far greater co-operation in Europe.
Political and economic considerations will have an equal influence on the degree of co-operation. At best, Europe will have stable defence budgets for the foreseeable future. In reality, defence budgets will probably continue to reduce by a percentage point here or by £500,000 there. I would not wish to lay serious money on the likelihood that defence budgets will increase materially in the next five years. That being so, common procurement, greater integration, interoperability and even force specialisation will become more important in the future.
I have an interest in the Royal Air Force in three separate capacities. I am the spokesman for my party on defence and I am a member of the Defence Select Committee under the chairmanship of the hon. Member for Romsey and Waterside. He is no longer in his place, but he is a most vigorous and skilful Chairman who provides great leadership. As I have mentioned, I also have a constituency interest in RAF Leuchars. That front-line air base now alone provides the quick-reaction alert against intrusion into United Kingdom air space over the North sea. In all three capacities, I have the good fortune and the honour to view the Royal Air Force. As I do that, I am convinced that the men and women of today are a credit to the heritage of the Royal Air Force to which the Minister referred earlier. They continue to display the commitment, dedication and professionalism that has characterised the Royal Air Force for so many years. I am confident that, with the support of the House, they will continue to do so for a long time.
6.27 pm
Sir John Cope: I agree that the Royal Air Force serves this country exceptionally well, and my hon. Friend the Minister of State made that point effectively at the start of the debate. That was also apparent at the excellent recent presentation to Members of both Houses by the Royal Air Force presentation team and some senior officers.
The hon. and learned Member for Fife, North-East (Mr. Campbell) began by calling for stability for the Royal Air Force, and the Government have committed themselves to stability in defence organisation and spending. From the point of view of the Royal Air Force, the hon. and learned Gentleman must hope for continuity of Conservative government in the next few years. That is the only result that could guarantee the continuity of defence spending, as set out in the White Paper and elsewhere.

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My concern arises from my constituency interest and involves the defence industrial base. I shall follow on from and, to a certain extent, agree with some of the remarks made by the hon. Member for Warley, West (Mr. Spellar). Towards the end of a somewhat thin speech, the hon. Gentleman complimented the report of the Select Committee, and my right hon. Friend the Member for Kettering (Mr. Freeman) when he was at the Ministry of Defence, on the emphasis that they placed on the importance to this country of the defence industrial base.
The view has occasionally been expressed in some quarters of the Ministry of Defence that the health of the companies involved is a matter for the Department of Trade and Industry, not the MOD, which should look for the best equipment for the forces at the best prices and allow companies' health to be the responsibility of others in government. But that is a narrow view. It is certainly in the national interest that the great defence companies of this country, both large and small—many small businesses are involved in defence—should continue to contribute a great deal to this nation.
It is said that 395,000 jobs in the United Kingdom are supported by defence goods and services, of which about 80,000 are dependent on exports. There are more people in the defence industries than there are in the armed forces—there are about 215,000 people in the armed forces in total. That should not surprise us, as 39 per cent. of the defence budget is spent on equipment and 29 per cent. on service personnel. Those percentages back up the relative importance of the defence industrial base.
For those companies to flourish, it is essential for the Ministry of Defence to take account of the direct and indirect effects of its massive purchasing decisions on British companies. I would not express it quite as crudely as the hon. Member for Warley, West did by saying that we should always buy British or always try to. It is more complicated than that, as the speech of the hon. and learned Member for Fife, North-East made clear.
The maintenance of the industrial base is not only in the interests of the companies and industries involved, but in the interests of our defence. We are not asking the RAF or anyone else in the armed forces to accept lower standards of equipment or safety. The equipment produced by British companies is of as high a standard as any in the world, but we also know that we can rely on our companies.
During the Gulf war, it was interesting to note how many civilian personnel went out to help back up the armed forces in the field. We have not always been able to rely on defence equipment bought from other countries—a serious incident involving ammunition occurred in the middle of the Falklands war. The more general point is that, unless British industry—both the defence sectors and other sectors—prospers, we shall be unable to afford the defence that we should have and that we wish to have. The health of industry in general provides important underpinning for this country's defence.
I know that some people, particularly some Opposition Members, are embarrassed that our export effort and employment depend to such a large degree on the building of defence equipment. That has led people to think up the ridiculous idea of a defence industry diversification
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agency. The idea that a Government agency should help defence companies turn over to civilian production does not bear examination, and I am glad that the idea has not been repeated this afternoon. I have lost track of where the idea has got to within the hierarchy of defence thinking among Labour Members—perhaps I am about to find out.
Mr. Frank Cook: I am grateful to the right hon. Gentleman for giving me the opportunity to comment on his last assertion. The assumption that Labour Members are opposed to export sales of arms per se is misleading. Labour Members oppose the export of arms to regimes that will use them for suppression and repression—that is the point.
Sir John Cope: There are two separate arguments—I accept what the hon. Gentleman said. Of course, we can disagree about the particular regimes in question and the particular sales that are made, or are likely to be made, to them. However, some Opposition Members—I acquit the hon. Gentleman of this charge—seem less keen for us to be in the defence production business at all. That must be true; otherwise, what would be the point of a defence industry diversification agency?
The idea that some such agency could tell British Aerospace in my constituency or Rolls-Royce, which also affects my constituency, how the defence sections of their business could be switched over to peaceful activity is ridiculous. British Aerospace is already among the world's leading suppliers of airliners—particularly through its European connections and the airbus. Rolls-Royce is one of the world's leading aero-engine suppliers to both civilian and military aircraft. The idea that an agency could tell those businesses how to sell more civilian aircraft or aero-engines is ridiculous.
Mr. Paul Murphy: I shall have the pleasure and honour of visiting Rolls-Royce in Bristol next Monday. The last thing I shall be telling it is to diversify in the way that the right hon. Gentleman suggested. I am sure that he would agree that defence diversification in this country and others does not involve telling industry what to do. Because of the way in which the world has changed in the past few years, industry is looking for other ways to develop its skills and potential—there is nothing wrong with that.
Sir John Cope: I am all for that. I am happy that the two companies that I mentioned, and many others, are extremely active in civilian as well as military markets. The idea on which I was pouring cold water was that a Government agency could push them from the one to the other.
I shall return to the main points that I wish to make in support of the defence industrial base. My hon. Friend the Minister of State for the Armed Forces will have to give close attention to the three forthcoming purchases for which bids have been submitted. It is important to consider the British content of those bids not only in terms of quantity, but in terms of quality.
The bids are made to look as British as possible: all the literature that has poured in to us recently has been covered in Union Jacks and has contained great lists of subcontractors in every possible constituency. All those

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bidding do their best to demonstrate that they are the most British. But what matters is the quality of the contribution, not merely the quantity or percentage of the contribution.
Therefore, although I entirely accept the difficulty that Back Benchers face when judging competing bids objectively, I think that British Aerospace makes an exceedingly good point when it draws attention to its prime contractorship in the three bids in which it is principally involved—the maritime patrol aircraft, the stand-off missile and the air-launched anti-armour missile. In all cases, it is necessary to look extremely carefully at the quality of the contributions in the bids of all the companies when deciding between them—I appreciate that it is always an extremely difficult choice.
The decision by my hon. Friend the Minister of State and my right hon. Friend the Secretary of State will have great significance for the future of those sections of British industry and for potential exports. They should give the closest possible attention to that aspect of the purchasing decision.
I agree with some of what the hon. and learned Member for Fife, North-East, who sits on the Liberal Benches, seemed to say at the end of his remarks about Europe. In looking at the three purchasing decisions, I believe that there is sometimes a danger in becoming too involved with the American, as opposed to the European, contractors. The base from which the American contractors operate is massive. It is backed by massive Government research—the National Aeronautics and Space Administration, and in other ways—and, of course, it has the benefit of a huge home market.
Mr. Wilkinson: Could not the converse equally be true? Participation in American programmes, for the benefit of our armed forces, to meet a British need, gives British industry an incomparable opportunity to maximise its participation over large production runs, especially in the export markets, to meet American requirements. Dowty in Cheltenham is building the propellers for the C130J, and there is a huge benefit. The same could apply if that propeller was chosen for the Orion 2000.
Sir John Cope: I do not argue that it is wrong in every case or that there are no advantages in co-operating with the Americans, but the fact is that the United States is extremely reluctant to export any of its technology. One is not dealing with an equal partner when one takes on a partnership with the United States; whereas one tends to deal more with equal partners in the deals that are put together in Europe.
Mr. Bill Walker: My right hon. Friend should remember, when speaking on behalf of British Aerospace, that the collaboration and co-operation on the present generation of modern Harrier aircraft is an example of American and United Kingdom co-operation.
Sir John Cope: Of course, and that is one of the reasons why the AV8B has been extremely important to my constituency, among other things. That is one of the reasons why I am not putting it in absolute terms. Nevertheless, I still believe that we should look to increase European co-operation when we can.
Part of the reason why we joined the European Community in the first place was to increase the size of our home market as the base from which to do business
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with the rest of the world. We sometimes forget that nowadays, when looking at the statistics of trade within Europe. I do not and would not suggest that the European Union is the base from which we should do business in relation to defence. Clearly, the Western European Union is the right body from that point of view. The EU contains some countries that are neutral—why should they not be neutral if they so wish? —and that makes it a different organisation.
One of the areas of least co-operation in the WEU and the North Atlantic Treaty Organisation is in deciding the specification for defence products. Now that there is new vigour in achieving WEU co-operation, more attention should be given to trying to agree the specifications for defence products. Again, that is not a universal point—before any of my hon. Friends intervenes again. I recognise that the Eurofighter is an example of specific agreement on the specification, and the future large aircraft is another, to a degree, but such examples are relatively limited. I gather that our requirements and those of the French on the stand-off missile are similar, but they are not the same at this point. The two Governments and Air Forces are trying to combine, as was done in the case of Eurofighter, where a limited number of countries worked together.
My general point is that companies work right across Europe—
Mr. Wilkinson: The world.
Sir John Cope: And the world. They need to do so. The Governments and air forces are showing that they need to get their specifications closer together, as much as they possibly can. More attention should be given to that aspect of future planning for defence procurement.
6.45 pm
Mr. Frank Cook: The right hon. Member for Northavon (Sir J. Cope) criticised the hon. and learned Member for Fife, North-East (Mr. Campbell), the Liberal Democrat defence spokesman, for having made a fairly thin speech. I think that those were the words. [Interruption.] I accept the correction, but I take issue with the comment anyway, because if one measures one performance against the other, frankly there is no competition.
Our pattern of debates on defence issues must be renewed and reconsidered. We currently have a one-day debate each year on each of the three services, followed by a two-day thrash on the defence estimates. We do not get to grips with it. The Minister of State for the Armed Forces has, on more than one occasion this evening, both in his speech and in interventions, stressed the importance of the joint command, joint training and the joint control centre. As we are moving into a joint force activity, especially with the combined joint task force, we should debate defence issues in a less compartmentalised way.
I appeal to both Front Benches to get together, please, and review the approach for next year, because if they do not, they will have to the year after, as that is the way in which we are going, and it makes sense to look at it in that way.

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We have heard much about EFA, CASOMs and SWAARMs—all the acronyms that we are pleased—
Mr. Arbuthnot: Will the hon. Gentleman give way? Mr. Cook: By all means.
Mr. Arbuthnot: I am sorry to interrupt what will clearly be an interesting speech, but the problem with having a day to debate procurement and then, perhaps, an extra day to debate the armed forces, is that we would lose a day's debate on the armed services. I do not think that anybody would wish to see that.
Mr. Cook: I am asking for a review. I do not want the Minister to have to find the answer this evening. Let us just talk about it through the usual channels before next time. If both Front Benches do not review it next time, they will have to do it the time after that. That is my point.
Let us return to the acrimonious acronyms. I heard a complaint from the Liberal Democrat spokesman, who said, "I don't know how long I'm going to be, as I have to cover so many subjects." I think that that is a fault, and I shall not fall into that trap. I want to talk about just one topic in essence, with a small conclusion later.
I shall concentrate on sustainability because I have seen press reports that have said that it is one of the main anxieties of Sir Peter Inge, the Chief of the Defence Staff. I was puzzled by that, so when I attended the plenary session of the North Atlantic Assembly in Athens a couple of weeks ago, I took the opportunity to nobble—I do not know whether it is spelt with a k—Sir Peter at an evening reception at the ambassador's residence, to ask him what he meant.
Sir Peter was very helpful and he said that he thought that our draw-down was at about the right level, that he was satisfied with manning levels and with the equipment that was available, and that we had it about right for now. He said that he was worried about sustainability. I asked him what he meant, and he referred to the number of personnel that we currently have in Northern Ireland—and we intend to maintain that number until we get some sort of a guarantee of a lasting improvement in that awkward climate.
We also talked about our commitments elsewhere in the world. Sir Peter is proud of the fact that 12,000 United Kingdom military personnel are taking part in exercises in the United States. We apparently knocked America for six because they did not think that we were capable of providing a force of that size. That is good—as long as we stay where we are.
The Defence Select Committee recently released a report on what we call overstretch in the military. We heard a considerable amount of evidence, and two days before we published the report, we got the famous add-back. It seems that, even at this stage, add-back is proving hardly sufficient. When we visit units, we get reports not just from rankers, but from senior NCOs and the commissioned ranks, that personnel are being pushed to the limit.
Some weeks ago, we visited a type 23—HMS Lancaster in the Irish sea—and we were told by the senior warrant officers, by commissioned ranks and by the
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stokers that working 17 hours a day, seven days a week, even on a home base, was a regular thing. While there was decent morale in terms of esprit de corps and confidence in one's workmate—one's marra—there was considerable dissatisfaction on the home front because it was thought to be unnecessary in those situations.
I was further disturbed when I visited RAF Marham—similar criticisms were commonplace. That is not the result of a lack of morale or a lack of commitment; the individuals, in all three forces, give their best—more than their best—at all times. How long can we expect that to be sustained? Today we are talking about the Royal Air Force, so I shall keep my comments specific to it. I have mentioned RAF Marham, where we found criticisms about duty hours, guards and the like.
I refer to the Charlie 130s—the famous Hercules that are operating in the Falkland Islands—which are used for refuelling purposes. Some people have said that the Charlie 130s are the result of lash-ups that were designed on the back of a fag packet. They are somewhat Heath Robinson in appearance, they are single-skinned, they have unarmoured flexi-pipes and they are a serious source of risk. They need to be replaced, as they have been working there for an awful long time. I remind hon. Members that the subject of my speech is sustainability. They are sustaining themselves at the moment—but how long can we expect them to do so?
Our visit to Yeovilton allowed us to learn from squadrons 800 and 801, which had been flying Harriers on a six-month-on, six-month-off, basis with the Invincible and the Illustrious in the Adriatic. There was an admission that there were degrees of jading, if not with the aircrews, certainly with the aircraft. We have heard comments from the Chairman of the Defence Committee, the hon. Member for Romsey and Waterside (Mr. Colvin), about rolling robbing in the RAF. How long can we allow it to go on?
Most embarrassing of all was when the Defence Select Committee visited Bosnia—I can see smiles on the faces of Government Members; in a way it was humorous, but it could have been somewhat less humorous. We relied on the famous Chinooks, which had undergone their mid-life update. The commanding officer was proud of them, to the point that he said that they were infinitely better than anything that could be produced from the EH101 as a replacement.
We got into the first Chinook and flew about 15 miles before we had to return to transfer to another Chinook. It got us about the country for the next day and a half until, when we sought to depart from the American garrison at Tuzla, it refused even to cough into action. We were rescued by the United States cavalry in the shape of two Black Hawks, and we got back to Split for our connection a great deal faster than we would have done in the Chinook.
The point I am making is simple: how long can we expect equipment and people who are under pressure to carry on? There is not a lack of commitment on the part of those who maintain the equipment, there is not a lack of courage on the part of those who operate it and there is not a lack of dedication. I refer to the case of Corporal Wayne Mills—the first recipient of the conspicuous gallantry medal. He won the medal in Gorazde some time ago, for behaving in a particularly exemplary way in

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protecting his section of eight men when they encountered a numerically superior force of Serbs who were somewhat undisciplined and probably inebriate.
Wayne Mills defended his lads by telling them to leg it for safety and creating a one-man ambush. Wayne Mills, in characteristic British understatement—note that I said British—said that the whole thing was more to do with breathlessness than with bravery. In other words, the lad probably could not have run any further, but he still had the guts to create a one-man ambush out of his own ability.
I am talking about sustainability. They will turn it on in all three forces. Why? Because they take pride in the fact that all three forces are can-do forces, because we, as politicians, send them out to do a job, because that is why they joined the forces and because that is what they are paid to do. It is our responsibility to ensure that, when we send them out to do the job, they have the wherewithal with which to do it. It is as easy as that. A few Government Members are smirking. I am not telling them what I think; I am telling them what Sir Peter Inge, the Chief of the Defence Staff, is anxious about. If he is worried about it, by God, we should be worried about it, too.
Let us not plead breathlessness at a late stage. Corporal Mills did not plead breathlessness. He was a very brave man; they were all brave in that unit, regardless of whether they received awards. I say that with pride, because my son was with them and received a commendation.
Lastly, I wish to discuss the suggested sale of married quarters. The hon. and learned Member for Fife, North-East described the reaction to the suggestion in the services as apprehension. That is the wrong word. I tell the Minister of State for Defence Procurement: the right word is anger—downright anger; anger at lack of consultation, anger at an unheeding response, anger at the risk to which those people feel they will be put.
I add my support to the idea that the current voids should be put on the open market. I believe that 10,000 or 11,000 voids would be snapped up at £10,000 apiece. I add another suggestion. Many local authorities have written to the Government, pleading for the move to be stopped because they want the opportunity to take those properties into their housing stock. If those local authorities were allowed to put to use some of the assets that have accrued as a result of the sale of council housing, the MOD's problem could be resolved a great deal more rapidly than it previously supposed.
If that cannot be the case, I say to the Minister, "Take your current idea of selling married quarters on the open market and dump it; forget it altogether."
7.1 pm
Mr. John Wilkinson: I shall begin with a comment and follow it up briefly with a quotation. In comments attributed to Field-Marshal Earl Haig after the first world war, he said that, looking back on that horrendous conflict, to him two things were of importance—barbed wire and Trenchard. Barbed wire we can all understand—there are memorials to it throughout the length and breadth of Picardy, Flanders and the Gallipoli peninsula—but Trenchard? We are debating his memorial tonight. He was of course the commander of the first independent air force in 1918.
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Earl Haig, being unable to carry the war to Germany itself, had alongside him in the headquarters at Nancy, further down the front, in Trenchard, the architect of independent air power and, night after night in the concluding months and weeks of the war, the independent air force struck into Germany—Mannheim, Stuttgart, the Ruhr and so on.
Trenchard came to be Chief of Air Staff and, when the great demobilisation began after the great war, he found himself trying to keep the air force in being. He wrote a memorandum to the then Secretary of State for Air—and War, actually—Sir Winston Churchill, the grandfather of my hon. Friend the Minister of State for the Armed Forces. I regret that my hon. Friend is not here. Sir Winston presented the memorandum to the House in the form of a White Paper on 11 December 1919. It said:
"The force may in fact be compared to the prophet Jonah's gourd. The necessities of war created it in a night, but the economics of peace have to a large extent caused it to wither in a day, and we are now faced with the necessity of replacing it with a plant of deeper root.
As in nature, however, decay fosters growth, and the new plant has a fruitful soil in which to spring."
We have the economics of peace with a vengeance today, and the Royal Air Force has gone through the turmoil of readjustment, not least many families whose breadwinner probably aspired to a lifelong career of service in the Royal Air Force and found himself prematurely not wanted; but now we have an opportunity to nurture the service and to create the political environment to establish a Royal Air Force that will endure as an effective fighting service at least into the first two decades of the next century.
The withdrawal of the RAF from Germany was the culmination of a period of contraction. Many of us had urged that withdrawal long years heretofore, saying that the characteristics of air power did not necessitate a presence of the Royal Air Force, once the Warsaw pact was disbanded, on the soil of the Federal Republic of Germany.
Now, as an island country, we are in a position to create in our Air Force a powerful instrument to preserve peace in a very uncertain world. The Air Force has all the attributes that are requisite for the purpose—speed of intervention, flexibility, economy of force, the potential for a minimum risk of casualties, and minimum collateral damage as a result of the application of precision munitions.
Let us first consider what Trenchard regarded as most important—the men and women of the service. What will they most require, now and tomorrow? Above all, I would say discipline—discipline, and again discipline, and yet again discipline. Nothing is more fundamental for a fighting service. Therefore, the whole training programme, the development of commissioned and non-commissioned personnel throughout their service career, should re-emphasise that cardinal point.
The profession of arms calls for unnatural qualities of sacrifice and dedication, so the inculcation of qualities of character and devotion from the earliest years is crucial. That is why Trenchard founded Royal Air Force college Cranwell and the apprentice school at Halton, among other things, and they stood the service well and proved themselves in war and peace, and enabled the service to endure and to be one of which we are justly proud.

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With discipline must come education and training, both technical and physical; that is why I query what I would call the blazer and flannels ethos in the flying training schools. The Assistant Chief of Air Staff, in the session with the Select Committee on Defence, rightly said that it was his hope that a high proportion of qualified flying instructors would be reservists and therefore able to wear uniform.
I endorse him wholeheartedly. I think they all should be, and the great opportunity of the sponsored reserve category which we have created with our Reserve Forces Bill is that it enables contractorisation to be compatible with the exigencies of military service, with the requirement to serve anywhere at any time at the behest of the Crown in the defence of the realm.
I mentioned the blazer and flannels ethos with regard to the air crew, but it applies equally to the ground crew. My hon. Friend the Minister of State mentioned what is happening at RAF Valley. It comprises an advanced flying training school and a tactical weapons unit, which is supposedly a reserve squadron that can be mobilised rapidly in times of emergency or war.
If the Brown and Root and Marshall personnel are sent from Anglesey overseas at short notice into an inhospitable theatre, unless they are auxiliaries and have signed the Air Force Act 1955, I suppose that they could refuse to go. That could cause complications. It is why I urge Her Majesty's Government to make full use of the sponsored reserve's potential in that way.
We must achieve a balance between the Regulars and the reservists. The problem in recent years is that the balance has favoured the Regulars, and the potential of the reservists has never been adequately realised. I hope that this situation will be put right. The signs are good in that regard. For example, the No.1 maritime headquarters unit at RAF Northolt in my constituency does a first-class job supporting the naval headquarters at Northwood and the 11/18 group RAF headquarters at Bentley Priory. The support helicopter squadron at Benson is a precursor of things to come.
I recall another Trenchardism. In response to his suggestion about establishing the Royal Auxiliary Air Force, Churchill replied, "Weekend squadrons, Boom? Never." Of course, those weekend squadrons were formed, and they achieved a third of the victories in the battle of Britain. That battle could not have been won without them, any more than it could have been won without the Poles, whose memorial stands at the threshold of my constituency. Their No. 303 squadron, which operated out of RAF Northolt in my constituency, shot down more enemy aircraft in the battle than any other squadron, even though it was not officially operational when it plunged into the fray.
When considering the force structure in personnel terms, we must address also the equipment issue. I am pleased that the "Front Line First" exercise has enabled the Government to find extra money for equipment. If the Air Force is small in size, it must be equipped to the very highest standard. I am thrilled that the C130J has been introduced into service. The companies which are participating in the programme will benefit from the operational and industrial potential that it presents.
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As to the future transport force, it will need a strategic lifter. If we operate primarily from this island—we will have no overseas commands or groups, and few overseas bases—and if we are to project power, we will need an aircraft that can carry a large volume. That is why I advocate the C17 as a complement to the C130Js in the next century. There must be a mix of those aircraft.
As an island nation, we must concentrate on our maritime role. It is pointless looking to aircraft that are near the end of their useful lives or to hand-me-downs out of the desert: we must buy new aeroplanes that offer the very best in technology, good industrial participation for the United Kingdom and export potential for companies involved in the programme well into the next century, as well as a commonality with other allied air forces and navies that operate the P3.
The argument is fairly straightforward. I recall the VC10 tanker conversion programme. The refurbishment of those aircraft proved extremely costly, and there were hideous problems. With hindsight, it was probably not a very wise decision. Let us not make the same mistake again.
I make no comment about the weaponry—the AST1236 and 1238 or the advanced stand-off radar—except to say that the Royal Air Force must always be ready to buy the best equipment from any source. We must not have political preconceptions. We must not allow our participation in the European Armaments Agency or any other rationale to lead us to buy equipment that does not best meet the RAF's needs. Cost-effectiveness must be the criterion.
For example, the lesson to be learned from the European fighter aircraft 2000 is not that it will not meet the requirements—it probably will—but that an agency and superfluity of management, with a capital "M", is not what is required, as much as a commercial orientation to drive the programme forward, maximise profits for the participants and lead to the aircraft's early entry into service for the RAF.
In conclusion, I shall raise a subject to which my hon. Friend the Minister of State alluded in his speech. The sole No. 11 Group sector station of the battle of Britain—RAF Northolt—is situated in my constituency. It was founded as a Royal Flying Corps station in 1915, so it must be almost the oldest station in the country. The Transport Committee has suggested that it should no longer be a Royal Air Force station, but should become a civil satellite airport—Heathrow north, no less. It is proposed that the Royal Air Force be allowed to make requests from time to time regarding military movements.
The Royal Squadron No. 32 meets the communications flying requirements for the royal family and Her Majesty's Ministers, as well as for the permanent joint headquarters at Northwood, headquarters fleet at Northwood, the North Atlantic Treaty Organisation 1 East Atlantic headquarters at Northwood, Royal Air Force headquarters at Bentley Priory at Stanmore, the No. 11/18 group, the headquarters of RAF Strike Command at High Wycombe, the new NATO Command North-West Europe, which is also at High Wycombe, and diplomatic, and for highly sensitive Government movements of all sorts. To fulfil those roles—which are crucial in times of peace, emergency and war—a discrete dedicated facility is required. That role would not be compatible with reverting RAF Northolt to the status of a civil airport, which it became very briefly following world war 2.

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Residential development around Northolt has increased enormously since those early post-war years, and the Royal Air Force and the civil community enjoy a very satisfactory relationship. The civil executive jet fraternity are allowed to use the airport for a maximum of 28 movements a day with prior permission, five days a week from 08.00 to 20.00 hours. That is perfectly acceptable. If it were turned into a civil airport, it would prejudice one of the Royal Air Force's key roles, and I hope that it will not happen.
7.18 pm
Mr. Peter Hardy: I shall follow up several points raised by the hon. Member for Ruislip, Northwood (Mr. Wilkinson). First, I was particularly interested in his comments about training. I recall suggesting in debate two or three years ago that elementary flying training within the service was not simply about teaching people how to fly: it was about teaching people to fly into very hostile environments. The traditions, record and indoctrination that are necessary parts of military training confirm the hon. Gentleman's argument.
As to the reserve service, I hope that civilian instructors—who may not have received the same training as the hon. Gentleman and one or two other Conservative Members—will not become reservists as an excuse for administrative convenience.
The hon. Gentleman rightly paid tribute to the Auxiliary Air Force. He will also acknowledge that the sergeant pilots of the Volunteer Reserve made what was perhaps a greater contribution in Fighter Command during the second world war.
I wish, however, that he had continued his historical analysis. There were those who would have threatened the independence of the Royal Air Force, but Trenchard convinced them that the RAF could police the empire very cheaply, and that it would be cheaper to have a few squadrons of biplanes patrolling Kurdistan or the Himalayan areas of the Indian subcontinent than to have large numbers of infantry—whether British or imperial troops—stationed there.
Without that, it is unlikely that the Air Force would have survived the economic crises of the 1920s and 1930s. However, it did, and, as the hon. Gentleman said, we now have the oldest independent air force in the world. It is one of enormously high quality, to which the rest of the world looks with admiration. Is standing is probably higher abroad than it is in England. One reason for that was that, until the Minister's speech this afternoon, Government tributes to the Air Force over recent years have been somewhat grudging.
Although the debate so far has been forward-looking, we have all referred to the mistake that was made five or six years ago at the end of the cold war. All Governments in the west, including ours, reached out to grab the peace dividend because they thought that it meant there would be peace. Certainly, once the iron curtain had fallen and the Warsaw pact had disintegrated, there was no prospect of huge armies surging across the north German plain, the response to which was the Royal Air Force's principal obligation for most of the post-war period.
However, the end of the cold war and the grasping of the peace dividend was followed by an extremely large number of new commitments that presented new
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problems, anxieties and costs that may not have been anticipated. Ten years ago, the Royal Air Force had far fewer commitments than those to which a response has been given in the past 12 months.
The RAF has been operating in more locations during the past 12 months than it did at the height of the cold war. The Minister said that they were low-key commitments, and perhaps they were. They may also have been a great deal less comfortable and hospitable than those to which the service was accustomed during the cold war. Shrinking numbers of aircraft, squadrons and personnel have had to bear an increased burden.
It is all very well for the Minister to pay tribute to the RAF, and I welcome that, but the fact remains that the air crew, and the ground engineers and communication people who travel with them, spend an inordinate amount of time away from base and their wives and families. Recently, I saw a squadron diary showing how many weeks in the year the pilots, engineers and communication personnel spent away from base. It is not fair.
It is all very well to pay tribute to them for their dedication, but they pay a bitter price. It may be that the price they have paid is the reason why a substantial proportion of quite senior officers find it necessary to leave. The Air Force has lost some excellent people in the past few years, and we should ask why.
We are asking too much—not of them, as they are professionals, but of their families. They tend to be family men. The public image of an RAF pilot is a fresh-faced 19-year-old, but he is probably in his 30s, married with 2.1 children, and he likes to see his wife and children occasionally. More importantly, they want to see him. I trust that we will see a more positive and healthy approach from the Government.
Over the past few years, the Government have taken the lead in Europe's response to crisis. Perhaps they feel that, as a member of United Nations Security Council, we have to take the lead in accepting obligations and commitments although other wealthier members of the western alliance in Europe have been slow to offer a meaningful response. Perhaps they are incapable of offering one. If we are to accept those commitments, we have to speak a little more bluntly to some of our European colleagues about fair deals.
The hon. Member for Ruislip—Northwood has joined us on the delegation to the Council of Europe and the Western European Union. He may recall the meeting at Church house a few months ago when we were discussing the future organisation of security in Europe. A number of delegations from other countries—left, right and centre politically—spoke about the need for adequate logistics, training and police and medical staff. I moved an amendment stating that, if they planned to discuss proper commitments and undertakings, they would have to have people capable of firing guns and serving at the sharp end of conflict. The amendment was defeated.
Our allies are quite happy for Britain to provide a large proportion of the troops currently serving in Bosnia. The hon. Gentleman may recall that, in April, when we were in Strasbourg, it was proposed that the IFOR troops should remain in Bosnia a great deal longer. I was asked to move a amendment to that effect, but the people who asked me to do so represented countries that had no personnel there.

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I asked why I should expect my constituents to serve in Bosnia and expect Britain to provide a quarter of NATO troops, when they were not sending anyone at all. "We are behind you," they said. "Yes, I have noticed that," I replied, "and I shall not move the amendment." I did not do so. However, we may have to accept there will be an extension. That will give the British Government an opportunity to speak bluntly, but unfortunately they are not doing so.
On Monday, the Secretary of State for Defence addressed the WEU assembly in Paris. My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), who has replaced me as leader of the Labour delegation because I retire at the next election, has persistently followed up the argument that I had been advancing for some years—along with hon. Members on both sides of the House—about breaches of sanctions in the former Yugoslavia.
About four years ago, the Italian Minister told a Conservative Member and me that the Council of Ministers had all the information about breaches of sanctions, but would not tells us, or do anything about them. My hon. Friend the Member for Hodge Hill has taken over that initiative, but we still have not learnt anything more. He raised the matter with the Secretary of State for Defence, who unfortunately is not here, but no doubt will hear about it later.
When he was asked why the Foreign Office or the Ministry of Defence had not replied to my hon. Friend's persistent pursuit of the matter, the Secretary of State's response in Paris was to blame the nationalised British Post Office. That is hardly the mature comment that one would have expected from him in such an environment.
I also endorse the point raised by the hon. Member for Ruislip—Northwood about the future equipment of the service being of the highest quality. We give our service men inordinately heavy tasks, and we ask a great deal of them. It is essential that they have the proper equipment. Much of the equipment is British or part-British, and it is superb, but the Air Force should not be seen merely as a customer.
If it is to be a customer, however, privatisation should not be taken so far that the Air Force lacks the capacity to be an intelligence customer. Last year, I asked the Minister to ensure that the Air Force retained sufficient capacity in its operations to be able to judge whether the taxpayer was getting a good bargain and to perceive whether the contractor was providing adequately for training—an important matter, to which the hon. Gentleman referred.
I have a number of questions. I do not want to speak too long, but may I ask the Minister, in his reply to the debate, not to overlook the future large aircraft. I went to a briefing across the road attended by other hon. Members, where the French advised us that it was our duty to buy the FLA. The committee of the WEU on which I serve went to Toulouse, where we were given a programme and a timetable for the development of the FLA. I made the following remark: "Your timetable shows the FLA entering Royal Air Force squadron service 18 months before it has its maiden flight." Their response was, "We do a great deal by simulators nowadays."
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The fact remains that we were properly committed to replacing, as was necessary, at the earliest possible stage, the older Hercules with the C 130J. I spoke strongly in favour of that partial replacement, but the Government hit on what seemed a satisfactory compromise by replacing the older Hercules with the FLA.
Where, however, are we going now? Chirac seems likely to cancel the FLA. If we had done what the French had wanted, we would not have the C130Js, but would be waiting for the FLAs, which, even if they did replace the Hercules squadrons at Lyneham, would not do so for another 10 years. Meanwhile, the Hercules, which entered squadron service in 1964, bringing Britain back from its east of Suez policy, would have continued to serve long after it had reached its sell-by date.
I hope that the FLA will fly and that the Royal Air Force will be able to use it, but, even if it does, what will the Minister do about adequate heavy-lift capacity? What is going to lift the helicopters and all their appurtenances, which will be required in future regions of conflict in Africa, Europe, Montserrat or wherever the Minister may guess they might be? The Air Force will have to have such capacity. Europe may not be able to provide it, but it can provide the replacement air-to-air refuelling aircraft. There is no reason why the airbus could not be reasonably and economically converted to serve that purpose to replace the tankers currently in use by the air force.
I give this advice to the Minister. A year or so ago, I conducted—imperfectly, because, for one reason, of delays in some member states' response—an analysis of the capabilities of western European air forces. I found, for example, that the vast majority of western European air forces had no experience or ability in air-to-air refuelling, a singular omission; that many air forces had no all-weather-strike capacity, which is not acceptable if Europe is to provide properly for its security; that their capacity to undertake intelligence gathering and reconnaissance operations of the sort that the Sentry and Nimrod undertake was, in most cases, non-existent; that some of their pilots fly only when the weather is fine, during the day, perhaps after a good lunch; and that there is an inordinate number of different types of aircraft.
As ours is the most admired service, as we bear most of the burdens and as we serve as the model for and are admired by Europe—as the Minister has said, people come rushing from Europe to see how our contracting and hard-pressed service is operating—we are entitled to say, "Don't expect Britain to continue to bear burdens that you must share more frequently than you are doing at present."
If we do not say that, it will be unfair on the air crews and ground staff who serve them, who know very well that that is the position, but who are too discreet and too loyal to say it. We are imposing too much on them, which is not fair. It is time that the Government sought to ensure a much fairer deal in the responsibilities for air operations in the western alliance. Until that is achieved, we are entitled to feel aggrieved.
May I make one mischievous suggestion? The Government's current position with regard to Brussels and European negotiations is absurd. It is equivalent to a child taking its bat home because someone has bowled him out. However, I have sympathy with Conservative Members who think that we should show some criticism of the fact that one or two member states have been less helpful than they might have been; perhaps Germany is one of them.

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As a tribute to the enormous sacrifices that were made in the history of the oldest independent air force in the world, and as a little reminder of the genuine independence that Britain displayed between 1940 and 1944, why not give Bomber Command the medal that it should have received after the second world war? Go back to negotiations, but make a little gesture. It would be much more sensible.
7.34 pm
Mr. Bill Walker: It is always a pleasure to follow the hon. Member for Wentworth (Mr. Hardy). No one can deny that, in relation to the Royal Air Force, his heart and mind are in the right place, and we always welcome his contribution to the debates.
I remind the House that I have an interest. For many years, I have been a volunteer reserve pilot and instructor and I hold an honorary appointment. I have been thinking about the debate for some weeks, wondering what we would be talking about. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) and I must have been thinking about similar things because I had begun to think about the period between the wars and how Lord Trenchard had laid down the foundations that led to the expansion in the late 1930s.
The lessons of the second world war are that control of the skies is a necessary objective. Who could ever forget the sinking of the Prince of Wales and the Repulse, two capital ships that were lost because they had no air cover? The absence of air cover was critical and the lesson was brought home to us, if we needed it, that even men-of-war that were thought to be invincible were vulnerable to air attack. Who can ever forget the battle of Britain, a close-run thing? I could go on and on about that period, but I have made my point. We must therefore consider today's Royal Air Force against the evidence of history.
If we are to continue to have the broad range of capability, which is the task that Parliament has required the RAF to meet, again history will assist us. Like my hon. Friend the Member for Ruislip—Northwood probably, I have been re-reading some books about the pre-war RAF and about the battle of Britain. Like most people of my generation, I have a library of such books and from time to time I return to them. Having read them, I asked myself: do we today have the ability to expand within, say, three years to defend United Kingdom air space against aggression from the continent?
People will say, "Who are the enemies?" but I remind them that in 1930 no one had heard of Hitler and, by 1940, in 10 short years, he had created the most massive military force known to man and had occupied most of Europe. In fact, in 1932, no one had heard of him. I pick on three years deliberately because the years 1936–39 were critical for the RAF and the year 1939–40 was vital to our survival.
So I ask the question: do we have the capacity to create a strike force capable of taking modern weapons deep into enemy territory? Could we create a modern equivalent of Bomber Harris's Bomber Command? Do we have the capacity today to create a transport and maritime capability, the modern equivalent of Transport and Coastal Command? More important probably, do we have a logistics and training capability to meet the demands of supplying front-line expansion capabilities? My concern is primarily directed towards our ability to expand logistics and training. If we fail in either or both of those sectors, front-line expansion will not take place.
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My reading of the expansion years of the late 1930s is that the ability to produce and to maintain aircraft and spares was vital. Attrition losses in the early years of the war, particularly in France in the first year, required new equipment quickly and squadrons to be created to meet the demands of defending the skies of the United Kingdom.
Will one fast-jet training unit be capable of turning out the number of aircrew required if expansion is necessary in the circumstances that may evolve? The hon. Member for Wentworth and others reminded the House that the unexpected always happens. Will we have the capacity to train sufficient technical staff for the extra squadrons? I can envisage the Royal Air Force having the aircraft but empty seats, because it will be incapable of producing the required number of fast-jet pilots in time.
The present Chief of Air Staff and the Air Force Board are to be congratulated on following the example of Trenchard and learning the lessons of the pre-war years. I am sure that the present Chief of Air Staff would be the first to admit that there must be some risk in the way that financial pressures have forced the RAF to produce training structure logistics that may not expand as the service would wish in times of emergency.
The hon. Member for Stockton, North (Mr. Cook) used the word "sustainability", and the combination of that in current circumstances with the ability to expand will ultimately determine whether or not policies decided and decisions taken now were wise. I heard that with some feeling because we often hear from people—sadly, some of them on the Opposition Benches—the nonsense that a defence review will solve the problem. All experience of such reviews is that they are designed to save money. If we are creating structures that are the direct result of financial pressures—the so-called peace dividend—heaven help us if we go down the route of a defence review designed to save more money, because that will mean cutting planned defence procurement. That is the only way to produce quick savings.
I am pleased with the actions of my hon. Friends the Ministers in respect of defence procurement. I welcome the upgrading of the Tornado F3, which was a wise and sensible decision that had the added advantage of protecting the vital Eurofighter 2000 programme, which we must do nothing to undermine. We are depending on that aircraft, and on it coming in on time. Can my hon. Friend the Minister of State for Defence Procurement give an assurance that decisions on the following programmes will be announced before the summer recess? [Interruption.] I pause while my hon. Friends have their collaborative chat, and I am happy that they should chat. The programmes to which I refer are the replacement maritime patrol aircraft, SR1236—the CASOM, and the SR1238 anti-armour weapon. May we expect decisions before the recess?
The first duty is to buy the maritime patrol aircraft that is right for the job. The second is to get it at the best possible competitive price—I do not argue with that. We must also consider UK involvement. Collaboration is a fact of life and not something that one can discard. In military aviation manufacturing, collaboration is not an option. No single company or country can today provide the high-cost, leading-edge, sophisticated and modern military equipment required to give our air force the edge that it needs. Purchasing decisions cannot ignore that factor. It is important to consider not only price but work

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share, future capability, the retention of a UK research and development and manufacturing capability, and the vital export potential and through-life costs.
It is nonsense for Members of Parliament and the Government to spend taxpayers' money on something that will not offer export potential. That is where collaboration is vital and important. Are we collaborating with countries whose markets will be open to us, or not? I commend my hon. Friends on the selection of the C130J, which was the right decision, as subsequent events have shown, because one should not be persuaded to buy a paper or political aircraft—aircrew do not like the idea of flying, either.
Whatever the pressure on my hon. Friend the Minister—and it will be huge—he should bear it in mind that the companies involved in all the runners for the maritime replacement aircraft should have a large UK content. It is also nonsense to say that, because a company is a leading fuselage manufacturer, it is the only choice—it is not. I hope that the replacement's specification and price will be carefully examined and that the RAF will get the right aircraft, which will have implications for sales world wide. Also, can my hon. Friend the Under-Secretary give some idea when a decision on procuring the SRA1239 is likely to be made?
People tend to think of the Royal Air Force in terms of fast, noisy, low-flying jets. Sadly, that is often the only evidence the public have of an RAF presence. With that in mind, I congratulate my hon. Friends on sanctioning and agreeing the successful Red Arrows tour of the far east, which was one of the most valuable exercises in many decades. It had a huge impact and did enormous good for UK export potential.
Opposition Members mentioned the time that individuals must be away from their home base as a result of the overstretch faced in some areas—a critical factor in maintaining morale and professional standards at home and abroad. We should not be surprised if people have domestic problems if we continue to require them to be away for six months of each year.
Housing is another matter of concern, and answers can and should be found. It is important that we communicate effectively to the people who are affected so that they can clearly receive the message and understand what is happening. I believe that those at the highest levels of the RAF understand what the Government are trying to do, but I am not sure that people at the lower levels understand.
I welcome today's announcement on the RAF Valley contract. I join my hon. Friend the Member for Ruislip—Northwood in suggesting that there should be a pilot scheme for sponsored reserves. I believe that sponsored reserves is the way to go forward. As a volunteer myself, I have always felt that the volunteers' value was not always properly understood by the Government or by the services. Given the opportunity and the training, volunteers are as professional as full-time people. The RAF Valley contract should be a good way to get the sponsored reserves moving.
I cannot forget that, in the immediate post-war years, people such as those from Airwork manned the reserve flying schools, with which I was associated. All the people from Airwork at those flying schools were reservists. Those were the days when the volunteer
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reserve was a very large organisation. I should like to see those manning levels restored through the auxiliaries. I therefore welcome the decision on the helicopter composite squadron at Benson, which is a move in the right direction.
I should now like to turn to a topic that is very close and dear to me. My hon. Friend the Minister of State for Defence Procurement will not be surprised to hear that I am going to mention something that my hon. Friend the Minister of State for the Armed Forces did not mention in opening the debate—the cadets. The Air Training Corps, which currently has 37,000 cadets, not only provides training in citizenship, leadership, team work and many other attributes sought by potential employers; it also remains a valuable source of recruits for the RAF.
Recruiting is not one of the ATC's main objectives, but it is worth noting that the cadets who join the RAF not only have a lower wastage rate in training but remain in the service longer than those without Air Training Corps experience. Moreover, as the RAF significantly decreases its manpower and its geographical spread of bases, the Air Training Corps increasingly represents the only blue RAF uniform that the public ever see.
It is interesting to note that, according to the figures given by my hon. Friend the Minister of State for the Armed Forces, by 1999 the service will be down to 52,200 people. The ATC, including the adults in uniform who are associated with it, will be nearly the same size. We will have a cadet force that is almost equal in size to its parent service. It is therefore important that my hon. Friend the Minister recognises, and agrees, that the air element of the Air Training Corps is the vital feature that distinguishes it from other organised youth activity, and that it is an important way in which to raise the RAF's profile in the public eye.
My hon. Friend the Minister will not be surprised to learn that I want to draw attention to volunteer gliding schools. There are problems with those because sites are becoming increasingly difficult to find. As the RAF shrinks and RAF stations decrease in number, we find it difficult to find sufficient sites for our 28 volunteer gliding schools. The situation is particularly difficult in north-east and south-east England. In some places we have entered into shared agreements with the Army and the Navy, by which they have taken over former RAF bases and shared the airfields with us.
I should like to make it clear to my hon. Friend the Minister that the Army and the Navy must realise that the volunteer reserve gliding units are a part of the RAF training machine, that airfields are for aeroplanes, gliders and other aircraft to fly from and that airfields are not meant for other things. It would be useful if the Army and the Navy—at local level, because there has never been any problem at the highest level—understood that.
I also ask my hon. Friend the Minister of State for Defence Procurement—I have already written to my right hon. Friend the Secretary of State for Defence about this—to understand the need for additional Vigilant motor gliders, which will provide the flexibility that is necessary because of the lack of sites. I do not expect an answer today, but I ask the Minister to have a word with the Secretary of State about my bid for seven more Vigilant motor gliders. They are necessary because of the difficulty with sites.

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We have found that fewer summer camp places are now available because of the reduction of RAF stations. It has therefore become increasingly necessary for us to find other ways in which to get the cadets to camp. I should like my hon. Friends the Ministers to realise that that problem must be examined in some depth. There may be new solutions.
My hon. Friend the Member for Wyre (Mr. Mans) has a direct interest in air experience flying. We will be considering replacing the Bulldog aircraft, which is used for university air squadron flying and for the air cadet air experience flying. I hope that soon we can receive some answers on the replacement for the Bulldog. If my hon. Friend the Minister accepts—I am sure that he does—that the air element is the important element of the air cadets, Bulldogs and the replacement aircraft are important and should have a fairly high priority. As it is not an expensive project—as are the projects I mentioned earlier—I should think that, even with our tight budgets, we will find ways to replace those aircraft.
I always find it interesting to listen to debates on the RAF because, fortunately, there are still some hon. Members who have direct RAF experience. One of the great tragedies of the modern Parliament is that so few hon. Members who are elected to it now have direct experience of the military. We are blessed to have colleagues with direct experience of the military. We are also blessed to have such hon. Members as the hon. Member for Wentworth (Mr. Hardy), who has a keen and direct interest in the military. The RAF benefits from that.
The message that I should like the House to send out to the people in the RAF is that we care, that they are important and that we want to do the right things for them.
7.57 pm
Mr. Barry Jones: I am glad to follow the hon. Member for North Tayside (Mr. Walker), who speaks with a very patriotic insight. My speech will be unashamedly constituency-oriented. When I heard the Minister's remarks about Normandy and about those years of crucial importance to the future of our nation, I was reminded that from 1940 the Vickers company built and operated a shadow factory in my constituency, where the Wellington and later the Lancaster bombers were made. My constituents' skills greatly helped the RAF in the war effort.
I will deal first with the future large aircraft. In my constituency, 2,200 plane makers make the wings of the airbus and they also want to make the wings of the FLA. One of the reasons I want them to be able to do so is that, in the past two and a half years, my constituents have lost some 2,000 jobs at Airbus, British Aerospace and Broughton, which has had a great impact on the local economy. If we were to make the wings for the FLA, it would be the icing on the very successful airbus cake. That is our hope and our plea.
The airbus activity is the linchpin of my constituency's economy, but it is also the linchpin of the Wirral area, Cheshire and the city of Chester. The airbus activity has meant that my constituency in north-east Wales has a reservoir of skills arguably unparalleled anywhere else in the country. I should like Ministers to acknowledge that the FLA project is crucial for the future of the whole industry. Do they comprehend the strategic importance of the aerospace industry itself?
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I would itemise the industry's importance as follows: it represents sales of £10 billion a year and 2 per cent. of the nation's gross domestic product; three aerospace companies are among Britain's top five exporters; there are some 130,000 employees in this great industry and tens of thousands of people are indirectly employed; the industry has very competitive labour costs and, above all, it contributes about £2 billion per year to Britain's balance of trade.
No one could doubt that Britain's aerospace industry is truly world class—it is perhaps our last world-class industry in terms of skilled activity. I ask Ministers to ensure more Government support for this great industry. Will the Ministry of Defence use its undoubted weight to get positive Treasury backing? The industry is now in a state of flux on the mainland of Europe, so why should Britain not urgently seek to take the lead? The Ministry can help it to do that.
I should also like the Ministry to ensure that the Government give the aerospace industry a much bigger research and technology budget. That is an urgent requirement, as it is the seedcorn that will deliver the profits in the years ahead. Will the Ministry acknowledge that the aerospace industries of other European countries and of the United States have far bigger research budgets?
Are Ministers still committed to the FLA, and specifically to the 40 to 50 aircraft that it is mooted that the Government will buy? Are Ministers stressing to France and Germany the importance of the FLA project? I should like the Government, and especially Defence Ministers, to say that they have done everything possible to bring the project into being. Many of my constituents are dismayed at having to endure the lengthy delay in making the decision.
Are the Government using every diplomatic device and all possible pressure to persuade the French to make up their mind about the FLA? I very much want Defence Ministers to take the lead in the Government in putting more pressure on the French Government because I feel that the French interest, activity and approach is very weak—indeed, wimpish. It is up to our Ministers to use all their weight to ensure a positive outcome.
Having said all that, I must thank the Minister of State for Defence Procurement for being so accessible and courteous when I raised these matters with him, and specifically when he patiently received the deputation that I brought him in respect of the FLA project. I am most grateful to him. I now invite him to visit the Broughton factory, where he can see the making of the airbus wings. Were he to visit the factory, he would surely boast about the skills and successes of my constituents.
I also draw the Minister's attention and that of his colleagues to the chilling headline in the authoritative Financial Times earlier this week:
"Aerospace industry sees 30,000 job cuts".
My constituents who work on the airbus were dismayed to hear of proposed cuts on that scale. Cuts were mooted for the whole aerospace industry, of course. I would argue that a successful FLA project would be helpful in the context of those cuts. Are Ministers anxious about the signposting of redundancies on such a scale?
My second constituency point relates to RAF Sealand. Of the 1,600 people working there, 1,300 are civilians. I believe that it is the best maintenance unit in western

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Europe. It has a fine team—flexible, co-operative, productive and successful—and it did not let the RAF fliers down in the Falklands war and the Gulf war. In a way, it received battle honours.
At present, RAF Sealand is under a cloud, and that cloud—to put it bluntly—is market testing. My constituents say that market testing is a despised phenomenon. It sits uneasily alongside the task of a maintenance unit. That task is, at the drop of a hat, to respond in an emergency to war and to look after the interests of our fliers. We simply do not like the prospect of market testing. My constituents say that market testing is in effect ensnaring a loyal work force into what they believe is an ideologically inspired experiment. We do not want it and we do not see the need for it.
I want to put it on record that RAF Sealand has demanned in considerable numbers over the years. It is a co-operative unit and very positive and innovative. I have also found it to be very responsive. Market testing and the failure of an in-house bid would be a very poor reward for being loyal and carrying out a patriotic duty.
My advice to Ministers is, if it works, don't fix it. My plea is that they make this part of Wales a market-testing-free zone. The deal that we are offering is this: if they take market testing away from RAF Sealand, we will continue to deliver the goods and to find the savings. I urge Ministers to place a moratorium on market testing. Why not kick it into touch?
The Minister of State for Defence Procurement was also accessible and courteous when he received my deputation from RAF Sealand. Equally speedily, he accepted my invitation to visit RAF Sealand. I express the thanks of those who work at RAF Sealand for the trouble that he took to see the base for himself. Perhaps I may therefore put a few questions to him on RAF Sealand.
Why was the deadline for bids to take over the work at RAF Sealand delayed yet again? That rankles at RAF Sealand. The leaders of the work force, who have been so loyal to the unit and have worked so hard on the in-house bid, believe that private contractors may be getting an unfair advantage by being allowed more time to gather information for their bids. As we see it, more time means a more competitive bid against those who have made the in-house bid in good faith. My constituents are wondering what answer would have been given if the in-house team had sought an extension. Suspicions have arisen and I draw them to the attention of the House in good faith.
Mr. Arbuthnot: In view of the detail of that question, I should like to answer it immediately. The reason why the tender was extended by five weeks was that more time was needed to answer bidders' formal questions and to provide them with up-to-date detailed Transfer of Undertakings (Protection of Employment) Regulations data, and to update the invitation to tender.
Mr. Jones: I am grateful to the Minister, as I am for his written answer on pretty well the same subject. However, suspicions remain, and it was worth making the point in the House.
The Minister might agree that the prize in the market-tested bidding is the maintenance and repair contracts. The big boys in play are GEC and Brown and
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Root. The fear back home at RAF Sealand is that there will be redundancies if either big company wins the contract. If the in-house bid fails, it is our sincere view that the Ministry of Defence will lose in the long run because the unit will not work as effectively as it does now.
It must be emphasised that the large predators bidding for the contracts at the expense of my constituents are bidding for profit. My loyal, patriotic and co-operative constituents at RAF Sealand want the in-house bid to win—for the sake of RAF Sealand, Wales, Britain, and ultimately, those brave and most professional aircrew.
Now that the Minister has visited RAF Sealand and gained a full understanding of the unit's complexities, and bearing in mind the difficulties with the recently contractorised Nimrod major servicing unit at RAF Kinloss, which follow major difficulties with the Airworks Tornado contract at RAF St. Athan, how can the Government remain convinced that the risks of a contractor operating the far more complex organisation of RAF Sealand are justified?
That is a genuine concern. On Deeside, we believe that the Government must take that into account. I know that the Government care about the future of the RAF. Do the Government agree that the taut but flexible contract that will be required to enable a contractor to operate RAF Sealand is unachievable in practice? We believe that it is. I express those views on behalf of my constituents.
I do not usually refer to the Daily Mail, but I shall do so in this debate. On 1 May, a large headline read: "Air defences down as Nimrods are grounded". The defence correspondent said:
"A quarter of the RAF's 24 Nimrod spy planes have been grounded because of a maintenance crisis.
Repair and servicing was handed last year to a contractor as part of the Defence Ministry's programme of switching such work to the private sector to cut costs.
But sources at Kinloss, Grampian, where most of the Nimrods are based, claim the contractor is dogged with problems ranging from a lack of expertise to poor morale. One said: 'It is a nightmare."'
My constituents at RAF Sealand do not want that nightmare. They want, very proudly, to continue to deliver a fine service to the Government and the RAF. I speak on behalf of a work force who delivered during the Gulf and the Falklands wars and who know what they are talking about.
I very much hope that Ministers will give fair play to my constituents who have submitted the in-house bid, bearing in mind that the Ministry of Defence wants long-term success, not a short-term response to an ideologically motivated approach. After all the wonderfully co-operative work at RAF Sealand, it would be a terrible kick in the teeth if the in-house bid lost. My full support must go to the maintenance unit. I am sure that the RAF's high command is very proud of RAF Sealand and does not want market testing to lead to an outsider winning the contract. I certainly put on record my pride in that wonderful base.
I have received messages today from those who work at the unit in my constituency. They have noted that Brown and Root and others in the consortium have gained contracts at RAF Valley in Anglesey. Their message to me is that that will not improve the spirits of those who work at the unit. Mr. David Barratt took the trouble to telephone me at 7.50 pm to say that the bid at RAF Valley had been lost to the outside contractor. He said:

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"I think this will have an effect on RAF Sealand."
I know this councillor and I respect his concern, which I have put on the record on his behalf and on behalf of my constituents.
Having told the House of two thundering successes in my constituency—RAF Sealand and Airbus—I wish to refer briefly to a tragedy, an injustice and the loss of hundreds of jobs. Seven years ago, 1,200 skilled men and women made a world-class, two-engined executive passenger jet that could fly the Atlantic. So good was the product that a United States multinational, Raytheon, accepted an offer which could not be refused and bought the business for a song—just like that. Although jet production continues for the time being, half the original jobs have gone and the rest are scheduled to go soon. The jobs will be exported from my constituency to the United States, and that wonderful, world-leading aircraft will be made not in my constituency but in Wichita in Kansas—the home state of that powerful and influential politician, presidential candidate Bob Dole.
Mr. Mans: I have a certain sympathy with what the hon. Gentleman is saying, but I am slightly at a loss to understand what his remarks have to do with a debate on the RAF.
Mr. Jones: If the hon. Gentleman will listen for a few more seconds, I will show him why I am entirely in order. I invite him to make the same statement in my constituency in front of my Raytheon workers: he would need my protection. However, I know that he made it in the best sense and was not being mischievous. If he will listen, I will explain.
Before I so foolishly gave way to the hon. Member for Wyre (Mr. Mans) —I note his origin—I was saying that Senator Bob Dole might perhaps have had a hand in the move. Later this year, the Raytheon jet makers in my constituency will suffer considerable job losses. I believe that they deserve better.
I thank the Minister of State for receiving a deputation of Raytheon workers. The Minister, who comes from the same party as the hon. Member for Wyre, gave a lot of his time to allow my constituents to make a passionate, well informed case for Britain's future as well as for their own. I thought that they made a wonderful case, and the Minister's reception of us was most helpful and hospitable.
I invite the Minister to my constituency once again, to visit the Raytheon plant, where he will be astonished and astounded—and very proud—to witness the skills of my constituents, who on current probabilities are soon to lose their jobs when the making of that wonderful machine moves for ever from Great Britain to the United States. That is madness. It is unjust and it is wrong. I know that the hon. Member for Wyre will now agree with me and will wish to show his support for the campaign that we are mounting.
I should like the Ministry of Defence to reward my excellent Raytheon work force with the contract to service the Hawker jets that the Ministry of Defence owns. The hon. Member for Wyre forgot that my constituents have made—and the Ministry of Defence has bought—25 to 30 of those machines, which I believe are now known as Dominie aircraft. As my constituents see the loss of their manufacturing jobs drawing ever nearer, they have had to
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ask themselves what they will do. They have made a fine business plan whereby the current manufacturing centre would become a service centre for the whole of Europe, for all the machines that the work force has made over the past quarter of a century and longer.
It is in the gift of the Ministry of Defence to award the service contract to Raytheon. If that happened, we could save many jobs and a presence would remain in Britain. The Government have admitted what I once described as the breakfast sale of the century—the sale of the Hawker jet to the United States—so what special help will they give? The work force have been so positive that they deserve a reward. They seek to make that plant a service centre for the whole of Europe, maintaining and servicing those fine machines, and that is a reasonable ambition for my constituents to have.
I have thrice thanked the Minister for his reception of our deputation, which was of great consequence for my area, and I hope that he will ponder my request carefully. So far, I am most grateful to him.
8.22 pm
Mr. David Lidington: Unlike some of my hon. Friends, I can claim neither personal military experience nor personal memories of the great days of the Royal Air Force in the 1940s, which for me must come alive through film and newsreel, or through the tales recounted by those honoured veterans who were there.
However, in my constituency there are many members of the Royal Air Force, ranging from the most junior ranks in the service to some of the most senior and decorated. At RAF Halton, just outside the village of Wendover, is the centre of the Royal Air Force's basic recruit training, and about 12 miles along the Chilterns, in the village of Naphill, lies RAF High Wycombe, which is the base of Strike Command and now also the home of the new Anglo-French group.
In the years since I was elected to the House, what has impressed me enormously is the tremendous pride that every member of the service, from the rawest recruit to the most senior air marshal, takes in the Royal Air Force. With that pride in the service goes a strong sense of duty to the nation that the RAF serves.
Last summer that was brought home to me strongly, when I had the honour to be invited to act as the reviewing officer of a parade of new recruits leaving RAF Halton after their basic training. Talking to those new members of the service—young men and women in their late teens or early twenties, and to their families—what struck me was the fact that they could draw on the history of the RAF, not as an arid museum of experience but as a living tradition. It was a history that gave them meaning, a sense of corporate identity, and a continuing sense of duty and purpose as they entered on their careers in the service.
There is no doubt that, for both the RAF bases in my constituency, the last couple of years have been times of great challenge and some difficulty. Some problems have been specific to each base, and others have been shared with the rest of the service as it has made its adjustments to the defence costs review.
At RAF Halton there has been a switch from technical training to basic recruit training. The base has also seen the reorganisation of the medical provision for the armed forces, which has led to the closure of the Princess Mary

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Royal Air Force hospital, and the reorganisation of dental services, which has also affected Halton. I hope that it will not be too long before Ministers will be able to resolve the uncertainty that still surrounds the future of the Princess Mary hospital site and the associated office space at the Halton base.
Various hon. Members have mentioned RAF quarters. For Halton the problem lies not with the policy change that is in train, but with the fact that question marks persisted for some years over the future of the base, until the decision was taken to relocate basic recruit training there. That meant that very little was spent on the buildings on the base, so there is now a substantial backlog of work, which I hope Ministers and senior RAF officers will ensure is tackled.
RAF High Wycombe has had to cope with the reorganisation of headquarters functions, and both stations have had to manage the problems associated with the overall reduction in RAF personnel and the contracting out of support services. Those policy decisions have certainly caused difficulties for my constituents, but I am sure that they were the right decisions.
Senior RAF officers who gave evidence to the Defence Select Committee only a few days ago said that the RAF's savings from the defence costs study would contribute about £300 million each year once the changes were implemented in full. At a time when not only the defence budget but all areas of Government spending are subject to scrutiny and to great pressure, it is clearly right for Ministers to look for every opportunity to make savings in administration and support services, so as to concentrate on providing our young men and women in the armed services with the best equipment and training, to enable them to do their job on behalf of the nation.
I would find some of the criticisms that Opposition Members have made during the debate slightly more compelling had they not coupled their critique of the Government for making savings or for seeking to contract out support services with additional demands for expenditure on defence procurement, or for taxpayers' support for defence industries. There is an inconsistency in the position of Opposition spokesmen, which Ministers have every right to expose.
I was glad that my hon. Friend the Minister of State for the Armed Forces acknowledged that these necessary policy decisions have led to problems for individuals. Personal hopes have been disappointed and career ambitions frustrated, and far-reaching changes have been made to the organisational culture of many parts of the RAF. I therefore welcome his acknowledgement of the scale of the challenge facing the RAF in the next few years, and his tribute to the professionalism that the services are showing in tackling those changes and seeking to manage them in a way which deals as sensitively as possible with the real dilemmas and difficulties facing service men and women.
As the service comes through a period of turbulence, the duty lies with Ministers to demonstrate clearly to service men and women of all ranks that the RAF will continue to offer a fine career to new recruits and that it still has a central role to play in the United Kingdom's defence strategy. That cannot be done by exhortation
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alone, although exhortation and reassurance from Ministers—who must showing solidarity with the officers and men in the services—is important.
We must also think clearly about the future of the service in the post-cold war world. There is still a great deal of uncertainty about the nature of future threats to the United Kingdom and the interests that our armed forces might be required to defend in various parts of the world. I therefore welcome the steps that my right hon. Friend the Secretary of State and his team have taken to enhance the role of the Western European Union in the Atlantic alliance.
I see no contradiction between a sceptical attitude towards some of the more extravagant ambitions of the European Union—although I could add a scepticism that would be recognised by my distant predecessor Edmund Burke, if not by one or two tabloid newspapers—with an equal desire to search for ways in which the countries of Europe can co-operate more effectively in the field of collective security.
Mr. Mans: I am interested in what my hon. Friend has to say about the WEU. Does he agree that, if we want European states to collaborate, we have a perfectly good way of doing so through NATO? The WEU is surely not the way forward.
Mr. Lidington: The Government are right to make it clear that NATO should remain the cornerstone of the western Atlantic alliance, but it is compatible with that principle for the Government also to try to strengthen the European pillar within that alliance. The recent White Paper on the intergovernmental conference proposed that we look for a strengthened role for the WEU as one way of giving effect to that policy.
I am pleased that we have seen some fruit from our efforts to woo France back into the main stream of the western alliance. It was a difficult courtship, conducted with the delicacy and the restraint appropriate to a Jane Austen novel. I am glad that we seem to have received a favourable response from Paris, although, as some Opposition Members have said, there is still a long way to go.
In addition to the importance that the Government rightly place on the Anglo-French relationship, I hope that they will have regard to the need to bring Germany more fully into the defensive arrangements of the Atlantic alliance. I know that there are differences between our approach and that of the current German Government, who hope to develop a defence role European Union. I personally do not think that that is desirable.
Speaking to younger German politicians, one realises that members of the Bundestag are quite rightly confident about their national identity, and take an understandable pride in the achievements of a democratic Germany during the past 50 years. They accept that one aspect of their maturity as an advanced democracy will be to play a more active role as a partner in western defence arrangements in the future. I hope that my right hon. and hon. Friends in the Government will be able to strengthen our relationship with Germany in the years to come.
8.35 pm
Mr. Hugh Bayley: A characteristic of our debates on the armed forces is that many things are said on which there is agreement. I listened carefully to the hon. Member for North Tayside (Mr. Walker), who is well informed and speaks with great experience on these matters. As always, I learned something from listening to him. He said, rightly, that one of the things that the House must be concerned about is that relatively few Members entering the House for the first time have served in the armed forces.
The hon. Member for North Tayside said that that small number were supplemented by some hon. Members who take a particularly close interest in the armed forces, and mentioned in that context my hon. Friend the Member for Wentworth (Mr. Hardy), who has a long-standing interest in the RAF. He forgot, however, that my hon. Friend has served in the RAF. I know that because I travel to and from Yorkshire with him frequently. As a graduate of the armed forces parliamentary scheme, he suggested to me that I might usefully spend some time in the scheme. I did so last year and the year before and, as someone who has not served in the armed forces, I learned a great deal from it.
I want to say some things that the Government may not agree with, but I base my remarks on what I have learnt during my visits to a considerable number of RAF bases, and I believe that this needs to be said. I am sorry to have to say it, but this has been a bad year for the RAF in terms of the number of aircraft that it has lost. In five months, the RAF and the Royal Navy have lost 11 aircraft, and two air crew from the RAF and two from the Royal Navy have lost their lives. That is a considerable number, and compares with the six aircraft lost by the RAF during the Gulf war.
In his opening speech, the Minister suggested that it was irresponsible to ask questions about what has been happening and why. I do not share that view. The House should be asking deep, serious and penetrating questions about these accidents. I do not intend to detain the House for too long, but we should remind ourselves of the aircraft that have been lost.
In January, two Tornado F3s collided in mid air in the middle of a training exercise. The following day, one of the attack GR1 Tornados was lost in Germany, and a Jaguar was lost that month as well. In February, a Hawk aircraft crashed on take-off at RAF Valley. The pilot, an experienced man, was killed. The press reports about that accident suggested that the reason for the crash may have been that the ailerons had been disconnected for servicing and had not been reconnected before the flight. I do not expect Ministers to comment on that until the air investigation report is published, and when it is published it will, of course, be made available to hon. Members in the Library.
Two Royal Navy Sea Harriers were lost, together with an RAF Harrier and another Tornado GR1 that month. Last month, a Tucano, from RAF Linton-on-Ouse near my constituency, crashed in Wetwang in Humberside and, last Monday, a Hawk aircraft was lost at an air display in Portugal.
The losses in the five months of this year have been twice the average rate of loss in the past four years. In his opening speech, the Minister, who is now in his place, said that those losses were nothing other than an unfortunate coincidence; that the loss of those aircraft and
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lives was simply bad luck. That could be the explanation, because accidents by their nature do not happen in a regular cycle.
The figures for air accidents are fickle and they go up and down. In 1991, the armed forces had a bad year and lost 20 aircraft, but those figures—in an especially bad year—showed a lower attrition rate than was suffered in the first five months of this year. Of course, five years ago, the armed forces had more aircraft in service than now.
Of the 11 aircraft that have been lost—nine RAF aircraft and two Royal Navy aircraft so far this year—10 were fast jets. In 1992, the Royal Air Force had 647 front-line fast jets in operational use or in in-use reserve. Now 580 fast jets are in use. In 1992, three fast jets were lost, or one for each four months of the year, but in 1996, so far, 10 fast jets have been lost, or two per month. The loss rate is eight times higher than in 1992.
It is right and acceptable for the Minister to hope that the high loss rate that we have had in recent months is just bad luck. I, too, hope that that is the cause. I hope that the loss rate will right itself in time and that it is an unfortunate statistical quirk, but it is irresponsible to assume that the only cause is bad luck that will right itself. We must consider the alternative explanations and discount them only when we have firm evidence that we should. When an accident happens, there is a thorough investigation and the reports of those investigations are placed in the Library. Each of those investigations considers a single accident.
I was not convinced, by the Minister's intervention in the speech by my hon. Friend the Member for Warley, West (Mr. Spellar), that sufficient attention is paid to trends from one accident to another and whether there are any common factors. My hon. Friend was right to say that a special inquiry should be set up to consider whether there are some common factors in the high loss rate.
I understand that none of the aircraft lost this year has been maintained by contractors. We have had evidence that contractors can fall down on the job. All hon. Members present will know about the Airworks problem when 18 Tornado aircraft were damaged, causing a repair bill of some £100 million. The same company damaged 11 Hercules aircraft. According to the Defence Select Committee's report of December last year, the company caused serious damage to the aircraft by cutting away load-bearing stringers, omitting fasteners, deviating from drawings and drilling holes in the air frames in the wrong places.
I shall give the House a long quotation—longer than I would normally use, so I ask for the House's forbearance—from the evidence given by Hunting plc to the Defence Select Ctte in its inquiry into market testing. Hunting plc said:
"Notwithstanding the policy that value for money and quality are now the key determinants in the award of a contract, practice suggests that the cheapest tender still wins. As a consequence, contract prices are being driven down to levels which will, in the final analysis, create longer term problems or possibly failures. There is already sufficient evidence to show that the lowest price bid is not always the most cost effective."
The cost-cutting approach that contractors necessarily follow is copied by RAF engineering teams who seek to retain work in house, as my hon. Friend the Member for Alyn and Deeside (Mr. Jones) pointed out. That, after all,

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is the very intention and purpose of contractorisation—to consider whether the job is being done in house as cost-effectively as possible. But the House must ask at what point the competitor pressures and contract culture start to undermine standards of RAF engineering.
A second hypothesis has been put forward by certain hon. Members about a possible—I say no more than possible—cause for the current high incidence of aircraft loss. That is that the defence drawdown has reached a point at which it is beginning to compromise the operational effectiveness of the armed forces and the RAF in particular. I was sorry to hear the Minister suggest that to raise that issue is an irresponsible act by a few maverick Labour Members. The same fear has been expressed by hon. Members on both sides of the House, and one of them is present tonight.
The Independent, on 28 February 1996, in a report on a meeting, stated:
"Fears that cuts in defence spending may be partly to blame for the string of crashes by RAF aircraft are to be raised with ministers by senior Conservative MPs."
From the context of the article, I believe that one of those who attended that meeting, and who was also probably the provider of the information to the journalist, is here on the Conservative Benches tonight.
During my year with the armed forces parliamentary scheme, I became acutely aware of the enormous pressure on those serving in the Royal Air Force. Hon. Members have made that point already today and I will not dwell on it. The RAF is now smaller than at any time since the second world war. In March, 5,600 officers and men were made redundant from the RAF, although the RAF is now deployed in more places overseas in an operational role than at any time since the second world war. I will not list all the places but during my time on the parliamentary scheme I had the opportunity and privilege to visit the RAF detachments at Palermo, Gioia del Colle and Aviano to see what life was like and what the job—at least, the job at the base—entailed. I also observed the morale of the people involved in the front line on operational duties.
My hon. Friend the Member for Stockton, North (Mr. Cook) spoke about the huge pressure on front-line jet pilots, who spend perhaps 200 days a year away from home in either a front-line operational role or training; they are away from their homes and families. When a detachment is deployed, it is not just the air crew who go—engineering staff and ground crew provide back-up.
There are 450 RAF personnel at Gioia, and most of the air crew are deployed for a three-month period. One evening in the sergeant's mess—the bar in the big hotel where most of the NCOs were billeted—a young airman told me that his wife had given birth to a baby shortly after he had come out on deployment. He would not have an opportunity to go home to see his wife or baby for two months; it was impossible for him to go home for a weekend while on an operational assignment. Those who have served in the armed forces will know that that is forces' life, but it seems to me, as someone who has not served in the forces, a hard burden to bear.
However, if someone signs up to the armed forces, that is part of the deal. If someone is deployed away from home for a quarter of the year—that is the average—that is what he comes to expect. But as the pressure to be
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away on operational duties more frequently steps up, the pressure on the individual and, as my hon. Friend the Member for Stockton, North said, on that person's family, increases too.
The problems of pressure are compounded by problems of job insecurity and lack of promotion prospects. At RAF Odiham I met an extremely able young aircraft engineer who had served in his rank for seven years. He was told that he had no prospect of promotion; in the past he would have been promoted two or three years earlier. That happens not just at NCO level, but at officer level. Hon. Members have talked of the numbers of middle-ranking officers leaving the RAF because there is no a career ahead of them if they stay. Morale is, to say the least, fragile.
On 25 February this year an RAF officer was quoted in The Observer as saying:
"We have a problem. Frankly some of our guys are just worn out."
The RAF trains harder and flies better than any air force in the world. It is an incredibly valuable and prized national asset but it is currently being squeezed from both sides: its budget and its manpower are being cut while its operational obligations are increasing.
The hon. and learned Member for Fife, North-East (Mr. Campbell), who is no longer in his place, reminded the House that NATO inspections of RAF bases have been suspended. Annual formal inspections of RAF bases have also been abandoned. Participation in the royal tournament has been reduced to a minimum because the resources are no longer there. That reflects the pincer pressure—the RAF has greater commitments and fewer resources. The strain is beginning to show. The House and the Government need to answer the question: are we now, and have we been, expecting and requiring the Royal Air Force to do too much with too little for too long?
8.53 pm
Mr. Keith Mans: I was interested in the remarks of the hon. Member for York (Mr. Bayley) and pleased that he has had such a pleasant time with the RAF under the parliamentary scheme that we have with the armed forces. I shall not dwell too long on what he said, but I want to make one point in relation to the accidents that he mentioned.
During his time with the Air Force, the hon. Gentleman may not have picked up the fact that a continuous inquiry is being held into the relationships between different accidents, as well as near-accidents and incidents. Every such incident, near-accident and crash is looked at to see whether something has gone wrong which could affect other aircraft in that fleet or with that role. Therefore, the idea of another special inquiry is superfluous. I am confident that that exercise is continuing all the time. If there are lessons to be learned from the spate of accidents, they have already been learned or certainly will be learnt when the full findings of those accidents are made available in the normal way.
A number of other speakers tonight made a series of requests of my hon. Friend the Minister, and I shall start with a personal one. As my hon. Friend the Member for North Tayside (Mr. Walker) said, he is a member of the Royal Air Force Reserve, as I am, and a pilot. I have been personally affected by the changes in the Royal Air Force over the past two years. The aircraft that I have been

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flying for the past 19 years sadly left service with the RAF on 31 March after a period of 49 years, 10 and a half months. It was perhaps a little churlish of those in charge of the operation not to postpone that for an extra six weeks, to ensure that the aircraft had been in service and had flown for 50 years.
I have been forced in my middle age to learn to fly a new aeroplane. I was slightly worried by what my hon. Friend the Member for North Tayside said about the possibility of the air experience flights and the university air squadrons having yet another new aircraft, as I can see myself having to prepare for that in a special way. All I ask of my hon. Friend the Minister is to let us have a little information about that as soon as possible, as I should like to know whether, in the near future, I shall be required to go through the exercise that I have been through over the past month yet again.
Compared with previous years, the RAF has, over the past year, been in the news a great deal. As we have heard, the news has not always been welcome, and it has not been an easy year for the RAF. What is sometimes forgotten is that, when politicians sign off decisions, service men have to implement them and do so for a considerable period. As Lord Craig said in the House of Lords on Monday in another debate, the devil is often in the detail.
It is a tribute to the service men of all three services, but particularly the RAF, as it is the subject of tonight's debate, that they have got on with the job and done what has been required of them in a year when manpower has been reducing rapidly and many non-core activities have been contractorised. I agree with my hon. Friends the Members for North Tayside and for Ruislip-Northwood (Mr. Wilkinson), and I worry that we might have gone a bit too far.
I very much want to see the new Valley contract operate properly and successfully. I am certain that the people employed will be first-class, but we need to look closely in the medium and long term to ensure that we have the balance right.
That also relates to flying training, for which an element of discipline is necessary. That has to be taught at some stage during training, but if there are too many civilian instructors, it will be harder to do so. We must be careful and analyse in detail the effects of the changes. One can easily add up the figures, save money on flying hours at the beginning of training and turn out a pilot with wings, and show that one has saved the taxpayer money in doing so, but one must then see whether that individual is as effective on his squadron as his predecessor was two or three years before who went through the previous system.
As far as I am concerned, the jury is still out. We may well have got it right. We may well have saved money. We may well have retained the operational effectiveness of which the Air Force is rightly proud, but I want squadron commanders in front-line air squadrons, front-line aircraft, to tell the Ministry of Defence how the new pilots who have been trained in the new ways are performing; whether they need further operational training to bring them up to the required standard; or whether they are achieving that standard just as quickly—I hope that they are—as their predecessors did a few years ago. Only then will we know whether the changes have been successful. I hope that they are, because we want to move forward, but we should not count our chickens just yet.
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Also occurring this year—I hope that it is transitory and will not continue—is the changeover from manning by airmen to manning by contractors. Undoubtedly, gaps will be created as a result. We have already seen that. The RAF, quite rightly, has curtailed activities that are not essential to its front-line duties. I fully approve of that, as it is a reasonable response. It is a difficult year, and I look forward to the time when most of the contracts can be awarded and we can create more stability in the running of the armed forces, particularly the Royal Air Force.
Indeed, while suffering a cut of 42 per cent. in its strength over seven or eight years, the RAF now operates in more locations overseas than it did before the change. Its tasks are greater, while its resources are fewer. It is worth saying that the RAF has always had a tradition of getting on with the job and doing it well, and that is precisely what is happening this year in the units that I have visited, in which there is still the same professionalism and commitment to the job. A good illustration of that, which has already been mentioned, was the Red Arrows' highly successful trip around the world, which did much for the quality of the RAF, its professionalism and, indeed, the serviceability of the excellent Hawk aircraft they flew. They performed well, and I am certain that that will lead to many exports.
For the reforms that have taken place to bed down, it is important that we have the period of stability that we are always promised. I agree with a number of hon. Members, from both sides of the House, who said that we should look more closely at the proposal to sell off the married quarters estate. I shall not dwell on the matter. The hon. and learned Member for Fife, North-East (Mr. Campbell) was right. I believe that we can gain what we need by getting rid of the vacant quarters and at the same time provide the necessary resources to upgrade quarters that are below standard, without having, at this stage at least, to go through the much larger operation of selling the whole estate, which is envisaged. In a slightly parochial sense, the RAF has always spent a bit more than the Army on its estate, with the result that it is likely that the proceeds used to upgrade the estate will go in the direction of the Army rather than the Air Force, although that is probably right if one is to bring all the quarters up to a particular level.
In talking about stability, I shall make one other point. The Labour party—I welcome this—tries to suggest that defence is an issue on which we can combine, that there should not be a diversity of view in any sense and that it is an issue on which we agree. I would like to see, in that spirit of bipartisanship, the Labour party drop the silly idea of a further defence review. I cannot think of anything more likely to create the very conditions that we and the Labour party least want to see.
A defence review would not promote stability. It would promote anxiety across the whole rank structure as to what would be the next change. If the Labour party is serious, it should say, "The armed forces are about the right size; we have got it about right. We shall not have a defence review—we shall have to make the odd change here or there, but we shall not have a review." I do not understand why those on the Labour Front Bench cannot make—or have not made—that commitment. I hope that they make that commitment later tonight.

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I had planned on making a few remarks about air power. However, my hon. Friend the Minister of State for the Armed Forces—who is a former Guards officer—made a tremendously supportive speech about the use of air power, and I was encouraged by that. I am unable to add anything to what my hon. Friend said about the importance of air power in the future.
If aeroplanes and air forces are to carry out the tasks that they are asked to do, they must have the right weapons and platforms. Eurofighter is of vital importance to the future of the Royal Air Force. Despite some of the knocking copy that we have seen in the media, the programme is doing relatively well compared with previous programmes. The workshare arrangements seem to have been worked out.
I congratulate my hon. Friend on the excellent work that he has done in that area—he has ensured that the Germans understand that, if they buy fewer aircraft, they cannot expect the share of the work that they had in the past. That has been a highly successful outcome and I am pleased about the new management structures, which may even reassure my hon. Friend the Member for Ruislip—Northwood (Mr. Wilkinson) that the programme has some chance of succeeding in the future—he seems to think that it has not in the past.
Mr. Wilkinson: I have confidence in the aeroplane, but I query the need for a European Armaments Agency. That is a separate issue from the management of the aircraft.
Mr. Mans: I apologise to my hon. Friend.
I shall refer briefly to some of the other programmes. Many hon. Members have referred to the criteria for the Nimrod replacement. I acknowledge the remarks of my hon. Friend the Member for North Tayside and of the hon. and learned Member for Fife, North-East on ensuring that we have the right aircraft.
We had a similar debate about 25 years ago, and the Royal Air Force decided on a pure jet solution. We have to ask why we want to change our minds. It raises a number of questions, such as whether the right decision was made all those years ago, to go for a particular concept, which was different from the concept that the Americans went for at that time. However, I noted that the Japanese Government recently said that their new maritime patrol aircraft should be a pure jet and not a turbo-prop.
I suggest caution in relation to export potential. We all want to export and to ensure that the aircraft that the RAF buys has export potential. However, we must not be beguiled by the idea that a huge number of orders will flow directly from a particular decision being made. Export potential is important, but it does not happen quite so soon and is not as lucrative as people make out when the original decision is made.
We need decisions on the two missiles that have already been mentioned today. I hope that those decisions—as well as the decision on the Nimrod replacement—will be made before the summer recess. I disagree with my hon. Friend the Member for Ruislip—Northwood about the missiles. I believe that there is a lot of sense in some of the collaboration that is taking place, provided that it can be done cost-effectively.
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When it comes to the conventionally armed stand-off missile, we should look at the opportunities of moving it forward, so that we can get the benefits of a reduction in research and development expenditure when we combine with NATO and others to produce new systems.
I hope that we can find out exactly what the private finance initiative is that is associated with university air squadron and air experience flight aircraft. That is important, because it is a way of ensuring that, in future, cadets and students at universities get a bit more flying than they have had until now.
It is dangerous for politicians to make predictions, but I make one tonight about air power in all its facets. The Air Force has not gone through a very easy patch in the past year or so. The very basics of the use of air power have been challenged by, I suggest, many people ignorant of those matters, who have drawn completely the wrong conclusions. I was very pleased by the remarks that my hon. Friend the Member for Ruislip-Northwood made on that subject.
I believe that, in future, air power will be more rather than less important. It allows one to project military force over great distances speedily. Technology is driving its capabilities forward very fast. In practice, politicians find it an effective way of responding to crises speedily—and with a minimum of casualties, which, although it is always important, is even more important in our multi-media age than it was previously.
I strongly believe, therefore, that despite the difficulties in the past year or two, the Royal Air Force has a great future.
9.11 pm
Mr. James Couchman: I am very pleased to be able to speak for just a few minutes at the end of this important debate.
I was almost put off by the enormous experience of my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson), for North Tayside (Mr. Walker) and for Wyre (Mr. Mans), who have just spoken from their experience as serving RAF personnel. My experience of the Royal Air Force was confined to only 18 hours of dual flying in the university air squadron before the RAF decided that a 6 ft 5 in, substantially framed gentleman in a flying helmet and a Chipmunk were completely incompatible.
Over the years, my constituency has led me to speak frequently in the Army debate, the Royal Navy debate and the defence estimates debate, although infrequently in the Royal Air Force debate. We have had Chatham dockyard in my constituency, and we still have the Royal School of Military Engineering. I believe that the nearest RAF establishment was at RAF Detling, which is quite a long way outside the constituency, but we do have a substantial interest in the defence industry.
Shorts started its life in the Medway towns, and we still have one of our leading-edge technological firms in GEC-Marconi Avionics. There is scarcely a procurement project that does not involve GEC in some consortium or other, and I make no apologies for pushing its claims for the replacement maritime patrol aircraft. I think that it offers the only new aircraft among the three contenders. The idea of refurbishing a 25-year-old airframe appears highly speculative.

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I have visited GEC. The company has an impressive simulator of its mission system avionics suite. I understand that the combination of the P3 aircraft with GEC avionics makes a formidable contender for that contract. I hope that, when my hon. Friend the Minister of State for Defence Procurement takes that difficult decision—which I agree with my hon. Friend the Member for Wyre needs to be taken very soon—he will take into account the fact that that aircraft is likely to have a long service, and make up his mind as to which will be the best option for long service with economic through-life costs and so on, and not simply choose on the basis of a figure for initial purchase.
My final point concerns married quarters. A substantial garrison is situated in my constituency—although it is not a Royal Air Force establishment—comprising several married quarters. My constituency home backs on to married quarters. Service personnel in my constituency are worried that, although my hon. Friend wishes to ensure that those who are entitled to married quarters should continue to have that entitlement, little has been said about availability. Entitlement does not guarantee availability.
I am particularly worried that we may build in unnecessary rigidities in terms of married quarters. I am concerned about potential purchasers' proposals to dispose of married quarters at the time of renewal if they wish either to develop the site or to offer a comparable alternative site. I am worried that comparable sites may be remote from the establishment that the married quarters serve, which could affect the ability of wives and families to find work in the area. If the purchaser decides to develop a married quarters town site—there is such a site in my constituency—alternative provision some distance from that site would involve substantial hardship for families.
I believe that the proposal should be rethought. I have seen my hon. Friend's letter to my hon. Friend the Member for Canterbury (Mr. Brazier), who is very interested in the issue and had hoped to participate in the debate. I share my hon. Friend's concerns about the matter and I urge my hon. Friend the Minister to rethink the proposal to sell the entire stock.
I understand the problem caused by the 11,000 voids. Are those voids associated with closed establishments? Do they relate to married quarters that have no future use and could be sold off readily? Are they voids within established estates around existing and continuing garrisons, such as the one in my constituency? I should like answers to those questions. Some of those 11,000 voids could be sold in order to raise substantial capital, which would be sufficient to renovate some of the estates that I know are in bad shape. Some married quarters in the Medway towns are in a poor state and need capital spent on them. I question whether my right hon. and hon. Friends' proposal is the best way of raising the necessary capital.
9.17 pm
Mr. Paul Murphy: I am sure that all hon. Members will agree that the standard and the quality of the speeches in today's debate has been very high. That is due in part to hon. Members' associations with the Royal Air Force. My hon. Friend the Member for Wentworth (Mr. Hardy) served in the RAF and my hon.
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Friend the Member for York (Mr. Bayley) spent some time with the RAF as part of the armed services scheme. The hon. Members for Ruislip-Northwood (Mr. Wilkinson), for North Tayside (Mr. Walker) and for Wyre (Mr. Mans) brought to the House a diversity and richness of experience that has made the debate particularly interesting.
In addition, a number of hon. Members have in their constituencies RAF stations or defence industries which employ many people. The Minister of State for the Armed Forces began the debate, quite correctly, by referring to the recent activities of the Royal Air Force in Bosnia—my hon. Friend the Member for Stockton, North (Mr. Cook) gave a vivid account of his experiences in the former Yugoslavia—in the Gulf and in Northern Ireland. Since the unfortunate ending of the ceasefire, the RAF has played a very important role—as it always has—in preserving peace in the Province.
As my hon. Friend the Member for Wentworth, among others, said, the world has changed considerably in the past decade and defence cuts were inevitable. However, the scale has been pretty enormous. The hon. Member for Romsey and Waterside (Mr. Colvin), in his capacity as Chairman of the Select Committee on Defence, said that morale has inevitably suffered because of the cuts. The hon. and learned Member for Fife, North-East (Mr. Campbell) spoke about turbulence in the Royal Air Force, and the hon. Member for Ruislip-Northwood also mentioned those difficulties.
By the year 2000, the Royal Air Force will be down to 55,000 men and women. That represents a 38 per cent. reduction in manpower. I agree that defence is a matter of consensus, but at the last general election the Conservative manifesto stated:
"They"—
that is the Labour party—
"would devastate our conventional forces by cuts of at least 27 per cent. which would lead to huge job losses."
The Government have exceeded that.
The hon. Member for Wyre, who is not in his place, said that there was no need for another defence review. Tonight is not the time to go into the rights or wrongs of that, but some of the more devastating effects of the cuts might have been less devastating had there been a well thought-out defence review as we have suggested.
By March 1997, there will have been 8,600 redundancies in the Royal Air Force—the largest cut since the second world war. Many of those redundancies are compulsory and 5,000 of them occurred in the current year. Strike command is particularly affected, contributing the largest number at just over 3,000. My hon. Friends the Member for Alyn and Deeside (Mr. Jones) and for Carlisle (Mr. Martlew) and the hon. Member for Harrow, East (Mr. Dykes) all referred to the effect that that has on RAF stations up and down the country. Stations at Brize Norton, Lyneham, Brampton, St. Athan, Cranwell and others are due to lose considerable numbers of personnel. Some operational stations were better stocked in 1935 than they are in 1996.
I would like to give the House the first quote of the evening from the Royal Air Force News, which is a semi-official newspaper. This is what it said about the redundancies:
"Coupled with the fact that not all applications for redundancy have been accepted, this creates the seemingly anomalous situation in which some who want to go have been told they must stay while others who want to stay have been told they must go."

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That is not right. If, instead of Treasury-led cuts, there had been a proper review of our defence in terms of resources and matching commitments, it would have been a different story.
I should like to quote the hon. and learned Member for Fife, from last year's RAF debate.
"I do not believe that we could contemplate any further reduction in funding for the RAF, without affecting its front-line strength. There is a limit to the reductions of the numbers of personnel or the contracting out of support services that can be made".—[Official Report, 4 May 1995; Vol. 259, c. 491.]
We all agree with those sentiments and a number of hon. Members referred to them this evening.
A year or two ago, Air Chief Marshal Sir Michael Graydon publicly disagreed with the Treasury—and then had to publicly retract that disagreement—when the then Chief Secretary to the Treasury, who happens now to be the Secretary of State for Defence, was asking for cuts. The air chief marshal was particularly concerned about the comparison that was made—presumably by spin doctors—with the Israeli air force. He is reported as saying:
"the Israeli comparisons were deeply misleading. Whereas the Israeli Air Force was simply defending its own air space and could mobilise reserves overnight … the RAF had to maintain bases as far afield as the Falklands, Hong Kong, Northern Ireland and Germany plus a NATO headquarters."
That is perfectly right. I sometimes wonder how such stories get about. Labour Members have mentioned and will mention again the advice that the Secretary of State for Defence receives. Perhaps some of these advisers were at last night's infamous party, and we wait for the Minister to give us some explanation of what happened there. I refer to Mr. David Hart, who, in The Spectator on 6 February 1993, attacked the RAF as top heavy,
"with too many command groups controlling too few front-line squadrons."
I do not deny that all sorts of people can have views on the RAF, but in an article in The Observer in January this year, Mr. Hart was described as
"unelected, without the responsibilities of a civil servant and lacking any military experience. Mr Hart is a millionaire property developer, failed playwright and novelist."
I hardly think that such people should be providing advice to the MOD and House of Commons.
I note that, in December, The Daily Telegraph, not normally a friend of my party, managed to discover a Christmas card sent out by Mr. Hart, on which he was dressed as a pilot. The newspaper said:
"For certain sections of the MoD, the sight of him tricked out as a fighter pilot is enough to curdle the bread sauce.
People such as Mr. Hart should return to their previous professions and leave giving advice to people in the armed forces and the MOD who know what they are talking about.
Mr. Hart was probably responsible for initially advising that we should lease American second-hand airplanes—which eventually did not come—instead of updating Tornado F3s. I am delighted that hon. Members on both sides of the House were responsible, I hope, for changing the minds of the MOD and Ministers, who sensibly take no notice of people such as that.
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We have talked a lot in the debate about the relationship between the defence industry and the MOD and procurement. I hope that, in his winding-up speech, the Minister of State for Defence Procurement will make announcements on the replacement maritime patrol aircraft. The hon. and learned Member for Fife, North-East and the hon. Members for North Tayside and for Gillingham (Mr. Couchman) have all referred to that.
Perhaps the Minister will make an announcement on the future large aircraft. My hon. Friends the Members for Warley, West (Mr. Spellar) and for Alyn and Deeside (Mr. Jones) talked at some length and with great feeling about the FLA, and my hon. Friend the Member for Alyn and Deeside discussed its effect on his constituency, which I hope to visit fairly soon. I hope that the Minister will tell us what is happening. Has France announced that she will pull out of the programme? What will happen? Will he look into that? What pressures are there in the negotiations that are proceeding between ourselves and the French Government?
The right hon. Member for Northavon (Sir J. Cope), who has now left the Chamber, talked about the relationship between procurement decisions and the defence industry. As my hon. Friend the Member for Warley, West said, it is about time that we thought about that relationship. When the MOD makes decisions, they have enormous consequences for employment prospects, research and development and this country's manufacturing base. There is a unique relationship between the two. All hon. Members believe that that is the case.
My hon. Friend the Member for York in particular and the hon. Member for Wyre referred to the tragic and costly aeroplane crashes. I understand what the Minister was saying: that there is not necessarily a link between the 11 crashes. They have cost lives and nearly £200 million. We must consider the fact that that compares with an average annual loss of 14.2 aircraft between 1991 and 1995 and that the losses occurred in a front-line fleet that is approximately one third smaller than in 1991. I do not know whether training cuts or "over-stretch" have anything to do with it. I do know this. When the individual inquiries are opened, it will behove the Ministry of Defence to consider the incidents as one to discover whether there is a link. If there is, Ministers should tell the House what must be done. We cannot answer those questions.
My hon. Friends the Members for Warley, West and for Alyn and Deeside mentioned RAF St. Athan, which is also of interest to me as a Welsh Member of Parliament. We have been told that market testing is important to cut costs and ensure that money is properly spent. That may be true in some cases but has proved devastatingly wrong for St. Athan. The Minister has a duty to the House and the nation to say exactly how much money taxpayers must provide to pay for what has happened there.
The Minister of State for the Armed Forces referred to the Bett report in respect of married quarters. I assume that the House will be informed of the Government's response before the summer recess, because that report is of enormous importance to all the armed forces and especially to the RAF. Pensions are a significant and worrying issue. On 30 May, no fewer than five former Chiefs of the Defence Staff wrote to The Times to express their concern about service widows in particular. I hope that the Minister will take those views into account. As

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he knows, the value of the pension has dropped since 1980. The immediate pension for personnel leaving at age 40 has been justified by the need to compensate them for their low salary expectancy in civilian life.
Sexual harassment in the armed forces is of concern to many hon. Members. The Government should produce reliable figures and tackle the problem seriously if they are genuine about wanting to attract more women to the armed forces and to the RAF in particular. There is no excuse for harassment, which should be dealt with effectively. In 1995 there were 10 reported cases, four of them in the RAF. Those were only official complaints. No central record is kept. All complaints should be recorded. I have no doubt that many women are afraid to complain about harassment, so proper methods should be introduced to make it easier for women to express their concerns.
The hon. Members for Wyre and for Gillingham spoke of the significance of the RAF. The Chief of Air Staff has said that the Air Force is at the heart of national security. We all agree. We are familiar with the problems that change has brought and sympathise with personnel who have lost their jobs.
My hon. Friend the Member for Stockton, North made an important point about sustainability. We must plan for not just the next two, three or five years but for decades ahead, which requires much thought and a proper defence review. The move to the contractorisation of support services, and to reducing stocks of spare parts and ammunition, carries elements of risk. There are other areas of concern.
We have not ended the review of the Royal Air Force or of the other armed services, because the world has changed and will undoubtedly continue to change. A number of hon. Members, including the Chairman of the Defence Select Committee, said that we live in a highly dangerous world—more dangerous in a way than in the days of the cold war. I believe that the United Kingdom's role will be centred on our international obligations as a member of the United Nations and, of course, as a key member of NATO. The RAF will play its important role in that, as it has done in the past.
It is significant that we are debating the RAF on the anniversary of D-day. It is significant that my hon. Friend the Member for Wentworth talked about a medal for Bomber Command, because all hon. Members—particularly those of my generation—owe a great debt to all the men and women who served in the RAF in those years. We pay our warmest and most sincere tribute to them.
9.34 pm
The Minister of State for Defence Procurement (Mr. James Arbuthnot): This has been a valuable debate. It has raised such a large number of issues of considerable importance that, inevitably, I shall not be able to deal with them all in the time available. I apologise for that. My right hon. Friend the Minister of State for the Armed Forced or I will write to hon. Members whose points remain unanswered.
I have received a number of requests for contracts, for visits and for information. I think that the most delightful was the request from my hon. Friend the Member for Wyre (Mr. Mans) that he not be forced to retrain on a different aircraft. I have bad news for him, because the
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Bulldog aircraft is used to provide university air squadrons and air cadets with air experience flying. Earlier studies suggested that there were potential value-for-money benefits in replacing the Bulldog early. That process is now under way. It is a private finance initiative project, and we aim to secure the best value for money achievable through a negotiated contract.
Mr. Frank Cook: Is there any truth in the rumour that the Bulldogs will be replaced by Sopwith Camels?
Mr. Arbuthnot: That remains for negotiation.
We aim to place a contract in 1997, so it is likely that my hon. Friend the Member for Wyre will have to retrain fairly soon. I suspect that he might like to do so in a Sopwith Camel, but he is a young man and I know that he will make it through without any difficulty.
We have heard some outstanding speeches in this debate, including those from my hon. Friends the Members for Harrow, East (Mr. Dykes), for Ruislip-Northwood (Mr. Wilkinson), for North Tayside (Mr. Walker), for Aylesbury (Mr. Lidington), for Wyre and for Gillingham (Mr. Couchman), and from my right hon. Friend the Member for Northavon (Sir J. Cope).
My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) made a powerful speech, which we have come to expect from him as Chairman of the Select Committee on Defence. One of the important points he made was the value that this country receives from buying equipment—as we sometimes do—overseas and from industrial participation coming into this country, making use of outstanding British skills and providing jobs.
My hon. Friend the Member for Romsey and Waterside also raised the issue—as did the hon. Member for Warley, West (Mr. Spellar) and my hon. Friends the Members for Aylesbury and for Gillingham—of the married quarters estate. I am happy to accept the invitation of my hon. Friend the Member for Romsey and Waterside to dispel the misapprehensions that surround that issue. He referred to a recent letter of mine, in which I said:
"Misapprehension number one. It has been suggested that recent rises in Married Quarter charges are somehow linked to the Sale"
of the married quarters estate,
"almost as though there were some 'hidden agenda' to discourage Service families from living in married quarters".
That is absolutely not the case. We have no intention whatever of discouraging accompanied service. Obviously we will not force people to live in married quarters. We must recognise that many personnel have an understandable wish to live in their own homes, which we could not and should not sensibly try to frustrate. We are completely committed to the value of "the patch", to the value of cohesive communities and of mutual support, which do so much to foster the service ethos and to reduce unnecessary worry about families left behind when the services go overseas.
We are committed to providing the right quarters in the right places for service families who wish to exercise their entitlement. Charges for quarters—here I deal specifically with an issue that was very inappropriately raised by the hon. Member for Warley, West—are recommended not by the Ministry of Defence or by the Treasury but by the Review Body on Armed Forces Pay, a fully independent body whose independence should not be impugned or doubted.

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Also in my letter I referred to the second misapprehension:
"It has been suggested that the Sale will lead to the break-up of Service communities, and the introduction into Service housing 'patches' of undesirable neighbours."
That is not so. The real issue is how to reduce the high vacancy rate in MOD homes while at the same time keeping down social tensions, but that is going to be a challenge whatever happens to the estate.
Several hon. Members, including the hon. and learned Member for Fife, North-East (Mr. Campbell) and my hon. Friends the Members for Wyre and for Gillingham referred to the possibility of selling the surplus homes we already have. I agree that, if it were possible to continue to pursue the policy that we have been pursuing for a number of years, and if it had the effect that we would all like, we would do so, but, unfortunately, that policy has proved unsuccessful.
The change that occupants of the married quarters estate can expect from the transfer that we are proposing is that significantly more money will go to the upgrading of quarters where standards are poor. Without the sale, of course we would try to find the money and do our best as far as the money would stretch, but only a sale can give us the sort of capital injection we need to get what we want within a reasonable time scale and without it being subject to the ordinary and inevitable pressures of the public spending settlement.
The hon. Member for Carlisle (Mr. Martlew) asked about RAF Carlisle. I have two pieces of news for him. First, there is no market testing at RAF Carlisle. As he knows, we are closing the site progressively and looking for expressions of interest in it, but no decisions have been taken about the most appropriate means of disposal. Secondly, we have had no requests to store bonemeal at RAF Carlisle and, under current plans, no bonemeal is likely to be stored there.
Mr. Martlew: I am grateful for the Minister's remarks, and my constituents will be, too. However, is it not a fact that the MOD has said that it will withdraw from the joint venture and be subjecting the site to market testing? I have the minutes of the meeting in question if the Minister would like to see them.
Mr. Arbuthnot: I do not want to create any confusion in the hon. Gentleman's mind. Market testing is very different from asking for expressions of interest in the site. As I said just now, we have not made any decisions about the appropriate means of disposal of the site. When we start to make decisions, the hon. Gentleman will of course be one of the first to know.
The hon. Member for Torfaen (Mr. Murphy) made an interesting speech. He suggested that defence was a matter of consensus. I have news for him, too: the consensus is that Labour cannot be trusted on defence. Labour is committed to a fundamental defence review. That is no more than a device to cloak the party's desire, driven by Back-Bench and conference pressure, to cut defence spending. A review would cause precisely the instability that the armed forces wish to and must avoid, which the hon. Member for Stockton, North (Mr. Cook), in an excellent speech, said that he did not want.
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At the end of the last decade, the right hon. Member for Sedgefield (Mr. Blair) believed that all nuclear weapons should be removed from British territory. That position remains the gut feeling of the Labour party. Labour's problem is that defence is simply not one of its spending priorities. It would be its natural target for cuts to pay for things that are priorities.
One need only look at the letter from the Transport and General Workers Union, which has sponsored the right hon. Member for Sedgefield and one or two other prominent members of the shadow Cabinet. It calls for defence spending to be reduced from £22 billion to £4 billion. That reflects the genuine views of many Labour Members. I exempt from that accusation several Opposition Members who have spoken in this debate, including, for example, the hon. Members for Wentworth (Mr. Hardy) and for Stockton, North, who have always taken a very sensible view on defence. Unfortunately, that view is not shared by the majority of their party.
Mr. Hardy: Does the Minister accept that, year after year, the Labour party has made it clear that it is fully committed to membership of NATO? Does he also accept that over the past few years his party has sought to create division in the House of Commons in public party political utterances, but is desperately eager to present a united front when dealing with the Western European Union, the Organisation for Security and Co-operation in Europe, and so on? He cannot have it both ways. The Government cannot have our co-operation when we are abroad in serious debate and expect to play silly party games of the sort that he has just indulged in.
Mr. Arbuthnot: The hon. Gentleman is a valiant defender of defence, but he is a rare voice in his party. He asks what was happening year after year, and I will tell him. Year after year, Labour party conferences called for cuts in defence spending and for the removal of nuclear weapons. That is what the Labour party believes in.
Mr. Spellar: As has been pointed out to Ministers a considerable number of times, their Government have been implementing those cuts. Indeed, the Minister has not yet answered the question posed by my hon. Friend the Member for Torfaen (Mr. Murphy) about the level of cuts in the RAF being greater than those that the Conservative party claimed at the last election would take place under Labour. That is the reality: the Government say one thing and do another.
Mr. Arbuthnot: That is nonsense. The problem is that the Labour party does not believe in defence. It believes in a number of different concepts, and defence comes at the end of the queue for spending. It might be a good idea if I moved on—[Interruption.] I think that I should move on to more sensible policies than those of the Labour party.
The House has taken the opportunity today to reaffirm the vital role played by the Royal Air Force in support of the United Kingdom's security interests. The Government are firmly committed to providing the men and women of the Royal Air Force and their civilian support with the means necessary to fulfil that role. There can be no question but that the effective use of air power continues to be vital in the changed strategic setting that we face.

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We have moved away from planning for defence against the monolithic threat that the Warsaw pact represented. Now we need to be ready to respond to the many and varied risks to our security that might arise. It is necessary to consider only the crises to which our forces have reacted in recent years to realise the breadth of possible tasks.
In the Gulf, we were part of the largest allied operation since the second world war, which successfully liberated a friendly country from unprovoked aggression. In Bosnia, we worked to safeguard the supply of vital humanitarian aid to civilians caught up in a tragic civil war. We form the second largest contingent in the NATO force which ensures the peace.
At the same time, we have maintained our commitments to the defence of our territory and our presence in the dependent territories, as well as our continuing commitment to NATO. The withdrawal from Bruggen by 2002 will enable the RAF to make more effective use of time available for training and does not in any way imply a weakening of our commitment to the alliance.
The operations that I have mentioned are examples of the wide range of missions that the RAF of today carries out. The importance of different facets of air power has been clearly demonstrated and we must be prepared to ask the RAF to perform those and many other kinds of duties in the next few years and into the new century.
I should like to take this opportunity to record my personal gratitude to the personnel of 5 squadron at RAF Conningsby, who afforded me the privilege of taking a flight in a Tornado F3 just before Christmas. The hon. and learned Member for Fife, North-East was right when he spoke about white knuckles. I was able to see for myself, when my eyes were not shut, the brilliance of our Air Force pilots, who are rightly respected the world over, and the formidable power of the F3 as an air defence fighter.
The importance of "Front Line First" was founded in the need to develop the right support structure for the new kinds of forces that we need for the 21st century. We are seeing a worldwide progression towards smaller but more capable forces. Quality is of ever-increasing importance as quantity reduces.
The reform of the RAF logistics community has meant enormous efficiency improvements and savings. New management systems building on best commercial practice have been effective in promoting better management of stocks, without compromising either safety or the RAF's ability to respond to contingencies.
The "Competing for Quality" programme has generated further efficiency improvements. Across the Air Force, more than £155 million-worth of business has been market-tested, generating £41 million of savings. That is crucial, because, by bearing down on the costs of support for the front line, we have managed to sustain increased investment in Air Force equipment within a stable defence budget.
We aim to identify, and realise, the full potential for improving long-term value for money in defence support by systematically exposing all RAF non-core activities to private sector involvement. Significant "Competing for Quality" programmes in the near future include that at RAF Sealand, which the hon. Member for Alyn and Deeside (Mr. Jones) mentioned, and that at RAF St. Athan. Both those programmes are proceeding well.
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The Air Force has been active in pursuit of the opportunities offered by the private finance initiative. Many Air Force projects, at varying stages of maturity, have been identified as having potential for PFI. Those include the provision of simulators and associated training, and the replacement of the Bulldog elementary flying trainer, which I mentioned in connection with the speech by my hon. Friend the Member for Wyre. It was also mentioned by my hon. Friend the Member for North Tayside, who has such a valuable contribution to make in all matters concerning cadets. Other projects with private finance initiative potential include the provision of utilities at various RAF stations.
As a result of "Front Line First", CFQ, PFI and other initiatives—I am sorry about all those initials, Mr. Deputy Speaker: CFQ stands for "Competing for Quality"—we are now able to devote a greater share of our resources to providing the right modern equipment for the RAF's front line. By the end of the decade, Logistic Command's expenditure will fall from one third to one quarter of the RAF's budget, yet, as a result of efficiency improvements, we shall be able to continue to support a front line for which equipment expenditure is expected almost to double by the turn of the century. That is a remarkable achievement. The RAF will be smaller than in the past, but it will be prepared for 21st-century military combat.
The sheer breadth of the forward equipment programme demonstrates clearly our commitment to that vision of highly resourced, flexible and responsive air power. All areas of the RAF's front line will benefit from massive investment in fighting equipment, which will amount to nothing less than a technological revolution in the RAF's inventory.
Much has happened since the House last had a debate on the Royal Air Force. Important progress has been made on a number of major projects, including the Eurofighter, which several hon. Members have mentioned. Following upgrades, the first two development aircraft resumed flying in May 1995. Those were joined shortly afterwards by the third development aircraft, which is fitted with the EJ200 engine specially developed for Eurofighter. The flight test programme has now notched up over 160 sorties, steadily expanding the aircraft's performance envelope. Last month, the aircraft made its debut at a major international air show when it took part in the flying display in Berlin, and it is expected to appear at Farnborough later this year.
I announced on 5 March that we have decided to upgrade the weapons systems of the Tornado F3, and that was welcomed on both sides of the House. That programme will enable the aircraft to carry advanced short-range air-to-air missiles and advanced medium-range air-to-air missiles, and will thus improve the F3's capability against modern airborne threats.
Also during the past year, we have signed a contract with GKN Westland for 22 Utility EH101 medium support helicopters for the RAF, and another with Boeing for 14 new-build Chinooks. Together with the programme to upgrade our existing Chinook fleet to HC2 standard, which has now been completed, those programmes will provide the RAF with a flexible and highly capable support helicopter force, which is vital for the support of joint operations.
The first Hercules C130J aircraft, 25 of which will be delivered to the UK from 1997 onwards, had a successful maiden flight in April this year. I listened with care to the

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interesting points made by my hon. Friend the Member for Ruislip-Northwood about strategic lift and the C17. We have joined the United States production programme for an upgrade to the radar system of the E3D Sentry airborne early warning aircraft. This will ensure that the RAF maintains an effective early warning capability against modern aircraft and missiles. Within the tanker fleet, all but two of the VC10 aircraft undergoing conversion to the air-to-air refuelling role have now been delivered.
The programme to update 142 Tornado GR1 interdictor strike aircraft to GR4 standard is progressing well. This will greatly increase the aircraft's ability to prosecute its targets in all weathers, using new generation smart weapons. The first Tornado GR4 aircraft will enter service in 1998, and the aircraft will remain the UK's front line attack aircraft for another 20 years. We have also undertaken a programme to improve the capabilities of the Jaguar—a matter referred to by the hon. and learned Member for Fife, North-East—pending its replacement by Eurofighter in the next decade. That has involved giving the aircraft a thermal imaging and laser designation capability, together with certain enhancements to the aircraft's avionic systems. Twelve aircraft have been upgraded as part of the initial programme, and we expect the remainder of the long-term fleet to have completed their upgrade by 1998.
Of great importance in the near future are the competitions to provide the RAF with new air-launched, stand-off and anti-armour weapons. The conventionally armed stand-off weapon was mentioned by the hon. Member for East Londonderry (Mr. Ross) in relation to the work by Shorts that is going into one of the contenders for that programme. These weapons will significantly enhance our capabilities against high-value infrastructure assets and modern armoured vehicles respectively. We expect to announce our decisions shortly.
In December last year, we issued an invitation to tender for the future medium-range air-to-air missile, which with the advanced short-range air-to-air missile will provide Eurofighter's key weapons for the air defence role. We also expect to announce shortly the winning bid in the competition to supply a replacement for the RAF's aging fleet of Nimrod maritime patrol aircraft. [Interruption.] I say "shortly", because I have been asked whether the decision will be made before the recess. Unfortunately, I
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do not know when the recess will be. I shall address my inquiries to the Refreshment Department, which always seems to find out before Ministers.
The maritime aircraft proposal was referred to by my hon. Friends the Members for Bromsgrove (Mr. Thomason), for Birmingham, Hall Green (Mr. Hargreaves), for Wyre, for Romsey and Waterside, for Ruislip-Northwood, for Gillingham and for North Tayside. My hon. Friend the Member for North Tayside correctly said that the most important thing was to buy the right aircraft.
We have continued to work with industry and our partner nations within the future large aircraft programme to ensure that we can rejoin the project, provided that the conditions we set out in our announcement in December 1994 are met. That matter was mentioned by the hon. Members for Warley, West, for Wentworth and for Alyn and Deeside, as well as by my hon. Friend the Member for Wyre. We await clarification of the French position. It is not wimpish to do that, as the hon. Member for Alyn and Deeside suggests. The French position is crucial to the future of the project.
Looking slightly further into the future, we are examining how we might best meet the requirement for an airborne stand-off radar system to support land-based operations. There are several significant decisions to be made in the near future. Expenditure on equipment for all three services as a proportion of the defence budget will rise over the next decade. This coincides with a period of change within the defence industrial sector itself, and will be of great benefit to British jobs and firms that rely on that sector. In our reply to the report of the joint inquiry by the Select Committees on Defence and on Trade and Industry, we gave several important pieces of evidence and I do not need to repeat them.
In answer to the thoughtful speech by my right hon. Friend the Member for Northavon, I agree that we need to collaborate more with Europe, but not at the expense of collaboration with the United States, which is an important partner.
The equipment programme that I have outlined displays clearly the Government's firm and lasting commitment to the Royal Air Force. We will ensure that RAF personnel are given the training, equipment and support that they need to do the job. The whole country can take pride in the Royal Air Force.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Computer Systems (Century Date Change)
Motion made, and Question proposed, That this House do now adjourn.—[Dr. Liam Fox.]
10 pm
Mr. David Atkinson: This is my second attempt to raise a matter that should concern everyone who has or uses a computer. Thus it is one that will concern most businesses and all Government Departments, not just in this country but throughout the world. It is the effect that the change of date at the turn of the century, from 1999 to 2000, will have on computers. Quite simply, if they are not prepared, they will fail.
Articles in computer magazines and, more recently, in the national press have sensationally described the situation in terms such as "Millennium Meltdown", "Catastrophic Computer Crash" and "Doomsday 2000", and I have been prompted to pursue the matter in the House. I asked a question of my right hon. Friend the Prime Minister last December; I have sent a series of written questions to every Government Department—most recently, to my hon. Friend the Minister for Science and Technology; and I have corresponded with my right hon. Friend the Prime Minister. It appears that I am the only hon. Member to pursue the matter thus far, and the publicity that I have provoked has produced expressions of relief that, at last, someone is doing something.
I am pleased to have the opportunity tonight to enlarge on the problems, and I am sure that I am not the only one to look forward to the Minister's reply. I fully confess to being computer illiterate, a fact which may become even clearer during my speech, although I value the immense advantages that computers provide, and over the years I have been blessed with staff who have been fully educated to take advantage of them.
Computerisation of our parliamentary offices has enabled us, as Members of Parliament, to increase our throughput a hundredfold and has improved our ability to communicate with and respond to our constituents efficiently and effectively. No doubt those improvements will be as nothing compared to the promised revolution to come, when we are linked up to the Internet and the World Wide Web.
A constituent came to see me at my surgery last autumn to share his concern that neither business nor Government appeared to be aware of, let alone ready for, the century date change. Even I was able to grasp the potential seriousness of the problem, and my initial inquiries confirmed that my constituent's fears were far from groundless.
All but the most recent computers have been programmed to recognise a shorthand standard date format—dd/mm/yy—with two figures for the day, the month and the year. For example, my hon. Friend the Minister's date of birth would be given as 18/04/45.
Because memory is or was very expensive, programmers economised by cutting out the first two digits of the year—19—to save money and memory. Thus two-digit year dates exist on millions of data files used as input to millions of applications. Therein lies the problem. Those computers will recognise the double zero digits of
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2000 as 1900. As a result, all calculations, logic and date-driven processes will fail to function properly at midnight on 1 January 2000. If my hon. Friend's computer does not recognise the century date change, it will show his age to be not 55, but minus 45 in the year 2000. I would not want that prospect for my hon. Friend.
All of us with personal computers can apply a simple test to see whether they will fail at the end of the century. We can set the date to 31 December 1999 and set the time at 23.58. We can switch off the computer and, after a few minutes, switch it back on to check the date. It should say 1 January 2000, but my computer said 4 January 1980. Some 95 per cent. of all personal computers fail that test.
The vast majority of our information systems are based on the original, faulty standard date format, which will cost billions of pounds to reprogramme. One estimate of the cost is put at £400 billion worldwide and £20 billion for this country alone; the cost to the United States Government will be $30 billion. Those costs are rising daily, as the shortage of skills available to undertake the necessary reprogramming and recoding is realised.
There can be no doubt that, unless organisations are prepared and have taken the necessary action, they will face catastrophic consequences, including a disastrous loss of trade and revenue—it is no exaggeration to say that some of them may go out of business very early in the new century. Many of them will have experienced a minuscule taste of what is to come on 29 February this year, as some computers did not recognise the extra leap year date. A piece of medical equipment in a hospital failed to work on that day.
I shall give a few everyday examples to help to explain the wide-ranging consequences of what might happen. The competitive position of many exporting companies will be severely threatened unless they have anticipated the problem in time. Any timetable for a 1999 single European currency will require new computer systems to be in place. Supermarket computers will fail to replenish stocks and will throw out existing stocks, calculating that everything will have gone mouldy on the shelves after more than 99 years. The time locks of buildings will be unable to recognise the correct date, so staff will be locked out and vaults will be open. Trains will not run because their control systems will be unable to say what else is on the track that day. Flights will be cancelled as computers in airport maintenance will have grounded all aircraft because they are 99 years overdue for overhaul.
The turn of the century will have similar consequences for the computers of Government Departments and agencies unless they have been properly prepared—the most obvious being the automatic payment of benefits systems and the pay-as-you-earn system that generates millions of tax returns.
Such a computer failure would affect our system of court orders, the child support maintenance system and car licence expiry dates. Traffic lights and school bells will operate their weekday schedules. Libraries will send out notices of fines for some seriously overdue books, and any programme that prints a date on a cheque or invoice will stop working properly.
The potential for disaster lies most in the financial sector. The interdependency of computers and the complex computer systems used in all financial transactions will create huge problems for City institutions. Even if their own systems have been

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reprogrammed and are working correctly, other firms with which they are dealing may not have had the same foresight.
A firm may be awaiting the processing of a derivatives contract in Singapore which, if not correctly processed, may undermine that firm's short-term liquidity. The huge sums that are transferred every day in settlement of bond, equity, trade or foreign exchange flows bring the danger of a systemic breakdown of the banking settlements system, which could lead to temporary liquidity crises, and perhaps bank failures.
London, as we know, is the centre of the global financial services industry, so it is vital that the UK takes a lead on this issue. Most major financial institutions will, I hope, have their systems in order on time, but interrelation of the industry means that all firms will have to be made aware of the seriousness of the problem. What assurances or policy proposals has my hon. Friend received from the Bank of England, the London stock exchange, city regulators and the European central bank to prepare the markets for 2000?
Last month, I tabled written questions to every Government Department to find out how they are responding to the problem. I was encouraged to learn that most Departments seem to be aware of it, but not all are treating it with the seriousness that it deserves. Many of the replies I received showed undue complacency.
I hope that their confidence is justified and that, with the advice of the Central Computer and Telecommunications Agency—CCTA—and computer suppliers, they will be prepared for the century date change. However, because public sector systems are in general larger and older than those in the private sector, I should like to know my hon. Friend's understanding of the percentage and the number of Government computers that will need to be reprogrammed or replaced, and his estimate of the cost involved.
As my hon. Friend knows, I also tabled a question on his Department's recent survey of the problem in this country and the action that it will take to alert and help businesses to respond to it. In his reply, he said that the survey revealed
"a high level of awareness amongst IT directors of organisations."—[Official Report, 8 May 1996; Vol. 277, c. 152.]
How does that square with newspaper reports that only 8 per cent. of businesses have conducted an audit to assess the extent of the risk, and that more than 90 per cent. are failing to deal with it?
A recent survey of IT directors of major UK firms undertaken by the magazine Computer Weekly shows that most large firms are aware of the problem, but most are still undecided what to do about it. I look forward to learning from my hon. Friend precisely how the Government are alerting business to the problem and precisely what help and advice will be available, especially to small businesses, which I imagine will find responding to the problem much more difficult than larger corporations.
As one of the essential messages seems to be that the chain is only as strong as its weakest link, and most computers are dependent on others, it is not enough to adjust one's own computer and rely on others to do the same. Inevitably, there will be those who will not respond.
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Is the problem not serious enough to contemplate, as the Singapore Government are doing, the introduction of statutory guidelines for businesses to follow? Perhaps we should consider following the example of the United States, which recently held congressional hearings on the problem. I urge my hon. Friend to read the testimony from that hearing, as it makes very interesting reading as well as being alarming.
Fortunately for us, it appears that, because ours is a more sophisticated information technology market, European companies are in a worse position than ours in planning for 2000, so I put it to my hon. Friend: is this not an opportunity for British skills to be exported abroad and to establish a crash course for those prepared to offer those skills?
It would appear that much has happened since I drew the Prime Minister's attention to the problem in the House last December; that the Government are taking appropriate action regarding the computer systems for which they are responsible, and are now alerting others of the need to do the same. I welcome that.
The century date change should be treated as the most devastating virus ever to affect our information technology system. The message from the debate must be clear. This is urgent. The majority of computer systems will fail if action is not taken, and the majority of companies are not aware of the problems they face. There are fewer than 850 working days left in which to take action. If action is not taken, companies will face enormous difficulties. This is one of the greatest challenges facing business management today. I look forward to my hon. Friend's response to a crisis that will face our national daily life in less than four years' time.
10.15 pm
The Minister for Science and Technology (Mr. Ian Taylor): I am extremely grateful to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) for raising this important issue on the Floor of the House, for pursuing it through questions, and for discussing it with me. I openly admit that he has informed my views on the subject. As Minister for Science and Technology, I have had the opportunity to discuss this with many people in the industry. This is a timely and necessary debate. It is surprising that a relatively simple issue can have such serious implications. I welcome what my hon. Friend has said this evening.
I join my hon. Friend in raising the alarm this evening, and I shall put it into context. Information technology is crucial to industry and to our competitiveness as a nation. The cost to the United Kingdom of not fully exploiting information and communications technology would be infinitely higher than the cost of putting this problem right.
I do not wish to understate the problem. On 8 May, in a written answer to my hon. Friend, I said:
"The longer it is left, the higher the likely cost of remedial work. I am urging all chief executives to discover now for themselves the extent of the problem in their companies."—[Official Report, 8 May 1996; Vol. 277, c. 152.]
My hon. Friend referred to awareness. Our survey with the Central Computer and Telecommunications Agency showed that the awareness of the problem was higher than 90 per cent., but that action plans had not been put into place. That is the key point, and it is why I am so concerned about the issue.

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My hon. Friend made some telling points about how the system could go wrong if the double digit at the end of the year throws up a double zero in the year 2000. For example, pensioners and others could lose their pensions and entitlements—or certainly not be paid them; centenarians could appear on primary school intake lists; all military and aeronautical equipment could be simultaneously scheduled for maintenance; thousands of legal actions could be struck out; student loan repayments could be scheduled as overdue; and 100 years of interest could be added to credit card balances. These things will not be particularly welcome.
Data could be sorted in the incorrect order. For example, the years 2000 and 2001 could be sorted ahead of 1997 and 1998, which could affect hospital waiting lists. In addition, housing allocation priorities could be wrongly assigned. There will be supply chain difficulties. For example, organisations with which a company exchanges data must have tackled the problem or errors will propagate through interconnected systems. If data are not shared, a company could survive the loss of a key supplier while it sorts out its IT system with difficulty.
In other words, it is vital that companies in supply chains take a mutual interest in attempting to eradicate the problem, to avoid a contagious disease. How long would companies survive if their customers could not pay their bills because their information system is not working?
Non-conventional information technology systems could also fail: process control; access systems, such as swipe cards which would appear to be outside the period of validity; air-conditioning systems that are pre-programmed; weapons systems—programmes using two-digit dates embedded in out-of-production chips will have a particular problem; and safety-critical installations in nuclear power plants and in air traffic control.
I have raised these points not to create a panic—I remind everyone that we are currently in 1996, so we have a while to go before the year 2000—but to alert people to the fact that action taken now is absolutely vital, because there will not be the opportunity to take action properly as the year 2000 approaches. I believe that some problems may emerge before the year 2000, which is why I am urging that audits are carried out into systems in various companies.
The resources will be needed to fix the problem. For example, for some of the older systems the COBOL-trained staff could become scarce and perhaps prohibitively expensive. Organisations may find that they no longer have the people or skills used at the time that their systems were built. The criticality of the problem is its scale: the billions of lines of code to search, the fact that the deadline is immovable—we know that it will occur after midnight in the year 1999—and the complexity and interdependency of the systems involved.
The suppliers of non-compliant software will need to be checked to discover whether they are prepared to fix the systems that they have installed or will walk away from the problem. We need to know much more about that issue or understand it much better.
Obviously, we need to be very careful in some aspects, such as the use of databases and spreadsheets that may have corrupt information in them, and which may not necessarily be understood by the people in companies who now work on them, because they will have been devised at an earlier period.
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The predictions of industry experts as to what the problem is likely to entail vary hugely. Some say that 50 per cent. of information technology budgets will be spent on this problem, and therefore that money probably would not be spent on more constructive developments in information technology. There are estimates that, if the current rate of progress is maintained, at least half of companies will not achieve compliance by the year 2000, which will be an appalling tragedy for those companies, and, because they are interconnected, many others which have tried to be compliant. Obviously, some companies will go out of business if they have not tackled the problem, or not ensured that their suppliers have tackled it.
The cost is almost impossible to quantify, and I am very wary of putting a figure on it. My hon. Friend did put a figure on it which is a good deal higher than the figure given by Kleinwort Benson as quoted in the Independent this morning, which said that British computer users might have to spend £5 billion in the next few years on finding remedies to the problem. I shall not validate that figure; I merely pass it on as having appeared in the morning paper.
As a point of comparison, the Computing Services and Software Association members' revenues in 1994 were more than £7 billion. Those figures are increasing very sharply, and of course they are only a small part of the problem. We must consider not only software but mainframe hardware, which may need minor modification.
We need to examine operating systems, especially IBM, MVS and UNIX, ICL, VME, Digital VMS, DOS, Windows and so on, and we need to examine the application software. We need especially to consider companies who have installed bespoke or in-house applications, which could present the biggest problem if the people who installed it do not now work for the company or are unable to remember the keys and codes that were put into the system.
Let me say a few words about action. Within Government, the CCTA has written to all Government Departments, alerting them and requesting details of the remedial action being undertaken; and all new information technology procurements in Government and let through the CCTA must be millennium-compliant. Our systems in the Department of Trade and Industry are being reviewed. We have appointed consultants to plan a programme of work to make necessary changes to all systems to make them compliant by the year 2000; they will also work with our suppliers.
We have set up a departmental management group. In at least one of our systems in the DTI, we have a four-digit year, which is therefore not sensitive, but of course there are many other systems, and I repeat that our suppliers may have systems that are not compliant, so we have a considerable issue to resolve.
As to the private sector, I urge chief executives not to leave the matter to their information technology managers. I do not question the excellence or the expertise of those managers, but it is a management problem that must be dealt with at the top.
Chief executives of all companies of every size should conduct a demonstration of their computer system. They should set the computer clock at just before midnight and see what happens when it changes for 2000. They will

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then find out whether they have a problem. If they have no problems—which I would find surprising—they must ensure that their suppliers and others who access their computing software do not have any. The situation must be managed, and the sooner the better.
The Government cannot do it for them. It is no use companies coming to us in 1999 and saying, "The Government have not fixed it." The Government did not install the computer software. Failure to deal with the problem could lead to commercial collapse—I put it bluntly because I want to get the message across. We cannot move the deadline, so time management in the interim is crucial.
In order to signal to business the seriousness with which the Government view the problem, I have written to the Deputy Governor of the Bank of England, the Confederation of British Industry, the Institute of Directors, the National Computing Centre, the Federation of the Electronics Industry, the Computing Services and Software Association, the Federation of British Electrotechnical and Allied Manufacturers Associations, the British Computer Society and the Worshipful Company of Information Technologists, in order to meet and discuss the impact of the problem and try to find a way forward.
The Computing Services and Software Association—the lead trade association for the information sector—is working with the DTI to form a task force of users, suppliers and consultants, and the first meeting will be held before the end of the month. I stress that users must be part of the process. There is no point in only the software suppliers looking at the problem; users must be involved in the task force as well.
The DTI will publicise the growing body of help and information through its own World Wide Web site, and through business links and Government offices. The CSSA operates a World Wide Web site and business inquiry service which can put inquirers in touch with firms specialising in solutions to the problem. Guidelines on tackling the problem are due to be published next week. The CCTA and PA Consulting will be involved in that exercise.
Databases of millennium-compliant software are being compiled and updated, and conferences, seminars and workshops will be held. We shall contact interest and user
820
groups. I am urging the trade associations, including those I have mentioned, to alert their members to the problem. The President of the Board of Trade and I launched the information society initiative in February. It is designed to encourage companies in this country to use computers, the Internet and electronic data interchange. We are not now discouraging them from doing so. It is not a question of not using information technology: it is a question of using it safely and of taking steps to ensure that new programmes are millennium-compliant so that the problem will not continually affect the system.
We shall provide advice through the information society initiative, while encouraging companies to use information technology. That item will be on the agenda for discussion at the multimedia industry advisory group, which will meet in the next week or so.
Trading and financial networks extend beyond our shores. We shall raise the matter with the European Commission, and we are considering what international organisation is best able to tackle the problem—whether it is the Organisation for Economic Co-operation and Development or the World Trade Organisation. There will be bilateral talks, including talks with the American Government, in view of their important role and that of the industry in that country.
Advances in technology are occurring so quickly that the problem may be resolved between now and 2000. New creative software packages may be designed that attack the problem at source. I am not overly optimistic, as many old systems must be dealt with. Nevertheless, I do not deny that there is a commercial incentive for someone to come forward with software that deals with the virus. We should be optimistic in that regard, bearing in mind the fact that computer power doubles every 14 months for the same price, the use of the Internet doubles every nine months and that we are seeing an explosion in information technology around the world.
It is inconceivable that anyone who is involved in the industry—be it as a supplier, hardware manufacturer, software creator or as a user—would wish to see the problem occur in 2000 and destroy so much creative effort and excellent information technology work. I am grateful to my hon. Friend for raising the issue. I take it very seriously, and I urge everyone else so to do.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock.

LORD CHANCELLOR'S DEPARTMENT

  Remand Prisoners
  Mr. Bill Michie
  To ask the Parliamentary Secretary, Lord Chancellor's Department what action he intends to take to reduce the length of time prisoners are held on remand in custody awaiting trial. [30269]

  Mr. Streeter
  I have been asked to reply.

  The question concerns a specific operational matter on which the chief executive of the Court Service is best placed to provide an answer and I have accordingly asked the chief executive to reply direct.

  Letter from Michael Huebner to Mr. Bill Michie, dated 6 June 1996:
  The Parliamentary Secretary, Lord Chancellor's Department, has asked me to reply to your Question about what action has been taken to reduce the delays in arranging the trials of defendants in custody.
  In the financial year 1995/96, the Crown Court sat a record number of 88.775 days, an increase on the previous year of 648 days, and although the number of outstanding cases had fallen substantially by the end of the year, it is planned to maintain this level and to sit 88,318 days in 1996/97.
  Since January 1996, all cases committed to the Crown Court by magistrates' courts are automatically given a date for a plea and directions earing (and when the defendant is in custody, this is within four weeks of committal). This procedure ensures that all cases are subject to judicial management at an early stage. This enables the parties immediately to raise with the judge, any problems which might cause delay. At this hearing, the defendant has the opportunity to enter a plea. Defendants who pleads guilty, are sentenced immediately thus reducing the time spent on remand; if a plea of not guilty is entered, the court is required to bear in mind the statutory custody time limits which require that a date for trial he fixed within sixteen weeks of the date of committal unless the judge extends that period. The prosecution and the defence are expected to be able to tell the court what dates their witnesses are available to give evidence so that the trial can begin on the date arranged. In general, cases where the defendant is in custody have priority over cases where defendants are on bail. When a trial date cannot be arranged within sixteen weeks from committal—for example if key witnesses are not available within that time—the reasons for this are recorded and a further hearing is fixed to review progress and to fix a date for trial.
  In August 1995, a new system of collecting information n the reasons for delay in cases where the defendant is in custody was introduced in all Crown Court centres. Detailed information is reported to regional managers monthly and senior managers receive reports on individual cases that are not heard within sixteen weeks. Senior managers also discuss their courts performance in reducing delay at regular reviews with me. In addition to the administrative action to the monitors delays, senior judges in the courts and the Circuit Presiding Judges are provided with details on a monthly basis of custody cases which have not been dealt with within 16 weeks of committal.
  The combined effect of these initiatives has been to reduce waiting times for all cases, but particularly those for defendants in custody. The average waiting time for custody cases is now 11.4 weeks compared with 13.4 weeks for the financial year 1994/95 and the Court Service expects waiting times to continue to
  504
  fall In addition to maintaining the high level of sittings mentioned above, the target level for the key performance indicator of 70% of all defendants to be dealt with within 16 weeks of committal, has been increased to 75% for 1996/97.

ENVIRONMENT

  Water Supplies
  Mrs. Helen Jackson
  To ask the Secretary of State for the Environment what voluntary leakage reduction target each water company has set over the next five and 10 years. [27164]

  Mr. Clappison
  Pursuant to his reply 30 April 1996, Official Report, c. 420: The leakage target shown in the table for Dwr Cymru should read: "Aim to achieve a reduction of 17 per cent. by 2000 and over a third by 2010".

  Environment Agency
  Mr. Pike
  To ask the Secretary of State for the Environment what guidance his Department has given to the Environment Agency in respect of(a) action to deal with foul water flooding, (b) abandoned mines water discharges, (c) flood alleviation and (d) unsatisfactory storm overflows; and what is the regional distribution of (a) (b) and (d). [30001]

  Mr. Clappison
  No guidance in respect of action to deal with foul water flooding has been issued by the Department to the Environment Agency. I understand that Ofwat holds information about the distribution of foul water flooding.

  No specific guidance has been given to the Environment Agency regarding discharges from abandoned mines. The regional distribution of such discharges was described in detail in "Abandoned Mines and the Water Environment," a report issued by the National Rivers Authority in March 1994.

  My right hon. and learned Friend, the Minister for Agriculture, Fisheries and Food and my right hon. Friend the Secretary of State for Wales, are responsible for policy on flood alleviation. The published "Strategy for Flood and Coastal Defence in England and Wales" provides a comprehensive framework for the Environment Agency to work within.

  Guidance is being prepared to assist both dischargers and the Environment Agency in implementing the Urban Waste Water Treatment (England and Wales) Regulations 1994. It will include guidance on the limitation of pollution from storm water overflows. Information about numbers and location of unsatisfactory storm overflows will be held by the regional offices of the Environment Agency.

  Sharks
  Ms Walley
  To ask the Secretary of State for the Environment if the recent change in status of the basking shark under the International Union for the Conservation of Nature and Natural Resources red list will affect the proposal to protect the species under section 9 of the Wildlife and Countryside Act 1981 currently under review; and if he will make a statement. [31334]
  505
  Mr. Clappison
  I refer the hon. Member to the reply I gave on 8 May 1996,Official Report, column 134.

  The Joint Nature Conservation Committee, the Government's statutory conservation adviser, will take account of all relevant conservation data, including the IUCN red list where appropriate, when considering which species should be protected under the Wildlife and Countryside Act 1981 as part of the third quinquennial review. The committee's recommendations to the Secretary of State are due to be submitted in October 1996.

  Ms Walley
  To ask the Secretary of State for the Environment what programme of action his Department has to protect the basking shark under the EU habitats and species directive; and if he will make a statement. [31335]

  Mr. Clappison
  The basking shark is not listed in the annexes to Council directive 92/43/EEC—the habitats and species directive. Nor is it included in the list of species for which action plans will be prepared over the next three years under the United Kingdom biodiversity action plan.

  Ms Walley
  To ask the Secretary of State for the Environment what work has been undertaken by the Joint Nature Conservation Committee to assess the threats to the basking shark in United Kingdom waters over the last five years. [31337]

  Mr. Clappison
  The joint nature conservation committee and the Government's statutory conservation agencies have contributed funds to a number of research projects concerned with the status of the basking shark in British waters in the last five years.

  These projects include acoustic tagging of basking sharks for tracking and monitoring, plankton and water quality sampling, and funding for a basking shark watch scheme. The JNCC has also supported several workshops which have brought together expertise and existing knowledge on basking sharks.

  Housing Points
  Mr. Barry Field
  To ask the Secretary of State for the Environment what steps he is taking to modify the Housing Corporation's advice on the granting of points for a local connection in line with amendments to homeless persons legislation. [30975]

  Mr. Clappison
  The Housing Corporation will be revising its guidance to registered social landlords about access to social housing in the light of the legislative changes currently before Parliament.

  Mr. Field
  To ask the Secretary of State for the Environment what representations he has received about the Housing Corporation ending the practice of associations awarding additional points for a local connection. [30976]

  Mr. Clappison
  The Housing Corporation has not changed its guidance on allocations. We have received no representations on this matter.

  Pennington Sewage Treatment Plant
  Mr. Morley
  To ask the Secretary of State for the Environment what steps he is taking to ensure that the 506
  secondary biological treatment plant at Pennington is equipped with ultra-violet disinfection equipment by Southern Water Services. [31168]

  Mr. Clappison
  UV disinfection equipment is not required for secondary treatment. Secondary biological treatment when installed at Pennington will significantly improve the microbiological quality of the receiving water. Water quality in the area will be re-assessed once the new scheme comes into effect.

  Unitary Authorities
  Mr. Morley
  To ask the Secretary of State for the Environment what is the amount of standard spending assessment per person for each of the new unitary authorities created on 1 April. [31169]

  Sir Paul Beresford
  The standard spending assessments requested are as shown in the table.

  SSA £ per head

  Bath and north-east Somerset

  664.62

  Bristol

  699.88

  South Gloucestershire

  622.56

  North Somerset

  647.33

  Hartlepool

  815.36

  Middlesborough

  862.89

  Redcar and Cleveland

  805.25

  Stockton on Tees

  772.02

  East Riding of Yorkshire

  668.03

  Kingston upon Hull

  813.89

  North-east Lincolnshire

  760.06

  North Lincolnshire

  718.32

  York

  629.64

  Building Research Establishment
  Mr. Dover
  To ask the Secretary of State for the Environment if he will publish the current key performance targets for the Building Research Establishment. [31805]

  Mr. Robert B. Jones
  My right hon. Friend, the Secretary of State for the Environment announced on 2 April 1996 his proposals for transferring the Building Research Establishment to the private sector by February 1997. While it remains an executive agency, BRE is working to the following key targets for 1996–97:net vote cost of £545,000;
  deficit on trading account no greater than £119,000;
  gross non-Exchequer income of £3.56 million;
  an increase of less than 4 per cent. in the average unit cost of research commissions.

  Cement Kilns
  Mr. Pickles
  To ask the Secretary of State for the Environment when he will issue the Government's response to the second report of the Environment Committee on the burning of secondary liquid fuels in cement kilns, HC497 of Session 1994–95. [32086]

  Mr. Clappison
  The Government have today published their response to the Select Committee and copies have been placed in the Library.
  507

  Water (Pesticides)
  Mr. Dover
  To ask the Secretary of State for the Environment when the working party on the incidence of pesticides in water will publish its report. [31804]

  Mr. Robert B. Jones
  The working party on the incidence of pesticides in water has today published its review on the monitoring of pesticides in water in the United Kingdom. I am placing a copy in the Library. It concludes that:there is a basically sound system of monitoring and investigation that has emerged out of a long established intention to control pesticides effectively.
  However, it has identified some gaps in monitoring and it has made some recommendations for improvements.

  This report provides a comprehensive summary of the data which is available on pesticides in water. A group, led by the Environment Agency, will be formed to ensure that there is an ongoing review of monitoring requirements and that monitoring efforts are most effectively directed.

  Rack Marsh, Bagnor
  Mr. Rendel
  To ask the Secretary of State for the Environment what advice he has been given in relation to the creation of a site of special scientific interest at Rack marsh, near Bagnor in Berkshire. [31362]

  Mr. Gummer
  [holding answer 5 June 1996]: I understand that English Nature's Council has approved the notification of Kennet and Lambourn floodplain, Berkshire/Wiltshire as a site of special scientific interest. The area known as Rack marsh forms a component part of this composite site. English Nature is now notifying owners and occupies of the council's decision.

  Vertigo Moulinsiana Snail
  Mr. Rendel
  To ask the Secretary of State for the Environment what advice he has been given in relation to the creation of a special area of conservation for the vertigo moulinsiana snail in the Kennet and Lambourn valleys. [31363]

  Mr. Gummer
  [holding answer 5 June 1996]: English Nature, through the Joint Nature Conservation Committee, has formally recommended that eight separate locations in the Kennet and Lambourn valleys be considered as a possible candidate for designation in due course as a special area of conservation under the European directive 92/43/EEC—the habitats directive—following the discovery in the area of large populations of the species Vertigo moulinsiana, Desmoulin's whorl snail. All the relevant survey material has been placed in the Library. The Government have accepted this recommendation and public consultation on this proposal is now under way.

  The JNCC has also recommended that parts of the Avon valley appear to qualify for possible designation, subject to more detailed survey work to determine boundaries. If this recommendation is confirmed and accepted, public consultation on a site in this area will be undertaken in due course.
  508
  Another possible site, Chilbolton common, on which public consultation has already taken place, is, in the light of recent survey material, not now considered by the JNCC to be of sufficiently high quality to qualify for SAC status and is withdrawn from further consideration.

  The recommendation of parts of the Kennet and Lambourn floodplains and part of the Avon valley as possible SACs for this species seems to me to be consistent with the requirements of article 4 and annex III of the habitats directive and with the United Kingdom approach to selection of possible SACs for other habitat types and species. The JNCC's advice is that these two sites would complement the selection of three other sites for this species in East Anglia which have already been submitted as candidate SACS to the European Commission following consultation.

  The implications of the JNCC's advice for the Newbury bypass are explained in a separate answer given today to my hon. Friend the Member for North-West Hampshire (Sir D. Mitchell) by my hon. Friend the Minister for Railways and Roads.

  I consider that, subject to the outcome of public consultation, a proposal for five high quality sites would comply with the obligations under the habitats directive to make a contribution to the Natura 2000 network in proportion to the representation within this country of the habitat of the species. The course of action announced today in respect of the safeguarding of Vertigo moulinsiana is also consistent with my general endorsement on 15 May of the biodiversity steering group's report which recommended an action plan for the species.

HEALTH

  Lariam
  Ms Hodge
  To ask the Secretary of State for Health what research his Department has(a) commissioned and (b) evaluated on adverse drug reaction to the anti-malarial drug Lariam (Mefloquine); and if he will indicate the number and type of reactions reported. [31322]

  Mr. Malone
  None.

  The Medicines Control Agency monitors adverse reactions reported with Lariam and evaluates potential safety issues in the light of any new evidence that emerges. The MCA received 956 reports of 2,678 suspected adverse reactions associated with Lariam between 1990, when the product was launched in the United Kingdom, and 1 June 1996. During this time in excess of half a million patients have received Lariam. The reports received are consistent with the known safety profile of Lariam as described in the authorised product information.

  Parliamentary Questions
  Mr. Donohoe
  To ask the Secretary of State for Health, pursuant to his answer of 26 March,Official Report, column 515, how much his Department estimated it would have cost to provide the information requested. [31460]
  509
  Mr. Horam
  More than £450, the current threshold above which answers are deemed to incur disproportionate cost.

  Health Authorities (Severance Costs)
  Mr. Redmond
  To ask the Secretary of State for Health if he will make it his policy to hold centrally information in respect of severance costs incurred by health authorities to achieve management cost reductions targets; and if he will make a statement. [31425]

  Mr. Malone
  No.

  Cash Limits and Running Costs
  Mr. Day
  To ask the Secretary of State for Health what changes will be made to the cash limits and running costs limit of his Department in 1996–97. [31969]

  Mr. Dorrell
  The cash limit for class XI vote 1—hospital community health, family health and related services, England—will be reduced by £4,000,000 (from £27,686,304,000 to £27,682,304,000). This allows for a transfer to class XI, vote 2—Department of Health, administration, miscellaneous health and personal services, England—in respect of a re-apportionment between health votes.

  The cash limit for class XI, vote 2—Department of Health, administration, miscellaneous health and personal social services, England—will be increased by £35,984,000, from £1,173,472,000 to £1,209,456,000. This allows for an increase of £36,000,000; £25,000,000 for services for people seeking asylum; £7,000,000 for a grant to the Thalidomide Trust, and £4,000,000—running costs—for a transfer from class XI, vote 1 as mentioned. The overall increase is partially offset by a transfer of £16,000 to class VI, vote 2—regeneration and countryside and wildlife, England—in respect of a project requiring assistance from the European regional development fund.

  The Department's gross running costs limit will be increased by £4,002,000 from £276,202,000 to £280,204,000 reflecting the transfer. Also the original running cost limit published in the "Public Expenditure Statistical Analyses", Cm 3201, table 3.8a was understated by £2,000.

  All increases will either be offset by foregoing the take-up of end year flexibility, transfer to or from other votes or charged to the reserve and will not therefore add to the planned total of public expenditure.

  Youth Treatment Service Group
  Mr. Michael Brown
  To ask the Secretary of State for Health when he will publish the fourth report of the youth treatment service group; and if he will make a statement. [32062]

  Mr. Bowis
  Copies of the report have been placed in the Library today. I have accepted the recommendations in the report and charged the management of the Glenthorne youth treatment centre with its implementations. Following this report and the closure of the St. Charles YTC, the group has now completed its task.
  510
  I am grateful to Mrs. Winifred Tumim and her colleagues on the group for the valuable work they have done over the years. Mr. Tom White, who was a member of the group, has agreed to continue to make independent visits to the Glenthorne youth treatment centre.

  Mental Health Review Tribunal
  Ms Jowell
  To ask the Secretary of State for Health if he will list the waiting times by section, between applications being received by the mental health review tribunal service and the hearings taking place; and what assessment he has made of the scope for reducing the waiting times. [30444]

  Mr. Bowis
  The tables give details of the waiting times for the last quarter of 1995. The tribunal offices are currently working to an eight week deadline for non restricted cases outside the special hospitals and 20 weeks for restricted cases outside the special hospitals. Deadlines for section 2 cases are determined by legislation and are required to be heard within one week of application. Delay times are continuously being monitored and options considered to improve the overall waiting times.

  Waiting times last quarter of 1995 Non-restricted cases

  Under 8 weeks

  9–12 weeks

  Over 12 weeks

  NHS hospitals (665 cases)

  303

  293

  69

  Special hospitals (44 cases)

  0

  14

  30

  Restricted cases

  Under 20 weeks

  21–24 weeks

  Over 24 weeks

  NHS hospitals (171 cases)

  102

  29

  40

  Special hospitals (95 cases)

  6

  38

  51

  Edgware General Hospital
  Sir John Gorst
  To ask the Secretary of State for Health if he will make a statement about the reappraisal he initiated six months ago of the provision of accident and emergency services at Edgware general hospital. [30583]

  Mr. Dykes
  To ask the Secretary of State for Health if he will make a statement on the future provision of accident and emergency services at Edgware general hospital. [31368]

  Mr. Dorrell
  My right hon. Friends have made sure that I am fully aware of the strong local representations on this matter. Barnet health authority is discussing future medical involvement in the casualty services at Edgware hospital with local clinicians. A working group is expected to meet in early July to consider its recommendations. I will write to my hon. Friends following that meeting.

  Elective Surgery
  Ms Harman
  To ask the Secretary of State for Health if he will estimate the annual administrative costs of cancelling and re-scheduling elective surgery in the NHS. [31215]
  511
  Mr. Horam
  The information needed for such an estimate is not available centrally.

  NHS Waiting Lists
  Ms Harman
  To ask the Secretary of State for Health if he will estimate the annual cost of administering waiting lists in the NHS. [31214]

  Mr. Horam
  This information is not available centrally.

  General Practitioners
  Ms Harman
  To ask the Secretary of State for Health if he will estimate the number of forms completed by GPs annually. [31365]

  Mr. Malone
  The average general practitioner currently submits just over 600 claim forms per year. From 1 July 1996 approximately 30 per cent. of claim forms will be abolished and completion of the remainder may be delegated to practice staff. Doctors will also have to complete 400 fewer prescriptions per year and simplified patient registration forms mean that GPs benefit from a 34 per cent. reduction in the number of such forms to be signed.

  Referrals
  Ms Harman
  To ask the Secretary of State for Health what percentage of extra-contractual referral requests for secondary referrals are refused. [31366]

  Mr. Malone
  This information is not available centrally.

  NHS Appointments
  Ms Harman
  To ask the Secretary of State for Health if he will estimate the total number of "did not attends" for(a) out-patient appointments and (b) in-patient appointments in the NHS in the last available year. [31367]

  Mr. Horam
  The total number of "did not attends" for out-patient appointments during 1994–95 was 5,131,405. In the calendar year 1995, there were 209,082 "did not attends" for in-patient or day case admissions.

OVERSEAS DEVELOPMENT ADMINISTRATION

  Zambia
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he has taken following the announcement by the Zambian authorities of the disqualification of ex-President Kenneth Kaunda from the current year's elections. [31170]

  Mr. Hanley
  We have already made clear to the Government of Zambia our concern that measures to restrict eligibility of candidates for president damage Zambian democracy and risk undermining the multi-party system.
  512

  Bosnia
  Miss Hoey
  To ask the Secretary of State for Foreign and Commonwealth Affairs in what ways the British Government are working with(a) the Bosnian Government and (b) other European countries to conduct a survey of the needs and locations of amputees needing prostheses in Bosnia. [31119]

  Mr. Hanley
  We are not currently participating in any survey of the needs and locations of amputees in Bosnia. However, ODA is in close contact with the Bosnian Government on establishing its priorities for bilateral assistance in the health sector, including the needs of those disabled in the war.

  Police Training
  Mr. Jon Owen Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 13 May,Official Report, columns 385–87, if he will list, by name, the individual projects or schemes under the ODA's country aid programme, under which funding is given to countries to finance training of police officers (a) in the United Kingdom and (b) in their home countries; and if he will list which countries have benefited from each project. [31161]

  Mr. Hanley
  The ODA does not keep centrally a record of the titles of individual projects which finance the training of police officers either in the United Kingdom or in their home countries. Police training projects are managed and recorded on a country basis only and it would involve a disproportionate cost to collate this information.

TREASURY

  Tax (Self-assessment)
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer (1) what is his estimate of the impact on the public sector borrowing requirement for(a) 1996–97 and (b) 1997–98 of the effect of the change in the dates on which SC60 tax refunds will be made as a result of the switch to self-assessment; and if he will make a statement; [30593]

  (2) when SC60 tax refunds relating to accounts years ending in tax years 1995–96 and 1996–97 will be made; what account will be taken of the timing of the relevant 1996–97 assessment in issuing these refunds; and if he will make a statement. [30592]

  Mr. Jack
  Refunds of deductions made from the earnings of self-employed sub-contractors in the construction industry—SC60 refunds—are made, and will continue to be made, where the sub-contractor can demonstrate that the deductions for any tax year exceeded his full liability to income tax and class IV national insurance contributions for that year. Although a sub-contractor's self-assessment for 1996–97 will not be due until 31 January 1998, this will not prevent a refund of SC60 deductions being made at an earlier date, if his liability for the year can be established. The Inland Revenue are drawing up guidelines for such claims to repayment, which will shortly be sent in draft to the representatives bodies for comment.
  513
  It is impossible to predict the effect of self assessment upon the timing of claims to repayment of SC60 deductions.

  Credit Unions
  Mr. Pearson
  To ask the Chancellor of the Exchequer what is the length of time taken currently, from the initial application, for credit unions to be registered under the Credit Unions Act 1979; and what estimate he has made of the length of time which will be taken under the Act as amended by the Deregulation (Credit Unions) Order 1996. [31056]

  Mrs. Angela Knight
  The time taken for a credit union to be registered depends largely on how soon its committee members undergo training and set up the systems needed to run its operations. The deregulation order will not reduce that, though it will cut down the amount of work involved in determining the existence of a common bond among the members. However, as this normally takes place concurrently with other activities, it is unlikely to reduce the overall time taken for registration.

  Mr. Pearson
  To ask the Chancellor of the Exchequer what criteria the Registry of Friendly Societies will use to assess the status of credit unions wishing to register under the Credit Union Act 1979 as amended by the Deregulation (Credit Unions) Order 1996. [31055]

  Mrs. Knight
  To be registered a credit union must satisfy the registry that its objectives are the promotion of thrift among members, and the provision of credit at a fair rate of interest; that a common bond exists between members; that it is complying with statutory provisions for rules and insurance against fraud; and that its officers have received appropriate training.

  The Deregulation (Credit Unions) Order 1996 will not change the assessment criteria used by the registry, but will allow greater flexibility in establishing a common bond. A guidance note for new credit unions is given to those seeking to start a credit union, and I have placed a copy in the Library.

  Drug Seizures
  Mr. Jim Cunningham
  To ask the Chancellor of the Exchequer how many drug seizures were made by Customs and Excise in(a) Coventry and (b) the west midlands in each year since 1990; and if he will indicate for each year the percentage change from the last one. [31095]

  Mr. Heathcoat-Amory
  The number of drug seizures made by Customs and Excise in Coventry and the west midlands, and percentage changes were as follows:

  Coventry

  West Midlands

  Number

  Per cent. change

  Number

  Per cent. change

  1990

  0

  —

  65

  —

  1991

  0

  —

  64

  -1

  1992

  15

  —

  94

  +46

  1993

  16

  +7

  87

  -7

  1994

  14

  -13

  93

  +7

  1995

  23

  +64

  120

  +29

  514

  Living Standards
  Mr. Michael Brown
  To ask the Chancellor of the Exchequer what were the average living standards in each Organisation for Economic Co-operation and Development country in 1995; and what was the gap between the United Kingdom and the OECD average. [30796]

  Mrs. Angela Knight
  The most commonly cited single measure of living standards for which valid international comparison can be made is gross domestic product per capita.

  The 1995 figures for GDP per capita are available for all OECD countries in the OECD publication "Main Economic Indicators", which is available in the House of Commons Library.

  Disabled Employees
  Mr. Llwyd
  To ask the Chancellor of the Exchequer how many registered disabled people are employed by his Department; and what percentage this is of the total figure. [30770]

  Mrs. Angela Knight
  As at 1 April 1996, the Treasury employed three registered disabled people, which represents 0.27 per cent. of the Treasury staff. The Treasury also employs a number of disabled people who have chosen not to register, or who became disabled after the withdrawal of the registration scheme under the provisions of the Disability Discrimination Act 1995.

  Exchange Rate Mechanism
  Mr. Michael Brown
  To ask the Chancellor of the Exchequer what is his policy in respect of the pound sterling eventually re-joining a system of managed exchange rates. [30795]

  Mrs. Angela Knight
  The Prime Minister has made clear on many occasions the Government's policy which is that the United Kingdom will not rejoin the ERM during this Parliament, and there is no question of us ever rejoining a rigid, old-style exchange rate mechanism.

  Inheritance Tax
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer what plans he has to raise the limit below which delivery of an inheritance tax account is not required for administering a deceased person's estate. [32064]

  Mr. Jack
  The Inland Revenue has today laid regulations increasing the overall limit from £145,000 to £180,000, and relaxing the current rules on lifetime gifts and overseas assets. The changes will come into operation from 1 July 1996, for estates of persons dying on or after 6 April 1996. They will simplify the administration of some 7,500 estates in 1996–97.

  Council of Ministers
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer if he will make a statement on the recent Council meeting of the Economic and Finance Ministers of the European Union. [32166]

  Mr. Kenneth Clarke
  I represented the United Kingdom at the Economic and Finance Council—ECOFIN—of the European Union in Luxembourg on 3 June.
  515
  At the start of the meeting we reminded the Council that the Prime Minister had made it clear that until there was agreement to lift the export ban on beef derivatives, and until a clear framework was in place leading to a lifting of the wider ban, the UK could not be expected to continue to co-operate normally on other Community business. As a result, the UK could not be expected to agree decisions requiring unanimity.

  I later made clear that the UK would not be able to agree the common position on the regulation on the protection of the Community's financial interests although the UK supported the regulation. I also put down a general reserve on a proposal for a directive for a common system of VAT on agricultural outputs.

  With the Minister of State, Department for Education and Employment, I attended a joint lunch with other EU Finance Ministers and Social Affairs Ministers at which we discussed the importance and priority of tackling unemployment.

  As preparation for the forthcoming Florence European Council, the Council considered a report on progress to date in preparing for stage 3 of economic and monetary union, an interim report on follow-up to discussion of employment at previous European Councils—a substantive report is due for the Dublin European Council—and a draft of the broad economic policy guidelines for the Community and member states.

  The Council decided to reinstate the excessive deficit decision relating to Germany and to abrogate the excessive deficit decision against Denmark. The Council did not reach agreement on a proposal to extend the European Investment bank mandate to lend to Asia and Latin America. The Council was consulted on the recommendation by the European Monetary Institute council for the appointment of a new president of the EMI and briefly considered a paper on pension reform in the EU and central and east European countries in preparation for the structured dialogue at the 8 July ECOFIN.

  Company Profits (Isle of Wight)
  Mr. Barry Field
  To ask the Chancellor of the Exchequer what account was taken in the company profit component of the gross domestic product figures for the Isle of Wight of the profits of companies or holding companies whose headquarters are not based on the Isle of Wight; and how the effects of the rules relating to habitual residence were applied. [28442]

  Mrs. Angela Knight
  [holding answer 7 May 1996]: For the compilation of regional gross domestic product, profits of multi-regional companies are allocated to the area in which they are generated, either directly where data are available or otherwise by the use of proxies such as wages and salaries of employees in the area.

  Habitual residence appears to refer to the main residence of an individual for the Inland Revenue's assessment of tax. Taxes are transfers of income not involving productive activity; habitual residence is not a term associated with gross domestic product since the latter is a measure of production.
  516

FOREIGN AND COMMONWEALTH AFFAIRS

  Hong Kong
  Mr. Corbett
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's policy towards the security of human rights in Hong Kong after 1 July 1997. [30977]

  Mr. David Davis
  The Sino-British joint declaration on the question of Hong Kong, which is a binding treaty between Britain and China, provides for continuing human rights protection in Hong Kong after the handover. Specifically, in the last paragraph of chapter XIII of annex I to the joint declaration, China pledges to ensure that the provisions of the international covenants on civil and political rights and on economic, social and cultural rights, as applied to Hong Kong, remain in force after 30 June 1997.

  Mr. Garnier
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the interpretation by the Standing Committee of the National Peoples Congress on the implementation in Hong Kong of the Chinese nationality law. [32165]

  Mr. Rifkind
  The interpretation in question states that British citizenship acquired by Chinese nationals under the British nationality selection scheme will not be recognised under the Chinese nationality law. The British Government regard British citizenship obtained under the BNSS as having exactly the same validity as British citizenship acquired in any other way. We do not differentiate between British citizens who have acquired their British citizenship through the BNSS and those who have acquired it in any other way. Passports issued under the BNSS are the same as passports issued to all other British citizens and are equally valid.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Vietnamese boat people in Hong Kong. [31241]

  Mr. David Davis
  [holding answer 4 June 1996]: There has been encouraging progress in recent months. The steering committee of the international conference on Indo-Chinese refugees, which held its final meeting on March, emphasised that those screened out as non-refugees must return to Vietnam. We have been working hard to raise the monthly number of returnees, with good co-operation from the Vietnamese Government. As a result, the rate of both voluntary and orderly repatriation has increased. It remains our objective to complete the repatriation of Vietnamese migrants by July 1997.

  Disabled Employees
  Mr. Llwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many registered disabled people are employed by his Department; and what percentage this is of the total figure. [30765]

  Mr. David Davis
  Based on a voluntary survey of staff, as at 1 April 1996 the Foreign and Commonwealth employed 48 registered disabled officers. This is 0.7 per cent. of the total number of staff employed.
  517

  Military Training
  Mr. Jon Owen Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what type of projects and programmes constitute the United Kingdom military training assistance scheme. [31110]

  Mr. David Davis
  The military training assistance scheme sponsors developmental and skills training in the UK. This can include training which has a main or subsidiary aim of familiarising participants with British military techniques and equipment. It also provides for in-country developmental and skills training by UK trainers on attachments overseas, the training of nationals from several countries at regional centres, and sponsorship of participants in courses operated by organisations such as the United Nations.

  Mr. Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs which Governments fund the United Kingdom military training assistance scheme; and in what proportions. [31112]

  Mr. Davis
  UKMTAS is entirely funded by Her Majesty's Government.

  Mr. Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many police officers from other countries have received training under the United Kingdom military training assistance scheme. [31111]

  Mr. Davis
  Full details are available only from 1990. Since then, some 179 police officers from overseas countries have attended training courses in the UK sponsored by the scheme.

  Mr. Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the cost to public funds of the United Kingdom military training assistance scheme for each year since its inception. [31109]

  Mr. Davis
  The scheme has been operating in its current form since 1988. Annual financial year expenditure is:

  £ million

  1988–89

  13.2

  1989–90

  15.5

  1990–91

  18.1

  1991–92

  15.2

  1992–93

  12.5

  1993–94

  11.8

  1994–95

  12.0

  1995–96

  113.5

  1 Estimate.

  Mr. Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the countries which have received training of police officers under the United Kingdom military training assistance scheme. [31113]

  Mr. Davis
  In recent years officers from the following police forces have received training sponsored by the scheme:Belize, Chile, Czech Republic, Costa Rica, Cyprus, Fiji, Honduras, Hungary, India, Kazakhstan, Kenya, Lebanon, Malaysia, Malta, Nepal, Nicaragua, Papua New Guinea, Paraguay, Palestinian Authority, Philippines, Romania, Slovakia, Sri Lanka, Trinidad and Tobago, Tonga, Uganda and Vanuatu.
  518

  European Union Flag
  Mr. Redmond
  To ask the Secretary of State for Foreign and Commonwealth Affairs what instructions were issued to his Department's offices and agencies in respect of flying the European Union flag on 8 May; and if he will make a statement. [31505]

  Mr. David Davis
  None.

  Kashmir
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs when elections are scheduled to take place in Azad Kashmir to elect a new Government; if he will arrange for United Kingdom observers to monitor those elections; and if he will make a statement. [31466]

  Mr. David Davis
  Legislative assembly elections will be held on 30 June. Staff from our High Commission in Islamabad will visit Azad Kashmir during the elections.

DEFENCE

  Porton Down
  Mr. Livingstone
  To ask the Secretary of State for Defence (1) by what methods the Chemical and Biological Defence Establishment is currently monitoring the health of the service volunteers who took part in studies at the establishment with the nerve agent pre-treatment sets; [31347]

  (2) when the Chemical and Biological Defence Establishment carried out studies to evaluate whether nerve agent pre-treatment sets caused long-term health effects in humans; and what were the conclusions of these studies. [31346]

  Mr. Arbuthnot
  These matters are for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from Johm Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your questions about studies into the long term health effects on humans and the monitoring of the health Service volunteers who took part in studies with the Nerve Agent Pre-treatment Sets (NAPS). I am replying to both questions in this letter as Chief Executive of the Defence Evaluation and Research Agency (DERA), which now includes the Chemical and Biological Defence Sector (CBD) in its Protection and Life Sciences division (PLSD).
  There have not been any studies directly undertaken by CBD Sector, Porton Down, to assess long term health effects on humans of the administration of NAPS tablets and no monitoring of the health of volunteers who took part in studies involving the administration of NAPS is currently being conducted. The active ingredient of NAPS tablets is pyridostigmine bromide, which is licensed for use in the clinical treatment of myasthenia gravis. Adults with this complaint take dosages far in excess of that found in NAPS tablets over extended periods, in some cases for life. There are no indications that these high doses over long period of time give rise to long term health effects.
  I hope this information is helpful.
  519
  Mr. Livingstone
  To ask the Secretary of State for Defence, pursuant to his answer of 9 May,Official Report, columns 223–24, if Porton Down has used service personnel from the service volunteers programme in work which Porton Down has carried out for civilian organisations since 1996; and what has been Porton Down's policy on involving service volunteers in work for civilian organisations. [31349]

  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your question asking whether Service volunteers have been used in work carried out by Porton Down for civilian organisations. The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  No Service volunteers have been involved in work carried out by Porton Down for civilian organisations since 1966. The purpose of the Service volunteer programme is to ensure that any protective measures proposed by CBD Sector are acceptable from a military point of view and therefore it would not be appropriate to involve Service volunteers in work which was not directly relevant to military situations. Moreover, the independent ethics Committee which reviews all protocols for work with volunteers must satisfy itself that there is a military justification for the work before it approves a protocol and no such work can be started until the ethics Committee's approval has been received.
  I hope this information is helpful.

  Mr. Livingstone
  To ask the Secretary of State for Defence what studies have been carried out by the Chemical and Biological Defence Establishment to evaluate the long-term health effects of short-term exposure to the nerve agent Soman (GD); when these studies were carried out; and what were their conclusions. [31341]

  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to you question concerning studies involving the nerve agent Soman. The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  No studies have been conducted to evaluate long term health effects on volunteers exposed to Soman. The only study carried out by CBD Sector specifically to investigate the long term effects of short term exposure to Soman examined the effects on mouse diaphragm muscle. The study indicated that subtle changes were observed in tissue 3 days after exposure to Soman. However, there was no observable difference in response between exposed and unexposed tissue 28 days after exposure. The findings of the study were published in the Journal of Pharmacy and Pharmacology in 1993 (Volume 45, pages 176–181).
  I hope this information is helpful.

  Mr. Livingstone
  To ask the Secretary of State for Defence, pursuant to his answer of 8 May,Official Report, column 187, what was the amount of sarin to which volunteers were exposed in the study using single fibre electromyography. [31342]
  520
  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your further question about the single fibre electromyography study. The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  In this study Service volunteers breathed in Sarin nerve agent vapour whilst walking in an exposure chamber at Porton Down. The Sarin was present at a concentration of 0.5mg m3 and the volunteers were exposed for 30 minutes. The results of this study have now been reported in the open literature and can be found in the journal "Human and Experimental Toxicology" (1996) Volume 15, pages 369–75.
  I hope this information is helpful.

  Mr. Livingstone
  To ask the Secretary of State for Defence which division within the Chemical and Biological Defence Establishment has had overall responsibility for running the service volunteers programme since 1966. [31343]

  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your question about responsibility for running the Service volunteer programme at the Chemical and Biological Establishment since 1966. The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  In the period from 1966 to 1995 the Medical Division of the former Chemical and Biological Defence Establishment had overall responsibility for administering the Service volunteer programme. The responsibilities included co-ordination of the requests for volunteers to participate in studies, conducting medical examinations, providing medical supervision of studies, maintaining the records of volunteer attendance and liaison with military authorities. Since the internal reorganisation that was prompted by the move of CBDE into the DERA trading fund in 1995 these duties have been discharged by the Medical Countermeasures business centre.
  I hope this information is helpful.

  Mr. Livingstone
  To ask the Secretary of State for Defence, pursuant to his answer of 9 May,Official Report, column 222, for what reasons staff at Porton Down are not allowed to test chemical agents on themselves; and how many staff have deviated from the policy on self-testing since 1966. [31344]

  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your further question about self experimentation by staff at Porton Down. The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection

  521
  and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  Staff at Porton Down are not allowed to test chemical agents on themselves because this would not be consistent with the proper ethical control, oversight and experimental design required for work of this nature. The scientific value of such studies would be very limited. We are not aware of any formal studies since 1966 which deviated from this policy.
  I hope this information is helpful.

  Mr. Livingstone
  To ask the Secretary of State for Defence, pursuant to his answer of 9 May,Official Report, column 223, what details of experiments are given on request to the doctors of service personnel who took part in the service volunteers programme at the Chemical and Biological Defence Establishment in cases where the service personnel have died. [31345]

  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your question concerning information provided to the doctors of deceased volunteers at the former Chemical and Biological Defence Establishment (CBDE). The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  To date we have not received any enquiries from the doctors of deceased former volunteers. If we were to be approached by a doctor acting on behalf of relatives in such circumstances we would provide them with the same information as if the patient was still living.
  I hope this information is helpful.

  Mr. Livingstone
  To ask the Secretary of State for Defence when the Chemical and Biological Defence Establishment carried out experiments with service volunteers involving the nerve agent GE; and what were the conclusions of this work. [31348]

  Mr. Arbuthnot
  This is a matter for the Defence Evaluation and Research Agency under its framework document. I have asked the chief executive, DERA, to write to the hon. Member.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 6 June 1996:
  I have been asked to reply to your question about experiments with Service volunteers involving the nerve agent GE. The Chemical Biological Defence Sector (CBD) at Porton Down is now part of the Protection and Life Sciences division (PLSD) of the Defence Evaluation and Research Agency (DERA) for which I am responsible as Chief Executive.
  The nerve agent GE was investigated in the early years of the nerve agent programme and those studies indicated that it caused similar effects to other organophosphorus nerve agents. No work involving GE and Service volunteers has been carried out since the early 1950's.
  I hope this information is helpful.

  Submarine Reactor Flasks
  Mr. Dalyell
  To ask the Secretary of State for Defence if he will make a statement on the submarine reactor flasks being built by Rolls-Royce and Associates. [31327]
  522
  Mr. Arbuthnot
  A contract for the design and build of purpose-built used fuel flasks for the transportation of used submarine reactor fuel was awarded to Rolls-Royce and Associates in May 1995. Manufacture of the flasks is sub-contracted to BNFL Engineering Ltd. Delivery is currently planned for the end of 1998.

  Upholder Submarines
  Dr. David Clark
  To ask the Secretary of State for Defence what receipts from the sale of his Department's Upholder class submarines will be retained by(a) his Department and (b) the Treasury; and if he will make a statement. [31173]

  Mr. Arbuthnot
  I currently expect that all the receipts accruing from the sale of the Upholder class submarines will be retained by the Ministry of Defence. In the event that actual receipts exceed voted provision, Government accounting regulations stipulate that the excess goes to the Consolidated Fund.

  Married Housing Estate
  Dr. David Clark
  To ask the Secretary of State for Defence what guarantees on future standards of repair and maintenance will be sought from private sector institutions which purchase leases on his Department's married housing stock. [31171]

  Mr. Arbuthnot
  As I told the hon. Member for Warley, West (Mr. Spellar) on 23 April,Official Report, column 83, my Department will retain responsibility for the management and maintenance of the quarters which we lease back. This responsibility will continue to be discharged by the Defence Housing Executive after the sale.

  Dr. Clark
  To ask the Secretary of State for Defence who will be responsible for setting the rent levels and what account will be taken of local pay levels and circumstances after the sale of the married housing stock. [31172]

  Mr. Arbuthnot
  I refer the hon. Member to the reply I gave on 4 June to the hon. Member for Warley, West (Mr. Spellar),Official Report, column 344.

  Army Technical Support Agency
  Dr. Spink
  To ask the Secretary of State for Defence what key targets he has set for the Army Technical Support Agency in 1996–97. [32148]

  Mr. Soames
  The chief executive of the Army Technical Support Agency has been set the following key targets for 1996–97:Key target 1: Influence equipment design by attaining 70 per cent. acceptance of land systems technical support recommendations.
  Key target 2: Achieve a 10 per cent. gross cost saving in advanced order recommended spares purchasing without reducing sustainability or availability of equipment.
  Key target 3: Answer 90 per cent. of ad hoc inquiries within two working days.
  Key target 4: Achieve an average response time of nine working days for demand for technical publications.
  Key target 5: Complete 90 per cent. of operational (O) projects and 65 per cent. of priority A projects before the agreed target date.

  523
  Key target 6: Reduce the administrative lead time to complete initial spares provisioning lists to 10 months.
  Key target 7: Satisfy 90 per cent. customers when undertaking technical projects.
  Key target 8: Improve efficiency by 3.6 per cent. over 1995–96.

  Disabled Employees
  Mr. Llywd
  To ask the Secretary of State for Defence how many registered disabled people are employed by his Department; and what percentage this is of the total figure. [30768]

  Mr. Arbuthnot
  At I October 1995, the number of registered disabled people employed by the MOD and its agencies was 1,333. This represents 1.2 per cent. of the total staff.

  Disposal Sales Agency
  Mr. Merchant
  To ask the Secretary of State for Defence what key targets he has set for the Disposal Sales Agency in 1996–97. [32147]

  Mr. Arbuthnot
  Since its launch in October 1994 the agency has brought in substantial revenues and has made significant efficiency savings. The key targets which have been set for the chief executive of the Disposal Sales Agency for this financial year are aimed at maintaining the momentum achieved in previous years through industrial participation and other efficiency measures.

  1. To achieve disposal sales revenue of £80 million within budgetary cost allocation;

  2. To secure efficiency savings of £4 million against the baseline of 1994–95 unit cost of generating £1 million of sales;

  3. To increase to 85 per cent. the volume of receipts (excluding Government-to-Government) achieved through contractorised arrangements;

  4. To achieve £1 million of sales on behalf of other Government departments and agencies.

  National Enterprise Board
  Mr. Waller
  To ask the President of the Board of Trade if he will make a statement about the National Enterprise Board. [32070]

  Mr. Lang
  On 5 June 1996 I signed an order under section 11(2) of the British Technology Group Act 1991 dissolving the National Enterprise Board with effect from 1 July 1996.

TRADE AND INDUSTRY

  Industry Council
  Mr. Hargreaves
  To ask the President of the Board of Trade if he will make a statement on the outcome of the EU Industry Council held on 20 May. [30816]

  Mr. Eggar
  The Council adopted a resolution on industrial co-operation with third countries, particularly the Mediterranean region. The Council also agreed conclusions on shipbuilding which noted the state of ratification of the Organisation for Economic Co-operation and Development agreement.

  The Council also reached political agreement on a basis text of a Council decision implementing a third multi-annual programme for small and medium
  524
  enterprises which incorporated a United Kingdom request for additional wording highlighting value for money considerations. I placed a parliamentary reserve on the text as a whole.

  The Commission made oral presentations on its proposal for a new steel aid code to replace the current one which expires on 31 December, developments in the EU competition policy during 1995; its communications on the competitiveness of the chemical industry and on the textile and clothing subcontracting sector. The latter was referred back to COREPER for further consideration.

  Finally, under any other business, the Commission gave a brief report on last week's G7 information society conference in South Africa.

  Post Office Security Equipment
  Mrs. Helen Jackson
  To ask the President of the Board of Trade what contributions were made by his Department for the provision of security equipment in local post offices in each of the last five years. [31138]

  Mr. Oppenheim
  The provision of security equipment in sub-post offices is a matter for Post Office Counters Ltd. and sub-postmasters.

  Telecommunications (Liberalisation)
  Mr. Nigel Evans
  To ask the President of the Board of Trade what are the results of his consideration of responses to his consultation document on the liberalisation of international telecommunications services. [32167]

  Mr. Ian Taylor
  The Government will be inviting applications from today for further licences to provide international service from the UK, on the same terms enjoyed up to now by only BT and Mercury—that is, on telecommunication facilities owned and controlled by the company providing the service. These companies will be able to offer services on any route they choose.

  This is another step in ensuring the continued competitiveness of the United Kingdom, both as a hub for telecommunications traffic worldwide, and as a place where the increasing number of companies for whom telecommunications play a major role in their business will choose to base their operations.

  I believe that this further liberalisation will benefit users by bringing down international rates more quickly, and benefit the UK economy by attracting new investment, both by telecommunications operators and user companies, to the UK.

  In parallel, we will be continuing to press for improved access for UK operators, both within the EU through strict application of new Community liberalisation rules, and in other countries through the World Trade Organisation.

  I am also pleased to announce that the UK will, on 1 July, be lifting the "equivalency" rules which at present limit international simple resale services to certain routes. We will allow the provision of telecommunications services over leased line capacity on any route. I stress, however, that while we wish to open the UK market to full competition, we will ensure that such competition is fair.
  525
  I believe that liberalisation in Europe and other major markets reduces this risk of abuse by overseas companies which enjoy a monopoly or are inadequately regulated in their home market. One-way bypass—where companies might continue to charge UK-based carriers above-cost accounting rates, while delivering their own traffic more cheaply here—is an example of such abuse. We will be taking steps to deter such behaviour in the licences we shall be issuing.

  The licences will contain many of the provisions already in public telecommunications operator licences and in those for international simple resale. In particular, we will wish to give the Director-General of Telecommunications powers to prevent one-way bypass or discriminatory practices between affiliate companies.

  Where there is no overseas competition, provisions will be applied immediately requiring "proportionate return" both for resale and international facilities-based traffic. This will avoid rapid traffic imbalances occurring as a result of one-way bypass. Operators on these routes will also have to charge the same accounting rates as each other.

  However, on the six routes which have already been found equivalent, and for EU routes, these obligations will be only reserve powers, and will not be applied unless market developments dictate. As other routes become more competitive, we will waive these last two requirements for those routes.

  The new licences will be public telecommunications operator licences, and we will undertake the usual public consultations, and address any further issues which arise in the course of these applications. I aim to be able to issue the first licences from July.

  Patent Office
  Mr. Waller
  To ask the President of the Board of Trade what targets he has set the Patent Office executive agency for 1996–97. [32069]

  Mr. Lang
  I have set the Patent Office the targets listed for 1996–97.

  Efficiency

  To increase output in relation to total staff numbers by 2 per cent.

  To increase output in relation to total staff costs by 2 per cent.

  To increase output in relation to current expenditure by 2 per cent.

  Quality

  To issue patent search reports within 12 weeks of receipt of a request in the Patent Office.

  To issue patent examination reports within 18 months of publication.

  To confirm payment of patent renewal fees within six working days of receipt in the Patents Office.

  To issue initial search and examination reports on design applications within 12 weeks of receipt of request.

  To confirm payment of design registration renewal fees within six working days of receipt in the Patent Office.

  To issue trade mark examination reports within two months of data capture in the Patent Office.

  To advertise within seven months of examination, trade mark applications which attract no substantive objection at the examination stage.

  526

  To register within four months of advertisement, trade mark applications which are not formally opposed.

  In addition, I expect the chief executive of the Patent Office to continue to reply within 10 working days to all letters from Members of Parliament delegated to him for reply.

  Ariane 5
  Sir Michael Marshall
  To ask the President of the Board of Trade what assessment he has made of the implications for United Kingdom space policy of the launch failure of Ariane 5; and if he will make a statement. [31872]

  Mr. Ian Taylor
  The loss of the European Space Agency's first Ariane 5 launch vehicle and the four CLUSTER space science satellites is a great disappointment for everyone involved. The United Kingdom Government contributed £35 million to CLUSTER and invested £12 million in instrumentation. British scientists played a prominent role in the CLUSTER mission and the setback in the research community will be keenly felt. The agency's space science programme will, however, continue to provide important opportunities for British space scientists.

  The UK will continue to support competitive European launch capacity to meet commercial and research programme needs. The UK contribution to Ariane, announced in March of this year, totals £2.8 million up to 2000 for the follow on programme for infrastructure. The UK Government also contribute £5 million a year to the operations of the Kourau launch centre. The decision to re-enter the Ariane programme came as a result of discussions with industry about the priorities for British space policy. A further space policy seminar with industry is to be held on 25 June.

  The Government's interest in space focuses particularly on our contribution to the science programme and the increasingly important civil activities of earth observation, pollution monitoring, mineral extraction data, global navigation, telecommunications, television and weather forecasting.

  Exchange Rates
  Mr. Mike O'Brien
  To ask the President of the Board of Trade, pursuant to his answer of 22 May,Official Report, column 265, how much Britain has gained or lost in pounds sterling as a result of changes in exchange rates in each of the last three years. [31261]

  Mr. Eggar
  [holding answer 4 June 1996]: The structural funds regulations provide for a number of block allocations of grants for multi-annual programmes to be made to each member state. These allocations, like the whole of the EC budget, from which they are drawn, are denominated in ecu. Changes in exchange rates therefore affect the value in national currencies of the structural funds grants received by all member states. There are no losses or gains in sterling terms since the sterling equivalent of the ecu value of the allocations are known only when the programmes are completed.

  Accounts (Late Filing Penalties)
  Mrs. Roche
  To ask the President of the Board of Trade if he will list the current tariff of penalties employed at Companies House for late filing of
  527
  accounts, indicating what size businesses the penalties relate to, and including the sliding scale for the length of delay in filing. [30729]

  Mr. Oppenheim
  [holding answer 4 June 1996]: The registrar and chief executive of Companies House executive agency has delegated authority to deal with such matters on behalf of the Secretary of State for Trade and Industry. The registrar has been asked to write to the hon. Lady.

  Letter from John S. Holden to Mrs. Barbara Roche, dated 6 June 1996:
  The President of the Board of Trade has asked me to reply to your Parliamentary Question concerning the current tariff of penalties employed at Companies House for late filing of accounts.
  The scale of late filing penalties, the class of company against which these are levied and the time periods involved are set out in the following table.

  Scale of Penalties

  Public companies £

  Private companies £

  Not more than 3 months late

  500

  100

  More than 3 months but not more than 6 months late

  1,000

  250

  More than 6 months but not more than 12 months late

  2,000

  500

  More than 12 months late

  5,000

  1,000

  The scale of penalties is laid down in Section 242A of the Companies Act and applies equally to all companies in each class, irrespective of their size.

  I hope this is helpful.

  Research Councils
  Mr. Ingram
  To ask the President of the Board of Trade if he will place in the Library the memoranda issued to(a) the chief executives of the research councils, and (b) the director generals of the research councils setting out the conditions of their appointments. [31192]

  Mr. Ian Taylor
  [holding answer 4 June 1996]: The Director General of Research Councils is a senior civil servant serving on a limited period appointment. Apart from his performance bonus arrangements the conditions of his appointment are those of senior civil servants. The

  Retirement pension single rate £

  Retirement pension couple rate £

  Cost to national insurance fund £

  Savings in income-related benefits £

  Increase in Treasury income tax receipts £

  1995–96

  59.90

  95.75

  470 million

  130 million

  50 million

  1996–97

  62.25

  99.50

  510 million

  140 million

  50 million

  Sources:

  1. National insurance fund estimates provided by Government Actuary department.

  2. Income-related benefit effects calculated using the policy simulation model 1996–97, based on the family expenditure surveys 1991, 1992 and 1993.

  3. Income tax figures supplied by the Inland Revenue and calculated using provisional figures from a projection of the 1994 family expenditure survey.

  Notes:

  1. All costs are rounded to the nearest £10 million with the exception of income tax receipts which are rounded to the nearest £50 million.

  2. The estimate for 1996–97 is based upon uprating the 1995–96 figures shown in the table.

  3. Rates of retirement pension have been calculated on the basis of movement in the retail prices index and the average earnings, whole economy, index as produced by the Office of National Statistics as appropriate.
  528
  chief executives of the research councils are employees of the councils. I have placed in the Library of the House the statement issued to those appointed since 1 April 1994 detailing the conditions of their appointments as chief executive and as accounting officer.

  Rail Transport Research
  Mr. Riddick
  To ask the President of the Board of Trade what measures are being taken to ensure that research into rail transport continues following privatisation. [32168]

  Mr. Watts
  I have been asked to reply.

  I have approved the establishment of a review to consider the best mechanism for directing and co-ordinating research and development in order to meet the needs of the new railway industry. The review will provide advice for the successor bodies, which, following privatisation, will be responsible for determining their own research requirements. It will be chaired by Professor Sir David Davies, chief scientific adviser, Ministry of Defence. Its membership comprises: Professor Brian Mellitt director, engineering and production, Railtrack plc; Mr. Gordon Pettitt, transport management consultant, formerly managing director, regional railways; Professor Tony Ridley, professor of Transport Engineering, University of London centre for transport studies; and Mr. Tony Roche, board member, engineering services and safety, British Railways Board. The review is currently in the process of collecting evidence and will present its findings and recommendations to the permanent secretary, Department of Transport, by late summer.

SOCIAL SECURITY

  State Pensions
  Ms Lynne
  To ask the Secretary of State for Social Security what the state pension for(a) a single pension and (b) a couple would have been in April 1995 and April 1996 if the pension in each of these years had been uprated by the higher of the retail prices index or earnings in both of these years; and what estimate he has made of (i) the gross additional costs of such increases in pension and (ii) the net cost after savings in (1) means-tested benefits and (2) increased Treasury receipts from income tax. [30163]

  Mr. Heald
  The information is in the table:
  529

  Reduced Earnings Allowance
  Mrs. Anne Campbell
  To ask the Secretary of State for Social Security how many pensioners will be affected by the reductions in the reduced earnings allowance. [30833]

  Mr. Roger Evans
  I refer the hon. Member to the reply I gave the hon. Member for Barnsley, West and Penistone (Mr. Clapham) on 25 April, column 252.

  Mr. Clapham
  To ask the Secretary of State for Social Security what modification will be made in the application of the good cause clause in reduced earnings allowance cases which are restricted to 12 months' retrospection; and how they will now apply. [31258]

  Mr. Evans
  No change has been made to the application of the good cause provisions for late claims to reduced earnings allowance. However, where there is good cause for a late claim or application for review of an award made on or after 24 March 1996, a maximum 12 months arrears of reduced earnings allowance is payable, in line with other, non-industrial injuries benefits.

  Mr. Clapham
  To ask the Secretary of State for Social Security if reduced earnings allowance will continue to be paid to a married woman who reaches 60 years of age but who has insufficient national insurance contributions to claim a retirement pension in her own right and her husband is in full-time employment and under 65 years of age. [31256]

  Mr. Evans
  Reduced earnings allowance recipients who have given up regular employment will transfer to retirement allowance after reaching state pension age.

  Mr. Clapham
  To ask the Secretary of State for Social Security what are the reasons for the 12-month restriction on back dating reduced earnings allowance in cases where the effects of a latent injury or disease have resulted in a loss of faculty which has reduced the claimant's earnings capacity; and what further retrospection will be allowed in such cases to the date of the last application for an award. [31257]

  Mr. Evans
  The introduction of a maximum 12-month period for payment of arrears of reduced earnings allowance is designed to bring the allowance into line with other, non-industrial injuries, earnings replacement benefits such as incapacity benefit or income support. Reduced earnings allowance is payable only in respect of industrial accidents occurring or prescribed diseases with a date of onset, before 1 October 1990. It is not justifiable to continue backdating payments in such claims indefinitely. Reduced earnings allowance can still be backdated for a maximum of 12 months where someone can show good cause for making a late claim.

  Mr. Tom Clarke
  To ask the Secretary of State for Social Security how many representations he has received regarding the reduction in reduced earnings allowance; and how many of these representations express support for the changes he has made. [31143]

  Mr. Evans
  As at 31 May, 97 right hon. Members and two organisations have written to Ministers. The letters have generally expressed concern or sought clarification.
  530

  Disability Discrimination Act
  Mr. Garnier
  To ask the Secretary of State for Social Security if he will issue a code of practice on access to goods, facilities, services and premises under part III of the Disability Discrimination Act 1995. [32084]

  Mr. Burt
  I have today laid a draft code of practice covering rights of access to goods, facilities, services and premises before Parliament under the powers contained in sections 51 and 52 of the Act. Proposals for the code were made by the National Disability Council following a very successful public consultation exercise. Response to the NDC's draft was favourable, with particular praise for the clear drafting and use of examples to explain the concepts contained in the Act.

  In conjunction with the consultation by the NDC, the Government consulted on a number of proposals for regulations under part III of the Act. Regulations covering powers of attorney; insurance; guarantees and the exclusion of certain education-related services will be laid before Parliament in the near future.

  The draft code of practice and the regulations will come into force on 2 December 1996, subject to parliamentary approval. The code will be published as soon as possible to give service providers, those involved in the selling, letting and managing of premises and others affected time to take account of its guide.

  The Disability Discrimination Act is a huge step forward for disabled people. The code forms part of a co-ordinated framework of advice and guidance to ensure that the business community and disabled people are aware of their new duties and rights.

  Mr. Garnier
  To ask the Secretary of State for Social Security if he will issue guidance on the definition of disability under the Disability Discrimination Act 1995. [32149]

  Mr. Burt
  I have today laid draft guidance before Parliament under the powers contained in section 3 of the Act. A draft of the guidance was issued as part of the recent consultation exercise carried out by the Department for Education and Employment. Many respondents to that consultation felt that the draft could be improved in terms of its structure and should provide fuller guidance. They also felt that the guidance in the draft should be put into context with references to the relevant provisions of the Act. The draft which I have laid before Parliament reflects these views. The Act defines disability as a physical or mental impairment which has substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities. People who have had a disability in the past which met this definition are also protected by the Act. The guidance explains some of the matters to be taken into account in determining whether an impairment has this effect.

  The guidance is not legally binding, but an industrial tribunal or court must take it into account where it appears to be relevant. In most cases it will be clear whether or not someone meets the definition of disability in the Act. The purpose of the guidance is to provide help where there is doubt over whether someone is disabled. It is designed primarily for courts or tribunals, but may also be of help to disabled people and businesses.
  531
  I have also laid regulations before Parliament which refine the Act's definition of disability. Proposals for the use of regulations on the definition of disability were also included in the DfEE's consultation exercise, and the regulations have been drafted to reflect views expressed. The regulations make it clear that addictions, anti-social behaviour and tattoos and body piercings will not entitle people to protection under the Act. They also make it clear that babies and young children are protected by the Act.

  The regulations and the draft guidance will commence on 30 July 1996 subject to approval by Parliament.

TRANSPORT

  MV Derbyshire
  Mr. Loyden
  To ask the Secretary of State for Transport if he will estimate the cost of the technical experts listed by his Department to take part in the second survey of the MV Derbyshire wreckage field. [31273]

  Mr. Norris
  I refer the hon. Member to my reply on 7 May,Official Report, column 52.

  Railfreight Distribution
  Sir David Mitchell
  To ask the Secretary of State for Transport what plans he has to privatise Railfreight Distribution; and if he will make a statement. [32067]

  Mr. Watts
  I have today announced that the Government have decided that Railfreight Distribution—British Rail's channel tunnel freight business—should be offered for sale as soon as possible. I have asked BR, in consultation with my Department, to draw up a programme for its disposal. The offer for sale will be based on the existing business.

  Railfreight Distribution is heavily loss-making. Privatisation will enable the business to be put onto a sound financial footing so that the growth potential of international freight services via the channel tunnel can be exploited on a commercial basis, thereby furthering the objective of transferring more freight from road to rail.

  Departmental Research Sites (Sale)
  Mr. Riddick
  To ask the Secretary of State for Transport if he will make a statement about the proposed sale of his Department's former research site at Crowthorne and Livingston. [32169]

  Mr. Norris
  My Department no longer needs to own the sites at Crowthorne and Livingston after the sale of the Transport Research Laboratory to the Transport Research Foundation. It has a 15-year lease at Crowthorne and a one-year tenancy at Livingston. Healey and Baker are to market the Crowthorne site and Richard Ellis the Livingston site. Applications are about to be made to the local planning authorities to confirm the existing use and planning status of each site, including the scope to rebuild on the sites. The sites will be put on the market in the near future.
  532

  British Rail Maintenance Ltd.
  Sir David Mitchell
  To ask the Secretary of State for Transport when Ernst and Young's report of their emerging findings on the sale of British Rail's former heavy maintenance depots, British Rail Maintenance Ltd., will be available. [32068]

  Mr. Watts
  I have today placed a copy in the Library.

  Newbury Bypass
  Sir David Mitchell
  To ask the Secretary of State for Transport (1) what are the implications for the Newbury bypass of the discovery of the snail Vertigo moulinsiana in the area; [32065]

  (2) when the Highways Agency expects to award the main contract for the Newbury bypass; and if he will make a statement. [32066]

  Mr. Rendel
  To ask the Secretary of State for Transport (1) which contractor has won the main contract for the construction of the Newbury bypass; [31360]

  2. which contractor has won the contract for archaeological work on the route of the Newbury bypass; [31361]

  3. what measures he expects the Highways Agency to take to replace any snail habitat lost through the construction of the Newbury bypass. [31364]

  Mr. Watts
  My right hon. Friend the Secretary of State for the Environment explains today in a separate answer to the hon. Member for Newbury (Mr. Rendel) that public consultation is now under way on a formal recommendation by English Nature, made through the Joint Nature Conservation Committee, that various locations in the Kennet and Lambourn valleys be considered as a possible candidate for designation in due course as a special area of conservation under European directive 92/43/EEC—the habitats directive—following the discovery of large populations of the species Vertigo moulinsiana, Desmoulin's whorl snail, in these locations.

  One of the locations in question, Bagnor island, is due to be crossed by the Newbury bypass. Part of another area, Speen moor, will be affected by it. My right hon. Friend and I have accordingly considered JNCC's recommendation and the implications for the bypass.

  The provisions of regulations 50 to 53 of the Conservation (Natural Habitats &c) Regulations 1994, review of existing decisions and consents, do not apply in the case of this site which is not yet a "European site" as defined by the regulations, nor is it yet subject to the policy protection which the Government apply to candidate SACs from the time when they are proposed to the Commission. However, in the light of the acknowledged conservation value of the site, my right hon. Friend and I have considered whether the bypass can proceed in a manner which is consistent with the conservation objectives of the directive.

  The site recommended by JNCC consists of a cluster of eight separate locations, six of which are unaffected by the proposed bypass. The conservation objectives of the recommended SAC in the Kennet and Lambourn floodplain would be to seek to ensure that a large and viable overall population of the snail was maintained in the area. English Nature and the Highways Agency have

  533
  discussed measures to achieve these conservation objectives. Porous asphalt will be used to minimise spray and the discharge of run-off will be controlled to reduce pollution. A number of further measures which can be implemented by the Highways Agency have been agreed in principle with English Nature. These will reduce the extent of snail habitat which would otherwise be destroyed by the road, together with other measures to maintain the conservation status of the snail in the area. Areas of new habitat are planned which will be much greater than those lost. The main measures are detailed in paragraphs 4.3 and 4.4 (option 2A) in the report "A34 Newbury Bypass—Impact of the A34 on Vertigo Moulinsiana and Opportunities for Mitigation—May 1996", copies of which have been placed in the Library. English Nature considers that, subject to further detailed discussion, these measures, if successfully implemented, should maintain the overall snail populations within the Kennet and Lambourn floodplain, and extend the distribution of the snail within the area where these measures are to be carried out.

  My right hon. Friend and I are in any case satisfied that there are no alternative solutions and that there are imperative reasons of overriding public interest for proceeding with the proposed bypass.

  Both the need for the bypass and the choice of route were established following the statutory procedures set out in the Highways Act 1980, which included two public inquiries. In addition to these procedures, my right hon. Friend the then Secretary of State for Transport announced his conclusion on the choice of route following a further assessment in 1995. The assessment took into account changes in appraisal techniques and local circumstances, as well as new traffic and economic data since the public inquiries and the subsequent statutory decision to go ahead with a western bypass. He considered carefully the balance between all the options and concluded that the proposed route was the most effective solution for Newbury. Having considered the new information about Vertigo moulinsiana, my right hon. Friend the Secretary of State for the Environment and I are satisfied that it does not change the balance of the weight of evidence, including environmental evidence, in favour of this particular route. As I have already explained, new measures will be adopted with the aim of reducing the effects of the road on the snail population.

  The imperative reasons for overriding public interest for proceeding with the bypass are environmental, social and economic. In particular:

  the bypass will relieve the severe environmental problems along the existing A34 in the town including noise and reduced air quality. At present, around 50,000 vehicles per day use the A34 through Newbury. This figure could increase to 78,000 by the year 2010 if the bypass is not built. In particular, the bypass will reduce heavy lorry traffic through Newbury by up to about 70 per cent.;

  it will improve road safety. Over the next 30 years, we estimate that 28 lives will be saved, and an estimated 370 serious casualties and 1420 less serious injuries will be avoided;

  it will aid the economy. The A34 is an important route nationally, linking the North and the Midlands with the ports of Southampton and
  534
  Portsmouth. But high traffic volumes are causing long tailbacks and delays and these are getting worse. At peak times queues can extend over five miles either side of the town. The bypass will relieve a serious bottleneck on this important trunk road.

  Extensive reviews of the trunk road programme in 1994 and 1995 have confirmed the need for the bypass.

  My right hon. Friend and I are satisfied that the proposed course of action is consistent with the conservation objectives of the habitats directive. We have concluded after careful consideration that the bypass should proceed without further delay, and I instructed the Highways Agency to let the main contract for its construction.

  Accordingly the main contract for the construction of the bypass has been awarded to Costain Civil Engineering Ltd. York Archaeological Trust has been awarded the contract for archaeological work along the route.

SCOTLAND

  Disabled Employees
  Mr. Llwyd
  To ask the Secretary of State for Scotland how many registered disabled people are employed by his Department; and what percentage this is of the total figure. [30779]

  Mr. Michael Forsyth
  The number of registered disabled staff employed the Scottish Office core and its executive agencies at 1 April 1996 is shown in the table.

  Registered disabled staff in post in the Scottish Office and its executive agencies at 1 April 1996

  Total

  Per cent.

  Registered disabled staff

  58

  1.1

  All other staff

  5,180

  98.9

  Water and Sewerage Authorities
  Mr. Gordon Prentice
  To ask the Secretary of State for Scotland what considerations led him to specify 6.5 per cent. as the rate of return he believes to be reasonable for the water and sewerage authorities. [30836]

  Mr. Kynoch
  The required rate of return reflects an assessment of the opportunity cost to the economy of new investment in activities such as the provision of water and sewerage services which involve low risk.

  Ms Celia Urquhart
  Mr. Wilson
  To ask the Secretary of State for Scotland if he will list the positions to which Ms Celia Urquhart has been appointed by his Department. [31067]

  Mr. Kynoch
  Ms Urquhart is currently a member of(a) the National Board for Nursing, Midwifery and Health Visiting for Scotland and (b) Scottish Enterprise.
  535

  Fixed Penalties
  Mr. Wilson
  To ask the Secretary of State for Scotland how many cases which have been dealt with by way of fixed penalty by procurators fiscal in Scotland in each of the past five years have also resulted in awards being made by the Criminal Injuries Compensation Board. [31069]

  Lord James Douglas-Hamilton
  This information is not available.

  Criminal Injuries Compensation
  Mr. Wilson
  To ask the Secretary of State for Scotland under what provisions it is necessary to establish that a crime has been committed before an award can be made by the Criminal Injuries Compensation Board. [31070]

  Lord James Douglas-Hamilton
  The board makes ex gratia payments of compensation in respect of eligible applications received up until 31 March 1996, under the provisions of the 1990 criminal injuries compensation scheme.

  The terms of the scheme are reproduced in the board's annual reports, copies of each of which have been placed in the Libraries of the House. The scheme defines a criminal injury as one directly attributable to a crime of violence, including arson or poisoning, to an offence of trespass on a railway, or to activities such as attempting to apprehend an offender or prevent an offence being committed.

  It is not necessary for an offender to have been convicted of a crime, but the board will not make an award if it is not persuaded that the injury has resulted from a crime of violence and may withhold or reduce compensation if the applicant has not taken, without delay, all reasonable steps to inform the police of the circumstances of the injury and to co-operate with the police in bringing the offender to justice. It is the board's policy to ask the police to investigate compensation applications which may be fraudulent, including those where there is a suspicion that the injury did not result from a criminal act.

  Abortion
  Sir David Steel
  To ask the Secretary of State for Scotland (1) how many deaths were recorded as a result of abortion operations in Scotland in 1995; [31315]

  (2) how many abortions (a) in total and (b) per 1,000 women were carried out in Scotland in 1995. [31319]

  Lord James Douglas-Hamilton
  The provisional number of abortions performed in Scotland under the Abortion Act 1967 in 1995 was 11,136; the rate per 1,000 women aged 15–44 was 10.1. None of the abortions performed in Scotland in 1995 resulted in the death of the pregnant woman.

  Fire Service
  Dr. Reid
  To ask the Secretary of State for Scotland how many fire fighters in the fire service in Scotland have had to retire through post-traumatic stress disorder, stress or depression arising from their job. [31350]

  Lord James Douglas-Hamilton
  This information is not held centrally.
  536

  Unitary Authorities
  Mr. Morley
  To ask the Secretary of State for Scotland what is the amount of standard spending assessment per person for each of the new unitary authorities. [31165]

  Mr. Kynoch
  Standard spending assessments do not apply to Scotland. The equivalent figures are for Government-supported expenditure for which the information requested is as follows:

  1 2 3GSE per person

  Aberdeen City

  1,078

  Aberdeenshire

  1,063

  Angus

  1,057

  Argyll and Bute

  1,397

  Scottish Borders

  1,223

  Clackmannanshire

  1,121

  West Dunbartonshire

  1,344

  Dumfries and Galloway

  1,207

  Dundee City

  1,281

  East Ayrshire

  1,150

  East Dunbartonshire

  1,043

  East Lothian

  1,100

  East Renfrewshire

  1,026

  City of Edinburgh

  1,105

  Falkirk

  1,076

  Fife

  1,112

  City of Glasgow

  1,489

  Highland

  1,349

  Inverclyde

  1,292

  Midlothian

  1,146

  Moray

  1,146

  North Ayrshire

  1,156

  North Lanarkshire

  1,166

  Perth and Kinross

  1,066

  Renfrewshire

  1,164

  South Ayrshire

  1,123

  South Lanarkshire

  1,143

  Stirling

  1,214

  West Lothian

  1,151

  1 Population estimates for mid-1994 supplied by Registrar General for Scotland.

  2 GSE comprises grant-aided expenditure, plus allowances for: loan and leasing charges; expenditure on council tax benefit and housing benefit net of DSS subsidy; and, where applicable, expenditure on urban programme net of specific grant.

  3 The Islands Councils of Orkney, Shetland and Western Isles were unitary authorities prior to 1 April 1996.

  Nature Conservation Payments
  Ms Roseanna Cunningham
  To ask the Secretary of State for Scotland if he will list the payments made to landowners by Scottish National Heritage for nature conservation purposes and access to their estates in each year since 1991. [30505]

  Mr. Kynoch
  [holding answer 22 May 1996]: Scottish Natural Heritage, which came into existence in 1992, makes payments to landowners in two ways, through management agreements and grants. Details of grant payments are listed in the annual reports of SNH, copies of which are in the Library of the House. A list of all management agreements was published in SNH's first annual report and new agreements are included in subsequent reports.
  537

  Cullen Inquiry
  Mr. Dafis
  To ask the Secretary of State for Scotland if he will amend the terms of reference of the Cullen inquiry to include consideration of the depiction of murder on films, videos and television as a possible contributory cause of violent behaviour. [30510]

  Lord James Douglas-Hamilton
  [holding answer 4 June 1996]: The terms of reference already allow the Inquiry to consider the issues arising from the tragic events at Dunblane primary school on 13 March, as well as the circumstances leading up to and surrounding these events.

  Animal Feedstuffs
  Mr. Welsh
  To ask the Secretary of State for Scotland when the Ministry for Agriculture Fisheries and Food(a) first evaluated and (b) first had access to a test for mammalian material in animal feedstuffs. [29913]

  Mrs. Browning
  [holding answer 17 May 1996]: I have been asked to reply.

  The development of the ELISA test for bovine, ovine and porcine protein in ruminant feed has been a long-term project, based upon previous expertise in the identification of species of origin of meat. There were significant difficulties in purifying raw material to prevent interference by and cross reactions with many plant components of animal feed. Once resolved, there was a period of further validation based on the testing of feed samples collected on farm, commencing in June 1994. Additional testing of feed samples collected on farm, commencing in June 1994. Additional problems were identified, particularly relating to cross reactions with ingredients not previously tested, until the test was considered secure enough by mid-1995 to embark on surveillance at feed mills in compliance with Commission decision 95/287.

PRIME MINISTER

  Lockerbie
  Mr. Dalyell
  To ask the Prime Minister, pursuant to his oral answer of 14 May,Official Report, columns 762–63, what consideration he has given to the issue addressed to him by the chairman of United Kingdom Families Flight 103, in a letter of 13 May, as to (a) whether the criminal investigation findings were reliable and complete and (b) whether there has been a fabrication of evidence to conceal certain matters therein set out. [30298]

  The Prime Minister
  My noble and learned Friend, the then Lord Advocate, concluded after the most intensive investigation in United Kingdom history that there was no evidence to support charges against the nationals of any other country. The alleged involvement of a Palestinian terrorist group was closely investigated during the early stages of the investigation, but no credible evidence emerged to substantiate its involvement in the Lockerbie crime. It is for a jury to decide how reliable the evidence is, but successive Lord Adovcates would not have brought and maintained charges if they had believed that the evidence on which they were based was unreliable, incomplete or fabricated.
  538

  Beef Ban
  Sir Russell Johnston
  To ask the Prime Minister what representations were made to the United States Government following their banning of British beef in 1989; what further negotiations have taken place since; and if he will make a statement. [31114]

  The Prime Minister
  It is not true that the United States authorities banned British beef in 1989. However, the USA has not accepted imports of bone in beef from Britain since 1989. After 1989, negotiations concentrated on securing access to US markets for boneless beef, which were successfully concluded in July 1994. Negotiations continue on securing wider access to the US markets, although in regular discussions with representatives of industry, the USA has not been identified as a priority market for the export of beef.

  Kashmir
  Mr. Madden
  To ask the Prime Minister if he will make representations to the Prime Minister of Azad Kashmir concerning the detention in Mirpur prison of Chazanfer Ali; and if he will make a statement. [31422]

  The Prime Minister
  As Ghazanfer Ali, a Pakistani national, has now been formally charged and has made appearances in court, it is now a matter for the Azad Kashmir authorities. It would not be appropriate for us to make further representations.

  European Union Flag
  Mr. Redmond
  To ask the Prime Minister what instructions were issued to Government offices and agencies in respect of flying the European Union flag on 8 May; and if he will make a statement. [31515]

  The Prime Minister
  I refer the hon. Member to the reply given today by my hon. Friend the Minister of State, Foreign and Commonwealth Office.

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30456]

  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Thursday 6 June. [30457]

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

  Security and Intelligence Services
  Mr. Day
  To ask the Prime Minister when the annual report of the commissioner appointed under the Security Service Act 1989 will be laid before the House; and if he will make a statement. [32004]

  The Prime Minister
  A copy of Lord Justice Stuart-Smith's sixth annual report for 1995 has been laid before the House today in accordance with section 4(6) of the Security Service Act 1989. The confidential annex to the report has been excluded from that copy in accordance with section 4(7) of the 1989 Act. I am grateful to the commissioner for his work in providing
  539
  assistance to the tribunal as provided in that Act and for reviewing the issue of warrants under the Intelligence Services Act 1994. I note that he is satisfied that the Secretaries of State have exercised their powers in accordance with the provisions of the 1994 Act.

  Sir Roger Moate
  To ask the Prime Minister when the annual report of the commissioner appointed under the Intelligence Services Act 1994 will be laid before the House; and if he will make a statement. [32005]

  The Prime Minister
  A copy of Lord Justice Stuart-Smith's first annual report, for 1995, has been laid before the House today in accordance with section 8(6) of the Intelligence Services Act 1994. The confidential annex to the report has been excluded from that copy in accordance with section 8(7) of the 1994 Act. I am grateful to the Commissioner for his work in reviewing the issue of warrants and authorisations, and in providing assistance to the tribunal as provided for in the Act. I note that he is satisfied that the Secretary of State has properly exercised his powers under the two sections of the 1994 Act.

  Sir Jim Lester
  To ask the Prime Minister when the annual report of the commissioner appointed under the Interception of Communications Act 1985 will be laid before the House; and if he will make a statement. [32006]

  The Prime Minister
  A copy of Lord Nolan's annual report for 1995 has been laid before the House today in accordance with section 8(7) of the Interception of Communications Act 1985. The confidential annex to the report has been excluded from that copy in accordance with section 8(8) of the 1985 Act. I am grateful to the commissioner for his work in reviewing the issue of warrants and in providing assistance to the tribunal as provided for in the Act. I note in particular the commissioner's view that the interception of both postal and telecommunications remains both an effective and essential operation in the interests of national security and the economic well being of the United Kingdom, and the prevention and detection of serious crime.

EDUCATION AND EMPLOYMENT

  European History
  Sir Russell Johnston
  To ask the Secretary of State for Education and Employment what action she proposes to take in response to recommendation 1283 (1996) of the parliamentary assembly of the Council of Europe on history and the learning of history in Europe; and if she will make a statement. [31433]

  Mr. Forth
  The Government make the recommendation, much of which is reflected in the national curriculum. My officials, together with members of Ofsted and the Schools Curriculum and Assessment Authority will continue to contribute to the Council of Europe's meetings and projects on history teaching in Europe.

  School Inspections
  Mr. Blunkett
  To ask the Secretary of State for Education and Employment (1) what representations have been received(a) for and (b) against a six-yearly cycle
  540
  of school inspections during the consultation on future inspection arrangements; when the results will be published; and if she will make a statement; [31017]

  (2) what criteria will be used in assessing which schools will be inspected more frequently than the proposed six-yearly cycle; what proportion of schools she estimates will be affected; and if she will make a statement. [30996]

  Mr. Robin Squire
  Her Majesty's chief inspector is currently consulting educational interests on future inspection arrangements. Once I have his advice on the outcome, I will make a further statement.

  Disability Discrimination Act 1995
  Mr. Riddick
  To ask the Secretary of State for Education and Employment what conclusions she has reached following the recent public consultation on an employment code of practice and employment regulations under the Disability Discrimination Act 1995; and if she will make a statement. [32063]

  Mr. Paice
  Over 670 replies were received from organisations and individuals by the close of the consultation period at the end of March. This was a welcome and helpful response.

  Most respondents considered that the draft code could be improved in the way it gave guidance on the employment provisions in the Act and helped employers avoid discrimination in all areas of employment. There was also a great deal of support for the code to contain more illustrative examples. Although most respondents considered that the length of the draft was about right, the constructive comments they, and others, made could not be taken into account without substantial revision.

  We have therefore arranged to lay before Parliament today a redrafted code of practice relating to the elimination of discrimination in the field of employment against disabled people and people who have had a disability. The code includes many illustrative examples and significant additional guidance about the employment provisions of the Act, as well as information about how complaints might be made and how to seek further information, and a comprehensive index. It should now meet the needs of organisations of all sizes covered by the Act's employment provisions.

  The proposals for employment regulations were supported by a majority of those who expressed a view and only minor changes have been needed to deal with some issues which were identified during the consultation process. As a result, we have also laid before Parliament today the Disability Discrimination (Employment) Regulations 1996.

  The consultation exercise also sought views on two issues for which we made no proposals for regulations but were interested in opinions about the merit of possible change. One issue was the setting of a financial cap for making a reasonable adjustment. A clear majority of those who expressed a view were not in favour of a cap, and the Department is not proposing to introduce one when employment provisions are commenced.

  The other issue was whether the duty of reasonable adjustment should apply to aspects of physical features of buildings or extensions which meet the British standard 5810.
  541
  A clear majority of those who expressed a view considered it should apply and we do not propose to introduce regulations on this issue. Therefore no aspect of a building will be exempted from the duty of reasonable adjustment simply because it meets BS5810.

  We have decided that the employment provisions of the Disability Discrimination Act 1995 will commence on 2 December 1996. The draft code of practice and the Disability Discrimination (Employment) Regulations 1996 will also commence on that date, subject to completion of the parliamentary procedure. The code will be published as soon as possible to give employers and others affected by the employment provisions time to take account of its guidance.

  A statistical analysis of the responses to the consultation is being placed in the Library.

NORTHERN IRELAND

  Schoolteachers (Qualifications)
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland, pursuant to his answer of 1 May,Official Report, column 552, where he stated that 198 Irish schoolteachers had their qualifications recognised in Great Britain under EU rules in 1993–94, what assessment he has made of the number of recognitions cited in the European Commission's recent report on the implementation of the professional qualifications directive; and if he will make a statement. [31122]

  Mr. Ancram
  The 1,277 recognitions relate to the cumulative total for England and Wales since directive 89/48/EEC was implemented, whereas the 198 recognitions refer to 1993–94 and include Scotland.

  School Transport
  Mr. Worthington
  To ask the Secretary of State for Northern Ireland (1) by how much school transport costs have risen in(a) cash, (b) real price and (c) percentage terms since the Government adopted a policy of open enrolment; [31030]

  (2) what have been the percentage, cash and real terms changes in transport costs in the primary, secondary, further and special needs sectors of education since the adoption of a policy of open enrolment. [31031]

  Mr. Ancram
  Between the introduction of open enrolment policy in 1990 and March 1995–1994–95 is the latest year for which actual expenditure is available—net expenditure on school transport has risen by some 50 per cent. from £23.2 million in 1990–91 to £34.7 million. The equivalent figures in constant price terms are £26.4 million and £34.7 million respectively reflecting an increase of approximately 31 per cent. Separate costs are not readily available for primary, secondary, further and special needs sectors of education and could be obtained only at disproportionate cost.

  Mr. Worthington
  To ask the Secretary of State for Northern Ireland what are the principal factors underlying the change in school transport costs in the last five years. [31032]
  542
  Mr. Ancram
  The principal factors are an increase in the total school population, an increase in the proportion of pupils attending schools beyond statutory walking distance and an increase in the cost of provision of such transport.

  Mr. Worthington
  To ask the Secretary of State for Northern Ireland if he will publish a breakdown of current education transport costs by made of transport. [31033]

  Mr. Ancram
  The latest year for which actual expenditure is available is 1994–95 and the information is as follows:

  £ million

  Education and Library Board Vehicles

  9.2

  Public Transport

  19.9

  Taxi Services

  3.8

  Other

  1.8

  Total

  34.7

  Mr. Worthington
  To ask the Secretary of State for Northern Ireland to what extent the rise in education transport costs is due to increases in charges by transport companies. [31034]

  Mr. Ancram
  Increases in charges by public transport providers account for approximately 21 per cent. of the total cost increases for school transport in the period 1990–91 to 1994–95.

  Education Funding
  Mr. Worthington
  To ask the Secretary of State for Northern Ireland if he will list his allocation of resources to each of the education and library boards in the current financial year; and what percentage increase this constitutes over the 1995 allocation in constant price terms. [31035]

  Mr. Ancram
  The total allocation to the education and library boards for 1996–97 is £963.3 million, an increase of 0.6 per cent. at constant prices over the allocations initially provided for 1995–96. Individual board allocations have not yet been finalised as the 1996–97 figure includes £28.5 million which is earmarked for specific purposes, and has not yet been distributed among the five boards. I will write to the hon. Member later in the year when directly comparable allocation figures are available.

  Mr. Worthington
  To ask the Secretary of State for Northern Ireland if he will state his allocation of resources to the schools which he directly funds; and what percentage increase this constitutes over the 1995 allocation in constant price terms. [31036]

  Mr. Ancram
  The information requested for the financial years 1995–96 and 1996–97 is set out in the table.

  1996–97 £

  Percentage increase (constant prices)

  Voluntary grammar schools

  113,696,000

  1.47

  Grant maintained integrated schools

  Primary

  4,366,000

  16.43

  Secondary

  7,266,000

  30.36

  543
  The 1996–97 figures for grant maintained integrated schools take account of three new secondary schools and one new primary school and increased enrolments in existing schools.

  Law Reform Advisory Committee
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland (1) when the Law Reform Advisory Committee commenced work on the subject of landlord liability for failure to repair defective premises; what tenants interest groups it has consulted; and when it will issue its report; [31123]

  (2) what factors led the Law Reform Advisory Committee to cease further work on actions arising out of insidious diseases; [31124]

  (3) if it is the policy of the Law Reform Advisory Committee to make submissions to the Law Commission on areas of work in which it is interested; [31125]

  (4) what is the policy of the Law Reform Advisory Committee in respect of when it addresses issues on which the Law Commission is working. [31128]

  Sir John Wheeler
  The Law Reform Advisory Committee is an independent non-statutory body whose remit is to keep the civil law of Northern Ireland under review and make recommendations for its reform to the Secretary of State. The committee operates within terms of reference and a programme of law reform which are approved by the Secretary of State. Within these parameters, the committee has an independence in policy matters and a discretion with regard to the working practices it adopts in pursuance of its remit. Accordingly, the advice of the chairman to the committee, the right hon. Lord Justice Carswell, has been sought on those aspects of the hon. and learned Gentleman's questions which refer to the committee's policy areas and detailed working practices.

  The sub-committee dealing with the topic of landlord liability topic is at an early stage of the consultative process. It is not therefore possible to say at this stage when a report will be issued. The main committee decided to defer preparation of its report on actions arising out of insidious diseases until the Law Commission has completed discussions with the insurance industry on the remedies of plaintiffs against insurers.

  The Law Reform Advisory Committee regards it as an important part of its work to consult the Law Commission regularly. It also considers the work of the Law Commission and decides which topics merit further consideration given the particular relevances to its jurisdiction.

  Paedophiles Register
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland if he will ask the Home Secretary to include Northern Ireland from the beginning in legislation to set up a national register of convicted paedophiles. [31126]

  Sir John Wheeler
  The Government are considering suggestions that convicted sex offenders should be required by law to notify the police of any changes of address. My right hon. and learned Friend the Home 544
  Secretary intends to publish a consultation document shortly which will canvas views on this and other measures

  At that time I will wish to seek views on the applicability of the proposals to Northern Ireland.

  Balloo Road, Bangor
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what were the accident and casualty rates over the last five years on the Balloo road in Bangor; if he will give an assessment of the improvements required; and what are his Department's plans for upgrading that road. [31127]

  Mr. Moss
  Responsibility for the subject in question has been delegated to the Roads Service under its chief executive, Mr. W. J. McCoubrey. I have asked him to arrange for a reply to be given.

  Letter from W. J. McCoubrey to Mr. Robert McCartney, dated 31 May 1996:
  The Secretary of State for Northern Ireland has asked me to reply to your question about accident and casualty rates on the Balloo Road in Bangor and future improvement proposals for the road.
  The RUC, who are responsible for compiling accident statistics, have advised me that in the 5 year period 1991–1995 inclusive 39 injury accidents in which 2 people were killed and 60 injured (7 seriously) were recorded in respect of the Balloo Road in Bangor.
  Balloo Road is 2,200 metres long. The two end sections of the road, totalling some 1,400 metres have been reconstructed in the last 10 years at a cost of £1.5M. A scheme to bring the 800m central section up to a similar standard is included in the 6–15 year major roadworks programme where its priority will be assessed as part of a detailed review to be completed later this year. The work will involve reconstructing the carriageway to 9 m width with right turning lanes at 4 junctions, constructing footways on each side and installing traffic signals with a pedestrian facility at the Bloomfield Road South junction.

  Peace Process
  Mr. Nigel Evans
  To ask the Secretary of State for Northern Ireland if he will make a statement on nominations to the forthcoming political negotiations, and about progress in setting up the forum established by the Northern Ireland (Entry to Negotiations, etc) Act 1996. [32163]

  Sir Patrick Mayhew
  I have issued invitations to nominate teams to participate in the negotiations, under section 2(2) of the Northern Ireland (Entry to Negotiations, etc) Act 1996, to the nominating representatives of the following parties:

  Alliance Party

  Democratic Unionist Party—DUP

  Labour

  Northern Ireland Women's Coalition

  Progressive Unionist Party (PUP)

  Social Democratic and Labour Party (SLDP)

  UK Unionist Party—Robert McCartney

  Ulster Democratic Party (UDP)

  Ulster Unionist Party (UUP)

  I am required by section 2(3) of the Act to refrain from inviting nominations in respect of any part if I consider that requirements set out in paragraphs 8 and 9 of the ground rules for substantive all-party negotiations—

  545
  published as Command Paper 3232—are not met in relation to it. Paragraph 9 of the ground rules makes clear the agreement of the British and Irish Governments that the participation of Sinn Fein in the negotiations requires the unequivocal restoration of the ceasefire of August 1994.

  After consultation with the Irish Government, both Governments are agreed that this requirement is not met and that, for so long as it is not met, no invitation can be issued in respect of Sinn Fein.

  Letters have also been sent to the nominating representatives of all parties returned at the elections, including Sinn Fein, about arrangements for the forum. With them is a draft of initial rules of procedure, on which we seek comment. The letters also deal with the location of the forum: we have now identified suitable premises for it at the Interpoint centre in Belfast. I am placing a copy of these letters in the Library of the House.

  Hydro-electricity
  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland if he will make available to the representatives of Lough Neagh and Maine System Game Anglers Association details of the minutes of meetings which took place between the fisheries division of the Department of Agriculture, the energy policy division of the Department of Economic Development, the hydro-electric consultant Mr. Dougal Baillie and a turbine manufacturer based in the Province with regard to the Radalstown hydro-electric application. [31223]

  Mr. Ancram
  [holding answer 4 June 1996]: No meeting of these parties took place on this subject.

WALES

  Cattle Slaughter Scheme
  Mr. Morgan
  To ask the Secretary of State for Wales what representations he has received from farming organisations concerning extensions of the 25p per kilo live weight supplementary payment until the 30-months slaughter scheme is fully operational; and if he will make a statement. [30700]

  Mr. Hague
  I have received a number of representations about the national supplement of 25p per kilogrammes live weight which beef specialists can receive under the over 30-month slaughter scheme.

  The Government have extended the qualifying period for this rate until 15 June. Rates will be reviewed regularly thereafter in light of market rates for young cattle as EC regulations limit us to providing no more than the difference between 1 ecu per kilogramme and the market value.

  If animals over 30 months of age on 20 March cannot be slaughtered before 15 June they will remain eligible for the top-up payments of 25p.

  Mr. Morgan
  To ask the Secretary of State for Wales when he plans to introduce a system for consigning animals due to enter the cull scheme to specific collecting centres; and what proposals he has for making arrangements for the relevant interim payments. [30702]
  546
  Mr. Hague
  The over 30-month slaughter scheme is being run by the intervention board executive agency. Arrangements for consigning cattle to collection centres are matters for those taking part in the scheme, who are best placed to consider their own needs and local circumstances.

  I understand the producers will be asked to notify the board of all the animals on which they wish to claim interim payments before the end of June and that payments will be made in the first half of July.

  Mr. Morgan
  To ask the Secretary of State for Wales what is the current backlog of(a) steers and heifers over 30 months and (b) cull cows awaiting slaughter in each county in Wales. [30697]

  Mr. Hague
  Precise figures are not available. The total number of clean beef cattle and of cull cows aged over 30 months awaiting slaughter in Wales is estimated at between 15,000 and 20,000.

  Mr. Morgan
  To ask the Secretary of State for Wales what is his estimate of the date on which producers will receive their interim payment on(a) steers and heifers and (b) cull cows awaiting slaughter. [30701]

  Mr. Hague
  The over 30-month slaughter scheme is being run by the intervention board executive agency. I understand that producers will be asked to notify the board of all the animals on which they wish to claim interim payments before the end of June and that payments will be made in the first half of July.

  Mr. Morgan
  To ask the Secretary of State for Wales what representations he has received from Welsh farming organisations concerning the introduction into Wales of the Scottish random selection system for allocation of animals to collection centres and for subsequent disposal; and if he will make a statement. [30703]

  Mr. Hague
  I have had a number of representations regarding the Scottish arrangements for allocation of cattle to selection centres. I understand that this has been organised by those taking part in the over 30-month scheme, who are best placed to consider local circumstances, and to decide priorities.

  Mr. Morgan
  To ask the Secretary of State for Wales what proposals he has for the introduction of a cataloguing system for farmers with steers and heifers in the pipeline for the slaughter under the 30 months and over slaughter scheme, to assist in the identification of eligible animals. [30699]

  Mr. Hague
  The over 30-month slaughter scheme is being run by the intervention board executive agency. Arrangements for consigning cattle to collection centres or abattoirs are matters for those taking part in the scheme, who are best placed to consider their own needs and local circumstances.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what further initiatives he will take to ensure the efficient processing of cattle destined for slaughter under the 30-month BSE regulations; and if he will make a statement. [31134]
  547
  Mr. Gwilym Jones
  The over 30-month slaughter scheme is being run by the intervention board executive agency. Arrangements for consigning cattle to collection centres or abattoirs are matters for those taking part in the scheme, who are best placed to consider their own needs and local circumstances.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what proposals he has to increase rendering capacity in Wales. [30998]

  Mr. Gwilym Jones
  Rendering capacity in Great Britain is being made available to all slaughterhouses operating as part of the 30-month slaughter scheme. We are actively considering a variety of options for increasing throughput of cattle under the scheme.

  Abattoirs
  Mr. Barry Jones
  To ask the Secretary of State for Wales what proposals he has to increase the number of abattoirs in Wales. [30999]

  Mr. Gwilym Jones
  Investment in abattoir facilities remains essentially a matter for the commercial judgment of individual operators.

  Care and Repair Schemes
  Mr. Llwyd
  To ask the Secretary of State for Wales what representations he has received from Care and Repair Cymru; and if he will make a statement. [30751]

  Mr. Gwilym Jones
  Representations have been received from Care and Repair Cymru in response to the consultation paper, "The Welsh Office and Local Government: Redefining the Relationship". The issue was also discussed at a recent meeting between my officials and the organisation's director.

  Mr. Llwyd
  To ask the Secretary of State for Wales what representations his Department has received concerning changes in its support for local care and repair schemes; and if he will make a statement. [30759]

  Mr. Jones
  The Welsh Office has received representations from Care and Repair Cymru, voluntary organisations including individual care and repair schemes, local authorities, housing associations and private individuals. These representations are being considered.

  Dental Services
  Mr. Murphy
  To ask the Secretary of State for Wales how many dentists have left NHS service during the last year in(a) Torfaen, (b) Gwent and (c) Wales. [30980]

  Mr. Hague
  Information on the number of dentists who stop treating NHS patients is not available centrally. However, the number of dentists treating NHS patients in Gwent and Wales is shown in the following table. Separate information for Torfaen is not available centrally.

  Number of dentists treating at least some NHS patients

  Gwent

  Wales

  At 31 December 1994

  140

  850

  At 31 December 1995

  141

  856

  548

  GP Fundholding
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his estimate of the extra annual administrative costs of the general practitioner fundholding system in Wales. [31000]

  Mr. Hague
  Reimbursement to general practitioner fundholders in respect of expenses covered by management allowances since the inception of the scheme is as follows:

  1990–91: £0.112 million

  1991–92: £0.518 million

  1992–93: £1.677 million

  1993–94: £3.055 million

  1994–95: £3.795 million

  Expenditure figures for 1995–96 are not yet available, but provisional accounts suggest that the total sum amounted to some £6.7 million.

  Mr. Jones
  To ask the Secretary of State for Wales how he proposes to ensure that the general practitioner fundholding system relates to health authority plans for local people. [31002]

  Mr. Hague
  Guidance on ensuring the accountability of GP fundholding practices was issued by the Welsh Office on 27 September 1995.

  The guidance emphasised the need for GP fundholders and health authorities to develop partnerships to meet agreed national and local health priorities and to set out the main action required in the performance agreements between individual practices and authorities.

  I have arranged for copies of the guidance to be placed in the Library of the House.

  Disabled Employees
  Mr. Llwyd
  To ask the Secretary of State for Wales how many registered disabled people are employed by his Department; and what percentage this is of the total. [30777]

  Mr. Hague
  The number of registered disabled staff employed by my Department is 33. This represents 1.4 per cent. of the total staff employed.

  A further five registered disabled staff are employed in my Department under the sheltered placement scheme.

  Pontypool Bypass
  Mr. Murphy
  To ask the Secretary of State for Wales if he will make a statement on delays to work on the Pontypool bypass, A4042; and what penalties will be levied on the contractor. [30978]

  Mr. Gwilym Jones
  The contractor, Shephard Hill Civil Engineering Ltd., has experienced three days' delay as a result of adverse weather.

  Liquidated damages would be applied to the contract in the normal way for late completion.

  Direct Grant Schools
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many primary and secondary schools(a) are direct grant and (b) are seeking direct grant status; and if he will make a statement. [31132]
  549
  Mr. Hague
  There are no longer any direct grant schools in Wales and, currently, no plans to seek applications.

  School Health (Children)
  Mr. Wigley
  To ask the Secretary of State for Wales if he will set up a study of the condition of the teeth of primary and secondary school children in Wales with particular reference to the effects of the level of calcium in their diets. [31148]

  Mr. Hague
  I have no plans to do so.

  Beef Farmers
  Mr. Barry Jones
  To ask the Secretary of State for Wales how he will assist beef farmers in respect of cattle under 30 months old; and if he will make a statement. [31140]

  Mr. Gwilym Jones
  The beef special premium and suckler cow premium schemes are available to assist beef producers. I have arranged for payments of subsidies to Welsh beef producer to be accelerated and over £66 million—representing 90 per cent. of livestock payments—was paid during April 1996. In addition, the Commission is recommending supplementary payments under these schemes which the Agriculture Council is considering this week.

  Free School Milk
  Mr. Wigley
  To ask the Secretary of State for Wales if he will list the proportion of primary schools which are participating in the discretionary scheme for supplying school children under the age of five years with free school milk in each county or old county. [31155]

  Mr. Hague
  The EU school milk subsidy scheme is administered by the intervention board executive agency. I have asked the chief executive, Mr. G. Trevelyan, to reply direct to the hon. Member on this matter and will arrange for a copy to his reply to be placed in the Library of the House.

  Farm Visits
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many farms and in what locations he has visited in 1996. [31133]

  Mr. Hague
  None. I visited a number of farms in 1995 and intend to do so again later this year.

  Bovine Spongiform Encephalopathy
  Mr. Ron Davies
  To ask the Secretary of State for Wales if he will make a statement on(a) the operation of the Government's measures in Wales to deal with the BSE crisis; and what assessment he has made of their effectiveness. [31081]

  Mr. Hague
  The Government have introduced a number of measures to assist those involved in the beef industry. These include direct support to renderers and abattoirs and schemes to remove older beef from the food chain and to help beef producers until the market recovers. It is too early to assess the effectiveness of these measures on the overall state of the industry.
  550

  City Technology Colleges
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many CTC colleges he proposes for Wales; and if he will make a statement. [31131]

  Mr. Hague
  I should be glad to consider an application to establish a CTC from any potential sponsor.

  Welsh Language
  Mr. Wigley
  To ask the Secretary of State for Wales what restrictions European law places on the advertising of contracts for the supply of goods or services by local authorities though the medium of the Welsh language. [31145]

  Mr. Hague
  There are no restrictions on the advertising of contracts for the supply of goods or services by local authorities through the medium of Welsh. However, advertisements that are required to be placed in the Official Journal of the European Communities must be in one of the Community's official languages.

  Youth Training
  Mr. Rowlands
  To ask the Secretary of State for Wales what is his latest estimate of the number of young people currently on youth training in each training and enterprise council area; and what were the equivalent figures in the last three years. [31358]

  Mr. Jonathan Evans
  The figures requested are contained in the following table:

  Numbers in training on youth training/youth credits/modern apprenticeships1 at the end of March

  1993

  1994

  1995

  1996

  Gwent

  2,429

  2,861

  2,449

  2,418

  Mid Glamorgan

  2,503

  3,420

  3,192

  3,522

  North-east Wales

  1,526

  1,679

  1,928

  1,491

  North-west Wales

  2,166

  2,053

  1,946

  1,928

  Powys

  672

  653

  694

  639

  South Glamorgan

  1,721

  1,622

  1,754

  1,880

  West Wales

  4,102

  3,857

  3,697

  4,303

  Wales total

  15,119

  16,145

  15,660

  16,181

  1 Includes accelerated and modern engineering apprenticeships.

  European Union Flag
  Mr. Redmond
  To ask the Secretary of State for Wales what instructions were issued to his Department's offices and agencies in respect of flying the European Union flag on 8 May; and if he will make a statement. [31514]

  Mr. Hague
  None.

  Unitary Authorities
  Mr. Morley
  To ask the Secretary of State for Wales what is the amount of standard spending assessment per person for each of the new unitary authorities. [31166]

  Mr. Gwilym Jones
  Information for the 1996–97 settlement is given in the following table. This information is also available in the "Local Government Finance Report (Wales) 1996–97," a copy of which is in the Library of the House.
  551

  Unitary

  Standard spending assessment per head of population (£)1

  Blaenau Gwent

  880

  Bridgend

  822

  Caerphilly

  844

  Cardiff

  799

  Carmarthenshire

  878

  Ceredigion

  860

  Conwy

  814

  Denbighshire

  860

  Flinshire

  775

  Gwynedd

  910

  Isle of Anglesey

  889

  Merthyr Tydfil

  939

  Monmouthshire

  761

  Neath Port Talbot

  860

  Newport

  855

  Pembrokeshire

  880

  Powys

  950

  Rhondda, Cynon, Taff

  866

  Swansea

  838

  The Vale of Glamorgan

  796

  Torfaen

  859

  Wrexham

  798

  Wales

  846

  1 The usually resident population at 30 June 1994 as estimated by the Registrar General.

ATTORNEY-GENERAL

  Wasted Costs orders
  Mr. Donald Anderson
  To ask the Attorney-General how many wasted costs orders have been made by courts against the Crown Prosecution Service in the last accounting year, with the breakdown of each Crown Prosecution Service area and the total sums for such areas and further broken down by the Crown courts and the magistrates courts. [28306]

  The Attorney-General
  [pursuant to his answer, 14 May 1996, c. 384–285.]: Information is now available about the number of costs awards against CPS central casework One such order was made in the magistrates courts and four in the Crown court. That answer also overstated the number of costs awards in the magistrates courts for the CPS Yorkshire area, by including some awards in favour of the CPS. The actual number of awards against the CPS was 11. An amended table is set out.

  Costs awarded against CPS 1995–96

  Number of cost awards against CPS

  Area

  Crown courts

  Magistrate's courts

  Amount paid £

  North

  2

  19

  3,102

  Yorkshire

  11

  11

  8,215

  Mersey/Lancashire

  11

  6

  3,259

  Humber

  9

  6

  22,827

  North-west

  5

  14

  9,363

  East midlands

  20

  39

  18,347

  Wales

  10

  4

  5,108

  Midlands

  9

  7

  7,503

  Anglia

  6

  16

  12,637

  Severn/Thames

  16

  16

  16,798

  South-west

  4

  4

  2,227

  552

  Costs awarded against CPS 1995–96

  Number of cost awards against CPS

  Area

  Crown courts

  Magistrate's courts

  Amount paid £

  London

  111

  95

  63,804

  South-east

  13

  26

  19,528

  Central casework

  4

  1

  52,003

  Total

  231

  264

  244,721

  1 Information is not available to establish the enactment under which the orders were made and awards of costs made otherwise than in accordance with the Prosecution of Offences Act 1985 may be included.

  2 The information in relation to the number of awards is limited to Crown courts and magistrates court cases. It does not include cost awards made in the higher court.

  3 The number of awards relates to all cases dealt with by the CPS areas, but does not include any orders made in respect of the specialised work handled by central casework.

  4 Information about the amounts actually paid includes payments in respect of orders made in the higher courts and those in respect of the specialised work handled by central casework, but the amounts paid cannot be broken down by type of court.

HOME DEPARTMENT

  Eastwood Park Prison
  Mrs. Clwyd
  To ask the Secretary of State for the Home Department what recent representations he has received about Eastwood Park prison. [30276]

  Miss Widdecombe
  My right hon. and learned Friend and I have received a number of letters from hon. Members and from members of the public about Eastwood Park and these were mainly about cell size.

  Assaults on Prison Officers
  Mr. Pope
  To ask the Secretary of State for the Home Department how many prison officer hours were lost during the financial year 1995–96 due to injuries sustained as a result of assaults by prisoners; and what was the estimated cost to the Prison Service. [30277]

  Miss Widdecombe
  Absence by prison officers due to assaults on duty is recorded in terms of days rather than hours lost. The total number of days lost for this reason was 11,788 in 1995–96. The cost to the Prison Service is £543,150.

  Identity Cards
  Mr. Michael Brown
  To ask the Secretary of State for the Home Department what plans he has to introduce a nationwide identity card scheme. [30280]

  Mr. Sackville
  We will announce our final decision on identity cards as soon as possible based on the options set out in the Green Paper published last year.
  553

  Ministerial Visits (Prisons)
  Mrs. Lait
  To ask the Secretary of State for the Home Department how many ministerial visits have been made to prisons int he last 12 months. [30282]

  Miss Widdecombe
  Since 6 June 1995, Home Office Minsters have visited Prison Service establishments on 75 occasions.

  Fake Guns
  Mr. French
  To ask the Secretary of State for the Home Department what is his policy on fake guns. [30283]

  Mr. Maclean
  There are strict law against the misuse of imitation firearms and the Firearms (Amendment) Act 1994 further strengthened the law. The Government's evidence to Lord Cullen's inquiry into the events at Dunblane discusses controls on imitation firearms and we shall take account of any comments Lord Cullen makes.

  Firearms
  Mrs. Helen Jackson
  To ask the Secretary of State for the Home Department what plans he has to review his Department's policy in respect of the issue of(a) shotgun and (b) other firearm licences to those aged under 18 years. [30286]

  Mr. Maclean
  Lord Cullen's inquiry into the circumstances of the tragedy at Dunblane will also examine wider issues including the controls on firearms. On 21 March the Government announced a review of firearms controls in Great Britain. As part of that review, the Government have provided detailed evidence to Lord Cullen's inquiry. Any changes to the firearms controls must await the outcome of that inquiry.

  Asylum and Immigration Bill
  Mr. Chisholm
  To ask the Secretary of State for the Home Department what assessment he has made of the impact on employment of the Asylum and Immigration Bill. [30287]

  Miss Widdecombe
  We believe that the Asylum and Immigration Bill will improve employment opportunities for people lawfully resident in the United Kingdom and entitled to work here.

  Euro 96
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department what additional resources are being made available to the Metropolitan police in respect of crowd control during Euro 96. [30288]

  Mr. Maclean
  Policing outside football grounds is part of normal police duties, and costs are met from existing resources. The cost of policing inside the stadia will be met by the Football Association.

  Police tactics for Euro 96 include the use of modern technology to transmit quickly to the regional centres photographic images of those involved in any disorder. The Football Trust is meeting the cost of this equipment, which is being made available close to the grounds hosting matches, in New Scotland Yard and in the national criminal intelligence service football unit.
  554

  Youth Justice System
  Mr. Tipping
  To ask the Secretary of State for the Home Department when he will bring forward plans to reform the youth justice system. [30289]

  Mr. Maclean
  The Government's priority is to ensure the effective implementation of the range of positive initiatives and changes that are already in hand to help tackle juvenile crime.

  Life Sentences
  Sir Teddy Taylor
  To ask the Secretary of State for the Home Department how many persons are at present imprisoned for life; and what were the comparable totals 10 and 20 years ago. [30268]

  Mr. Howard
  On 30 April, there were 3,436 life sentence prisoners in prison in England and Wales. The corresponding figures for mid-1976 and 1986 were 1,181 and 2,194 respectively.

  Betting and Gambling
  Mr. Hinchliffe
  To ask the Secretary of State for the Home Department if he will place the green seal service on a statutory basis. [30829]

  Mr. Kirkhope
  No.The Sporting Life green seal service is a useful independent arbitrator on disputed bets. We consider that these should continue to be dealt with by voluntary regulation.

  Mr. Hinchliffe
  To ask the Secretary of State for the Home Department what plans he has to improve the regulatory framework for gambling. [30279]

  Mr. Kirkhope
  The present framework has kept gambling well-ordered and crime free but we believe there is scope to reduce unnecessary regulation. We have proposed changes for casinos, bingo clubs and advertising of commercial gambling; and we are considering the position of the pools.

  Secure Units
  Mr. Sweeney
  To ask the Secretary of State for the Home Department what plans he has to speed up the provision of secure units for young offenders. [30278]

  Mr. Maclean
  We are pressing ahead with the provision of secure training centres and the first of the extra 170 additional places being financed by the Department of Health came on stream in December. Around 103 more will be provided during this year.

  Scott Report
  Mr. Amess
  To ask the Secretary of State for the Home Department if he will make a statement on the Government's conclusions in respect of Sir Richard's Scotts' recommendations on prosecution procedures. [32164]

  Mr. Maclean
  Sir Richard made eight recommendations concerning prosecution procedures. In essence, the recommendations are intended to ensure that in future the prosecution ascertains whether there are any documents held by other Government Departments and agencies which may be not only relevant to the way it proposes to put its case, but which may also be relevant
  555
  to the way in which the defence proposes to put the case for the accused, so far as it is known or can be inferred. They also seek to ensure that satisfactory arrangements are in place for recording what is done by the prosecution in this regard—and the responses to their requests of other departments and agencies—and reporting all of this to the defence.

  The recommendations are based on the existing law on disclosure but, as Sir Richard recognised, they need to be considered against the provisions in the Criminal Procedure and Investigations Bill, which is awaiting Report stage. The Government believe that the more focused and clearer duties established by the provisions in the Bill and the code of practice, to be promulgated under part II of the Bill, will address Sir Richard's concerns. To the extent that Sir Richard's recommendations are not already met by the provisions in the Bill, the Government have sought to identify what further action may be necessary.

  Part II of the Criminal Procedure and Investigations Bill provides that the Secretary of State shall prepare a code of practice for the police designed to secure that information obtained in the course of a criminal investigation and which may be relevant to it is recorded, retained and revealed to the prosecutor for a decision on disclosure. Investigators other than the police will have to comply with any provisions of the code that are relevant to them. The Government have concluded that the draft code of practice should be amended to emphasise the duty on the investigator to explore all reasonable lines of inquiry, including those which might point away from the suspect.

  The Government are preparing guidance booklets on disclosure for Government Departments and Crown servants. The purpose of these booklets is to give guidance on the procedures that should be followed concerning information which may be relevant to the investigation or prosecution of a criminal offence, and advice on the proper response to requests from investigators, prosecutors or the defence. This guidance will, of course, take account of Sir Richard's recommendations, as well as the provisions in the Criminal Procedure and Investigations Bill.

  Finally, the Director of Public Prosecutions is reviewing the guidance that she gives to the Crown Prosecution Service on the proper application of the code of crown prosecutors, to ensure that the guidance emphasises the importance of the prosecutor considering whether there are any further reasonable lines of inquiry which in his view should be pursued. Similarly, other departmental prosecuting authorities will review and, where necessary, prepare equivalent guidance for other Government prosecutors.

  We have placed a paper in the Library, giving a more detailed account of the Government's response to Sir Richard Scott's recommendations on prosecution procedures.

  Prisoners (HIV/AIDS)
  Mr. Key
  To ask the Secretary of State for the Home Department (1) how many prisoners have been infected with HIV while in prison in England and Wales; [30231]
  556
  (2) how many inmates currently are HIV positive or have AIDS in prisons in England and Wales; [30232]

  (3) how many cases of HIV and AIDS have been reported in United Kingdom prisons for each year since 1991. [30233]

  Miss Widdecombe
  Responsibility for these matters has been delegated to the Director General of the Prison Service, who has been asked to arrange for a reply to be given.

  Letter from A. J. Pearson to Mr. Robert Key, dated 6 June 1996:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Questions about prisoners who are HIV positive or have AIDS.
  There has been only one recorded case of a prisoner being infected with HIV while in prison in England and Wales.
  On 21 May 1996, 80 prison inmates were known to be HIV positive or to have AIDS in prisons in England and Wales.
  The following table lists cases of HIV and AIDS reported in prisons in England and Wales since 1991. Figures for Scotland and Northern Ireland can be requested from the Secretaries of State for those Departments.

  Year

  New cases

  1991

  26

  1992

  40

  1993

  20

  1994

  23

  1995

  33

AGRICULTURE, FISHERIES AND FOOD

  Cattle Incineration
  Mr. Jopling
  To ask the Minister of Agriculture, Fisheries and Food how many cattle were slaughtered and destroyed by incineration on their farms during each week of the last foot and mouth disease outbreak in 1967–68. [30023]

  Mrs. Browning
  This information cannot be supplied in the form requested without incurring disproportionate costs. However, I can confirm that 211,825 cattle were slaughtered during the eight months of the 1967–68 foot and mouth disease epidemic. The normal practice in such cases is for the carcases to be buried or incinerated on farm to minimise the possibility of spreading the virus.

  Disabled Employees
  Mr. Llwyd
  To ask the Minister of Agriculture, Fisheries and Food how many registered disabled people are employed by his Department; and what percentage this is of the total figure. [30775]

  Mr. Boswell
  At 1 April 1996 the Ministry of Agriculture, Fisheries and Food, including its agencies, employed 145 members of staff who had declared that they were registered disabled. This equates to 1.4 per cent. of the total staff employed.

  Pennington Sewage Treatment Plant
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what representations he has made to
  557
  Southern Water Services in relation to the discharges from Pennington sewage treatment plant and its impact on local shellfish. [31167]

  Mr. Boswell
  In 1994 the Department responded to statutory consultations by the National Rivers Authority relating to discharges from Pennington sewage treatment plant.

  The Department has made no representations on this subject to Southern Water Services.

  Livestock Collection Centres
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food which EU-approved markets and collection centres he had notified on or before 1 May to(a) the European Commission and (b) the central authorities of other EU member states as required by European Council directive 64/432/EEC. [30718]

  Mrs. Browning
  In addition to the collection centres listed in the reply I gave to the hon. Member for Nottingham, East (Mr. Heppell) on 20 December 1995,Official Report, column 1165, the following collection centres in Great Britain had been notified to the European Commission and central authorities of other EU member states on or before 1 May 1996:
  Norton and Brooksbank sale centre, Sleastonhowe, Kirkby Thore, Penrith, Cumbria
  Oliver and Son Ltd., New Market road, Edinburgh.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food (1) how many checks were carried out by his staff on holdings, as defined in European directive 90/425/EEC(a) during 1995 and (b) between January and April 1996; [30715]

  (2) if he will list the holdings in Great Britain that have been checked by MAFF in accordance with the requirements of European directive 90/425/EEC. [30714]

  Mrs. Browning
  [holding answer 4 June 1996]: Ministry personnel carry out many different types of checks at establishments which fall within the definition of a holding laid down in directive 90/425. Records of visits made are not held centrally and could be provided only at disproportionate cost.

  Sharks
  Ms Walley
  To ask the Minister of Agriculture, Fisheries and Food (1) on what available data the EC quota of 100 tonnes of basking shark liver oil is based; what assessment he has made of whether the level of exploitation is sustainable; and if he will make a statement; [31330]

  (2) if he will list the fisheries for basking sharks in United Kingdom waters. [31336]

  Mr. Baldry
  There is no EU quota for basking sharks. However, as part of the EU-Norway agreement Norwegian fishermen have a quota of 100 tonnes of basking shark liver in United Kingdom waters. The quota figure is based on historic catch levels. It has been reducing over the years from 800 tonnes in 1977 to 400 tonnes in 1988 and to the present 100 tonnes in 1991.

  The very limited Norwegian uptake presents no threat to basking sharks in UK waters.
  558
  Ms Walley
  To ask the Minister of Agriculture, Fisheries and Food if he will list the yearly catch for basking sharks under the EC-Norwegian agreement for each of the last five years. [31331]

  Mr. Baldry
  European Commission data indicate that Norwegian fishermen caught 5.8 tonnes of basking shark liver in 1993 against their annual quota of 100 tonnes under the EU-Norway agreement. No catches were recorded in the years 1991, 1992, 1994 or 1995.

  Ms Walley
  To ask the Minister of Agriculture, Fisheries and Food what data are collated by his Department on the landings in the United Kingdom of individual shark species; and what assessment his Department has made of the advantages of introducing a quota management system to log landings for shark species to support the convention on international trade in endangered species resolution 9.17. [31333]

  Mr. Baldry
  The Ministry records landings into the United Kingdom of a large number of commercially important fish species as well as of a number of species of shark and shark-like species not considered to be commercially important. The species of the latter which are currently recorded are angel shark, kitefin shark, leafscale gulper shark, great lantern shark, greater spotted dogfish, lesser spotted dogfish, spurdog, birdbeak dogfish, Portuguese dogfish, longnose velvet dogfish and knifetooth dogfish. Other shark and shark-like species are recorded under more general headings.

  Sharks are not included in the convention on international trade in endangered species. However, in response to evidence of increased trade in sharks CITES resolution 9.17 commissioned research on the impact of trade on shark populations. The UK has complied with the obligations of resolution 9.17 by providing the CITES animals committee with information on trade in sharks and the biological status of sharks in UK waters. Additionally, the Department of the Environment has contributed funding of £15,000 towards the cost of research by the shark specialist group of the world conservation union.

  Because shark catches in UK waters are low there is not sufficient justification for the establishment of a quota management system.

  Fisheries
  Ms Walley
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the outcome of the EC-Norwegian agreement in relation to the exchange opportunities for fisheries. [31332]

  Mr. Baldry
  As I said following the December 1995 Fisheries Council, the United Kingdom has large quotas at north Norway and we secured them for 1996 at the same level as in 1995.

  Gelatine
  Ms Quin
  To ask the Minister of Agriculture, Fisheries and Food if he will list the food products which contain gelatine of beef origin. [24953]

  Mrs. Browning
  [holding answer 17 April 1996]: This information is not centrally recorded and cannot be provided without disproportionate cost.
  559

  Beef Ban
  Ms Quin
  To ask the Minister of Agriculture, Fisheries and Food if he will list those countries which banned the import of British beef prior to the EU ban and the date the ban came into force in each case. [26021]

  Mrs. Browning
  [holding answer 23 April 1996]: In the week prior to the adoption of Commission decision 96/239/EC on 27 March the following EU countries imposed unilateral bans or restrictions on imports of British beef: Belgium, Germany, Spain, Finland, France, Netherlands, Portugal, Sweden and Italy.

  With regard to non-EU countries, I refer the hon. Member to the answer I gave to the hon. Member for Nottingham, South (Mr. Simpson) on 16 May, Official Report columns 579–80.

  Cattle Records
  Mr. Hain
  To ask the Minister of Agriculture, Fisheries and Food (1) when he last met representatives of National Milk Records to discuss investment in a computerised record system tracing cattle by genetic imprint; [30711]

  (2) what proposals there are for more investment in the National Milk Records cattle-tracing system; and if he will make a statement. [30712]
  560
  Mr. Baldry
  [holding answer 4 June 1996]: MAFF officials are in touch with National Milk Records about the future development of the NMR cattle recording system. I understand that an NMR working group is preparing proposals for extending the existing NMR database and I look forward to receiving these later this year.

  Export Certificates
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food if export certificate EC400 has been issued by his Department since October 1980 for calves destined for France, in excess of 15 days of age. [30727]

  Mrs. Browning
  [holding answer 4 June 1996]: Yes; certificate EC400 was used to certify calves under the age of 42 days.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food when divisional veterinary managers were notified that export certificate EC4000 is no longer to be issued; and what reasons were given. [30726]

  Mrs. Browning
  [holding answer on 4 June 1996]: The Ministry does not have an export certificate EC4000. An instruction to divisional veterinary managers to withdraw all export health certificates in respect of live cattle, including EC400, was issued on 27 March 1996. This was in response to ratification by the European Commission of Commission decision 96/239/EC on emergency measures to protect against bovine spongiform encephalopathy.

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bristol.

Arthur Andersen: US Court Action
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether, following the judgment in the United States courts in the action brought by the Northern Ireland Office against Arthur Andersen, it is their intention to pursue the case further, and what have been the costs of the action to date.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield): My Lords, in the recent judgment in the United States courts in the matter of Her Majesty's Government v. Arthur Andersen, the judge ruled that the Government's claims against Arthur Andersen in respect of negligence, breach of contract, fraud and aiding and abetting fraud should be allowed to proceed. Preparations are being made for the trial. The amount of costs in the case are a matter between government and their lawyers and disclosure while the action continues would not he in the public interest.
Lord Peyton of Yeovil: My Lords, would my noble friend be good enough to confirm that the events with which this action is concerned took place 16 years ago and that the case has been hanging around in the neighbourhood of the American courts for at least 10 years? If the Government will not tell me—I am sure they will not want to—what the costs have been, may I please guess that so far £15 million would just about cover it and that if they persist in the case, which they are likely to lose, the figure will be more like £40 million? It seems to me to be one of the most expensive pieces of face saving and cosmetics in history.
Baroness Denton of Wakefield: My Lords, I am pleased to confirm to my noble friend that there is no question of face saving whatever. There is competent legal advice that there is the opportunity to recover taxpayers' funds and in that matter I think the timescale is irrelevant.
Lord Williams of Mostyn: My Lords, when one deals with the question of taxpayers' funds, is it not the position that if the Government are successful a sum in excess of 300 million dollars is likely to be recovered, bearing in mind pre-judgment interest? Does the Minister agree that if there is a prima facie case supported by a judge in a competent jurisdiction in respect of allegations of negligence, common law fraud,
1354
security law violations and breach of contract, the British Government have a public duty to pursue those allegations?
Baroness Denton of Wakefield: My Lords, I am not a lawyer. To have the advice and comments of such a distinguished lawyer is exceedingly helpful.
Lord Howe of Aberavon: My Lords, perhaps I may divert my noble friend with a slightly different flavour of loyal advice. Has she had the opportunity of studying the 50-page report of the Public Accounts Committee produced some 12 years ago which said that this enterprise was impracticable from the start and should never have been assisted and made not one reference to Arthur Andersen, the defendants in this case? Does she not agree that the judgment of the American courts to which she referred dismissed at least half the alleged grounds of Her Majesty's Government's claim, including all of those which would give rise to so-called RICO triple damages? Is it not time for a fresh mind to be brought to bear on the wisdom of this litigious excursion?
Baroness Denton of Wakefield: My Lords, I am pleased to reassure my noble and learned friend that I have examined this matter with fresh expert advice. I believe that the matter of the Public Accounts Committee is outside the range of this Question and I believe the advice to continue to be very sound.
Lord Blease: My Lords, the noble Baroness will probably know that I was part of the body involved in the early negotiations concerning this case. We were quick to acknowledge that many mistakes were made. There is a past still to be pursued in collecting what was due because of corruption and other matters. The trade union movement and employers in Northern Ireland fully backed any methods used to redress the situation. The matter had a dampening effect on many aspects of life in Northern Ireland at that time. However, I am glad to say that many lessons have been learnt. Today, there is much American investment which is wholeheartedly supported and welcomed.
Baroness Denton of Wakefield: My Lords, I am grateful to the noble Lord for his comments. It is important that we learn from issues in the past. We continue to attract inward investment to Northern Ireland, because the best cement for peace is jobs.
Lord Peyton of Yeovil: My Lords, I would quite understand if, in present circumstances in Northern Ireland, Ministers there had not been following this matter with the closest concentration. They have other matters on their hands. I hope very much they will now take a serious look at what has been happening.
Baroness Denton of Wakefield: My Lords, I must question my noble friend's assumption that a Question of his would not be taken seriously or considered in depth. I assure him that I am not only representing Northern Ireland. I cast a Yorkshire eye over the issue.

National Lottery: Profits
3.14 p.m.
Lord Donoughue Lord Donoughue asked Her Majesty's Government:
Whether they consider that the profits achieved by Camelot through its monopoly contract to run the National Lottery have been appropriate.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): Yes, my Lords.
Lord Donoughue: My Lords, we on this side of the House fully supported the lottery legislation and welcomed the efficient launch and the benefits to good causes. But is the Minister aware that the pre-tax profits in only 18 months are heading for £100 million, which is more than the total capital invested in this operation and represents a return on capital far higher than in most of British industry, which operates in a competitive climate and does not run a monopoly licence to print money? Is he further aware that only three weeks ago the National Heritage Select Committee concluded that, in the light of the additional and unanticipated profits, Camelot should hand over a proportion to charity? Does the Minister agree with that? Would it not at least be elegant if it handed over £50 million to good causes?
Lord Inglewood: My Lords, Camelot has been an extremely efficient organisation. The main beneficiaries of that efficiency have been the Exchequer and the British people. We believe that charitable giving is an entirely desirable activity. We also believe that it should be for the individual who has the money to decide what to do with it.
Lord Wyatt of Weeford: My Lords, is the Minister aware that it is a very easy and simple thing to run a lottery? By this time, should we not have reverted to the original concept of two or more lotteries throughout the country so that there was real competition between them, more efficiency and greater amounts for good causes? Is the Minister aware that that is exactly what happened in the United States, where the state lotteries in various parts of the country rival each other? Does he not agree that that is the surest way of getting good competition, greater efficiency and more money for good causes?
Lord Inglewood: My Lords, it is glib to say that running a lottery is easy. Recently in the state of Arizona the newly-appointed lottery organisation had its licence withdrawn after six months because the operation was a shambles and the participants in Camelot, who made such a great success of the lottery in this country, have been called in to deal with the mess.
Lord Boardman: My Lords, can my noble friend confirm that the contract was awarded to Camelot in competition with many other firms and by an independent source? Can he also confirm that the risk-reward ratio at the time the contract was awarded was very much less favourable than it is in the light of the experience we have had to date?
Lord Inglewood: My Lords, my noble friend is right. The decision to award the lottery to Camelot was strongly underscored by the National Audit Office.
Lord Jenkins of Putney: My Lords, if the Minister believes, as he says, that the scale of profit is appropriate, does he agree that the word "appropriate" acquires a new meaning; namely, "grossly excessive"?
Lord Inglewood: No, my Lords, I do not accept that.
The Viscount of Falkland: My Lords, does the Minister agree that one should be wary of too much outrage over profit in this area because there is no doubt that the lottery has been run efficiently so far, no matter what one's moral position may be? Does he further agree that you run the risk, if only the profit of this operation is considered and if you say that someone else should run it, that the new organisation may not run it so efficiently, may not make such profits and may be unable to give bonuses to its directors, but it may nevertheless take more out of the lottery than the 1 per cent. taken by Camelot to achieve all those profits and bonuses?
Lord Inglewood: My Lords, the noble Viscount is absolutely right. Efficiency is a very good quality, and that applies in running a lottery, as in almost everything else.
Baroness O'Cathain: My Lords, can my noble friend confirm that of all the lotteries in the world, Camelot contributes more to good causes and to government than any other single lottery?
Lord Inglewood: My Lords, that is right. As the recently published La Fleur research pointed out, the British lottery, Camelot, contributes more to good causes and government than any other lottery in the world and also contributes a higher proportion of its total sales.

EU Anti-Fraud Measures: UK Position
3.18 p.m.
Lord Thomson of Monifieth Lord Thomson of Monifieth asked Her Majesty's Government:
What position they took about proposals to reduce fraud in the European Union at the most recent meeting of the Council of Ministers.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, on 3rd June, ECOFIN considered a draft regulation providing additional powers for the Commission to carry out on-the-spot checks against fraud in member states. My right honourable friend the Chancellor indicated support in principle for this measure. However, he made it clear that, in line with the policy outlined by the Prime Minister in another place on 21st May, the United Kingdom would be unable to agree to the draft regulation until there was an

1357
agreement to lift the export ban on beef derivatives and until there was agreement on a clear framework leading to a lifting of the wider ban.
Lord Thomson of Monifieth: My Lords, the Government have taken a leading role in the fight against fraud in the Community, encouraged by your Lordships' Select Committee. Therefore, is not this policy to block and veto proposals to take action against fraud the most absurd, self-defeating policy that we have so far supported? Has the Minister seen the article by the chairman of the CBI European Committee, Mr. Niall FitzGerald, who speaks about a "European nightmare" if the Government pursue such a policy? Would it not be wiser to take advantage of the good will of the Italian Presidency and of the modest concession that the Government made yesterday in connection with recognising Slovenia, in order to retreat from this cul-de-sac which they have got themselves into instead of announcing in the press today that they will be proposing another nine vetoes on Monday?
Lord Mackay of Ardbrecknish: My Lords. if I understand the noble Lord correctly, he is suggesting that one should block only those measures with which one does not agree. That is no different from what happens anyway. To make the point to our European partners, we have to block even those measures with which we do agree, including the regulation on fraud. The result is that we now have a decision from the Commission to lift the ban on beef derivatives. We recognise that that was not an easy decision and we are grateful to the Commission and to the Italian Presidency. Because of the interest of the Italian Presidency in Slovenia, we have indicated that, as we are prepared to review all such cases on a one-to-one basis, we shall not block that case when it comes up.
Lord Healey: My Lords—
Lord Barnett: My Lords—
Lord Taverne: My Lords—
Noble Lords: Healey!
Lord Healey: My Lords, I thank you. I congratulate the Minister on the noble example of self-sacrifice which the Government have set by vetoing measures with which they agree in order to achieve what they wish. However, does not the Minister find it a little odd that a government who oppose the power of the bureaucrats and the possibility of qualified majority voting should rely entirely on bureaucrats and qualified majority voting to get rid of the ban on beef derivatives?
Lord Mackay of Ardbrecknish: My Lords, I am sure that the noble Lord understands full well that we are grateful to the Commission for the sensible view that it has taken of the ban on beef derivatives. We are equally grateful to those member states, including the Presidency, which have supported us so far. However, the fact remains that other member states are determined to prevent any progress being made on the difficult
1358
question of beef. We believe that it is important that we stand up for the UK's interests and the interests of our important farming industry.
Lord Clark of Kempston: My Lords, does my noble friend agree that the British Government's stance is to protect the beef industry in this country plus our abattoirs and food processors? Does my noble friend further agree that it is extraordinary that HMG should be criticised for adopting a policy which has been adopted by France and Italy when the European Union has never criticised those two countries for it?
Lord Mackay of Ardbrecknish: My Lords, my noble friend is correct to point out that in the past other member states have taken even more drastic measures than that which we have felt obliged to take on behalf of the UK's farming industry and the many people whose jobs have been put at risk in industries which are downstream of the beef industry. My noble friend is right. We believe that it is as a result of our policy that we are beginning to see progress. The decision to lift the ban on beef derivatives is one step in what we firmly believe to be the right direction.
Lord Barnett: My Lords—
Lord Taverne: My Lords—
Lord Bruce of Donington: My Lords—
The Lord Privy Seal (Viscount Cranborne): My Lords, I am aware that this issue arouses great interest. Perhaps we can proceed expeditiously and in an orderly fashion, and begin with the noble Lord, Lord Barnett; I am sure that we can then fit everybody in.
Lord Barnett: My Lords, is the Minister aware that I pay tribute to the Government for what they have done to attempt to reduce fraud in Europe? However, given that the beef ban could well last for years not months, is it not now a question of the Government doing what they have done in relation to Slovenia and conceding that at least in this area they should agree with the rest of the European Community?
Lord Mackay of Ardbrecknish: My Lords, I think that the real point came in the second part of the last sentence of my Answer when I referred to,
"agreement on a clear framework leading to a lifting of the wider ban".
That makes it clear that it is not just a question of waiting for the wider ban to be lifted, but of waiting for agreement on the methods and the steps that will be taken along the road to the lifting of that wider ban. No such framework is yet in place. We firmly believe that it is important for our industry that such a framework is put in place. That is why I am afraid that we shall have to continue our blocking policy—except, as I said earlier, in the case of Slovenia—until all our European partners see some sense.
Lord Taverne: My Lords, will the Minister now confirm or deny that the Government might apply the same convoluted logic to all the other 60 non-European

1359
nations which have imposed a ban on our beef? Are we to seek to disrupt our relations with those countries also in order to have the ban lifted?
Lord Mackay of Ardbrecknish: My Lords, I am sorry to have to point out to the noble Lord that if another country bans imports of our beef, that is something that we shall have to negotiate with that country. The current ban is a ban on this country being able to export its beef and beef products anywhere in the world. I should have thought that there was a significant difference which even the most Euro-phile of noble Lords would be able to see.
Lord Renton: My Lords, may we get away from the beef ban for a moment and return to fraud? To what extent is fraud in the Community considered to be due to abuse of the common agricultural policy?
Lord Mackay of Ardbrecknish: My Lords, the common agricultural policy is a fairly rich source of fraud in various parts of the Community, and measures are already in place for dealing with that part of the European budget. The current regulation relates to a broader area than merely the question of the common agricultural policy. It would allow the Commission to go into member states to help them to detect fraud by on-the-spot checks.
Lord Bruce of Donington: My Lords, I have with me a copy of the proposal to which the Question refers, together with the Government's explanatory memorandum. Are we to take it from the Minister's Answer that the Government have abandoned the queries that they raised in paragraph 30 of their memorandum which states that before the Government can agree the proposal, they require further explanation and reassurances? Have the Government had those reassurances? If so, they must have received them within a remarkably short time since the memo is dated 9th May.
Is the Minister aware that in any event the regulation gives quite undesirable powers to the European Commission in connection with powers of inspection, but that it ignores the specific question of the possibility of irregularities occurring within the Commission itself or the rights of the Belgian police to be able to gain access to the documents that they require?
Lord Mackay of Ardbrecknish: My Lords, the position with regard to the draft regulation is that although, of course, we are never entirely satisfied, our reservations were both positive and negative. We had considerable reservations that other member states might attempt to water down the regulation. That has not happened. That is why I said that in principle my right honourable friend the Chancellor had indicated his agreement at ECOFIN.
Turning to the noble Lord's other points, if he is to widen the issue, we shall need a lot longer than the time available to us this afternoon. However, it is true that such regulations would give the Commission and its officials the power, along with member states, to carry
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out on-the-spot investigations. Given that the noble Lord is so keen on attacking fraud in the European Community, I should have thought that he would welcome that step.
Lord Wright of Richmond: My Lords, can the Minister confirm that the Government have taken note not only of Mr. Niall FitzGerald's remarks about a "nightmare", which were quoted by the noble Lord, Lord Thomson of Monifieth, but also of his remarks about the very real damage to British interests and British business which is being caused by the apparent diminution of the Government's commitment to the European Union?
Lord Mackay of Ardbrecknish: My Lords, it is in no way a diminution of our commitment to the European Union. We are continuing to work in the European Union, but we have made it clear that because of the very great damage that the policy of the ban on exports is causing to many fragile rural areas of our country, we have some responsibility to put our fellow countrymen first. That is what we are doing. The matter can be easily resolved. We will remove this policy immediately if our friends in the European Union start to build the framework which I mentioned in my earlier answers.
Lord Eatwell: My Lords, does the noble Lord agree that any responsible government before embarking on an adventure of this nature would give some consideration to the likely cost both to the Exchequer and the British taxpayer? On Tuesday we heard that the Government were prepared to give comfort to organised crime by vetoing anti-smuggling measures. We now hear that the Government are prepared to give comfort to fraudsters. The CBI tells us that damage is being done to British industry. Can the Treasury tell us its responsible forecast of the overall cost to Britain of this policy?
Lord Mackay of Ardbrecknish: My Lords, I say to the noble Lord, Lord Eatwell, that a few weeks' delay on these issues will not make any difference to a matter upon which we are agreed in principle and will be unblocked the moment that British interests are satisfied. I understand, as I did two days ago, that the noble Lord, Lord Eatwell, does not particularly want a British Government to stand up for British interests. I oppose that absolutely, as do the Government. I tell the noble Lord that the farming industry in this country is with the Government in a resolute stand on this issue and not with the noble Lord and his party.
Lord Eatwell: My Lords, am I to understand from the Minister's answer that if the framework is not in place within a few weeks the policy will have failed?
Lord Mackay of Ardbrecknish: My Lords, the policy will succeed, as it has begun to do, in that the beef derivatives ban has now been lifted. Would it not have been lovely if we had heard one word of welcome for the lifting of the beef derivatives ban from the noble Lord who speaks for the party opposite? This Government will continue to defend British interests.

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The blockage can be removed immediately our partners come forward with a framework which we believe will eventually lead to the ban being lifted.
Viscount Cranborne: My Lords, we have one more Question. I believe that your Lordships will agree that we have had a long and enjoyable run on the present Question.
Noble Lords: Hear, hear!

Euro '96: Measures to Combat Violence
3.34 p.m.
Lord McNally Lord McNally asked Her Majesty's Government:
Whether they are satisfied with the measures in place to deter and combat violence and hooliganism inside and outside soccer grounds during Euro '96 which begins on Saturday 8th June.
The Minister of State, Home Office (Baroness Blatch): My Lords, I can confirm that the regional police intelligence centres and the national co-ordinating centre in central London are now open and fully staffed in preparation for the competition. Intelligence about known and suspected hooligans is already being disseminated using the latest technology to ensure that local police have up-to-date information to assist them in ensuring that any trouble can be quickly dealt with.
Lord McNally: My Lords, I thank the Minister for that Answer. I sincerely hope that the confidence that the co-ordination and resources are adequate is justified. This is one game that the hooligans must not be allowed to win. Is the Minister prepared to say that any foreigners who are arrested for hooliganism during the competition should be removed from the country forthwith, and if they are British hooligans they should be banned not just from the competition but from soccer games for life?
Baroness Blatch: My Lords, I am sure that the whole House will agree that this is a great sporting occasion. We wish it well and hope that it will be a great success. It is worth putting on record that the majority of fans who will be coming to support their teams will be well behaved, law abiding and genuine supporters of the game. We believe that everything that can be done to pre-empt any trouble is being done.
There has been enormous collaboration between the countries and all the organisations in this country. I can give an assurance that there is plenty of legislation in place which provides the police with powers of arrest. We hope that anyone causing trouble will be dealt with speedily and in the manner suggested by the noble Lord.
The Viscount of Falkland: My Lords, can the noble Baroness tell the House of any specific plans to control the number of young people who are under the influence of drink on our streets during this competition? Violence is not necessarily connected with alcohol in this area but
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hooliganism, to separate the two, often is and can be a matter of great distress to the citizens of our country who may not necessarily be terribly interested in football.
Baroness Blatch: My Lords, there are so many measures in place that it would take too long to mention all of them at the Dispatch Box. For example, there has been good collaboration between the police and local authorities. The local authorities are the bodies that deal with the licensing hours in their localities. I refer to the following measures: Sporting Events (Control of Alcohol Etc.) Act 1985; the Public Order Act 1986; the Football Spectators Act 1989; the Football (Offences) Act 1991; and the Criminal Justice and Public Order Act 1994. The powers are all there. In addition, a great deal of forward planning has gone into this event. A good deal of information and intelligence has been gathered about known troublemakers. As the noble Viscount has probably read in his newspapers recently, quite a number of those people will not be attending any of these matches as a result of the work that has already taken place.
Lord Stoddart of Swindon: My Lords, whereas I fully support the police in their pre-emptive strike against well-known football hooligan spectators, can the noble Baroness say whether they will also carry out pre-emptive strikes against hooligan players who have recently caused so much trouble in Hong Kong and on a Cathay Pacific aircraft?
Baroness Blatch: My Lords, I am not sure whether there has been trouble in Hong Kong, but certainly we know about the trouble on the aeroplane. I have much sympathy with what the noble Lord has just said. What is to be done about it is a matter for the Football Association and the airline. The noble Lord will also know that there is an important piece of legislation waiting to go on to the statute book which we believe will give extra power to the police to deal with that kind of troublesome behaviour in the air. I do not believe that any Member of this House should condone it.
Lord Elton: My Lords, does my noble friend agree that the tone of these exchanges suggests that football is principally a producer of disorder, whereas the vast majority of the games are carried out in a good spirit and the game is enjoyed by the country as a principal sport? Does my noble friend also agree that the introduction of amateur football teams on a small charitable basis in large numbers does a great deal to keep young people out of crime and trouble? Until recently they were well supported by the Football Trust, whose funds have been so curtailed by the effects of the National Lottery that that has now ceased. Can Her Majesty's Government perhaps come to their aid?
Baroness Blatch: My Lords, I am pleased that my noble friend has emphasised the importance and enjoyment of this sport and the good that it can bring to the lives of young people and the not-so-young. I take this opportunity to tell him that up and down the land individual football clubs and the Football Association support participation by local communities and have a

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number of very imaginative schemes which engage the energies of young people in a productive way. I hope that that will continue. We certainly support it.

House of Lords Offices: Select Committee Report
3.38 p.m.
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move that the third report from the Select Committee on House of Lords Offices be agreed to.
Moved, That the third report from the Select Committee be agreed to (HL Paper 83).—(The Chairman of Committees.)
Following is the report referred to:
1. AVAILABILITY OF PAPERS IN CD-ROM FORM
The committee agreed to accept the laying of the appendices to the Scott Report in CD-ROM form. Two paper copies of the 24-volume appendices would be available for examination by Lords in the Library, and the CD-ROM would be accessible through the PDVN. In addition, it was agreed that the Library would introduce a loan service of CD-ROMs of government and parliamentary papers.
2. ACCOMMODATION FOR BLACK ROD
The committee approved the purchase of a flat outside the Palace for Black Rod.
3. X-RAY SCREENING OF MAIL AND DELIVERED ITEMS
The committee agreed to the introduction of X-ray screening facilities for mail delivered to the Palace of Westminster. The cost will be shared with the Commons in the ratio 78:22, Commons: Lords.
4. REGULATIONS FOR PHOTOGRAPHY, FILMING, SOUND RECORDING, PAINTING, SKETCHING AND MOBILE TELEPHONES
The committee approved the issuing of new regulations for photography, filming, sound recording, painting, sketching and mobile telephones in the Palace of Westminster.
5. CD-ROM OF THE PALACE OF WESTMINSTER
Subject to satisfactory negotiations, the committee agreed to allow a commercial company to make an interactive CD-ROM of the Palace of Westminster which would focus on the historical and architectural aspects of the Palace.
6. FACILITIES FOR THE DISABLED IN THE PALACE OF WESTMINSTER: PROPOSED TACTILE MODEL
The committee approved the purchase of a tactile model of the Palace of Westminster to aid partially sighted visitors to Parliament. The model would be placed at an appropriate point on the line of route, probably in the Robing Room or the Royal Gallery.
7. FIRE PROCEDURES
The committee agreed to proposals to paint red lines on the road surface from Black Rod's Garden to the inner courts to aid access for the fire services; and agreed to a proposal to hold a fire practice.
8. 1996 PAY
Following HM Treasury's delegation of pay and grading of staff at Grades 6 and below to departments from 1 April, the committee took note with approval of the pay offer to House of Lords staff for 1996. The paybill cost will be 4·99 per cent.
9. LORDS REIMBURSEMENT ALLOWANCES
The committee was informed of the annual up-rating of the motor mileage allowance in line with the increase in the retail price index. From 1 April 1996, the rate of motor mileage allowance was increased by 1·2 pence to 47·2 pence for the first 20,000 miles for the period to 31 March 1997. Further mileage in this period would be payable at the rate of 21·7 pence per mile.
Lord Cocks of Hartcliffe: My Lords, I confine my remarks to paragraph 2 of the report: accommodation for Black Rod. The committee approved the purchase of a flat outside the Palace for Black Rod. I had the opportunity of speaking to Black Rod before the House assembled and was able to assure him that I raised this matter entirely without animus towards him personally and that I was full of admiration for him. Some time ago I asked one of the very senior members of the Offices Committee why Black Rod and the Yeoman had flats within the Palace. I was told that it was a matter of security and it was absolutely essential that they were on the premises in case of emergency or some incident occurring. I am sure I will be told that the House approved this on 5th April 1995 when it considered the Second Report of the 1994-95 Session. I quote the last passage dealing with accommodation:
"alternative residential accommodation for Black Rod and the Yeoman Usher in the vicinity of the Palace".
I must confess a lack of vigilance on my part, because I did not pursue this matter having had that previous assurance about security. I felt that the phrase "within the vicinity of the Palace" must mean somewhere within the confines. I never for one moment imagined that premises were being sought outside.
We should not proceed with this. There is a particularly pertinent reason why. On Monday your Lordships discussed the Second Reading of the Armed Forces Bill. During the course of that debate a large number of contributions were made from all sides of the House which touched upon the likely effect of the sale to developers of the married quarters estate. The noble and gallant Lord, Lord Bramall, mentioned all those contributions and said that the situation could lead to a national disgrace.
Can your Lordships imagine the comments being made in the barrack rooms and mess rooms when our service personnel, who have this corrosive fear about the roof over their heads, hear that your Lordships' House is sanctioning the expenditure of £385,000 to purchase a flat for one of the staff? It is not just a purchase price of that nature, but there is an on-going revenue cost of £5,000 a year in service charges. I do not wish to be too harsh on the authorities: there must have been an absolutely savage negotiation to get the price down to £385,000, because the asking price was £390,000.
We are supposed to set an example here. How do we tell the bus driver and the nurse paying tax that their money is going on this accommodation? If I were a service wife worried about the prospects—whatever the merits or demerits of the Government's proposals—I should not feel very comforted if I read about this.
Measures of this type are always justified in your Lordships' House, because it is said that we are making more space available for your Lordships. We hear that refrain so often that I wonder how on earth the House has managed to cope with its business over the years until now. That phrase is being used to justify everything that is happening. It has become some sort of formula which has only to be mumbled for the House to give carte blanche to whatever is proposed.

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I do not believe that this House is so selfish and demanding that our own needs preclude every other consideration. The effect of this decision, when it becomes widely known throughout the services, will be extremely bad. That is quite apart from the effect on the general public. I ask the Chairman of Committees whether at this late stage the committee might take the matter back and have another look at it.
Lord Harris of Greenwich: My Lords, I hope that the Chairman of Committees will not agree to look at this matter again. It has been looked at over a substantial period of time by an all-party committee of this House. The accommodation requirements of Black Rod and the Yeoman Usher are well known. It is clearly necessary in the interests of the House that they should have accommodation within the House or close to it. This proposal ensures that Black Rod will have accommodation close to the House, which is, as I have said, highly desirable in itself.
All I would say to the noble Lord, Lord Cocks, is that those, like him and myself, who have access to a room in this House should not perhaps be so dismissive of those who do not have accommodation of their own in the House. Black Rod has agreed to move fairly expeditiously to make accommodation available within the House to working Peers. It seems to me that the price of the accommodation that has been negotiated has not been unreasonable, given the price of accommodation in this area. That being so, I very much hope that the Chairman of Committees will maintain the committee's position.
The Chairman of Committees: My Lords, I am grateful to the noble Lord, Lord Cocks of Hartcliffe, for having warned me well in advance that he proposed to raise this matter today. I shall try to deal with the points that he has raised and those raised by the noble Lord, Lord Harris of Greenwich. I understand the proposal made by the noble Lord, Lord Cocks, but I should let your Lordships know at the outset that I shall be seeking to obtain your Lordships' approval for this report of the Offices Committee. So that neither the noble Lord, Lord Cocks of Hartcliffe, nor your Lordships generally, are under any misapprehension, I should say that I am not defending this policy; I am advocating it, because I believe that it is right.
As the noble Lord, Lord Cocks, said, it stems partly from a decision of your Lordships' House of 5th April last year on the recommendation of the Offices Committee Report of 28th March last year. Your Lordships' House approved this policy. I should like to remind your Lordships of one or two fundamental points in connection with it. The first is that for many years your Lordships' House has provided accommodation for Black Rod and the Yeoman Usher. That has therefore been a cost to public funds. They have hitherto, and up until now, been accommodated within the Palace of Westminster. That must be an expensive way of dealing with the matter.
What we have a duty to do, and what your Lordships' committees have sought to do, is to make the best use of the accommodation within the Palace of Westminster. That leads me to my second fundamental point which has been in the minds not just of your Lordships but of the
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committees—that is, there has over the past years, particularly in recent years, been increasing pressure to find additional space within the precincts of the Palace of Westminster for your Lordships, Members of the House, and the staff of the House. If the House is to continue with its public duty of serving the nation in the way that it seeks to do, it must ensure that provision is made for Members and key staff within the Palace of Westminster.
I am grateful, and I know that the committees are too, to Black Rod and the Yeoman Usher. First—I believe this partly answers one of the points made by the noble Lord, Lord Cocks of Hartcliffe—they are among the hardest working public servants within the realm. They are tied to this place. They work very long hours indeed. It would not be right for them to cease to be provided with accommodation, if not within the Palace of Westminster, then within very easy reach of it. That is if your Lordships accept this Motion.
One of the reasons why there has been increasing pressure in your Lordships' House to find accommodation for Members and for staff is that the work has been increasing. It has increased tremendously. It is right that people outside the House should be well aware of what is the precise position. As your Lordships will know, it is that this is the second hardest working parliamentary Chamber in the world. It is beaten only by another place which is the longest sitting parliamentary Chamber in the world. Your Lordships' House is the second longest sitting Chamber. With that, and with the number of your Lordships who come frequently and in many cases, contribute regularly to the work of your Lordships' House, they deserve attention.
I am grateful to Black Rod and the Yeoman Usher. I know that the committees are too. This decision stemmed from a decision of your Lordships' House, and all the short-listed applicants for Black Rod's post, when we appointed our Black Rod last year, were told that this move was in the offing. Neither Black Rod nor the Yeoman Usher has waited to be pressed as a result of the decisions of your Lordships' Committee. In fact, over these past months they have taken upon themselves the initiative to pursue that decision. That is very good indeed.
The noble Lord, Lord Cocks, also referred to security. I understand the anxiety about that matter and I am not surprised it has been raised—indeed, I should have been disappointed if the point about security had not been raised. All matters which your Lordships believe to be relevant in considering this proposed move were taken into account and security was one such matter. Neither Black Rod nor the Yeoman Usher, in view of their considerable background, is short of an experience or two in relation to considering security matters.
Therefore, for all those reasons, I have no hesitation whatever in recommending to your Lordships, after the most thorough consideration by your Lordships' committee, that the Motion should be agreed to, including that aspect of policy.
On Question, Motion agreed to.

Dogs (Fouling of Land) Bill
Read a third time, and passed.

Housing Bill
3.51 p.m.
Lord Mackay of Ardbrecknish: 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 Mackay of Ardbrecknish.)
Lord Williams of Elvel: My Lords, before the House resolves itself into a Committee, I must declare an interest and I apologise to the House for not declaring it before Second Reading. I ruled myself out of discussion on Part III on leasehold reform on the grounds that I was a leaseholder who could be affected by the provisions of the Bill.
On studying the Bill further, I found that there could be an interest which I should have declared to your Lordships. It is that my wife is a member of the council of Stonham Housing Association. She is unpaid and performs that service on a voluntary basis. Indeed, at the risk of betraying marital secrets, she does not want to be paid, somewhat to my displeasure, but I leave that aside. I took advice from the Table as to whether that was an interest I should properly declare and the advice I received was that in view of the resolution which your Lordships passed last November about Peers being cautious about interests which may affect them, I should declare an interest. I do so very willingly. My wife has offered to resign from the membership of the council of management of Stonham Housing Association but I do not believe that your Lordships would consider that to be an appropriate measure. I certainly would not.
I mention the matter because this is the first point of—if I may so express it—case law under the resolution which your Lordships passed last November. I am sure that noble Lords will have been listening extremely carefully to what I said and will have noted the advice I received from the Table. I wonder whether, in some respects, we are not going too far. Therefore, I declare that interest.
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [The register of social landlords]:
Lord Williams Lord Williams of Elvel moved Amendment No. 1:
Page 1, line 11, after ("office") insert ("and regional offices").
The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendment No. 3. The whole matter of registration and how it is to be publicised was considered at length in another place. If the noble Baroness, Lady Hamwee, will permit it, it may save the time of the Committee if I ask the Minister to intervene at an early stage because I am advised that Mr. Curry, the Minister responsible for the Bill in another place, wrote to my honourable friend Mr. Raynsford with,
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among other things, a note from the Housing Corporation about how it proposes to handle the statutory register of social landlords and how it proposes to make available the relevant information. Members of the Committee may have been to the Library to read a copy of that letter but just in case that is not so, it may be useful if the Minister were to give a summary of its contents before we move on with the amendment. I beg to move.
Lord Lucas: Yes, I hope that I can give the noble Lord, Lord Williams, the summary he requests. It is proposed that the new statutory register of social landlords will comprise the registered number, name, address and relevant board minute of registration in hard copy. In the light of the requirement in Schedule 2 regarding the independent ombudsman scheme, the register may also include the name and number of the approved scheme that each social landlord registers.
In addition, there will be maintained a new public information file which will contain for each registered social landlord a copy of the rules and governing instrument with all amendments and consents to amendments since registration, formal registration documents, the completed application form for registration, the latest annual return, which will provide details of board membership, the number of members of the board, the principal solicitor's name, and such items as that, one set of audited accounts for the registered social landlord's last three financial years, complete with transfers of engagements where relevant, and, for larger associations, key policy documents on tenant selection and allocations of policy.
On a regional basis, it is proposed to develop a system whereby an abstract of key information from the PIF for each landlord is made available at each corporation regional office, probably through the computer network. The sort of information available will be key information on the annual return and a summary of the income and expenditure accounts and balance sheet. That would be accessible on a screen from a network channel or provided as a print-out. Members of the public requiring hard copies could obtain them by giving three days' notice of a request at the regional office. Those will then be provided by the head office. I believe that that is as much information as I can give as to what will be on the register.
Lord Williams of Elvel: I am grateful to the Minister for putting that on the record. I am sure that Members of the Committee, having heard what he said, will wish to look at the full proposals from the Housing Corporation, available, I understand, in the Library. As far as I can see, they meet the anxieties we had when proposing Amendment No. 1 and, indeed, Amendment No. 3.
There is only one point I wish to raise. Will the Housing Corporation consider the need for devolution of its responsibilities, particularly in relation to the information from the board, which is a central board? Such a devolution would not only increase the ability of the corporation to give information as and when required at a suitable place and in a reasonable time, but could also involve some form of democratic

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representation on regional boards which would provide a greater level of accountability than is the case at present in the Housing Corporation centrally.
The matter was debated at length in another place. The Minister has outlined what the Housing Corporation has in mind and has endorsed that on behalf of the Government. I am grateful to the noble Lord for that fact. I see that the noble Baroness wishes to comment. I give way.
Baroness Hamwee: I am much obliged. I am also grateful to the Minister for putting the information on the record. As this is the first amendment that the Committee is considering, perhaps I may explain why I, too, felt that that was important. The Housing Corporation is a quango, and we will no doubt have many debates during the Committee stage on questions of accountability. I shall certainly support requests for as much as possible to be placed on the record as regards the way in which the Bill will operate. I believe that that will be our best opportunity and the best record for us to refer to in the future when asking the Government how matters are progressing. It is important that the Government should set the context for what the Housing Corporation is doing, as we will not have the opportunity to question the corporation directly.
4 p.m.
Lord Lucas: I appreciate the remarks made by the noble Lord, Lord Williams, and the noble Baroness, Lady Hamwee, about accountability. Doubtless we will have to deal with that issue again at a later stage. Such points as whether there should be local representation on local boards for the Housing Corporation fall outside the scope of the amendment now before us, but we may have an opportunity to return to the matter later.
I turn now to the main question raised by the noble Lord, Lord Williams; namely, whether the information function should be delegated. We feel it is important that the register and the associated files, which are important documents, should be kept well, up to date and properly. We also feel that they should exist in a single place so that one can be sure that such functions are indeed carried out properly. To the extent that information then needs to be disseminated from that correct, confirmed register to other offices, we will certainly look at ways in which that might be improved. However, we believe that there needs to be one proper register upon which people can rely and which is maintained as a responsibility by one organisation rather than that responsibility being disseminated and, therefore, possibly not so easy to enforce.
Lord Williams of Elvel: I am grateful to the Minister for his response. I did not necessarily mean to suggest that different registers should be kept in different places for different regions. I accept that there has to be a central register. Nevertheless, with modern technology, it is not impossible for that central register to be disaggregated among whatever region and in whatever manner might be appropriate.
As I am sure the Minster realises, we are discussing an important matter. Anyone who is a tenant, or going to be a tenant, of a social landlord will wish to know—
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and, indeed, should wish to know—first: whether that landlord is on the register; secondly, what the condition of that social landlord is; and, thirdly, who the people are who will actually run the property of which he or she is, or may become, a tenant. In our view it is vitally important that that information should be available as soon as possible at any reasonable time.
I believe that the Minister and I are at one on the matter and that it is a question of technology. However, I very much hope that it will not be a matter of the Housing Corporation centrally simply saying, "That is the register and it is available on the Internet", or whatever it may be. I hope that there will be proper facilities for those who are, or who will become, tenants of social landlords to enable them to have access to such information at a suitable place and at a reasonable time. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendment No. 2:
Page 1, line 13, leave Out ("Part") and insert ("section").
The noble Lord said: In moving the above amendment, I shall speak also to Amendments Nos. 61, 106, 107 and 110. Amendment No. 2 allows Clause 1 to come into force on a date to be specified by order. That is necessary to enable the corporation's register of social landlords to be introduced in the correct sequence of events. It is consistent with the commencement provision for the Bill as a whole (in Clause 204), which provides for the provisions at Part I of the Bill to be brought into effect at different times.
The other amendments in the group provide for the commencement of various other clauses to come into force on a date to be specified by order. Amendment No. 61 concerns the commencement of provisions relating to the right of tenants to acquire dwellings. Amendments Nos. 106, 107 and 110 all concern the commencement of provisions relating to grants under Sections 50 to 55 of the Housing Act 1988. I beg to move.
Lord Williams of Elvel: In themselves, the amendments seem to be unexceptionable. However, can the Minister say why the provisions were not included in the Bill in the first place?
Lord Lucas: I think it would be honest to say that they were neglected.
On Question, amendment agreed to.
[Amendment No. 3 not moved.]
Baroness Hamwee Baroness Hamwee moved Amendment No. 4:
Page 1, line 16, after ("it") insert ("satisfies the conditions in subsection (2) and").
The noble Baroness said: In moving the above amendment I shall, for the convenience of the Committee, speak also to Amendments Nos. 5 and 6 which are grouped with it. Indeed, it would make no sense if I were not to do so. We are now dealing with a simpler point than might at first appear to be the case from the drafting of the amendments. Clause 2(1) describes bodies which are eligible for registration as social landlords and sets out three groups:

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"(a) a registered charity,
(b) a society registered under the Industrial and Provident Societies Act 1965 which satisfies the conditions in subsection (2), Or
(c) a company registered under the Companies Act 1985 which satisfies those conditions".
In the case of the second and third bodies, they are required to satisfy the conditions in subsection (2) of the clause. My amendment is designed merely as a means to ask the Minister to explain why those conditions do not have to be met by a charity. One of those conditions is that the body should be "non-profit-making". Of course, I can understand why it is not necessary to spell that out in the case of a charity. However, the "objects" of the non-profit-making body are dealt with later in the clause.
I wonder whether any charity which does not deal with housing matters—perhaps a medical charity, a dogs home; indeed, the list is almost endless—might be eligible to register. I suppose it is a rather picky point and I apologise to Members of the Committee for using prime time to raise it. Nevertheless, the issue arises at the start of the Bill and, therefore, I have raised it in its place. I beg to move.
Lord Lucas: The noble Baroness, Lady Hamwee, is right to say that it is a rather picky point. We are most concerned that charities should come forward where they feel able to play a part in the provision of social housing. However, looking at the amendments put forward by the noble Baroness, we feel that, picky though they are, they are probably right. Nonetheless, we would like time to look at the wording to see whether we agree with it absolutely or wish to propose something better. With those words of comfort, I hope that the noble Baroness will feel able to withdraw the amendment.
Baroness Hamwee: I shall not be quite as grudging as the Minister. I thank him for noting the point and for having regard to it. I have no particular proprietorial interest in my drafting; it is simply important to get the Bill to say what we want it to say. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 5 and 6 not moved.]
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
Lord Williams of Elvel: Before we leave Clause 1 there is a matter of which I hope I have given substantial notice to the Government; namely, the whole question of what is a social landlord and what should be on the register. In Clause 2, which we shall come to, there is a provision for companies registered under the Companies Act 1985.
The problem with social landlords who may be registered under one Act or another is that the governing Act of a social landlord is the Act under which he will be registered. In the case of, for instance, local housing companies—the principle of which we support—which may be registered under the Companies Act 1985, there
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seem to me to be some problems which the Government should consider. We have no particular difficulty with housing associations registered under the Housing Associations Act 1985. That is referred to in Clause 1. However, we have some problems with the Government's approach as regards other social landlords who may be registered under the Bill as it is at present drafted.
I give the Committee some examples. There may well be a company registered under the Companies Act 1985 which is governed by that Act as amended by later companies legislation. The duties of directors under the Companies Acts are quite different to the duties of members of a council of housing associations registered under the Housing Associations Act 1985. As your Lordships will be aware, the Companies Act is a rather complex and difficult measure. It imposes a variety of obligations on directors and on shareholders and contains a variety of measures about who can call general meetings and what those general meetings can decide and many measures as regards mergers, acquisitions and various other matters of that nature. I do not wish to go through the whole of the companies legislation before the Committee this afternoon.
It therefore seems to me that before we move on the Government would be wise to spell out in a certain amount of detail how they see local housing companies—as opposed to those housing associations which are registered under the Housing Associations Act 1985 mentioned in Clause 1—and companies registered under the Companies Act 1985 conforming with the provisions which we shall discuss later in the Bill. This is a general point which I wish to raise at the outset.
The whole matter of companies legislation is one thing but it appears from what I have heard that local housing companies will be encouraging widespread ownership, perhaps ownership by tenants of the properties of the local housing company. I can envisage that the local authority may be a shareholder in such a company. I can envisage that private interests—pension funds and others—may be shareholders. Under those circumstances, if that is what the Government's thinking is, the placement of those shares would come under the Financial Services Act. That raises all sorts of rather more complicated questions about the nature of due diligence and of the criminal penalties for those who offer shareholdings in companies without due diligence. The maximum penalty for recklessness under the Financial Services Act is seven years' imprisonment.
It therefore seems to me that the Government have to—and I hope at this stage will—make a general statement which we may well come back to in the course of our discussions. I hope the Government will wish to make a general statement about how they see social landlords who are not registered as such under the Housing Associations Act 1985. There may be similar questions in Clause 2 about those registered under the Industrial and Provident Societies Act 1965. However, I shall come to that later. As the noble Lord, Lord Lucas, will be aware, I have raised this question before. I repeat that I hope that he will be able to make a general statement to which we may well come back in the

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course of amendments which we move. It is to us rather a serious problem to find out exactly what the Government's intentions are.
4.15 p.m.
Lord Lucas: Yes, indeed, the noble Lord made known his concerns to the Government some little while ago. If I may say so, they are entirely reasonable. It is important that these two powerful pieces of legislation should work together, particularly when they are governing the same company. I hope I may be allowed to take up some small amount of the Committee's time to go through the basic principles which we see underlying how these two Acts will work together when applied to the same housing association.
The present situation is that the Housing Corporation may register as a housing association, a registered charity or a society registered under the Industrial and Provident Societies Act 1965 which meets certain conditions. These conditions are in outline that the society does not trade for profit and is established chiefly for the purpose of providing housing for letting. It is for a body which wishes to become a social landlord to decide which form of incorporation best suits its purpose. A registered charity will be subject to the supervision of the Charity Commissioners. A registered charity which is a Companies Act company must comply with the requirements of the Companies Act. An industrial and provident society will be subject to the supervision of the Registrar of Friendly Societies. If such a body succeeds in achieving registration as a housing association, it will be subject to the monitoring and regulation of the Housing Corporation using the powers conferred on it by the Housing Associations Act 1985, as amended.
We have a situation therefore in which a registered housing association will be subject to two or three sets of requirements emanating from different sources and governed by different legislation but each reflecting legitimate interests of regulatory and supervisory bodies. This Bill extends eligibility for registration to those companies registered under the Companies Act 1985 which satisfy certain conditions. These are in brief that they are non-profit-making and are established chiefly for the purpose of providing housing for letting. This will permit non-charitable Companies Act companies to register which they have hitherto been unable to do. In large measure the Bill re-enacts with minor changes the powers conferred on the Housing Corporation by the Housing Associations Act 1985 as variously amended.
The most significant new provisions are those relating to the right to acquire and to cases of insolvency. Thus non-charitable Companies Act companies will be subject to the regulatory requirements of the Housing Corporation, as charitable companies have thus far been, and will be subject to the new provisions like all other registered social landlords.
The Bill does not seek generally to replace, override or amend the Companies Acts. The duties, functions and other prohibitions placed upon directors, shareholders and others by those Acts remain unchanged. The powers in the Housing Bill supplement and overlay the
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Companies Acts with additional requirements designed to allow the Housing Corporation to fulfil its remit of protecting public funds and protecting tenants. The corporation needs separate, often parallel, powers because it will have different legitimate interests from those of directors, shareholders and others. It may wish or need to act when they do not. We need to ensure that it has the powers it requires to do its job.
Any Companies Act company considering bidding for social housing grant or taking over transferred council housing stock, or anyone thinking of setting up such a company for these purposes, will be able to see in the Bill and in the published criteria guidance and so forth from the Housing Corporation of what will be required of them. It will be for the company or the individual to judge whether this is acceptable to it.
It may be helpful to the Committee if I illustrate how the basic principle of separate but overlapping legislative provisions might work. The corporation has certain powers which parallel those of the shareholders of a company—for example, to remove a director in certain circumstances, Schedule 1, paragraph 4, and to appoint a new director in certain circumstances, Schedule 1, paragraph 7. This does not remove the shareholder's power to do the same thing. The corporation needs the power independently in order to be able to take action when the company is failing to manage its affairs so as to deliver adequate housing to its tenants. It must be able to act in the public interest whether or not any or all of the shareholders agree or are concerned. It is still the case that shareholders may dismiss directors and could, therefore, dismiss directors appointed by the corporation. They may seek to reappoint directors whom the corporation has dismissed. That kind of battle can develop now between rival factions of shareholders.
However, if in doing that shareholders put at risk the proper management of the company as a social landlord, with all that that implies for tenants, the corporation has further powers to bring into play. It may direct an inquiry into the affairs of the company. If the corporation embarks on this course it has various associated powers, in effect, to take control of the company's finances and staff. Again, therefore, in pursuit of the protection of public funds, the corporation can act without the agreement or against the wishes of shareholders but cannot remove their rights.
A director appointed to the board of a company by the corporation may call an extraordinary general meeting at 21 days' notice. Shareholders may also require an EGM to be held. Typically an EGM will be called to dismiss or appoint directors. These powers operate in parallel. This could lead to a succession of EGMs in the same way as the actions of different groups of shareholders could cause a series of EGMs to be held in an ordinary Companies Act company. It is unlikely that that would be an efficient way of resolving disagreements but company law permits it and the Bill does not change that.
The noble Lord, Lord Williams, asked about the issue of shareholdings in local housing companies to tenants and local authorities. It is likely that local authorities

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and tenants will wish to be shareholders in local housing companies. But those companies will not be publicly quoted companies. Shares will not be offered freely to members of the public. Therefore I believe that the noble Lord's concern about the full weight of the Financial Services Act being brought to bear may not arise. However, this is clearly an area of great importance and I do not wish to be drawn too far into what is a difficult and complicated area with a large number of teeth in its jaws. If the noble Lord will allow me, I shall write to him and to others who speak in Committee between now and Report stage to give a detailed picture of how we see this procedure operating under the Financial Services Act.
There are obviously other illustrations I could give of how the Companies Act will work with this Bill. For instance, perhaps I may draw the noble Lord's attention to paragraph 16(1) of Schedule 1 where the corporation determines the form of a company's accounts. The noble Lord, Lord Williams, asked whether that will lead to companies producing two sets of accounts, as people are rumoured to do in Italy. Yes.
Lord Hylton: It is well known that large institutions such as pension funds, insurance companies and provident and friendly societies control a very considerable amount of money. In recent years they have not used those funds for providing housing. In many ways it would be extremely desirable if they used at least a proportion of the funds perhaps to provide housing for their own beneficiaries, or—going further afield—for the general public at, if not the lowest level of housing association rents, somewhat below full open market value.
I shall be interested to hear from the Minister whether that possibility is in the Government's mind, and, if so, how they believe it should be achieved. Would they like to see such institutions registering housing subsidiary companies in their own right and therefore qualifying under this Bill? Alternatively, would they prefer to see such institutions providing funds to existing housing associations perhaps by way of a loan so that they could then be blended with other funds coming from the Housing Corporation and possibly involving housing association grant?
Lord Williams of Elvel: The noble Lord, Lord Hylton, has put his finger on yet another point to which the noble Lord, Lord Lucas, did not reply. I refer to the acquisition of local housing companies, if there are to be local housing companies. It is the duty of any director to respond to the interests of the shareholders. It is also the duty under the Companies Act—frequently neglected—to respond to the interests of employees. It has not been tested in the courts. I leave the point with the noble Lord.
The shareholders of a local housing company may be a pension fund. That is very desirable. There may be tenants. It may be a minority local authority. Someone comes along—I do not say who that someone will be—and says, "That's fine. It is an interesting company. It owns a lot of land. At the moment it is a social landlord but"—we discussed Ministry of Defence housing for
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families recently—"we think that this could be rather an interesting property company. We should like to deregister as a social landlord, take this over as we are entitled to do under the Companies Act, and make it into a formal property company." Is there any provision which would prohibit that other than the Housing Corporation making bleating noises?
The noble Lord is not right to say that private companies are excluded from the operation of the Financial Services Act. I am glad to hear that he will write to me on the matter. I make a perhaps rather niggling point. We have so far reached the end of Clause 1. On the Minister's advice, the Committee agreed to one amendment put forward by the Government on the ground that it had been neglected, the Bill having been through full debate in another place. In another case, on Clause stand part, I am informed by the Minister that the Government will write to me with a full response to the issues I have raised, the Bill having been debated at length in another place. I am full of the virtues of this House and this Committee. However, I feel that these issues might have been addressed by the Government before they reached another place, let alone this House.
Lord Lucas: I know that the noble Lord is as much a fan of this House as I am. I am sure he realises that it is the function of this House to act as a revising Chamber. It is a function which it performs extremely well. In the previous housing Bill this Session, the noble Lord demonstrated just how well this Chamber can perform its function. We are having the opportunity to do so again. The fact that the talents of the noble Lord, Lord Williams, are clearly required in the scrutiny of this Bill merely demonstrates what a good job this House does, how necessary it is, and what an important part of our British constitution it is. I am glad to have the support of the noble Lord on that, even though he did not state it explicitly.
I should like to read in Hansard what the noble Lord, Lord Hylton, said, before replying to him to ensure that I do not miss anything. However, the basic principle is that institutions lend to housing associations and increasingly they supplement government grant. We expect to see that continue. We also expect to see institutions investing in housing investment trusts for private rented housing. It is a direction we are clearly interested in supporting. However, I wish to read again exactly what the noble Lord said.
As regards the transfer of shareholdings and the consequences it might have, I agree with the noble Lord, Lord Williams, that there is nothing in the Bill which would prevent those evils. It is intended that such problems should be prevented by the requirements which the Housing Corporation makes on companies which wish to become social landlords as regards their articles, restriction on the transfer of shares, and restrictions on the ways in which they can change any item in their articles of association without the permission of the Housing Corporation.
The noble Lord, Lord Williams, will realise that one can set up the articles of association of a company to be pretty restrictive on the way in which shares are

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transferred. I agree with him that the point should be set out in full in writing to the noble Lord. I undertake to do that, if not immediately during this Committee stage then before Report.
4.30 p.m.
Baroness Fisher of Rednal: Before the Minister sits down, will he give me an assurance that we shall not fall into the trap of the Rachman period? I do not know that we would call him a social landlord; we prefer to call him a grasping something else. Will the legislation make allowances for a man or an organisation being prevented from sabotaging what should be a good set of regulations?
Lord Lucas: It is clearly of prime importance to prevent a social landlord falling into the hands of Mr. Rachman, Mr. Maxwell or, indeed, anyone of similar inclinations and, shall we say, lack of general morality. As I said to the noble Lord, Lord Williams we shall address the point in the requirements that the Housing Corporation sets out for companies which apply to become social landlords. However, the matter needs to be set out in detail and I shall send the noble Baroness a copy of what I write to the noble Lord, Lord Williams.
Lord Swinfen: The Housing Corporation's rules for management of social property will probably prevent a Rachman-like situation. However, like the noble Lord, Lord Williams, what concerns me is that social landlords would be at the low-value end of the market because such organisations would be non-profit-making organisations operating at low rents. It could well be that a carnivore company would come along, intent on buying up a company, changing the way in which it operates, increasing the rents considerably and possibly selling off part of the land bank that it was waiting to develop. There could be extremely attractive morsels to carnivore companies.
The Housing Corporation may well set limits on how a social landlord may dispose of its own assets and what it does with the proceeds of the disposals, but we ought to ensure that such companies are not available to be swallowed up by carnivores, with the whole tenet of that social landlord being changed.
Lord Beaumont of Whitley: I wish to pick up the point made by the noble Lord, Lord Williams, with which I feel that the Minister did not deal properly. Concerning the state in which the Bill reaches your Lordships' House, is the suggestion being made that, because your Lordships' House is a noble and competent organisation, there is no duty on the Government to produce Bills in the right state when they come here? This House is a good revising Chamber, but surely it should not have to revise often or very much. It is the Government's duty to produce Bills in the right state. I hope that the Minister will not at any future time produce as an excuse the suggestion that it gives us an opportunity to do our duty. It is rather like the theological suggestion that there should be more and more sin in order that grace should abound. It is faulty and I hope that the Minister will give it up.
Lord Lucas: Dealing with the last suggestion first, it is plainly ridiculous. If civil servants were perfect, we would not need Ministers; if Ministers were perfect, we would not need another place; and if all three together were perfect, we would not need this place. It is clear that we need this place and I glory in that fact.
Lord Williams of Elvel: Perhaps I may end the debate on a positive note. I offer a suggestion to the Government. It seems to me that the only way in which the Government can or we can protect local housing companies is for the Housing Corporation to have what is known as a "golden share" in each local housing company. That is a well tried and well established mechanism for ensuring that carnivores, as the noble Lord, Lord Swinfen, said, cannot take over companies and realise a great deal of profit. I recommend the golden share solution to the Government.
Lord Lucas: I clearly recognise that the House will wish to consider and discuss this matter in detail. I am committed to providing the House with the information which it will need in order to do so at Report.
Clause 1, as amended, agreed to.
Clause 2 [Eligibility for registration]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 7:
Page 2, line 34, at end insert—
("(g) engaging in other activities for the promotion of the social and economic well-being of residents, provided that these shall be incidental to its purposes under subsection (2).").
The noble Baroness said: This amendment stands in my name and that of the noble Lord, Lord Williams. Clause 2 provides for what I may call the main objects of the registered social landlords and permissible additional objects and purposes. I seek to place on the face of the Bill, through this amendment, a permissible additional purpose. I readily concede that subsection (7) allows the Secretary of State to add to the list by way of an order. However, the objectives contained in the amendment are important enough to be on the face of the Bill.
The amendment's purpose is to extend the criteria to include wider urban regeneration, to ensure that the potential of a local housing company can be maximised. I appreciate that the terminology,
"the promotion of the social and economic well-being of residents",
is wide. However, it is intentionally wide. Members of the Committee have frequently discussed the connections between housing, health, education, employment and so on. Many noble Lords have considerable expertise on the issues raised by care in the community. It is perhaps one of the faults of our administrative system that it is not always easy to cross disciplines. I hope that in the overarching view that the Committee is able to take of legislation, it is appropriate to suggest that an overarching provision should be included at this point.
Care in the community raises matters not just of housing in the sense of a roof over the head of the tenant but of the way in which that person's overall care is organised to enable him or her to live as fulfilled and

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independent a life as possible. That is wider than the simple provision of accommodation in its narrowest sense.
The matter was raised in another place and at that time the Minister said that, although he was willing to consider the point, he thought it was rather loose and wide. I am grateful to the Government for agreeing to consider it. I had hoped that since the stages of the Bill through another place, there would have been an opportunity to give further consideration to the issues raised. I think it important enough for the point to be on the face of the Bill. If that is not possible, then I should be interested in hearing the Minister's assurances about the issues. I beg to move.
Lord Williams of Elvel: I support the noble Baroness, Lady Hamwee, in proposing this amendment, which is important. It was discussed at some length in another place. It has the purpose of widening the role of local housing companies, particularly in urban regeneration. It also has the effect of allowing local housing companies to act for the benefit and social well-being of their tenants outside the main purposes for which they were set up by a sponsor. Other objectives might be to encourage local employment, improve health and all sorts of other things which in our view local housing companies should do.
The Minister in another place thought that such an amendment was slightly woolly and should not be on the face of the Bill. My view is that it should be. It would determine what local housing companies are meant to do. It goes beyond the rather narrow definitions that the Government had in mind. For that reason, the Government ought to pay very great attention to the remarks of the noble Baroness, and I certainly support her.
Lord Monkswell: One of the matters that we need to appreciate is the effect of size and scale. To take the Committee back to the 1930s, when the estate of Wythenshawe—which is rather like a new town—was being built on the outskirts of Manchester, it was built by the city council on land that it had bought. It included not only housing, which was the main purpose of the estate—namely, to rehouse people who lived in slums in the inner-city—but also factories, schools, hospitals and even churches and public-houses. They were either wholly owned by the local authority or let to the organisations, with ownership of the land and property being retained by the local authority. It was a very large development to house some 50,000 or 60,000 souls.
I think we all appreciate that in a development of that size there is a need to include schools, hospitals, factories, shops and leisure and religious facilities. While we may not envisage the building of a new town for 50,000 or 60,000 people happening very often in modern Britain, looking at the other end of the scale we see that if the local housing company is building one or two houses, there is very little requirement for it to consider any of the other social and economic amenities that may be required. As the operation becomes larger, the scale of the activities becomes more enveloping; the number of people involved and the geographical area
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become larger. There will then be a need for housing associations to take on board the social and economic needs of the people that they will house. If they are not to be involved in that directive themselves, they need to have some regard for it in the developments they propose. It is very important that we include a measure such as this. I strongly support the amendment.
4.45 p.m.
Lord Lucas: Registered housing associations have traditionally had a range of additional permissible purposes beyond the specific provision of housing for rent. These allow them to use their expertise more widely for the benefit of tenants. The Bill contains a list of such purposes or objects.
We recognise that there is scope to go beyond the present provisions, but the limitations placed on these activities are an important part of regulation. The primary purpose of registered social landlords is to provide housing for rent. We do not want registered landlords undertaking activities which extend beyond the expertise and competence of the management committee. This could threaten the commercial viability of a landlord and put at risk tenants and public funding.
We have a lot of sympathy with the ideas behind the amendment and behind the remarks of the noble Lord, Lord Monkswell. It is obviously clearly important that we build not just houses, but communities, and that they should have in them all that is necessary to make for a full life for the people who live there. However, the experience and finance available to an individual housing association are limited.
Therefore, the noble Lord will see the provision in Clause 2(4)(a) that housing associations or social landlords may work,
"either exclusively or together with other persons".
That is specifically to envisage the possibility that where what is required is more than plain and simple housing, and where, for instance, cinemas and shopping centres are required, the development should be done in conjunction with people who take the risk of those commercial activities and who are expert in providing and managing them. I believe Clause 2(4)(a) also covers the concerns expressed by the noble Baroness, Lady Hamwee, about care in the community.
Clause 2 covers the list of objects and purposes as enshrined in the Housing Associations Act 1985. It allows additional purposes to be added if new activities are identified that would be appropriate. A commitment has already been given during earlier stages of the Bill to consider possible additional purposes for inclusion in the order that the Government propose to bring forward at commencement to cover the additional purposes that have been added since 1985 by secondary legislation—principally, that is a particular long and complicated scheme for Wales.
Such additional purposes might, for instance, include the provision of community alarm systems, not just for the tenants of housing associations, but more widely. We can see merit in activities like these. However, the wording of this amendment is very wide and could

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encompass a range of activities which, while providing benefits for tenants, could nevertheless expose landlords to considerable financial risk.
In earlier considerations of the Bill in another place an offer was made to consider any clearly defined proposals for inclusion in the order that will need to be brought forward at commencement. We feel that that is the way to proceed. We would be happy to consider whether a more clearly defined proposal could be made which we could take forward. If the noble Baroness is able to devise such a proposal, we shall be happy to discuss it with her or on Report. For now, I should be grateful if she would withdraw the amendment.
Lord Williams of Elvel: I am grateful to the Minister for indicating that there might be some sympathy within the Government for the noble Baroness's amendment. Is it really right that the noble Lord expresses sympathy and then asks the noble Baroness to produce an amendment with which the Government have sympathy? Would it not be proper for the Government to take the matter away and say, "Yes, we understand what the noble Baroness and the Committee say and we will bring back an amendment on Report"? Is that not the correct procedure?
Lord Lucas: If this were an initiative of the Government on which we had ideas that we wished to bring forward, then we would. From previous experience we are aware that the noble Baroness, Lady Hamwee, is quite capable of having ideas that appeal to us. We hope that that might be the case this time.
Baroness Hamwee: We know that the Government are bereft of ideas but I had not expected to hear it in quite such blunt terms. I wish to pursue one or two matters further. The Minister said that the activities which will be allowed under this additional object might expose a landlord to risk. First, this is a subsidiary activity. I am not suggesting that it should be the main activity. Does the Minister accept that house building is a very risky business indeed and that it is perhaps a little paternalistic to be reacting against, if I may use the shorthand, the social responsibilities encompassed in this quite wide-ranging but nevertheless subsidiary matter.
Secondly, perhaps I may ask about his comment on care in the community activities coming within subsection (4)(a). He mentioned an alarm system—a community alarm system. Alarm systems are very valuable. I quite take his point that it is desirable to use the technology that is installed to make such systems available perhaps beyond just a small group of houses and flats. The example was used by his honourable friend in another place. That example surely fits within subsection (4)(a), so I fail to understand why it is used as an example of what might be dealt with specifically under something like my new clause. Can he confirm that subsection (4) is about permissible additional purposes and objects and not mandatory ones? His opening comments seemed to suggest that we were seeking to impose this on landlords. I assure the Committee that that is not the case.
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Finally, I think in opening—I may have misheard the noble Lord—he referred to regulations which the Secretary of State might make under Clause 2(7) containing a condition or limiting criteria. If I understood that correctly, it worries me somewhat because it suggests that the regulation-making power might be rather wider than the words on the face of the Bill suggest. Can the Minister respond to any or all of those points?
Lord Monkswell: Can the Minister advise us a little further? He suggested that subsection (4)(a) would allow the activity that might be beneficial. Yes, it would allow some activities, but let us think of the most significant problems faced by landlords generally and social landlords probably more particularly. One problem is what one might describe as bad neighbours—neighbour nuisance problems—and the other is marital breakdown. Surely it would be in the interests of the housing association to take steps to prevent, mitigate or reduce the incidence of bad neighbourliness and also the incidence of marital breakdown. That is not normally recognised as the activity of a landlord. However, the amendment would enable activities such as those to be carried out by the social landlord which would contribute significantly to the beneficial organisation and operation of his activities. However, as I read the Bill, a social landlord would be prohibited at the moment from undertaking such activities.
Lord Lucas: The noble Lord, Lord Monkswell, illustrates the problems with the amendment very neatly in terms of the ways one could extend the housing association's or social landlord's activities. The landlord might think that in a large development it was appropriate for him to run a betting shop and take all the risks himself. That might well be something that would fit in the terms of this amendment as it is.
Housing is a risky business but it is a business which most housing associations—indeed, all good housing associations and social landlords—understand and specialise in. It is important that in terms of the management of any organisation the management time and effort, which with a social landlord is likely because of the largely amateur nature of its board to be restricted, is directed at the main purposes of that operation and does not deviate to all kinds of subsidiary activities which then let it take its eye off the ball and which may in themselves go wrong and cause a lot of problems and whose existence may cause problems to occur in the main activity which would otherwise have been dealt with. So we think it is important to restrict what a social landlord can do.
However, I can give the noble Baroness the comfort that she asked for. These are permissive powers. We are not looking for housing associations and social landlords to take these on if they do not want to. The powers that may be added under subsection (7) are also permissive. They can extend the powers. They cannot impose restrictions on them. An alarm system just for the housing association's residents would come under Clause 2(4)(a), but something which extended to other premises would not. It is the extension to other premises which would come in the order under subsection (7).
Lord Williams of Elvel: Before the noble Baroness decides what to do with her amendment, perhaps I may ask the noble Lord to clarify exactly where we are in Committee. As I understand it, the noble Baroness has moved an amendment. We have debated it. The Minister has said that the Government have some sympathy with the aims of the noble Baroness. He then went on to say, as I understood him—I am open to correction—that if the noble Baroness produces on Report something similar the Government will consider it sympathetically. Am I right so far?
Lord Lucas: I do not think I used the word "similar". What I was trying to get across was that if the noble Baroness came forward with a more clearly defined proposal, one which did not carry the dangers of extension into all kinds of undesirable activities—we are currently proposing that such extensions should be made through orders under subsection (7)—we would look at it with an open mind. We are all headed in the same direction. It is merely a question of how we achieve it.
Lord Williams of Elvel: As I understand the words "clearly defined", they mean properly drafted by parliamentary counsel. Would the Government therefore be prepared to lend the noble Baroness the services of parliamentary counsel in order to devise a more clearly defined amendment at which the Government might look sympathetically?
Lord Lucas: If the noble Baroness cares to come to talk to me about it, I shall be very happy to discuss it with her as a preliminary to doing that. However, I do not think the noble Lord should confuse the concepts of parliamentary draftsmanship with "clearly defined". The two are not always the same.
Lord Williams of Elvel: I certainly do not confuse parliamentary draftsmanship with a clear definition. As I understand it, the Government are not prepared to draft their own amendment in response to the noble Baroness. Therefore, it seems only right that if the noble Baroness is to be invited to produce something on Report the Government should give her some assistance.
Baroness Hamwee: I was going to ask the Minister if I might discuss this matter with him in any event for a reason which has occurred to me as we have been debating the matter. I am becoming less clear about the relationship of the permissible additional objects and provisions such as one sees in the memorandum of association of a company which provide a range of ancillary powers and objects which support the main object. Quite frequently they refer to dealing with ancillary matters—an activity which supports the company's main object.
For instance, to take the example of an alarm system a little further, it may well be that it is not economically practicable to install an alarm system for a limited number of properties, but it would become very practicable to install it for a larger number of properties. It is the relationship of the powers under the landlord's constitution, however constitutionally it is organised, and the permissible purposes and objects under this clause, where I would welcome some clarification.
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Perhaps, having bowled that further matter at the Minister, he might want to say another word now—or perhaps not. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5 p.m.
Lord Lucas Lord Lucas moved Amendment No. 8:
Page 2, line 44, leave out ("by the landlord to the tenants") and insert ("of the houses by the body").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 9, 10, 12, 13 and 14. These amendments to Clause 2 have the purpose of clarifying the provisions. Amendment No. 8 amends subsection (5)(c) of the clause to enable the registered social landlord to be able to repair and improve houses sold or leased, possibly on a shared ownership basis, to prospective tenants as well as to existing tenants.
Amendment No. 9 reinstates the definition of "disposed on shared ownership terms" from the Housing Associations Act 1985. Amendment No. 10 extends the definition of "resident" to include a person occupying a house managed by the registered social landlord. The amendment reinstates the definition of "resident" from Section 4 of the Housing Associations Act 1985.
Amendment No. 12 seeks to provide that, where an order is made to add further additional permissible purposes, it may contain such provision as the Secretary of State thinks fit regarding,
"the priority of mortgages entered into in pursuance of any additional purposes, objects or powers".
Amendment No. 13 is a minor drafting improvement. Amendment No. 14 removes a duplication with Clause 51. I beg to move.
Lord Williams of Elvel: I am grateful to the noble Lord for proposing the amendments. I have a certain amount of difficulty with Amendment No. 9, which mentions:
"a premium calculated by reference to a percentage of the value of the house or of the cost of providing it".
In paragraph (b) reference is again made to the "value of the house".
Can the noble Lord tell me how the value of the house is to be calculated and how the cost of providing it is, in turn, to be calculated? Unless one knows that with absolute certainty, it is rather difficult to determine the premium calculated by reference to a percentage. While I am on that point, will the noble Lord be good enough to say what kind of percentage of the putative value of the house or the putative cost of providing it is appropriate?
Baroness Hamwee: That is a different point. Perhaps the Minister wishes to respond to it.
Lord Lucas: Yes. In order to keep my mind clear, perhaps that is best. As I understand the matter, this is a definition for the purposes of the rest of the Bill of what is meant by "disposed on shared ownership terms". It is a definition that has been in wide use since the 1985 Act and is, I believe, well understood. But if there is any difficulty or confusion with it, I shall certainly write

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to the noble Lord. I understand that the procedure is that the house is valued—we are not laying down in the Bill how it should be valued, merely defining that there shall be such a process—and then the amount that the person indulging in share ownership pays obtains a share of the property with the rest on lease. The amount that the person buys is commonly 40 per cent. but will rise over time, perhaps to full ownership, if the circumstances of the tenant improve. It depends on the particular terms envisaged by the social landlord.
I am not sure that there is any fixed arrangement on how the house should be valued or any fixed arrangement on what percentage of the house should be in the ownership of the social landlord and what percentage in the ownership of the tenant. I am not sure that we intend that there should be any fixation in those matters.
Lord Williams of Elvel: The noble Lord will surely be aware that in raising the question of the value of the house, we start again on the enormous hornets' nest which was the subject of endless debate regarding council tax: who values the house at what, and whether it is simply some estate agent who goes round and says, "That is valued at this, and that is valued at that." We have to go beyond that and ask how and who—how the house will be valued and who will value it for these purposes. It is more than a technical point. With the greatest respect, the 1985 Act had nothing to do with that matter. That Act appeared before the council tax was introduced.
Baroness Hamwee: I hope that the Minister can come back with something which will not have too much scope for argument in the future. The noble Lord, Lord Williams, in his capacity as a Member of the revising Chamber, has done the Chamber and, if I may say so, the Government, a service by asking those questions.
My points concern Amendments Nos. 12 and 14. With regard to Amendment No. 14, the reference to transitional provisions seems to have been lost. It is not contained in the provision that this clause replicates. It may be that the Minister will say that there is no need for transitional provisions. Perhaps he could clarify that point.
As I read Amendment No. 12, it allows the Secretary of State to impose a new order of priority of mortgages. That seems a very strange and rather worrying concept. Mortgages take priority in the world generally according to the order in which they are granted, subject to agreement between the various parties concerned. Frankly, I find it a little worrying to allow the Secretary of State to alter that arrangement.
Lord Lucas: I turn to the noble Baroness's second point. This is already a matter of fact in the existing order, which, as I said earlier, deals with a particular Welsh scheme under the 1985 Act. The concept of loans provided for different purposes having different levels of priority in a repayment and their rank vis-a-vis other repayments to different people is one which has been created for that purpose. We need, therefore, to recreate it to continue that scheme, and it may come into play in
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the future. I shall be happy to ask my colleagues in the Welsh Office to write to the noble Baroness to explain the necessity for this scheme. But since it is in place, and they wish it to continue, we are now merely wishing to ensure that they have the necessary powers to provide for its continuation.
So far as the transitional provisions are concerned, I believe that Clause 51(3) will provide the comfort that the noble Baroness requires.
Baroness Hamwee: I shall be grateful for an explanation of the point raised in Amendment No. 12. But I shall also be glad to have whatever assurances the Minister can give that the power will not be used any more widely than it is used at present. It appears to give quite considerable scope. I look forward to receiving letters on the subject.
Lord Lucas: I shall certainly do as I said. I shall also consider the points raised by the noble Lord, Lord Williams. My understanding of the purpose of this particular definition is merely to explain what that term means when we define the powers that a social landlord may have in its constitution. Therefore, I am not becoming involved in the mechanism of how that happens. I understand that in practice the landlord must employ a recognised valuer in order to arrive at the price, and the share is a matter of agreement between the landlord and the tenant. It is commonly 30 per cent. or 40 per cent., but that is very much a matter of agreement and flexibility.
I do not feel that in a definition for the purpose of this particular clause we need put our hand into the hornets' nest. But I shall look at the question and hope to make sure that we do not have to do so.
Lord Williams of Elvel: I am grateful to the noble Lord for that explanation. The amendment moved by the Government states:
"the value of the house or of the cost of providing it".
We are uncertain whether that is the value of the house on the market, whatever it might be, valued by somebody or the cost of providing it. The two things may be quite different and may be totally removed. Who is to choose whether it is the value of the house or the cost of providing it? Do the Government intend that it should all be done by negotiation?
Lord Lucas: As I understand it, we are merely trying to provide a wide definition of what shared ownership means and what is involved rather than trying to say that any particular type of scheme would be advisable, acceptable or permissible. I do not believe that they are questions which enter into the definition, which is just for the purpose of making sure that the social landlord has the power to enter into this kind of scheme. Then one can either say that a particular house is worth £50,000 and therefore a 40 per cent. share is £20,000; or it may be said that the house cost £50,000 to build and, therefore, whatever its value may be, a 40 per cent. share will cost £20,000. That is the way I read the

1387
clause; but, as I said, I do not see that the problem that the noble Lord raises, which is real enough, has an impact on this particular clause.
Baroness Hamwee: Can the Minister tell the Committee whether a shared ownership lease is defined elsewhere in legislation? The Minister need not necessarily tell the Committee at this moment.
Lord Lucas: The definition is taken from the Housing Associations Act 1985. As I understand it, the amendment makes sure that it reappears in this Bill exactly as it appears in the earlier Act.
Lord Williams of Elvel: That is precisely why, because the 1985 Act came before the council tax legislation, we might get into problems of the valuation of property and the cost of replacing it. This definition of shared ownership may well be out of date in the light of the debates which took place about the council tax and banding. I ask the Government to look at it again to see whether they can do something better.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 9 and 10:
Page 3, line 1, leave out ("shared ownership lease") and insert ("lease—

(a) granted on a payment of a premium calculated by reference to a percentage of the value of the house or of the cost of providing it, or

(b) under which the tenant (or his personal representatives) will or may be entitled to a sum calculated by reference directly or indirectly to the value of the house;").

Page 3, line 5, after ("provided") insert ("or managed").
On Question, amendments agreed to.
5.15 p.m.
Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 11 is agreed to, I am unable to call Amendments Nos. 12 to 14 inclusive owing to pre-emption.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 11:
Page 3, line 8, leave out subsections (7) and (8).
The noble Lord said: This amendment concerns the powers of the Secretary of State to change primary legislation, which is proposed in Clause 2(7) and (8). I am a little surprised that the Delegated Powers Scrutiny Committee of your Lordships' House did not focus on this matter rather more clearly than it did. I very much hope that it will wish to consider the matter. It is a general principle that amendments to primary legislation, if the recommendations of the Delegated Powers Scrutiny Committee are followed as they have been in the past, are normally achieved by the affirmative procedure rather than the negative process.
The Government should try to get their legislation right when it comes before your Lordships, and there should not be amendments saying, "We may have left something out and the Secretary of State can put something in as and when circumstances require or when they develop". Subsections (7) and (8) should not be there. They were only put in by the Government
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because they believe that they may have left something out. I am surprised that the Delegated Powers Scrutiny Committee has not focused on this point. It is wise for this Committee at least to have a discussion on the matter. I beg to move.
Lord Lucas: These two subsections are not here because we believe that we may have left something out, but because we know that we have left something out. The subsections are put in here quite deliberately. They are here because, as we discussed the amendment of the noble Baroness, Lady Hamwee, and the power suggested in that amendment—which in many ways is desirable—we felt that it ran too wide and offered many opportunities for social landlords to become involved in things in which they should not become involved. Nonetheless, we recognise that opportunities and ideas will occur from time to time, such as extending alarm systems into properties not owned by the social landlord, but which it will be appropriate for social landlords to deal with. These matters will need tight definition. They are concepts which will develop as the market develops. We need a way of including them in legislation because we have set our face, at least for the moment, against having any general permissory power as suggested in the noble Baroness's amendment.
I have explained at length why we do not agree with the noble Baroness's amendment and why we are uncomfortable with it. But we must have some way of bringing in these further minor permissory powers. The way we have chosen to do it is by individual scrutiny of the powers by the Secretary of State. In recognising that we need to make these additions from time to time, we must have the power for the Secretary of State to approve each individual extension. That is what we have. One way or the other, we need something within the Bill which allows it not to fossilise.
Lord Williams of Elvel: As always, I am grateful to the noble Lord for his response. He began by saying that it is not that the Government thought that they may have left something out, but because they knew they had done so. Perhaps the noble Lord can explain what the Government know they have left out and then we can begin discussing the Bill before us in the light of the Government's knowledge of what they have left out.
Having said that, would it not be appropriate in an amendment produced by the Secretary of State affecting primary legislation, and in accordance with the normal procedures of this House, for it to be put forward through the affirmative resolution procedure rather than the negative procedure?
Lord Lucas: We believe that in this particular case the negative resolution procedure is appropriate and the Delegated Powers Scrutiny Committee agrees with us. It is open to the noble Lord to disagree with us, but we hold to our view that for this particular power the negative resolution procedure is appropriate.
Lord Monkswell: I rise to support my noble friend Lord Williams of Elvel on this matter. I believe that he has got it right. It is curious that we have a long clause with detailed provisions, which the Government have

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seen fit to place before Parliament to have written into the Bill, and therefore to give the strength of legislative imprimatur to the matter. Yet they see fit to say that if they want to change these matters which they thought were so important to be in the Bill, that change will not be very important. Therefore, the provisions will not be worthy of the higher degree of scrutiny of the affirmative procedure. The Government cannot have it both ways. The matter is either of significance, and, therefore, changing the provision is a significant act and worthy of closer parliamentary scrutiny, or it is not. It is something which is worthy of what one might describe as "Executive diktat" rather than legislative authority. If the Government want to retain the powers of subsections (7) and (8), we must have the affirmative procedure rather than the negative procedure.
Lord Lucas: All that I can say is that I do not agree with the noble Lord. I said that we know that we have left something out because while the Bill was in another place we committed ourselves to re-enacting the Housing Associations Permissible Additional Purposes (England and Wales) Order 1994, which principally concerns a scheme which is in force in Wales and which is of a detailed nature which we did not consider belonged in the substance of the Bill.
As the noble Baroness, Lady Hamwee, mentioned, we have said that we should like to consider the question of alarm systems. It is possible that we can do that along with the re-enactment of that 1994 order, together with any similar proposals which are brought forward and meet with our approval. I do not regard these as major factors; they are additions rather than alterations to what is in the Bill. The power is restricted to adding rather than changing or deleting. Given that we intend to restrict the provisions to measures such as community alarm systems, I do not think that this should cause the Committee any alarm.
Baroness Hamwee: It is perhaps wrong to say that I am torn on this matter. However, not only are our obligations as a revising Chamber sometimes extremely onerous, but I have much sympathy with the notion that any order from the Secretary of State should be made under the affirmative resolution procedure. After all, as our debate on my earlier amendment showed, such matters are not necessarily straightforward. It is essential that the appropriate and widest suitable powers are given to landlords. It is because I believe that it is appropriate to ensure that their powers are as wide as is reasonable and appropriate that I do not feel that I can go along entirely with the noble Lord, Lord Williams.
However, I hope that the Government will take seriously our expressions of concern about the work that still requires to be done on this clause in order to ensure that we have clear and workable provisions which have received the proper amount of parliamentary scrutiny. The noble Lord is right that it is not appropriate for the Government to say, "We know that we have not been as imaginative as we
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might have been, so we shall give ourselves the opportunity to be more imaginative, but shall do so more or less in private".
Lord Williams of Elvel: The noble Lord, Lord Lucas, said that it was up to me to agree or disagree with what the Delegated Powers Scrutiny Committee said. Indeed, I disagree with what the Scrutiny Committee said and I very much hope that that committee will take the views of these Benches into consideration.
I am perfectly content that there should be some provision which would allow the update or adjustment of these clauses. Nevertheless, it is true that under past Bills amendments to primary legislation have been made by affirmative orders, not by negative orders. I very much hope that on Report the Government will take another look at this and perhaps change the procedure. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendments Nos. 12 to 14:
Page 3, line 9, at end insert—
("The order may (without prejudice to the inclusion of other incidental or supplementary provisions) contain such provision as the Secretary of State thinks fit with respect to the priority of mortgages entered into in pursuance of any additional purposes, objects or powers.").
Page 3, line 10, leave out ("Any such order") and insert ("An order under subsection (7)").
Page 3, leave out lines 11 and 12.
The noble Lord said: I spoke to these amendments with Amendment No. 8. I beg to move them en bloc.
On Question, amendments agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 15:
Page 3, line 15, at end insert—
("(9) In relation to bodies to which local authorities have transferred properties under section 135 of the Leasehold Reform, Housing and Urban Development Act 1993, they shall not be ineligible for registration as a social landlord solely by virtue of the number of properties so transferred.").
The noble Lord said: The purpose of the amendment which stands in my name and that of the noble Baroness, Lady Hamwee, is to ensure that there is no arbitrary limit on the number of properties that a registered social landlord should possess or have transferred to it from a local authority. The proposed limit of 8,000 homes on transfers to any one landlord is, in our view, an arbitrary maximum. A more flexible system which avoids the creation of a monopoly landlord would be to set the limit at 8,000 homes or one-third of the local authority's housing stock, whichever is the higher. We believe that it is essential to allow local authorities to package estates to secure private finance, as well as to benefit from economies of scale and to avoid setting up several separate companies which in the present circumstances would incur substantial and unnecessary establishment costs. A number of urban local authorities have indicated that the proposed limit will inhibit

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transfers. Therefore, I very much hope that the Government will reconsider their position on this. I beg to move.
Baroness Hamwee: The amendment stands in my name also and is grouped with Amendment No. 105, which has my name and that of the noble Lord, Lord Williams, boxed and coxed rather than coxed and boxed, but it relates to a similar point. One of my concerns about the Bill and some of the Government's responses so far to the criticisms that have been made of it is its restrictive and constrained nature. It is important to allow as much flexibility as possible.
We have reached nearly 5.30 p.m. without even one sentence being said about the need for the supply of affordable housing. I appreciate that in Committee it is not appropriate to make Second Reading speeches, but I think that it is appropriate simply to say that I hope that the Government will keep in mind the fact that underlying practically every amendment is the concern of many noble Lords, of very many of those who work in the housing sector outside this place and of their customers, as well as of those who fail to be customers because of the lack of supply, that we must use the Bill to assist that supply as far as possible, not restrict it.
Lord Hylton: It is only in recent years that it has become possible for local authorities to transfer part or all of their housing stock to housing associations. It would be helpful if the Government could give their view of how that process has worked in practice because there were some criticisms of it when it started. The question of accountability has rightly been raised. Anything that the Government can say on how the process has worked would be helpful.
5.30 p.m.
Lord Lucas: We have heard a clear explanation of what the two amendments seek to do. I do not agree that we should allow an unlimited number of properties to be transferred from a local authority registered landlord. My understanding is that the noble Lord, Lord Williams, does not believe that either. We are talking merely about a matter of degree. I shall explain why we end up where we are. Transfer brings a number of benefits to both the local authority and tenants. One of these is greater investment in the stock. But it also provides an opportunity to improve efficiency in the management of the stock, and the responsiveness of managers to the wishes of the tenants. Splitting large amounts of stock into smaller more manageable units helps this process. While there may be certain diseconomies of scale caused by splitting a stock of, say, 12,000 dwellings into three units of 4,000, there are also significant opportunities for greater efficiency and responsiveness.
Having a size limit is also important for trying to get more diversity and choice in the social rented sector. I accept that this may not always be the case in some shire districts where we have allowed all their stock to be transferred to a single new housing association. But in urban areas where an authority has a large amount of stock there are clearly opportunities to increase choice
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and competition between landlords. The ceiling of 5,000 is one that we want to keep. But we want to be pragmatic. There are cases where it would be appropriate for a transfer to exceed this limit. Where a larger urban authority progressively transferred its stock, an average of 5,000 properties would seem to be right: for example, where an authority with between 30,000 and 50,000 dwellings considered transferring part or all of its stock. In those circumstances it will naturally do it in a number of tranches and it is sensible to provide some flexibility to enable area or location-based transfers over the 5,000 limit. It is true, however, that in the case of many partial transfers in urban areas, which will often be estate based, the size of the transfer will be below the current limit.
We are also willing to make exceptions in rural areas where splitting the stock can occasionally be arbitrary and affect viability because of geography and the way the stock is managed. Where it is not practical to split the stock we will allow transfers over the 5,000 limit. We have said that even where an authority is working to an average of 5,000, the maximum size of any one transfer will be 8,000 dwellings. We feel that at this level there is no argument about economies of scale. Housing organisations do not need to be any bigger to be viable and provide a good level of service to their tenants.
I hope that this explanation of our policies and the flexibility that already exists make it clear to the Committee that subsection (3) of the new clause in Amendment No. 105 would be an unhelpful constraint on the Secretary of State's discretion. Amendment No. 15 and subsection (2) of the new clause in Amendment No. 105 have no material effect on their own, since at the point of registration newly established transfer landlords have no stock, the transfer taking place usually shortly thereafter. More importantly, there is no practical purpose in preventing the corporation establishing a size criterion for registration when it is the Secretary of State's policy and the exercise of his discretion which establishes whether there is to be a maximum size limit.
I turn to the comments of the noble Lord, Lord Hylton. Last year's White Paper expressed the Government's continuing support for housing transfers. Some 50 authorities have done this, all with the support of the tenants who have to vote for it. It is my understanding that the process is proving a success.
I do not have any particular expectation that the noble Lord, Lord Williams, will have been convinced by my arguments. I have a feeling that there is a basic difference of policy, perhaps with politics underlying it, but I hope that my explanation has at least given him a clearer idea of why we take this position.
Lord Williams of Elvel: The noble Lord is quite right. We have basic political differences on this matter. I said that a number of urban local authorities had indicated that the limit would inhibit transfers. The noble Lord has adduced no evidence to support the particular limit that has been chosen. I am sure that the Committee accept that there is here a basic political difference. The only way to resolve such a difference is to test the opinion of the Committee. I beg to move.
5.34 p.m.
On Question, Whether the said amendment (No. 15) shall be agreed to?
Their Lordships divided: Contents, 53; Not-Contents, 105.

Division No. 1

CONTENTS

Addington, L.

Hylton, L.

Archer of Sandwell, L.

Jenkins of Putney, L.

Ashley of Stoke, L.

Kennet, L.

Avebury, L.

Kilbracken, L.

Beaumont of Whitley, L.

McNair, L.

Berkeley, L.

McNally, L.

Blackstone, B.

Mar and Kellie, E.

Bristol, Bp.

Monkswell, L.

Broadbridge, L.

Morris of Castle Morris, L.

Bruce of Donington, L.

Nicol, B.

Carter, L.

Oxford, Bp.

Clinton-Davis, L.

Rea, L.

Cocks of Hartcliffe, L.

Redesdale, L.

David, B

Richard, L.

Russell, E.

Donaldson of Kingsbridge, L.

Sandwich, E.

Dormand of Easington, L.

Shaughnessy, L.

Dubs, L.

Simon, V.

Foot,L.

Simon of Glaisdale, L.

Freyberg, L.

Stoddart of Swindon, L.

Gladwin of Clee, L. [Teller]

Strabolgi, L.

Graham of Edmonton, L. [Teller]

Taverne, L.

Halsbury, E.

Taylor of Gryfe, L.

Hamwee, B.

Thomas of Walliswood, B.

Harris of Greenwich, L.

Wallace of Coslany.L.

Hayman, B.

White, B.

Hollis of Heigham, B.

Williams of Elvel,L.

NOT-CONTENTS

Aberdare, L.

Feldman, L.

Addison, V.

Forbes, L.

Alexander of Tunis, E.

Gainsborough, E.

Allenby of Megiddo, V.

Gardner of Parkes, B.

Ashbourne, L.

Gisborough, L.

Astor of Hever, L.

Goschen, V.

Balfour, E.

Gowrie, E.

Berners, B.

Gridley, L.

Bethell, L.

Hamilton of Dalzell, L.

Birdwood, L.

Harding of Petherton, L.

Blaker, L.

Hayhoe, L.

Blatch, B.

Hemphill, L.

Boardman, L.

Henley, L.

Boyd-Carpenter, L.

HolmPatrick, L.

Brabazon of Tara, L.

Hooper, B.

Campbell of Alloway, L.

Hylton-Foster, B.

Campbell of Croy, L.

Ilchester, E.

Carnegy of Lour, B.

Inglewood, L.

Carnock, L.

Ironside, L.

Chalker of Wallasey, B.

Kinnoull, E.

Chelmsford, V.

Lane of Horsell, L.

Chesham, L. [Teller.]

Lauderdale, E.

Clanwilliam, E.

Lindsay, E.

Coleraine, L.

Liverpool, E.

Colwyn, L.

Long, V.

Courtown, E.

Lucas, L.

Cranborne, V. [Lord Privy Seal.]

Lyell, L.

Denham, L.

Mackay of Ardbrecknish, L.

Denton of Wakefield, B.

Mackay of clashfern, L. [Lord Chancellor.]

Digby, L.

Dixon-Smith, L.

Marlesford, L.

Downshire, M.

Massereene and Ferrard, V.

Ellenborough, L.

Mersey, V.

Elton, L.

Miller of Hendon, B.

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Milverton, L.

Renton, L.

Monk Bretton, L.

Romney, E.

Monteagle of Brandon, L.

Saint Albans, D.

Mottistone, L.

Seccombe, B.

Mountevans, L.

Shuttleworth, L.

Mountgarret, V.

Soulsby of Swaffham Prior, L.

Munster, E.

Strathcarron, L.

Murton of Lindisfame, L.

Strathclyde, L. [Teller.]

Nelson, E.

Strathmore and Kinghorne, E.

Newall, L.

Sudeley, L.

Norrie, L.

Swansea, L.

Northesk, E.

Swinfen, L.

Orkney, E.

Swinton, E.

Orr-Ewing, L.

Teviot, L.

Oxfuird, V.

Trumpington, B.

Pilkington of Oxenford, L.

Ullswater, V.

Rawlings, B.

Vivian, L.

Rees,L.

Wyatt of Weeford, L.

Rennell, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.42 p.m.
Clause 2, as amended, agreed to.
Clause 3 [Registration]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 16:
Page 3, line 16, leave out ("may") and insert ("shall").
The noble Baroness said: I shall speak also to Amendments Nos. 17 and 19 in my name. Amendment No. 18, tabled by the noble Lord, Lord Williams, is grouped with these amendments. The list of groupings attaches Amendment No. 25 to this group, but it might be more convenient to debate it with the next group of amendments to which it more appropriately belongs.
My amendments are probing amendments, and the questions that I shall ask, are, I hope, straightforward. Clause 3 deals with registration of social landlords and provides that the Housing Corporation may register social landlords which are eligible. My first amendment to change the word "may" to "shall" is to enable me to ask the Government what scope for discretion they feel the Housing Corporation should appropriately have.
My second amendment provides that a social landlord which is eligible is registered if it applies for registration; in other words, the matter is not automatic.
Clause 3(2) refers to an application but the first part of the clause does not seem to require it. My third amendment (Amendment No. 19) is to ask the Minister to explain the reason for what is a dual set of registrations. Clause 3(3) provides for notice of registration as a social landlord to be given to the various registers upon which the particular social landlords are registered as a result of their own constitution as a company, charity, and so on. Is that to provide the investigator with a clue—a track—as between the different registers? I ask the question having partly in mind the scope for confusion that may arise if the bodies are required to register in different places, and there are different requirements for registration for each of them. Perhaps the Minister will explain why it is necessary to make that cross reference. I beg to move.
5.45 p.m.
Lord Williams of Elvel: Apart from the amendments to which the noble Baroness has spoken, there is also Amendment No. 18 in the group standing in my name. I shall be interested to hear the Government's response to the questions which she has put. The question I put—again mine is a probing amendment—is on what basis and how shall the corporation determine a fee for registration?
I understand that there is a general duty on the corporation to be reasonable, but social landlords may wish to have some indication as to what they may be charged for registration. The words "if any" imply that, as the Bill is drafted, the corporation may not wish to charge a fee. Is that the case? If it is not the case, under what circumstances might the corporation determine to charge a fee? In that case, what sort of fee and on what sort of scale will the corporation so determine? Will that be publicised in a manner which will allow those who wish to be registered to be properly cognisant of what they have to pay in order to get on the register?
Lord Lucas: I shall deal first with Amendment No. 16. The noble Baroness asks, quite reasonably, what sort of discretion are we giving to the corporation here. The answer is we are giving it a wide and unspecified discretion in order that it shall be able to refuse to register, effectively, landlords which it does not consider viable or suitable. Of course it has to exercise those powers reasonably. That is the control on it. There can be all manner of reasons why a company might not be suitable for registration.
Registration opens up a number of privileges, including the receipt of large quantities of taxpayers' money. It is right that the corporation can take action to keep companies which are in a dodgy financial position, or are in other ways deemed unsuitable, off the register. I do not believe that I can be much more specific than that in telling the noble Baroness how it will be exercised, except of course to re-emphasise that it will be exercised reasonably.
Amendment No. 17 adds the words "and which applies for registration" to that same sentence. I had, I am afraid, read that in conjunction with Amendment No. 16, and thought that the two just went together. The noble Baroness has described it separately. As she described it separately, it seemed to me to have some sense, but I should like to take it away to consider whether it should be included; otherwise, as the noble Baroness suggests, it will open the way for the Housing Corporation to register all sorts of people who did not wish to be registered. They might find that inconvenient.
Amendment No. 19 would remove the requirement for notification. That is required principally because in various parts of Schedule 1 we require the registrars not to take particular action unless permission has been received from the Housing Corporation, such as registering an amendment to the articles of association. Unless there is a mechanism for informing the registrar that those are companies or charities where those rules apply, which is what the subsection provides, the registrars could not carry out the duties we place upon them later in the Bill.
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Amendment No. 18 in the name of the noble Lord, Lord Williams of Elvel, deals with the introduction of a charge for registration with the corporation. The basic reason for this is to give the corporation protection which it does not need at the moment but may eventually need against frivolous applications. This is a question which the noble Lord raised on the housing grants Bill, when he proposed to purchase the mansion of my noble friend Lord Ferrers. He wished to protect local authorities against such frivolous applications.
Lord Williams of Elvel: I did not propose in that Bill to purchase the mansion of the noble Earl, Lord Ferrers. I was using that as a hypothetical possibility which the noble Earl indeed ruled out.
Lord Lucas: The noble Lord was indeed making a frivolous proposal, which was exactly the sort of thing he wished to protect local authorities against. I hope that we were able to convince him that local authorities had sufficient powers to enable them not to incur expense if such frivolous applications were made.
This is not the case with the Housing Corporation. It has to take applications seriously and investigate them properly. Therefore, if it were to occur that a significant number of frivolous applications were being made, this ability to charge a fee would be useful. But there are two key points to be made. Any charging proposals would have to be included in the new determination on the manner of applications. The corporation is required to consult on that determination. It could not introduce a charging system without warning and it would have to take representations into account.
Secondly, the corporation is required to follow the principles set out in government accounting. Any fee would have to be related to the costs involved. For example, it would be reasonable for it to charge a relatively nominal fee for standard applications, with additional charges for organisations with complex business plans. With those safeguards in place it is reasonable to allow the corporation to charge fees in the future if it deems such a procedure to be necessary.
Lord Hylton: The noble Lord the Minister has said in relation to Amendment No. 16 that he believes it to be desirable that the Housing Corporation should have a wide discretion. Let us suppose that it exercises that discretion to refuse an application; will there be any right of appeal against the decision? Also, would it not be most desirable that the criteria for non-registration should be published so that they can be known in advance?
Lord Lucas: I do not immediately have an answer to the very reasonable questions asked by the noble Lord. I shall write to him before Report stage.
Baroness Hamwee: At the risk of sounding a little impertinent, may I say in response to the Minister's comments that it is perhaps appropriate to wait and see what the Committee does with Clauses 4, 5 and 6, which deal with the criteria and appeals against decisions,

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because the points I have raised are probably better taken in context with the clauses that we end up with there. The Minister wishes to intervene.
Lord Lucas: Having received sudden inspiration, I am now able to confirm to the noble Lord, Lord Hylton, that a right of appeal is indeed contained in Clause 5 and the criteria will be published.
Baroness Hamwee: I was trying gently to say the same thing. I shall withdraw this amendment but, before I do so, perhaps I may say that the Minister said, quite sensibly, that the Housing Corporation needs to alert, to take one example, the registrar of companies to the fact that a company has particular conditions which will attach to it. Has it not come to a very cumbersome pass that such a straightforward matter as that, entirely ancillary to the general powers of the Housing Corporation, needs to be spelt out? That takes one-third of a page of legislation. We need then to be sure that those words are precisely right and give no scope for confusion. That also raises questions about whether other ancillary matters which are not spelt out are then within the powers of the Housing Corporation.
I believe that we sometimes need to stand back and consider rather more laterally the implications of the way in which we approach some of these matters. However, having got that off my chest, I withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 16 to 19 not moved.]
Clause 3 agreed to.
Clause 4 [Removal from the register]:
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before calling Amendment No. 20, I should inform the Committee that if this amendment is agreed to, I cannot call Amendment No. 21.
Baroness Hamwee Baroness Hamwee moved Amendment No. 20:
Page 3, line 39, leave out from ("shall") to end of line 40 and insert ("give the body at least 14 days notice that it intends to remove the body from the register.
( ) Where the Corporation receive a response to that notice they shall consider it and notify the body of their decision.
( ) Where the corporation decide to remove the body from the register they shall not do so until after the time for an appeal to the High Court under section 6 below (appeal against decision on removal) has expired.").
The noble Baroness said: I rise to speak to Amendment No. 20, grouped with Amendment No. 21 in the name of the noble Lord, Lord Williams of Elvel, and Amendment No. 22 in my name. It may be convenient if I refer here to Amendment No. 25, which is to take out a clause of the Bill that my other amendments seek to replace. I hope that this is a fairly straightforward matter, proposing an alteration of the process of removing a registered social landlord from the register. It makes it clear that the Housing Corporation is to notify the landlord of its intention, then make a decision and allow time for appeal before implementing the decision. The Housing Corporation notifies the companies registrar and other registrars only
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when it removes the landlord from the register. The structure under the Bill is perhaps a little unclear. Is it intended—this is the point of the amendment—that the registrar should be notified before removal, pending appeal? I beg to move.
Lord Williams of Elvel: I would like to speak to Amendment No. 21 standing in my name. It seems to me that 14 days, which would be, I imagine, calendar days rather than working days, is rather short notice when a social landlord is to be removed from the register. There may be holidays, there may be bank holidays, there may be all sorts of intervening matters. This is purely a probing amendment, and I would question whether 14 days is sufficient notice to allow proper consideration by the social landlord of what is being done.
Presumably, the social landlord would be in a position, having been given the notice, to correct the deficiencies which have led to the notice in the first place. That is what I understand, and I hope the noble Lord will correct me if I am wrong. If that is the case, I should have thought that 14 days is not long enough, having received the notice, for the social landlord to act in the manner in which it should act in order to remain on the register. It is really to try to help social landlords that I suggest 14 days might be insufficient.
The Earl of Kinnoull: I have not perhaps fully understood the matter further on in the Bill, and I wonder whether my noble friend could say what the financial consequences would be if a social landlord were to be removed from the register.
6 p.m.
Lord Lucas: Clause 4 of the Bill establishes the conditions to be satisfied before a social landlord can be removed from the register and the procedures that the corporation has to follow. It may be worthwhile to rehearse what they are. They are that the landlord is a body no longer eligible for such registration or has ceased to exist or does not operate.
Amendment No. 20 would require the corporation to notify a landlord of its intention to remove it from the register. Should it make representations to the corporation, it would, if it decided to proceed, be required to wait until completion of the period for an appeal to the High Court before effecting the removal.
In Amendment No. 21 the noble Lord, Lord Williams, proposes that the corporation be required to give at least 28 rather than 14 days' notice to a body before removing it from the register. The changes proposed here are unnecessary. The corporation can only remove a body from the register where it is no longer eligible, or has ceased to exist or does not operate. The corporation is required to give at least 14 days' notice, and is able to use its expertise and judgment in these matters to apply a period of notice in excess of 14 days where it is sensible to do so. Any active social landlord who is to be de-registered, will have had plenty of warning of what is afoot. This will not come as a surprise and he will be ready to appeal if he feels that is justified. The corporation must be able to take decisive action.

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The noble Baroness, Lady Hamwee, has further proposed that before taking a decision to remove a body from the register, the corporation should consult with a relevant local authority in whose area the landlord has assets. In practice the corporation will have consulted long before reaching such decisions. It would want to alert a local authority which has plans to work with a questionable landlord before de-registration became an issue.
I believe these amendments to be unnecessary and invite the noble Baroness to withdraw Amendment No. 20.
Baroness Hamwee: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 and 22 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 23:
Page 4, line 6, after ("body") insert ("owns assets or").
The noble Lord said: I am rather concerned about the word "operates" as it appears in the Bill as drafted. Social landlords of varying descriptions "operate" in the sense of "manage" and "operate" in the sense of "owning assets". The two do not necessarily go together. I should have thought that an amendment along the lines which I propose, which would clarify exactly which local authorities are to be consulted before a social landlord should be removed from the register, is appropriate because a social landlord may own assets in a local authority area and not manage them. Conversely, a social landlord may operate assets in a local authority area but not own them.
Therefore, the Bill will be drafted properly if it encompassed both owning assets and operating. They are two quite different functions and I believe that the Bill would be better drafted if my amendment were accepted. I beg to move.
Lord Lucas: I am informed that "operating" subsumes "owning" assets. If a social landlord owns assets in an area, then he is operating in that area. However, I appreciate the noble Lord's concern. I shall check this matter again with lawyers and come back on Report if there is any need to remove doubt.
Lord Williams of Elvel: I am grateful to the noble Lord. On the face of it, it seems a matter of plain English. However, the noble Lord says that "operates" may mean something else and I understand that lawyers sometimes think differently from the rest of us.
I am grateful to the Minister for saying that he will look again at this matter to make sure that although we all understand the intention in this regard, it is properly expressed in the Bill. Even if the noble Lord decides, on advice, that the expression in the Bill covers that at which I am aiming, I should still wish to have confirmation from him in the form of a statement clearly on the record that that is the case so that if ever there is a dispute about this matter, the courts can refer to a ministerial statement saying that "operates" means "owning assets". However, the noble Lord has said that
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he will seek advice on that matter and we shall see what happens at the next stage of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 24:
Before Clause 6, insert the following new clause—
DELEGATION OF CORPORATION FUNCTIONS
(". The Corporation shall have the power to delegate any part of its monitoring functions under this Chapter in respect of a registered social landlord to a relevant local authority after full consultation with them.").
The noble Lord said: The purpose of this amendment is quite simple. It is to enable the corporation to delegate any part of its monitoring functions, under the chapter which we are discussing, in respect of a registered social landlord to a relevant local authority, after consultation. By "relevant local authority", I mean an authority which is concerned in the area in which the social landlord operates or owns assets or, if the two are the same, simply operates.
The purpose of the amendment is to allow local authorities to take on regulatory responsibilities, particularly for local housing companies in which local authorities may well be shareholders. We must remember that that is a distinct possibility. In my view, the Government should allow the delegation of the corporation's functions to such local authorities in order that they may be in a position to be at least involved and control the companies within their relevant area which are part of their own business as a local authority in providing housing.
I understand that this was an amendment which was tabled in another place but was not selected for debate. Therefore, it is important for this Chamber to debate in Committee amendments which were not selected for debate in another place.
This runs along the lines which the noble Baroness, Lady Hamwee, and I have been working along throughout our debates in this Session. We have been trying to get local authorities more involved and more responsible and we have been trying to give more delegated powers to local authorities rather than having everything centralised. At the moment, the corporation seems to be centralised, whether it is for England or Wales. In our view, it seems to be a good idea that some of these activities, particularly where they concern local housing companies, should be delegated to the relevant local authority. I beg to move.
Lord Hylton: I am very much in favour of increasing, where possible, the powers of local authorities. However, if a local authority happens to be a shareholder in the registered company, it occurs to me that a conflict of interest may arise. Therefore, in those cases it may not be desirable to achieve such delegation.
Lord Lucas: We have considered the ideas put forward in this amendment but we remain of the view

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that the monitoring functions of the Housing Corporation belong with the corporation and that that responsibility should not be dissipated.
I agree with the noble Lord, Lord Williams of Elvel, that registered social landlords must work with local authorities to meet local housing needs.
Local authorities need to be reassured that the registered social landlords operating within their boundaries are providing good and effective services. They have an interest in all registered social landlords assisting them to meet their housing needs, regardless of size. I recognise that they will take a closer interest in a landlord that has taken over stock and tenants from the local authority; be it few houses by a small local housing association or a large-scale transfer to a local housing company established for the purpose.
The statutory responsibility for regulating registered social landlords rests with the corporation. It is accountable to Parliament to whom it must report, through the Secretary of State, annually. It is also subject to the oversight of the various committees established by the other place.
The corporation has a duty to ensure that the public funding invested in registered social landlords is protected. It also has a duty to ensure that the interests of tenants are protected and acceptable service levels provided. To enable it to fulfil its statutory function the corporation has been given a wide range of powers. These enable it to act quickly and effectively to redress any identified failings.
Only the corporation can exercise its functions. It can enlist the support and assistance of other bodies and organisations to help it to collect and interpret relevant information. Where it needs to buy in specialist expertise, it will approach private sector bodies or use existing public bodies; for example, the proposed involvement of the Audit Commission which is being provided for within the Bill. It can seek assistance from a local authority, and we have provided in the Bill, in Clause 32, for the exchange of information in support of any of the corporation's functions.
Registered social landlords operate across the whole of England and Wales. Some are small, locally-based organisations; others are very large landlords with properties and tenants in many local authority areas. The corporation, when exercising its regulatory function, must treat all registered social landlords equally. It must act consistently. Should it fail to do so, it would be open to judicial review.
If regulation is to be imposed consistently, the corporation must be in control of all decisions. Delegation of its monitoring for any individual registered social landlord would open up the possibility of a variation in standards. A local authority will have its own views based on local circumstances; it will not be able to judge performance across the whole sector.
The noble Lord, Lord Williams, suggested that the provision for consultation would enable the corporation to offer the relevant guidance to a local authority. It would, though, still allow a local authority some freedom and so leave open the possibility for varying standards being set.
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There is nothing to prevent the corporation keeping in contact with local authorities; indeed, that is to be encouraged. If there is to be consistency in the regulatory function, we consider that the decision-taking needs to rest with a single body. For that reason, we would not go along with the thought behind the amendment that there is scope for delegating some of that particular function of the corporation.
Lord Williams of Elvel: Of course, under the Bill the regulatory function of social landlords will not rest with a single body. It will rest with the Housing Corporation which is the regulator for England and with Housing for Wales which is the regulator for Wales. They are two different bodies. They may work to the same principles, but my general experience in how things apply in practice in Wales versus England means that there may be differences in the application of those general rules between both bodies. Therefore, having split the regulatory function in two—and I do not want to talk about Scotland at this stage, because it is not referred to in the Bill—and, presumably, having another regulatory power for Scotland and, indeed, one for Northern Ireland, it is no case to say that there is one regulator for all registered social landlords in the United Kingdom.
Having decided that that is not the Government's case, I have a suggestion to make for what, I agree, is a relatively small number of registered social landlords and, perhaps, for the small local housing associations of which there are many. Why not take advantage of the powers and knowledge of local authorities, subject to agreed standards which would have to be agreed between, for example, Housing for Wales and the Powys district council, or between the Housing Corporation and an English local council? Why not disaggregate the arrangement even further? Once you split it into two, three or four—as the case may be in the United Kingdom—why not introduce an effective regulatory power for the smaller operations using the local knowledge of the authorities whose properties many of the social landlords will take over? I am not entirely convinced by the Minister's argument. Perhaps he would like to respond to that point because it is particularly relevant to Wales.
6.15 p.m.
Baroness Hamwee: Before the Minister responds, I should like to express my strong support for the amendment for the many reasons outlined by the noble Lord, Lord Williams of Elvel. Perhaps the Minister can share with Members of the Committee the suggestions that the Government may make to the Housing Corporation as to how it should work with local authorities. It is important that such arrangements work smoothly. I understand the point made about delegation, but I am not clear how far the noble Lord thinks it would be a good thing for the Housing Corporation to take seriously the recommendations that are made. If it does

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not delegate, it could at any rate use the expertise of local authorities as much as possible without actually going as far as delegating.
Lord Berkeley: I rise to express my support for the amendment moved by my noble friend Lord Williams. For many years I have heard the principle espoused by this Government that subsidiarity is a good thing. It is particularly good when it relates to Brussels and Westminster. But, suddenly—as, indeed, we have just found in the Minister's response—it becomes the worst thing ever when it goes below Westminster, so to speak, to local authorities. Surely they have the local knowledge to deal with local matters.
Of course there must be common standards across the country, but they must take into account local variations and local knowledge. I detect a slight paranoia here about giving local authorities any involvement in what I see as being a pretty vital function. Again, subsidiarity bites the dust because no one seems to be prepared to let go. Surely it is possible within the overall control of the corporation to delegate or subcontract—or whatever the right word may be—work to local authorities in the areas with which they are familiar and in which they were elected to operate.
Lord Lucas: I appreciate the remarks made by the noble Lord, Lord Williams, that there are two housing corporations, both being separate, individually, empowered statutory bodies. To overcome the objections that I raised in my reply to the amendment, one would have to consider having an individual statutory body for each local authority. But, in that case, one would not have a satisfactory body to deal with the many housing associations which are spread widely between local authority boundaries.
I believe that Members of the Committee are trying to address the question of whether there is some mechanism for looking after the small local housing association or similar body which could reasonably be delegated to local authorities, where such authorities could be involved to the benefit of everyone concerned. Given the objections that I outlined earlier, I believe that that is likely to be more of a working arrangement than a statutory transfer of responsibility.
However, I shall certainly consider enlarging upon my description on how local authorities might work together with the Housing Corporation to deal with those small local operations. If the noble Baroness will allow me to do so, I should like to write to her on the matter before the Report stage.
Lord Williams of Elvel: Perhaps as this is also my amendment the noble Lord will write to me too before Report stage.
Noble Lords: Oh!
Lord Williams of Elvel: I do not insist. I am grateful to the noble Lord for his comments. However, I think there is a serious problem here and that the noble Lord now sees the point. I hope I may yet again mention the case of Wales. I have no particular experience of the
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Housing Corporation in England, but Housing for Wales needs the support of local authorities in monitoring the activities of local housing companies particularly. There are, of course, housing associations which spread across local authority boundaries, and indeed the Housing Corporation and Housing for Wales will have that authority. But it is the smaller bodies—particularly the local housing companies, if we are going in for that—where the local authority could easily do what Housing for Wales is perhaps not able to do at the moment. We do not want a big bureaucracy in Housing for Wales, do we? I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Appeal against decision on removal]:
[Amendment No. 25 not moved.]
Clause 6 agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 26:
Before Clause 7, insert the following new clause—
INDUSTRIAL AND PROVIDENT SOCIETIES: REGISTRATION
(".—(1) In this section an exempt society is a society—

(a) which is a society registered under the Industrial & Provident Societies Act 1965;

(b) whose objects are exclusively charitable; and

(c) which is registered as a social landlord,

and references in this section to a section or Schedule are references to provisions of the Industrial and Provident Societies Act 1965.
(2) In respect of the exercise by an exempt society of its functions as a social landlord—

(a) a society shall be deemed to fulfil the condition in paragraph (b) of section 1(2) (society which may be registered), and

(b) the words "provisions of this Act" in section 10 (amendment of registered rules) do not include section 1(2) and, for the avoidance of doubt, in respect of paragraph (b) of section 1(1) and paragraphs 4 to 6 of Schedule 1, the appropriate registrar shall only be concerned that provision is made and not with the manner of provision save that the rules as amended ensure compliance with section 20 (members under 18).").

The noble Baroness said: I apologise that the drafting which has been used to encompass the matter of concern is inevitably complicated. To say that it is opaque would probably not be putting it too strongly. I hope that I shall be able to make clear the point that underlies it. Increasingly over the past 20 years or so, it has been seen as right and appropriate that tenants of a housing association should be involved in the association as, if you like, its consumers.
Provision, for instance, has been made for direct election by tenants—as well as tenant shareholders elected as shareholders—to management committees. In one instance of which I know that was done on the basis that the tenants should not be in a majority. Rules such as that have received the consent of the Housing Corporation and have been registered by the Registrar of Industrial and Provident Societies. As I say, many associations are taking steps such as this to alter their rules. I have been advised of one association which, having done this with Housing Corporation consent, has found that the registrar recently appears to have altered his position on tenant involvement in a housing association. That registrar is insisting that, whenever an

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association seeks a change in its rules, its rules limit the shareholding by tenants; limit membership of an association's committee by tenants—in both cases to one-quarter—and make provision as regards quorums.
By and large, housing associations incorporated under the Industrial and Provident Societies Act have rules which are based on model rules drawn up by the National Federation of Housing Associations. This conflict, as it appears, between the registrar's views, those of the NFHA and those of associations which are seeking rule changes and which are pursuing progressive programmes in the involvement of their tenants is causing no little confusion and difficulty.
My amendment seeks to ensure that the registrar's concerns do not have such a wide effect as to inhibit a social landlord being registered as a social landlord and fulfilling the necessary conditions. I appreciate that, on the face of it, this is perhaps an obscure point, but it is right to raise it within the context of this Bill. I shall be grateful for any help that the Minister can give now or following today's debate. I beg to move.
Lord Lucas: I do not know whether the noble Baroness believes in reincarnation, but if so perhaps in another life she was a parliamentary draftsman. Certainly, as she said, this is a clause of great opacity, but I think we know what she is after. We recognise that tenants have an important part to play in the management of their homes. This is something the Government have supported and taken forward for many years now. It is right that tenants should not only be able to make their views known; they should also be able to ensure these views are reflected in the management decisions affecting their properties. Registered social landlords have generally welcomed these initiatives. Many have welcomed tenants onto their management committees where they have an opportunity positively to influence management decisions.
The noble and learned Lord, Lord Nolan, in his report on local spending bodies, which included housing associations, called for tenants to have a greater say and for them to have more opportunities to become members of their associations. Consideration is being given to this and the other recommendations in the report, and the Government will be responding formally at a later date. We understand the concerns of registered social landlords expressed by the noble Baroness, Lady Hamwee, regarding the recent announcement by the Registrar of Friendly Societies that where an industrial and provident society seeks to amend its rules then he would expect these to limit the percentage of tenants that can be members to no more than 25 per cent. of the total membership. He has also indicated that members should not comprise more than 25 per cent. of the places on the management committee of an association.
Our policy is clearly that tenants should not be in the majority. If I might put things diplomatically, I believe that discussions have been held between the corporation and the registrar on this matter and that these are to continue. The registrar has a duty to regulate all industrial and provident societies, not just those that are
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registered social landlords. This dual regulation can on occasions create some minor difficulties, but with good will on all sides they can generally be overcome.
The proposal in this amendment would effectively involve an amendment to another Act which has not been considered in any detail in the passage of this Bill. There needs to be further discussions to see whether the apparent difficulties can be overcome. We doubt that amendments to primary legislation are necessary but we shall certainly bear that possibility in mind. With that comfort, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Hamwee: I am grateful for those comments. The Minister has indeed been extremely diplomatic and careful in what he said. I, too, must be careful not to be so seduced by those words as to let the matter go at a later stage in this Bill if it appears that those discussions—I think that was the term the Minister used—are not proving as productive as the Government might hope. Can the Minister give any indication of the likely timetable as it relates to the timetable of this Bill? If he cannot, can he give an assurance before the next stage that the matter can be handled outside the scope of primary legislation as without some such comfort I would feel the need to return to the matter? In other words, I need to know that I am not letting pass a good opportunity to deal with something which is clearly of widespread concern.
Lord Lucas: If I have not been able to satisfy the noble Baroness by the time we reach this matter on Report, I would expect to see another amendment from her to the Bill. I am quite clear therefore that I shall have to answer her one way or another.
Baroness Hamwee: I thank the Minister. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
6.30 p.m.
Schedule 1 [Registered social landlords: regulation]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 27:
Page 116, line 7, after ("gift") insert ("or make a loan").
The noble Lord said: In moving Amendment No. 27, it may be for the convenience of the Committee if I speak also to Amendment No. 28 in the name of the noble Baroness, Lady Hamwee, Amendment No. 30 in our joint names, and Amendment No. 31 which stands in my name.
Amendment No. 27 concerns the remuneration of members of the council of the housing associations, and of the board of directors (if that is the case) of other social landlords. The Committee will he aware that before the House went into Committee I declared an interest in that my wife was a member of the council of Stonham Housing Association. Therefore, I enter particularly sensitive territory. Despite that, and on advice, I believe that I am able to speak on the matter.
Paragraph 1 of this schedule begins with the rubric,
"Payments by way of gift, dividend or bonus".
It does not mention making a loan. There are certain restrictions in companies' legislation on making loans. I imagine that Companies Acts would apply where a social landlord who is registered is a Companies Act company. I also imagine that such restrictions would apply to other organisations which may be registered as social landlords which are not Companies Act companies. In other words, there should be parity treatment between the different types of legal organisations.
I shall leave the noble Baroness to speak to her Amendment No. 28. Amendment No. 30 in our joint names refers to the remuneration of members of the council or board of directors, or whatever it might be, of a registered social landlord. As the Minister said in another place, the Government do not seek to change the ethos of the housing association movement. I am glad to hear that because I believe that the housing association movement has persisted for many years on the basis of voluntary service. It is only right that it should do so. Nevertheless, there is the nagging question not just of refunding the expenses of those involved in housing associations but also as regards loss of earnings. Again, I speak from a certain amount of marital experience. Being involved as a member of the council of the housing association involves an enormous amount of time, effort, reading papers and making decisions. Loss of earnings can be a major problem if a housing association wishes to have on its council people who are not supported either by private income or other means. It seems to me that some formula along the lines of jury service could be right.
It is an important matter. So far as I am aware—I am open to correction—it is the first time that it has been proposed that housing associations should cease being organisations run on a purely voluntary basis by people who give time and effort to them and become possibly professional organisations with directors or members of the council who are professionals in the sense that they are paid for that specific job. It is an important principle that I believe the Committee would wish to discuss.
Amendment No. 31 is simply a probing amendment which seeks to encourage the Government to explain why the corporation has the power to specify maximum amounts even in the case where shareholders of a company registered under the Companies Act decide that the managing director may qualify for substantial bonuses if the company, although non-profit-making, may have done particularly well. I question whether the corporation is not cutting across some of the provisions of the Companies Act in that respect. It is purely a probing amendment. I beg to move Amendment No. 27.
Baroness Hamwee: I do not need to add to the comments of the noble Lord in support of Amendment No. 30 which also stands in my name. Amendment No. 28 is entirely straightforward. It enables the
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Government to confirm that a gift does not include a benefit as set out in paragraph 2, to which the amendment refers.
Lord Lucas: As the noble Lord, Lord Williams, records, the housing association movement is supported by the commitment of voluntary committee members of registered social landlords. There are in England and Wales more than 25,000 such people freely giving of their time serving on the committees of housing associations. Many more contribute to the running of the registered social landlords as members of local, area and tenant committees. We are considering part of the Bill which proposes the possibility that they may receive some compensation for loss of earnings or for the time that they give in such service. Perhaps I may take time to set out the Government's position in this area.
First, let me explain the present controls over the granting of payments and benefits to board members of registered social landlords and members of their families. Paragraphs 1 to 3 of Schedule 1 of the Bill broadly re-enact the provisions of Section 15 of the Housing Associations Act 1985. Payments to board members are limited to the refund of expenses directly incurred. The provision provides for the corporation to be able to specify the maximum amount which may be paid.
Last year the National Federation of Housing Associations conducted a review under the chairmanship of Sir David Hancock, of the governance of housing associations. In their report the review team recommended that consideration be given to the introduction of a loss of earnings regime. In taking forward the provisions from the 1985 Act we have taken the opportunity to clarify the provision to enable loss of earnings regime to be introduced, subject to the corporation using its powers to specify the maximum amounts that might be paid.
I turn to the Nolan review. During his review of local spending bodies, including housing associations, the noble and learned Lord, Lord Nolan, was asked to consider the question of payment to board members. He concluded that at the present time there was no case for departing from the voluntary principle. Many long-standing members apparently suggested that they would be offended if offered money. Perhaps that applies to the wife of the noble Lord, Lord Williams.
The noble and learned Lord, Lord Nolan, also considered whether compensation for loss of earnings should be forthcoming. His committee concluded that at present it could not be justified. Nor was it necessary to attract new people.
Our position is that we are not advocating the introduction of payment to board members. But there is a continuing demand for new people to come forward. Should the position change, then we need to ensure that there are no unnecessary restrictions in place.
The noble and learned Lord, Lord Nolan, in his report suggested that where there was flexibility over the timing of meetings, this was another consideration against loss of earnings compensation. We have to recognise that employment practices are changing

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radically. For many there is no standard working day; some work flexible hours, others fixed shifts involving both early and late hours. If we are to recruit people from a wide cross-section of backgrounds, we may find that some form of compensation will be necessary.
Amendment No. 30 proposes that any payments to board members be limited to the amounts payable under the Juries Act 1974 for loss of earnings. I recognise there are benefits to be gained from using an existing scheme and I am sure the corporation will consider it before specifying maximum limits in accordance with its powers in paragraph 3 of Schedule 1. I shall return to that later.
The corporation's initial intention is to consider the possibility of a small token payment. However, it is possible that in some instances there may well be justification for some modest payment for such groups as the self-employed, the low paid or the unemployed. The jury service analogy, while helpful, may not be exactly what is required.
The corporation's good record was recognised by the noble and learned Lord, Lord Nolan. He considered that decisions on possible exemption should be the sole responsibility of the corporation and should not require the approval of the Secretary of State. We consider there are good grounds for also leaving decisions on the maximum level of payments to it and do not see any need to impose any separate limit. The corporation will consult on any proposals.
In Amendment No. 27, the noble Lord, Lord Williams, has proposed that the limit on gifts or payments granted by a registered social landlord to members should extend to loans. I am grateful to the noble Lord for his explanation of the purpose of his amendment. I share his concern that members should not be granted any unlimited benefits by registered social landlords. I recognise that at present loans are not explicitly mentioned. I do not believe that any amendment is necessary, but we shall check the position with our legal advisers and inform the noble Lord of the results.
In Amendment No. 28, the noble Baroness, Lady Hamwee, has proposed that to avoid any doubt an amendment be made to the effect that a gift does not include a benefit within the meaning of paragraph 2. I believe the paragraph already adequately covers gifts and do not think further clarification is necessary. I hope that that assurance will satisfy the noble Baroness.
I understand that the final amendment in this group is a probing amendment. The noble Lord, Lord Williams, would like some background on how this power is to be used. The first point is that it will be subject to public discussion. The corporation's board has given preliminary thought to these issues. Leading on from my points earlier, it has agreed two general matters of principle: first, if anything other than token payments are allowed, they should be modest and based on a loss of earnings concept; secondly, any system which is put in place should derive from an established regime, such as jury service or magistrates' allowance.
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The noble Lord, Lord Williams, also asked whether the power to set the maximum payment cuts across the Companies Act. The simple answer is yes. This is an extra limitation and the power allows the corporation to set maximum limits on certain payments. The shareholders of a Companies Act company are free to decide what to pay the managing director, but subject to the limit set by the corporation, which is an additional restriction, together with those in the Companies Act.
I hope that what I have said reassures the noble Lord. If the paragraph were to be removed, it would significantly weaken the corporation's powers, and we feel that it has its place in the Bill.
6.45 p.m.
Lord Swinfen: Before my noble friend sits down, perhaps he could help me. I have been looking through paragraph 2 of the schedule and wonder whether a social landlord will be able to make a loan to an employee or officer who moves from an area where housing is at a reasonable cost to an area of expensive housing. The loan would allow him to find somewhere for himself and his family to live and therefore to take up the employment with the social landlord. It may be to the benefit of the social landlord that that person should be employed because of his skills and knowledge, but he might not be able to take the job if he were not able to obtain a loan to buy property in that way.
Lord Lucas: Under paragraph 2(1)(a) a contract of employment which offered such benefits would allow them to be paid. I do not believe that there should be any difficulty if they are regularly offered to employees.
Lord Swinfen: What is the position if the point is not dealt with in the contract of employment? It does not have to be, because it could be separate from the contract of employment.
Lord Lucas: I see no other way in which the offer could be made under the schedule, but I shall write to the noble Lord if there is one.
Lord Monkswell: The employee could be issued with a new contract of employment which included those terms. Perhaps I may press the Minister about the power that the Housing Corporation will have to allow payment to members of a housing association. From what the Minister said, we currently have a voluntary system where people are not remunerated or paid or even given expenses. Apparently there is no demand for it according to what the Minister said. Yet the Government say that it may be necessary to recruit people. What is the responsibility of the Government to recruit people into, for example, a voluntary organisation?

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Previous changes that we have seen in what we might describe as public service—whether it be local authority members or magistrates—have required Acts of Parliament to determine their levels of remuneration or the level of expense claims that they may make. Surely it is not just that the power to determine the possible payments for a public service should be vested in the Housing Corporation rather than in parliamentary determination. There seems to be no mechanism whereby Parliament can be involved either by primary legislation or secondary legislation. There is no mechanism for Parliament to be involved in determining what levels of remuneration or expenses might be allowable or whether there should be any. It appears that the power is given totally to the Housing Corporation to determine the matter.
I suggest that it is a big departure from custom and practice in the way that public service has been considered that the power should be vested in the Housing Corporation rather than there being recourse to parliamentary determination. Can the Government respond to that point?
Lord Lucas: It is a matter of judgment. Earlier I quoted the noble and learned Lord, Lord Nolan, in support of the attitude that the Government take that the matter could reasonably be delegated to the corporation. I appreciate that the noble Lord, Lord Monkswell, and other Members of the Committee may believe that the noble and learned Lord does not get it right all the time. On this occasion, we agree with him and are comforted by his agreement with us. It is open to the noble Lord, Lord Monkswell, to take the opposite view but we take our view based on the same evidence before us.
Lord Williams of Elvel: I thank the Minister for his response to the amendments. I understand that he will consider Amendment No. 27 on the making of a loan and let me and other Members of the Committee know what the Government's legal view is. I wish to emphasise to the Minister that the housing association movement is absolutely committed to the principle of voluntarism. There is no question of it wishing to go professional, but housing associations recognise that a basic level of remuneration may be necessary in order to attract certain people to serve as members of the council.
The Minister adduced the report of the Committee on Standards in Public Life in aid of his view. Again there may be disagreement, but our view is that the amendment on the limitation to jury service meets precisely the terms of the Nolan Committee's second report. It reflects the spirit of the recommendations of the Nolan Inquiry. I find difficulty in understanding why the Government seem to leave matters rather in the air. I should have thought that some provision on
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the face of the Bill, perhaps better drafted than the amendment I have proposed, would be right. Perhaps the Minister would care to comment on that point.
Lord Lucas: It is certainly a matter that we shall think about. But there is no possibility of my even hinting to the noble Lord that we might actually agree with him.
Lord Williams of Elvel: A nod, as they say, is as good as a wink.
Baroness Hamwee: It is better to nod.
Lord Williams of Elvel: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 28 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 29:
Page 117, line 6, leave out from ("Corporation") to end of line.
The noble Lord said: This amendment concerns the powers which the corporation has to determine what payments or benefits a registered social landlord which is an industrial and provident society or a company registered under the Companies Act 1985 may make. These powers are not new. Under Section 15 of the Housing Associations Act 1985 the corporation currently has the same powers in respect of industrial and provident societies. They are sometimes known as "Section 15 exemptions" since, in effect, they exempt associations from the strict rules of that section designed to avoid conflicts of interest. Section 15 is re-enacted, with amendment, by paragraph 2 of this schedule.
In his second report the noble and learned Lord, Lord Nolan, supports the retention of these powers, but recommends that they should be fully devolved to the corporation to simplify the procedures.
We are still considering the main recommendations made by the noble and learned Lord in that report. But this is a relatively minor matter, and one on which we can agree that the corporation, as regulator, is better placed than we are to determine what exemptions from the general rules as to payments and benefits should be allowed. This amendment therefore removes the requirement for the Secretary of State to approve any such determination. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 30 and 31 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 32:
Page 119, line 36, leave out from ("receive") to end of line 39.
The noble Lord said: The Committee will be aware that I return once again to the provisions of the Companies Act and how they might affect local housing companies.
The Bill as drafted allows the corporation to appoint someone to be a director of a registered social landlord and goes on to allow that person,
"to require an extraordinary general meeting of the company to be convened within 21 days of a request to that effect made in writing to the directors of the company".
It is almost unprecedented that one director, as opposed to a group of shareholders, should be appointed by a regulator and then be allowed to call an extraordinary general meeting of a company. Certainly that is not the case, so far as I know, unless the noble Lord corrects me, with any of the regulators of the utilities. It seems a very extraordinary power to include. I hope very much that the Minister will be able to justify it. I beg to move.
Lord Lucas: Paragraph 7 of Schedule 1 provides the corporation with power to appoint a new director to a registered social landlord which is a registered company under the Companies Act 1985. Paragraph 8 of Schedule 1 provides the corporation with similar power to appoint a new committee member to a registered social landlord which is an industrial and provident society.
The purpose of this provision is to allow the corporation to exercise its judgment on when additional expertise or guidance is necessary and to enable the new director to help influence the existing directors to ensure that a registered social landlord is managed in an effective and proper manner.
Amendment No. 32 would prevent a director appointed by the corporation from calling an extraordinary general meeting. This power conferred on a director appointed by the corporation runs parallel to the powers under the Companies Act for shareholders and directors to call an extraordinary general meeting. It does not remove those powers. Rather this specially appointed director can act independently to call an extraordinary general meeting where he believes this would help to achieve the purpose for which he has been appointed—the proper management of the company's affairs. This director is acting in the public interest, which may quite legitimately differ from the interests of individual shareholders.
Extraordinary general meetings will typically be called to discuss the dismissal and appointment of directors. The corporation-appointed director will be concerned to restructure the Board to overcome management problems. Others could try to frustrate him. We cannot prevent this without removing their rights, which we have not sought to do.
What we have done is give the corporation further powers which we shall come to in later parts of this schedule to take more decisive action, if their appointed director or directors cannot get things under control.
I hope that explains to the noble Lord our logic in wishing the director to have these particular powers. I agree with him that it is unusual, though I can think of many instances in corporate practice where a particular investing organisation has been given particular powers through the board of directors or through its shareholding to call an EGM which would not run with the ordinary concept of majority control. This is a device which we feel fulfils the requirements we have in this particular case. We do not believe that it creates any problems under the Companies Act. However, I wait to hear the noble Lord's remarks.
Lord Williams of Elvel: I am grateful to the Minister. I am sure that it does not create problems
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under the Companies Act; it is just wholly unprecedented. It runs in parallel with the normal provisions of the Companies Act. The Minister mentioned groups of shareholders. Certainly 10 per cent. of shareholders can summon an EGM. That applies to any company under the terms of the Companies Act. I cannot think of any regulator—Ofgas, Oftel, Ofwat, off anything else—which has the power to summon an EGM of a Companies Act company. That is the power that the Government are giving to the corporation.
The noble Lord made the point that this would be to summon an EGM which would usually be used to sack the director. An EGM is also required for increasing capital. It may well be that the corporation will wish to increase the capital of a company. Presumably, the corporation will be allowed to make that suggestion and put propositions to an EGM. It is not stated anywhere that the corporation or the director can move a motion at an EGM; it simply says he can call an EGM. He cannot even necessarily speak at the meeting except as a director. It all seems very confused. The Government should examine this matter to see what would happen at an extraordinary general meeting, if convened by a director appointed by the corporation. Would that director then be allowed to move any resolutions at the EGM? It has to be assumed that he cannot unless he has the approval of the board under the Companies Act. I should be grateful if the Minister would look into the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Dubs Lord Dubs moved Amendment No. 33:
Page 123, line 25, after ("Corporation") insert ("together with the Accounting Standards Board").
The noble Lord said: In moving this amendment standing in the name of my noble friend Lord Williams of Elvel, I shall also speak to Amendments Nos. 34 and 35.
I was a little surprised when in an earlier debate, I believe on Clause 1 stand part, the Minister, in reference to paragraph 16(1) of this particular schedule, said that there would be two sets of accounts for those registered social landlords that came both under the Companies Act and under the Housing Corporation. I was rather puzzled by that, and I have tried to think my way through the significance of this particular provision. The Government risk causing some confusion.
As I understand it, some registered social landlords are also incorporated companies and therefore have to conform to Companies Act requirements. That means that the way in which they present their accounts would have to be in accordance with the Accounting Standards Board. Other registered social landlords may not be registered companies. Therefore, they would simply come under the requirements of the Housing Corporation. But, in addition, those which come under the Companies Act would also have to come under the Housing Corporation. It is difficult for me to take comfort from an outcome which means that the corporation may set different requirements for the whole

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range of social landlords, some of whom will also have to conform to the standards of the Accounting Standards Board.
In a nutshell, it seems to me that that is excessively complicated and will cause confusion. I trust that I am right in having quoted the Minister as saying that there would be two sets of accounts. If not, if the Minister will indicate, perhaps we can clarify that. But, as I heard him fairly clearly, no doubt he goes along with that. The Minister also used the expression "separate but overlapping".
The result is likely to be that for some registered social landlords there will be two sets of accounts; or certainly some social landlords will prepare accounts in one way and others will be obliged to prepare accounts in another way. I do not see how that will help clarify the financial position of those bodies. Moreover, I should have thought that the Accounting Standards Board would require the accounts to be prepared, as it says in the schedule:
"in a proper form and … give a true and fair view of … the state of affairs of the landlord … and … the disposition of funds and assets".
I cannot understand why there should be those different conflicting and confusing requirements. It seems to me that Amendment No. 33 helps clarify matters. The amendment simply requires that the Corporation:
"together with the Accounting Standards Board may from time to time determine accounting requirements".
That seems to me a very simple change which will add clarity and consistency to the way in which those bodies prepare their accounts.
Turning to the other two amendments which concern the requirements for audit, I have looked hard at that part of the schedule which refers to this matter. The expression "a qualified auditor" comes up more than once. My understanding is that when companies come under the Companies Act, they have to appoint auditors who are members of the Institute of Chartered Accountants (I think it is that), which means that they must conform to certain specific requirements. But some social landlords may not come under the Companies Act, as has already been made clear. Therefore, I assume that the reason for this provision is that they need to have qualified auditors because they are not obliged to provide auditors with particular qualifications under the Companies Act.
I ask who such a qualified auditor would be and to what would he have to conform if they were not the same requirements as those that come under the Companies Act. It seems to me that it would be much simpler if all social landlords had to have their accounts audited by people who conform to the same standards. That is the purpose of Amendments Nos. 34 and 35. I beg to move.
7 p.m.
Lord Lucas: These amendments raise two questions: first, whether there will be two sets of accounts, as I said earlier. It is quite clear that for a company incorporated under the Companies Act 1985 and for a
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registered social landlord under this Bill, which is also such a company, there are two sets of requirements to produce accounts. There is the requirement in the Companies Act and the requirement in this Bill. The two exist not in opposition but parallel. So, in principle, there is a requirement to produce two sets of accounts.
But the Housing Corporation confirms that there are no substantial differences between its requirements and those of the Companies Act. But the corporation requires more detailed information in some areas in order to fulfil its regulatory function. It says that in practice there may not be a need for completely separate sets of accounts; all that may be required is to supply the supplementary information alongside the Companies Act accounts. Ordinary commercial companies encounter that difference when producing accounts according to the English standard and the American standard. The accounts look different and are different but they apply to the same company and the same affairs. But one is looking at a different set of regulatory regimes and a different set of purposes.
We do not feel that Amendment No. 33 is appropriate. Page 123, line 25 of the Bill applies to the accounts required by the Housing Corporation. The Accounting Standards Board is interested in the Companies Act accounts. So we do not believe that the Accounting Standards Board has any function to fulfil in that set of accounts. The two are conceptually separate. But probably in practice one set of accounts, with an additional set of notes, will satisfy the housing corporation.
With regard to Amendments Nos. 34 and 35, I agree with the noble Lord, Lord Dubs. I find the phraseology on page 124 of the Bill—paragraph 18(4)—a little confusing. What it amounts to is that an auditor has to be a Companies Act auditor. In other words, any social landlord has to be audited by an auditor who is qualified to audit a company under the Companies Act. For the noble Lord's enlightenment, that consists of the Institute of Chartered Accountants in England and Wales, Scotland and Ireland, the Chartered Association of Certified Accountants and the Association of Authorised Public Accountants. They can all audit Companies Act companies and those people will be required to audit any social landlord.
Therefore, I do not believe that there is any case for a restriction to the Institute of Chartered Accountants in England and Wales because those people are already quite happily qualified to audit any company. We do not need to look for more than that. I understand that these amendments were put forward in the fear, which I agree could easily be gathered from the wording here, that there might be some possibility of a relaxation, allowing in people who would not be qualified to audit a company to audit a social landlord.
Lord Monkswell: The Minister has satisfied me to a certain extent with regard to the arrangements for the auditing of the accounts. But I must say that he has not satisfied me with regard to the preparation of the accounts and the accounting requirements.

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I am a comparative layman when it comes to accounts. I must admit that in the past I have had some difficulty in determining what the accounts of different organisations and companies mean. Quite often they are arranged in different ways and it is difficult to work out what they signify. When it comes to housing associations or arrangements under the Housing Corporation, we must recognise that there is a need for some transparency and visibility over what is going on. We are also dealing with a large body of volunteers who almost by definition will not be qualified in accountancy. It is useful to recognise that. We must ensure, as best we can, that the accounts that may be determined by the Housing Corporation are not significantly different from accounts that may be required for companies.
I was interested in the Minister's remarks that the requirements of the Housing Corporation were supplementary and additional to enable it to perform its regulatory functions. We can all recognise that and it is probably very useful to have extra information in accounts to make them more understandable and more transparent to the regulatory authorities, members of the Housing Corporation and others involved in this area of activity. It would be useful if, when the Housing Corporation is determining its requirements, it could be involved with the Accounting Standards Board to ensure that the accounts required by the Housing Corporation are supplementary and additional rather than in a different form, which could quite easily happen.
I hope that the Government will think about this problem. Although they may not accept this amendment, I hope that they will think of other ways of ensuring that two sets of accounts are not produced but that all the information that is needed can be enshrined in one set of accounts. The Minister's remarks about supplementary or additional information would be the way to do it. It is rather disturbing to hear that we are likely to see two sets of accounts. Unless this problem is resolved, we shall only add to the confusion of people trying to determine what is going on.
Lord Dubs: Perhaps I may briefly make a further comment. I thank the Minister for clarifying the position regarding the auditors. He has confirmed that the Bill as drafted means what the amendment is intending to achieve, so I am happy to have that assurance. However, I am less happy about the Minister's comments in relation to the question of how the accounts should be kept.
The Minister said that the Housing Corporation would not require accounts to be presented in a different form from those normally required by the Accounting Standards Board but that the corporation might in some respects want more detailed information to supplement the normal Accounting Standards Board requirements. That is fairly clear. If the amendment to which I was speaking is accepted, the Bill would say:
"The Corporation together with the Accounting Standards Board may from time to time determine accounting requirements".
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I should have thought that those words would actually meet what the Minister said and clarify the position beyond doubt so that we would not run the risk of having accounts presented in two different ways by the same social landlord. It would have the other advantage that all social landlords, whether or not they come under the Companies Act, would present their accounts in a similar way and conform to similar standards. I should have thought that the Minister's argument leads to the outcome which the amendment would achieve. I wonder whether he would think again about the merits of the suggestion in Amendment No. 33.
Lord Lucas: What paragraph 16 of the schedule achieves is that all social landlords will produce their accounts in the same format. It also says that the format will be determined by the Housing Corporation alone. We think that is right. It has its own requirements and it should be able to insist on accounts which show what it wants in the way that it wants.
I am sure that the Housing Corporation is made up of sensible people. It certainly is at present and it probably will be in the future. It will wish to work as far as possible with the grain; and that will mean, as far as possible, with accounting standards recognised for companies and in general for other bodies. That is why the Housing Corporation at the moment says that in practice all it would expect to be needed is a certain amount of supplementary information presented with the accounts and reported on by the auditors. We think that the powers should be there to enable the Housing Corporation to get what it wants in the way that it wants without being forced to comply with the wishes of some other body which has a different set of interests.
Lord Dubs: I see that the Government are not to be persuaded. I still regret that that is the Minister's position. We may well find that those social landlords who come under the Companies Act, if they wish to avoid producing two sets of accounts, may, in conforming to the Housing Corporation requirements, be departing from the requirements of the Accounting Standards Board. The Minister said that the Housing Corporation will be sensible and that—I am paraphrasing what he said—it will take account of the standards of the Accounting Standards Board in order to achieve a satisfactory outcome. In other words, the Minister is saying that he will not put it in the Bill but the Housing Corporation had better do what the amendment says. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment Nos. 34 and 35 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 36:
Page 125, line 40, after ("with") insert ("the").
The noble Lord said: This amendment corrects a drafting error. It inserts the word "the" between the words "with" and "consent" in paragraph 19(4) of

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Schedule 1. While "with consent" may make sense in certain circumstances, in this one it does not. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 37:
Page 126, line 7, at end insert ("or persons").
The noble Lord said: In moving this amendment, I wish to speak at the same time to Amendments Nos. 38 to 45. These amendments are necessary because the current wording of paragraph 20(7), which deals with the conduct of an inquiry by more than one person, is ambiguous and unclear. Paragraph 20(7) was introduced as an amendment at Commons Report, consequent on another amendment providing that more than one person can be appointed by the corporation to conduct an inquiry. These amendments therefore represent a certain amount of polishing that is required. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 38 to 45:
Page 126, line 8, leave out ("considers") and insert ("consider").
Page 126, line 11, after ("person") insert ("or persons").
Page 126, line 11, leave out ("he thinks") and insert ("they think").
Page 126, line 12, leave out ("him") and insert ("them").
Page 126, line 14, after ("person") insert ("or persons").
Page 126, line 15, leave out ("and in such form").
Page 126, line 15, at end insert—
("( ) An interim or final report shall be in such form as the Corporation may specify.").
Page 126, leave out lines 16 to 20.
The noble Lord said: I have just spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Lord Mackay of Ardbrecknish: I beg to move that the House do now resume. In moving this Motion, perhaps I may suggest that the Committee stage begins again not before 8.15 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Healthcare 2000 Report
7.17 p.m.
Lord Hacking Lord Hacking rose to ask Her Majesty's Government what is their response to the issues raised in the Healthcare 2000 Report.
The noble Lord said: My Lords, my purpose in tabling this Unstarred Question is to draw attention to the Healthcare 2000 Report and to seek the considered response not only of Her Majesty's Government but of Her Majesty's Opposition to the report. I am therefore delighted that the noble Lord, Lord Rea, a general practitioner in London, is speaking from the Opposition Front Bench and, although I am sad that my noble friend
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Lady Cumberlege is unwell and is unable to participate in the debate, I am delighted that my noble friend Lady Miller is replying on behalf of the Government.
Lord Graham of Edmonton: Hear, hear!
Lord Hacking: My Lords, I am glad to have support from the noble Lord, Lord Graham. Perhaps I may also say that I am delighted that a dental practitioner in London, the noble Lord, Lord Colwyn, is taking part, as indeed is the noble Lord, Lord Butterfield, who has held a number of very distinguished appointments both in hospitals and in academia. Although this report was published in September of last year, this is the first occasion that either House of Parliament has considered it. When the report was published there was comment from the political parties which, alas, was more political than constructive in its response. Perhaps, in fairness to my noble friend the Secretary of State, I should state that he was asked questions somewhat early in the morning on the "Today" programme and probably at a time before he had had an opportunity to give the report full study. Comment from the media was also more of the hysterical than the thoughtful kind. The so-called informed press was more hysterical than other organs of our other press. Indeed, to a leading article in the Independent of 20th September 1995 there was the heading, "Faulty diagnosis … dangerous".
This is not the only report that has been recently issued which expresses concern about the future of healthcare in this country. The Royal College of Physicians published a recent report. In a press release the report is described as saying:
"The criteria and procedures for determining priorities are inadequate and rationing in the National Health Service should be more openly discussed".
The British Medical Association and the NHS Consultants' Association also issued reports.
Therefore, I shall be arguing in my short speech that this is a thoughtful report that deserves and merits a thoughtful response. There have been enormous changes in the needs of patients and in the services of the National Health Service since it was founded in 1947.
The report has been funded by a number of leading pharmaceutical companies based in this country. The composition of the steering committee, chaired by Sir Duncan Nichol, was of very wide composition, consisting of doctors, clinicians, patients associations, academia and healthcare directors. There was also the widest consultation including not only critics of the National Health Service but also of the pharmaceutical industry. No fewer than 50 healthcare organisations were consulted. I make it plain that I have no interest whatever to declare under the rules of the House, including the latest resolutions, but I am most willing to tell your Lordships, as some noble Lords know, that I am in practice as a lawyer in the City of London and among my clients there are pharmaceutical companies.
The thoughtful report begins in Chapter 2 with an analysis of the challenges that face the National Health Service now and in the years ahead. The major advances in surgery and in treatment, computing and information technology have resulted in a widening gap between the

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provision of resources available to the NHS and the ability of National Health Service patients to receive those resources.
In Chapter 3 there is a very careful evaluation of the purposes and values of the National Health Service. As regards Chapter 2, I draw to your Lordships' attention one very important matter; namely, the analysis of demographic changes. The report identifies the fact that there are 9 million people currently over the age of 65 and 900,000 persons in the United Kingdom over the age of 85. By the middle of the next century, in the year 2050, there will be 15 million persons over the age of 65 and 3 million over the age of 85. A rather graphic way of describing this demographic change is that when Her Majesty first came to the Throne in 1953, I believe that she sent 270 telegrams to those who had reached the age of 100 years. I understand that Her Majesty is now sending nearly 3,000 telegrams, faxes—perhaps she is even using E-mail—to those who have reached the age of 100.
Similar demographic changes have been identified in the United States of America where there are 6,000 more Americans celebrating their 65th birthday as every day passes. By the year 2030 it is calculated that in the United States of America there will be more persons over the age of 65 than there will be persons under the age of 18 years.
Chapter 4 of the report deals with patients' need and the great need for better information passing from the health carer to the patient. Chapter 5 analyses the healthcare professions. Page 32 gives a very interesting example of a patient scenario, which I shall read to your Lordships because it describes how, with better integrated healthcare, the patient's position is greatly improved:
"Alan Christie had been depressed for most of his adult life. He had not consulted his doctor for a few years—not since he had a course of pills that didn't work. When the practice nurse was taking his blood pressure one day it all came out, how he couldn't concentrate, sleep or experience any joy from life. She referred him to the clinic run at the practice by the community psychiatric nurse. Alan attended the clinic and the nurse soon arrived at a diagnosis of clinical depression which needed active treatment. She assessed Alan's case with the family doctor. The doctor saw Alan within twenty four hours and decided, in consultation with the psychiatric nurse, on a plan of shared care. For the first time in years, Alan feels at ease—he no longer feels divided between the inner pain he felt and the mask he always wore to hide it".
Chapter 6 of the report analyses the funding of healthcare. Chapter 7 deals with the purchasing and provision of healthcare. It was those chapters that received the most publicity in the media because the report bravely grasped a number of nettles and asked central questions. As I said to your Lordships earlier, it identifies an increasing gap between resources and demand, which naturally brings into place proper questions that should be asked about the future funding of healthcare in the United Kingdom and whether we can continue still just to rely on general taxation as the major source of income for the National Health Service.
The plain facts are that the increasing cost of healthcare goes up year by year. I give noble Lords the figures: in 1970 the cost of the National Health Service was just under £2,000 million; in 1980 it was, in round
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figures, £11,600 million; in 1990 the figure was £27,760 million. The latest figure for 1996 estimates is that the cost will be £41,427,000. So in the past five years the cost of the National Health Service, despite a number of steps that have been taken to reduce it, has almost doubled in size.
The other fact is that from the outset of the National Health Service every government have had to seek more resources for it. As I have said, the NHS was introduced in 1947 and there were no prescription charges. However, within three-and-a-half years Hugh Gaitskell, who was then the Chancellor of the Exchequer, sought to introduce a prescription charge, which resulted in him being called, if I recollect correctly, "a desiccated calculating machine". That issue also caused the resignations of Aneurin Bevan, John Freeman and Harold Wilson. However, the Labour Party was driven to introduce a modest prescription charge of 5d within three-and-a-half years of the foundation of the NHS and, although the Labour Party abolished the prescription charge when it came back to power in 1964, by 1968 Kenneth Robinson, the Secretary of State for Health, had to reintroduce prescription charges.
An example from the other side of the political divide is that the Conservative Government have recognised the need for other funding within the National Health Service in terms of private health funds and in their NHS reforms. The trouble is that the debate about the NHS has always had a political cloud over it. That point was made by Dr. David Green in his dissenting opinion on page 60 of the report—
Lord Graham of Edmonton: Time!
Lord Hacking: My Lords, as I end my remarks—well within the time-frame—I am asking your Lordships for a constructive discussion—
Lord Graham of Edmonton: Twelve minutes!
Lord Hacking: My Lords, according to my note I have 15 minutes, but I am now ending my remarks, so let us not have a debate about whether I have 12 or 15 minutes, which was the time that I understood was available to me for opening the debate.
Let us have a constructive discussion. Above all, let us look at the valuable contribution which this report has made to the debate on healthcare in the future. I shall not read it out because there is not the time, but I draw your Lordships' attention particularly to the moving patient scenario which is identified on page 47. I commend the report to the House.
7.32 p.m.
Lord Butterfield: My Lords, as the lone Cross-Bencher, I am pleased to enter the debate which the noble Lord, Lord Hacking, has so wisely and kindly initiated. The Healthcare 2000 Report comes from a very prestigious committee led by Professor Sir Duncan Nichol, who has produced a penetrating and comprehensive report, which is not surprising because for a long time he was at the centre of the NHS. His committee is a powerful one and its report reflects the

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growing interest in such matters as the new roles of, and responsibilities for, the well-informed patient and how we are to make patients well informed. It raises interest in the movement of the centre of gravity of healthcare towards community services and it probes the questions of trials in the organisation of medical care and the flexibility of payment.
There is no doubt that it is very important for all of us who are concerned with the health service that we do not allow the fact that the examination is arduous to mean that people do not even try to take it. I urge noble Lords to read the report because they will find that a wide network of healthcare ideas is incorporated into the committee's deliberations. There will have to be a good deal of debate about the points raised in it well on into the millennium.
We are always concerned about training in the health service and I have been intrigued by the Chinese philosopher who urged that when facing complicated questions, leaders of organisations should always try to find the key link of the net of complexities, because if you find that key link, you can cast your net onto the river where it will settle evenly and enrich the chance of a good catch of fish.
For me, the key link is buried on page 8 of the report. Your Lordships will not be surprised when I say that it reads:
"It will be important for the caring professions to continue to attract the most able young men and women into their ranks. The growing diversity of need for the different types of professional ability requires people of varying characteristics and abilities".
To that, I should like to add that we must ensure that we attract the most ethical and sensitive young people. I believe that that is likely to happen only if the right philosophy lies behind healthcare. Students, whether they are nurses, doctors, physiotherapists or social workers, must be selected from the cohorts of young people who can be expected to put the patient first and not see patients simply in economic or profit terms.
I spoke earlier today to the President of the Royal College of Physicians, Sir Leslie Turnberg, who was involved for a time with the healthcare committee, and he is particularly anxious that we do not allow the funding of the NHS, and particularly the education of workers in the NHS, to fall behind in the eyes of either the public or the Treasury. I agree, but I think that that interest will be maintained only if the demographic problem in particular is constantly put before Parliament and the public.
It is equally important that the students selected for the health service have a philosophy of helping people to stay fit and that they see health promotion not as a bore but as a vital part of their co-operative work with their patients. David Green recognised the increasing burdens of self-inflicted disease on the health system and wrote an interesting note of dissent. As an economist, he was intrigued by the idea that health planners appreciated the power of individuals over the maintenance of their individual health programmes. That brings one face to face with the concept of patients
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planning their own care. It is expensive and, in my experience, even the rich are not able to work out particularly good health programmes for themselves.
The whole idea of an individual organising his healthcare programme is fairly common in America where the public are genuinely concerned about their personal responsibility for healthcare costs and where people are used to looking over and paying health bills. The idea of choosing the best buy becomes a feasible family procedure in America, but it is a strange sort of occupation for the great majority of the British people. To me, it seems best to leave the responsibility for determining the best health buys over the next 20 years or so to those general practitioners who are fund-holders and therefore have some authority in this area. I think that that is the sort of solution which the British would find most acceptable after 50 years of the NHS. However, I must add that it is important that such matters are debated.
When David Green considers the cost distribution of health between people of different ages, he recognises that the elderly are more expensive, but I do not think that he allows a high enough variation in their direction. I believe that the elderly can cost between three and five times as much as the middle-aged for the very expensive care and therapies that they need.
Of course, when people pass the ages of 60 or 65, they move into difficulties with the healthcare insurance folk. If they want to start a health insurance programme, they find that they can be covered into the future only for conditions which will be new to them. If they are discerning, they will notice that the financial premiums rise at the rate of 3 per cent. or more per annum. In effect, it seems that the diseases with which the elderly have been wrestling as their own weaknesses, such as osteoarthritis, emphysema, chronic lung disease, dementia or incontinence, are the very conditions that will bring them into difficulties with the health insurers who say, "We will be delighted to cover you for new conditions, but not for those which you already have". As chronic diseases last a long time and doctors strive to recognise diseases as early as possible, they are likely to lead to conditions which will put elderly people into difficulties in obtaining private health insurance. There is a great deal of scope for discussion about this matter in future. I suspect that one of the issues to be faced is the reopening of the question of euthanasia. I apologise for introducing that thought. However, the more one hears of the age spread, the more we shall hear about that subject in future.
I conclude by speaking about the role of exercise in staving off immobility, which so often mars old age and adds to the cost of caring for the elderly. In a speech I made in the House last year I believe that I amused one noble Lord by stressing the importance that I attached to the need for all of us elderly people to keep our thigh muscles, the quadriceps, strong and firm to keep us mobile and enable us to get up from chairs and so on.
On this occasion I feel compelled to bring to the attention of your Lordships, and your Ladyship, a small illustrated booklet—which I hold up and will place in

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the Library—entitled Exercise for Healthy Ageing. That booklet is published by Research into Ageing, a charity that I had the privilege to help launch in the 1970s. This booklet was first published in December 1994, and by March of this year it had reached its 11th impression. It makes the important point that it is never too late to start exercising. A commitment to stay active and exercised is an investment to help one remain independent.
My gesture in this short debate, which can touch only the tip of the huge iceberg covered by the report of Healthcare 2000, is to place a copy of the booklet in the Library in the hope that it will be a practical contribution to people's health and so to the NHS and the cost of the caring programme. I am not naêve enough to believe that this approach—the provision of guidance—solves the problems. The publication of a booklet only starts the process of health promotion. We are still only at the beginning of what can be done to promote the nation's health and the health of the elderly and, most particularly, to stave off the difficulties and disabilities experienced by an increasing number of people in future.
7.43 p.m.
Lord Colwyn: My Lords, I am grateful to my noble friend Lord Hacking for introducing this short debate this evening. I welcome him to the ranks of the medical speakers of this House. I also welcome my noble friend Lady Miller who is deputising this evening. I hope that my noble friend Lady Cumberlege will be back with us soon and regains her good health.
I read the report and found it interesting, provocative and challenging. Surprisingly, I found myself in agreement with the two previous speakers and much of the note of dissent written by Dr. David Green. In particular, I agree with his regrets that party politics and partisan affiliation are intricately involved in the NHS debate. In one way or another I have been involved in debates on the NHS in your Lordships' House for nearly 30 years. I sincerely believe that successive Governments have provided and always will provide funding and instigate changes that they believe are beneficial to the service.
It was not until I arrived this evening and realised there were so few speakers in the debate that I regretted having prepared only a four or five-minute contribution. I should like to say a few words on integrated care management which features in chapter seven of the report under the title "The Purchasing and Provision of Healthcare". The report states:
"The integration of purchasing for primary and secondary care will allow the purchasing of a co-ordinated package of care within which a clinical pathway becomes the basis for disease management".
I declare an interest as a dental practitioner and the director of a biotechnological company. Disease management is not a concept; it is reality. It is not a marketing tool for the pharmaceutical companies; it is a fundamental change in the nature of managing chronic disease that is happening now and will affect every participant in the health care industry from scientist to manufacturer to consumer. Disease management is the marker and the means for the shift from a component
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based to an overall integrated approach to diagnosis and treatment. Healthcare is a system, and there will be great financial savings for the health budget if the UK Government are able to use the system's new tools for making much needed improvements. The report states this as a challenge. It states that information technology will increase the quality, quantity and accessibility of information.
Disease management encapsulates the economic and social cost of disease, methods for detection, treatment and prevention. In assessing the cost and benefit of any one product, these issues must be considered by government, industry and patients. I believe that my noble friend the Minister will agree that an understanding of the economic and social costs of disease and a reduction of those costs are paramount in effective disease management. Having identified an illness and a section of the population for disease management, there are many decisions that need to be made. In some instances those decisions require funding to be made available now in order to realise significant long term savings.
Osteoporosis is one disease state which illustrates the point well. In the UK there are approximately 3 million osteoporosis sufferers but, as Healthcare 2000 points out, there are signs that not all patients who would benefit from some new treatments are obtaining them. Only 250,000 are treated at a cost of £640 million annually. The majority of costs occur as a result of fractures. One in three orthopaedic beds is occupied by an osteoporosis victim. It is only after suffering a fracture that an individual can be identified as having osteoporosis. Prevention is too late, and hence the £640 million associated costs follow. If the remaining 2.75 million patients are undiagnosed and untreated, it is only a matter of time before there will be an explosion of costs associated with osteoporosis.
Looking ahead, new innovations which can enable the diagnosis of disease in the doctors surgery must be promoted by the Department of Health. The improvement in diagnostics, developments in medical imaging and access to centres of specialist expertise can take treatment of diseases such as osteoporosis out of the hands of healthcare institutions and back to the general physician. Going the other way, it is my belief that oncology disease management should be taken away from the general physician and placed in the hands of specialised out-patient centres. The majority of general physicians are not comfortable with or completely knowledgeable about competing therapies and their costs. We have recently seen examples where breast cancer patients are treated differently in different parts of the country and have different chances of survival. If oncology patients are treated in specialised centres, I envisage improved outcomes and convenience together with a reduction in costs.
Disease management is no longer a concept. The Government must accept its arrival and take advantage of the new opportunities it will offer. Diagnostic and therapeutic tools exist today which have the ability to put disease management into practice and new

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developments in the same must be carefully assessed for their ability to contribute to the reduction of healthcare costs.
I hope that my noble friend will have time to comment on some of Dr. Green's remarks. The report believes that patients should be given statutory recognition along with clinicians and management. I agree with Dr. Green that giving patients statutory recognition is irrelevant to the exercise of personal responsibility and assumes that we are not capable of any personal responsibility and must have all aspects of healthcare managed for us. He refers to the Government's Health of the Nation report, where some of the national targets set by the Department of Health give officials responsibility for matters which should be strictly personal.
Declaring another interest as President of the All-Party group for Complementary and Alternative Medicine and the Natural Medicines Society, I agree that to a large extent our health status depends on our lifestyle: on what we eat, how much we exercise, and whether we smoke and drink. I agree with the noble Lord, Lord Butterfield, that this has to be a personal responsibility. I was sorry not to have seen anything in the report about the increasing national interest in complementary medicine and nutrition and the role that they will play in the future. I suppose that that is not unusual for a report funded by the pharmaceutical companies.
In conclusion, the report is a useful document to encourage discussion. I congratulate the members on their comprehensive analysis. Disease management and managed health-care are factors about which we will hear much more in the future. I feel sure that many of the recommendations are likely to be considered by the Government, and I look forward to hearing what my noble friend has to say.
7.52 p.m.
Lord Rea: My Lords, I am grateful to the noble Lord, Lord Hacking, for giving us the opportunity to discuss the report, although I am sorry that he chose today, because today is my birthday and I was perhaps hoping to do something else this evening. There is still time!
When the report was published, it received, as the noble Lord said, a great deal of publicity, but much of it was critical, from the Left to the moderate Right, including, as he said, the Secretary of State. As the noble Lord said, the matter has not been raised in Parliament except as an Unstarred Question in your Lordships' House on 17th October last when it occupied precisely three minutes. Clearly it had not exactly excited the House. An explanation for that may be that it was the first day back after the Summer Recess.
The noble Baroness, Lady Cumberlege, said on that occasion that while not agreeing with all the conclusions, it was a useful contribution to the health debate. I would put it the other way and say, "While agreeing with some of the conclusions, it is not a particularly useful contribution to the health debate,
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despite the time, trouble and expense obviously given to it". The report was financed wholly by the pharmaceutical industry. The authors however claim:
"It is entirely independent of both its sponsors and of any other sectional interest either within or without the National Health Service".
Therefore a great deal depended upon the outlook of the steering group and its chairman, Professor Sir Duncan Nichol, wearing his academic hat for the publication—which did not, incidentally, mention that he is also a director of BUPA.
My broad brush criticism of the report is that it barely touches on how the health of the nation could best be improved but concentrates almost entirely on how the health service can best respond to a demand for care which is painted as virtually spiralling out of control. One sentence refers to the fact that:
"Alleviation of poverty, improvements in housing and environment rather than the NHS, may be the best way of improving the health of individuals".
It went on only to dismiss that as impractical since:
"all political parties are committed to sustaining and increasing the funding of the NHS".
That suggests that these major, highly desirable and necessary improvements in the fabric of the nation can be achieved only by cutting the percentage of GDP going to health.
One of the deficiencies of the report leading to such a mistake may be that of the 68 experts who were consulted only two were public health specialists or epidemiologists, and one of those told me that his evidence was not used in the report, although his name is given as one of the advisers.
In 12 minutes, it is impossible to do justice to a 70-page report. The best way to tackle the task may be to address one or two of the areas which the briefing for the report kindly sent to us by the publishers suggests the Government and opposition parties should be asked to clarify. First, do we agree about the pressures on the NHS? The answer of course is yes, in so far as those are due to an increase in the number of elderly people, increasing technology, and increasing public expectation, but those will not continue to escalate for ever. They will eventually tail off.
Only one elderly person in four is in need of care. Although more people are surviving to 85 plus, they are now much fitter. Technological improvements can lead to reduced costs as well as increased costs. However, I agree that the balance is likely to be upward. Some of those extra costs are excessive. The Government need to continue to be firm in their pricing negotiations with the pharmaceutical industry and in their efforts to reduce prescribing costs.
Yes, public expectations are bound to rise. What is interesting however is that better off and better educated people are fitter and use the NHS less than poor or less educated people. That applies even to those who do not use any private care. They live longer, but they are more self-reliant. As society has increased its standard of living, a higher and higher proportion of the population moves into the professional and skilled sector. It is those who are left behind who have the worst health and the greatest burden of illness which falls on the NHS.

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Dr. Richard Wilkinson of Sussex University and UCL has shown in a series of papers that the health of a country improves in proportion to the equity of distribution of income between the better and less well off.
The second question the briefing asks is: do we agree with the conclusions of the report? In brief, those relate to patients' views, healthcare professionals and funding. We feel that current avenues can be developed rather than that a new system be brought in to discover the views of patients. The community health councils need to be strengthened. The CHC members must have a right to be present and speak at all meetings of health authorities and trusts.
The membership of trusts and health authorities needs to be more representative than it is now. We spent many hours in this House talking about the membership of health authorities as the National Health Service and Community Care Bill went through the House. I thoroughly agree—this is the best part of the report—that healthcare professionals should explore the merits of a common core curriculum and greater flexibility between the professions.
It is the funding proposals with which we have the greatest problem. The report suggests that more private resources should be brought into the NHS; that those who wish should be able to buy certain extras within the NHS. The reason given for that is that it is unreasonable to expect the public sector to go on increasing its share of taxation revenue when other countries have a higher proportion raised privately.
In the table on page 34 of the report, four other countries which are wealthier than the UK are shown to have a higher proportion of healthcare spending in the public sector than we do. In fact, it is not given in the report; but they also have a higher proportion of their total GDP spent on health as a whole. The countries are Norway, Luxembourg, Sweden and Iceland. All of them have health statistics equal to or a little better than the United Kingdom. There is no great move that I know of in any of those four countries to change its system. I dare say that governments are in difficulty all the time about keeping up with the costs of those health services, but their health service systems are effective and popular.
To conclude, this expensively produced report is, to my mind, flawed because although some of its suggestions are excellent, it is inconsistent and cannot claim to be representative. It has not consulted widely enough, nor does it properly represent the views of the professions who work in the National Health Service. That is a great pity because the report took a great deal of time and expense to produce.
8 p.m.
Baroness Miller of Hendon: My Lords, my noble friend Lady Cumberlege is very disappointed that she is unable to be here tonight for this debate, as it was she who originally replied to a Question by the noble Lord, Lord Dean of Beswick on 17th October last year. However, it has given me the opportunity of listening to this interesting debate, and I would like to thank my
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noble friend Lord Hacking for making that possible. He started his speech by saying that he hoped I would give a thoughtful reply and I very much hope that he will consider that my reply is a thoughtful one.
Also, while I am making these pious wishes, perhaps I may say that I hope that the noble Lord, Lord Rea, enjoys the rest of the day, and we all wish him a very happy birthday.
Noble Lords: Hear, hear!
Baroness Miller of Hendon: My Lords, while not agreeing with all its conclusions, Her Majesty's Government consider the Healthcare 2000 report to be a useful contribution to the debate on the future development of health services. It is timely that we are debating this issue on the day that the annual NHS Priorities and Planning Guidance is issued. This provides the overall national framework and the context for the planning and delivery of health services in England for the coming year. Comparable guidance is also issued elsewhere in the United Kingdom.
As my noble friend Lord Hacking told us, the report UK Health and Healthcare Services, Challenges and Policy Options was published by the Healthcare 2000 Forum in September last year. The forum was established and funded by Pharmaceutical Partners for Better Health, an international group of research-based pharmaceutical companies.
The Government do not accept the report's central contention that the need for healthcare will necessarily increase faster than the availability of tax funding. I know that the noble Lord, Lord Rea, agrees with that. Nor, therefore, do we accept that we face a stark choice between increasing user charges and/or patient co-payments and reducing the services provided by the NHS. The Government are firmly committed to the founding principle of the NHS—that it will remain open to all on the basis of clinical need and regardless of ability to pay—and we would not contemplate any system of funding that jeopardised this.
The other main issues raised in the report, which I will address in turn later, are: a proposal for a statutory body to represent the patient's voice at national and local levels; consideration of a common core curriculum for all entrants to the healthcare professions; the development of integrated care management to allow the purchase of packages of care; and consideration of the introduction of competition between health authorities and a mix of public and private franchises in healthcare purchasing.
This Government are justly proud of our record on NHS funding. I note that my noble friend Lord Colwyn felt that all governments do their very best to put whatever is necessary or whatever they are able to into the National Health Service. Since 1978–79 spending by the health service in the United Kingdom as a whole has increased by more than 70 per cent. in real terms. At the same time we have greatly improved value for money in the NHS. In England, for example, efficiency in Hospital and Community health services has increased by over a quarter between 1978–79 and 1994–95.

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The report is probably right in concluding that pressure on health service resources is likely to grow. One key pressure arises from demographic change. However, it is a pity that there is no acknowledgement in the report that demographic pressures are relatively modest for the next decade or so, giving us a window of opportunity before the real challenges of the second and third decades of the next century.
The long-term growth in demand for hospital and community health services from demographic pressures is expected to be lower over the next decade than over the last. Demographic pressures are expected to add only around 0.5 per cent. per year to costs for the next 10 years compared with 1 per cent. a year in the past 10 years. Again, taking figures for England, at a time when demography was adding 1 per cent. a year to demand pressures, real resources for hospital and community health services were rising by 3.4 per cent. and activity was increasing by 2.6 per cent. per year. Recent experience therefore is that extra money used more efficiently has not only enabled the NHS to accommodate the pressures on it but to increase the level and range of treatment that has been provided. In relation to demographic pressures, this task should be easier over the next 10 years than over the last.
The Government welcome the rapid development of medical science, which is contributing enormously to improvements in healthcare. The rate of advance may well accelerate but this will not necessarily mean an acceleration in cost pressures. The impact of medical advance on overall healthcare expenditure is a complex one. Some highly effective innovations increase both treatment costs and overall expenditure. But others can reduce expenditure across the health sector as a whole and also enable us to improve quality in healthcare while simultaneously reducing resource pressures.
To enhance our knowledge of such significant clinical advances, the United Kingdom was the first country in the world to establish research and development as a core function of public healthcare. Since 1993 over 300 studies have been funded by the NHS Executive under this strategy in priority areas, including mental health, heart disease and stroke, cancer and the links between primary and secondary care and health technology assessment. Related activities have also taken place throughout the United Kingdom. The Government will continue to monitor the impact of medical advance on overall healthcare expenditure. There is so far no evidence that the pressures will prove to be unaffordable.
Although we recognise that priority setting is a fact of life, we reject the centrally determined approach to priority setting that appears to be proposed by Healthcare 2000. Instead, the Government favour priority setting at three levels: Ministers set out a framework of national priorities and targets for improvement; health authorities (or health boards in Scotland and health and social service boards in Northern Ireland), and GP fund-holders assess the needs of their population and the services required to meet them; individual clinicians decide the most clinically appropriate treatment and clinical priority for each
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patient. This overall approach was endorsed last year by the Health Select Committee in its inquiry on priority setting in the NHS.
Improving the effectiveness of NHS clinical services has been a central objective for a number of years now. An example of this is the NHS Executive's approach for England which is set out in Promoting Clinical Effectiveness and was launched in January this year. Similar initiatives are also under way in Wales and Scotland. The Healthcare 2000 Report also rightly refers to Health of the Nation, with its aim of reducing avoidable ill health and premature death and promoting longer and healthier lives. Similar strategies are being taken forward in all four home nations.
Health Ministers and officials regularly meet patient groups in a wide variety of different contexts. We do not see a need to create a statutory body to represent the patient's voice at national and local levels as Healthcare 2000 proposes. This would compromise the independence of patient groups and could present a false and bureaucratic picture which underplayed the great diversity and richness of their views.
However, the Government welcome the report's emphasis on improving patient information and representation. I know that the noble Lord, Lord Butterfield, is concerned about this. In England, for example, it is one of the six medium-term priorities for the NHS to:
"Give greater voice and influence to users of NHS services and their carers in their own care, the development and definition of standards set for NHS services locally and the development of NHS policy both locally and nationally".
We are also developing a programme of action throughout the United Kingdom at both national and local level, building on the Patient's Charter programme. We are seeking to foster a variety of local good practice and avoid inflexible national blueprints.
Under an information systems strategy for NHS research and development, arrangements are in place to make information from research findings accessible to patients, carers and self-help groups. This is being addressed in different ways. The NHS Centre for Reviews and Dissemination is tasked with reproducing research findings in a user-friendly way to the public by, for example, publishing information leaflets on maternity services. I have other examples, but in view of the time, I must move on.
Like the noble Lord, Lord Rea, we welcome the report's suggestions about the developing role of healthcare professionals as a valuable contribution to an ongoing debate, and I know that that is of interest also to the noble Lord, Lord Butterfield. We are encouraging and promoting inter-professional learning opportunities. We have commissioned a survey of inter-professional learning initiatives in England, the results of which will be shared when available. The NHS Executive has also commissioned a major programme of research into human resource effectiveness and one key strand is the issue of role boundaries of healthcare professionals and the educational implications. Comparable work is under way elsewhere in the United Kingdom. But it is a matter for individual university medical schools to determine

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their own undergraduate medical curriculums. The noble Lord, Lord Butterfield, is right to say that we must attract the best people into the medical profession.
Among the competencies required of the next generation of doctors are: flexibility and appreciation of the benefits of multi-professional working, which both noble Lords opposite mentioned; better communication skills; an ability to empathise with patients and colleagues; a greater appreciation of the opportunities and challenges of primary and community care; and a greater understanding of ethics. The noble Lord, Lord Butterfield, was so right to mention that. These are major developments in undergraduate medical education which will not fully work through until well into the next century.
I turn now to the report's proposals for integrated care management. These are precisely what we are aiming to achieve through a primary care led NHS, the aim of which is to empower patients and primary health care teams to oversee the entire programme of care for particular patients or groups of patients. However, unlike Healthcare 2000, the Government wish to see the primary healthcare team, with their better understanding of an individual patient's needs and requirements and the ability to make appropriate links to social services where necessary, playing the leading role in purchasing and managing integrated care.
The noble Lord, Lord Hacking, referred to a gentleman who had a problem with mental health services. Yesterday I had the great pleasure to stand in for my right honourable friend the Secretary of State at the opening of a GP fund-holding practice. It was extremely good to see counsellors present in the practice.
Lord Rea: My Lords, before the Minister sits down, she implied that the fact that the counsellors were with that practice was because of its fund-holding status. The practice with which I have been involved has had counsellors present for something like 15 to 20 years.
Baroness Miller of Hendon: My Lords, I am very glad to hear what the noble Lord said. That makes it even more interesting.
We are extremely proud of our National Health Service. It provides patients with treatment and care which are both clinically effective and a good use of taxpayers' money. We were extremely pleased to see that the Royal College of Nursing's parliamentary brief for this debate endorses that view. The National Health Service will continue to strive to meet the needs of individual patients and will adapt as their needs change and as medical knowledge advances.
Lord Hacking: My Lords, before my noble friend finally sits down, if I understood her correctly, she said that the pressure of demographic changes on health costs will be less during the next decade. Perhaps she will tell the House what is the basis of that assertion, particularly in view of the figures which I gave to your Lordships
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which indicate a substantial increase in health costs year by year and that there has been an enormous increase between 1990 and 1995.
Baroness Miller of Hendon: My Lords, my understanding is that we do not accept the figures in the report on this matter. We believe that demographic pressures are expected to add only about 0.5 per cent. per year to costs for the next 10 years compared with 1 per cent. per year for the past 10 years. However, if I am not correct about that I shall most definitely write to the noble Lord.
Lord Hacking: My Lords, but I am asking what is the basis for that assertion.

Housing Bill
8.15 p.m.
House again in Committee on Schedule 1.
Lord Lucas Lord Lucas moved Amendment No. 46:
Page 128, line 42, at end insert—
("( ) Proceedings for an offence under sub-paragraph (1) may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").
The noble Lord said: In moving this amendment, shall speak also to government Amendments Nos. 119, 122, 126, 130, 131 and 171 and also to Amendments Nos. 46A, 46B, 119A, 119B, 126A, I 26B, 130A, 130B, 179A and 179B in the name of the noble Lord, Lord Williams of Elvel.
All these amendments concern proceedings for offences. The amendments we are proposing bring Clauses 31, 33, 35, 37 and 38 and paragraph 26 of Schedule 1 and paragraph 4 of Schedule 2 into line with provisions in Schedule 1—paragraphs 19, 23 and 24—whereby proceedings for offences may be brought only by or with the consent of the corporation or the Director of Public Prosecutions. They also bring them into line with current powers, under which the corporation brings proceedings from time to time.
There is no justification for different provisions in the Bill for what are in essence similar offences with similar penalties. The amendments we have proposed remove that discrepancy.
The effect of the amendments in the name of the noble Lord, Lord Williams, would be, among other things, that the corporation could not bring proceedings in certain cases without the consent of the Director of Public Prosecutions. This does not seem to us to be sensible. The issues on which proceedings may be brought are not generally matters of wide public interest; they are relevant to the corporation's regulation of social landlords. They are the result of non-compliance with requirements of the corporation; for example, failure by an association to supply information on its accounts. These are important matters for regulation, but do not warrant the routine involvement and additional bureaucracy of the DPP.
I look forward to hearing what the noble Lord, Lord Williams, has to say on his amendments, having heard our reasons for tabling our amendments.
Lord Williams of Elvel Lord Williams of Elvel moved, as an amendment to Amendment No. 46, Amendment No. 46A:
line 3, leave out ("by or").
The noble Lord said: It may be for the convenience of the Committee if, in moving this amendment, I speak to the amendments as they are on the groupings list.
I have a certain worry about this, as I explained to the Minister in earlier conversations. After all, we are dealing with criminal offences and with a number of criminal offences which up to now the corporation has been in charge of. But given its new powers, I wonder whether it is right that criminal prosecutions which involve penalties of a criminal nature should be brought by the corporation and not the DPP or the Crown Prosecution Service.
I am concerned, not on behalf of myself or my wife but on behalf of others, that there may be occasions when, for one reason or another, compliance with, say, the accounting requirements in paragraph 19 of the schedule may not be achieved by anything other than a casual approach—I do not say "negligence" because that is a legal term—simply because people do not understand what is required. The problem that I have is that "every responsible person" (to use the expression in paragraph 19) who is directly concerned may be open to prosecution by the corporation.
As I understand it—and the Minister may wish to correct me if I am wrong—all the offences which the corporation can proceed against are appealable. If they are appealable, then they must be appealable on a reasonable basis, without having the corporation exercising its muscle in the first place. As a probe, more than trying to amend the Bill, I am really asking the Government whether they have thought the matter through. In other words, should the corporation be allowed to bring criminal proceedings against individuals who may for one reason or another be unwitting? Is that right and proper in our law? I beg to move.
Lord Monkswell: I rise to support the amendment moved by my noble friend Lord Williams. I believe that we need to think in terms of the wider perspective and also bear in mind the experience of recent years. One can see very clearly the difficulties which arose when Customs and Excise had the ability to prosecute independently of the Crown Prosecution Service; indeed, that culminated in the investigation and the report of Lord Justice Scott.
I am not saying that that sort of thing is likely to happen. However, it raises the issue of the test of public policy which is quite important when prosecutions are involved. Two sets of standards may apply: one that the Housing Corporation would apply in terms of its prosecuting endeavours and one which the DPP would follow. As my noble friend suggested, we are talking
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about criminal offences and the criminal justice system. Therefore, it is quite important that common standards of prosecution should apply throughout the land.
One of the improvements that would result from the Government's acceptance of my noble friend's amendment is that we could rest assured that common standards would be applicable throughout the criminal justice system which might not obtain if the Bill is left in its present form, as proposed by the Government.
Lord Lucas: I understand the concerns expressed by the noble Lords, Lord Williams and Lord Monkswell. However, they should bear in mind the fact that we are discussing effectively routine matters of regulation. One hopes that the powers will not be used frequently, but they apply to relatively minor matters and would enable the corporation to enforce on social landlords the retention of information in the form in which it is supposed to be kept.
I appreciate that we are talking about criminal matters and, of course, they will be tried in a criminal court. It is not as if the corporation will be acting in any judicial capacity; it will merely be the prosecuting party. The Director of Public Prosecutions is, shall we say, strongly of the view that he would rather not have his staff burdened with such relatively small matters if they can be handled reasonably by the corporation.
Lord Williams of Elvel: Before the Minister continues, can he tell the Committee what would happen in the following situation? For the purpose, I have in mind paragraph 19 of the schedule. Let us say, for example, that a social landlord is not conforming with the accounting procedure, and so on. It is an offence not to do so. The corporation then brings a case and, according to paragraph 19 of the schedule, certain criminal penalties apply to such an offence; namely,
"a fine not exceeding level 3 on the standard scale".
In that case the corporation is a prosecuting authority, as the Minister rightly said. However, is there any other case involving, say, Oftel, Ofgas or Ofwat, where an organisation is a prosecuting authority and can act as such as opposed to referring a criminal offence to the DPP? I would be grateful for an answer to that question because, if such a precedent exists, it would solve many of our problems.
Lord Lucas: I am not aware of any precedent. However, I shall certainly carry out some research into the matter and, whether or not I am successful, I shall write to the noble Lord. I am sure that the noble Lord realises that the regulatory authorities such as Ofgas, Oftel and Ofwat are generally dealing with very large companies and that, therefore, different means of control are perhaps appropriate for them rather than for several thousand, mostly small, social landlords.
Lord Williams of Elvel: That may be so; indeed, I understand that. However, if a company under the Companies Act does not do what it should do and, say, fails to produce its accounts, the prosecuting authority would not be the DTI; the matter would be handed over to the DPP. It is the Government who prosecute, not a quango or a regulator. Can the Minister say whether any

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quango or regulator has any powers of prosecution regarding criminal offences? If not, then I believe that we shall have to look rather carefully at the matter.
Lord Lucas: I am sure it is quite right that we should look carefully at the matter. As I said, I am not aware of any precedents. The organisation that we are discussing is something of a unique body as regards the amount of money which it dispenses and the variety of organisations to which it dispenses it. We need to look at it in terms of the appropriate ways in which that organisation should control the people to whom it passes the money. The solution that we have put forward is that it should be done by means of giving the corporation the power to initiate criminal prosecutions. Of course that is something which does, as the noble Lord said, require serious consideration; indeed, we have given it serious consideration. However, we are very happy to listen to the views of noble Lords opposite, and others, as to whether it ought to be done in a different way.
8.30 p.m.
Lord Williams of Elvel: I am grateful to the noble Lord. However, it does not seem to me that the quantum really matters; it is the principle that matters. The Housing Corporation is a quango and Housing for Wales is a quango. The members of those quangos are appointed by the Secretary of State. They are not elected and they are not accountable to Parliament other than in a way which we shall discuss later in the Bill. When I was chairman of the Price Commission and the head of a quango I had no power at all to prosecute anyone who had contravened the pricing regulations. It was up to the Department of Trade and Industry to refer that matter to the DPP at the time. All I can say is that I shall be quite happy if the Government can produce any serious reason why this should not be a DPP matter—a criminal offence—and why it should be handed over to a quango which is unelected, unappointed and which has no real substantial experience of criminal matters.
Lord Lucas: I am certainly unable at this time to produce the parallels which the noble Lord, Lord Williams, asks for. I shall certainly undertake research and write to him and, as I have said, I shall also consider carefully the points which he has made about the principle involved. That is important and I shall be happy to express our considered views to him and, I hope, convince him that what we are doing is the right thing. To the best of my knowledge, what we are doing is a new procedure and therefore requires consideration. To the best of our knowledge it is the best and most practical thing to do. As I say, we are certainly conscious that we need to listen carefully to what may be said by others as regards their views on the solution we have proposed.
Lord Monkswell: How do the Government envisage this working in practice? The Government intend the Bill to say that the Housing Corporation will be the regulator and the prosecuting authority. That raises concerns about the powers of a regulator to get people to do what it wants if it can say, "If you do not do what
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we want, we will take you to court". I am sure that the Minister would not want that to occur. Therefore, presumably, there would have to be some practical separation within the Housing Corporation of the regulatory function and the prosecutorial function. We learnt from the Scott Report about how the system worked within Customs and Excise. There was a separate department within Customs and Excise that exercised the prosecutorial function. It is important that we get some idea from the Government as to how they envisage this new procedure will work in practice. Will the Housing Corporation be required to have a separate department within its organisation that specialises in the prosecution aspect, or is it envisaged that the same department within the Housing Corporation would carry out both the regulatory and the prosecuting functions? It would be useful if we could get some idea of how the Government envisage this system working in practice.
Lord Berkeley: Perhaps I can suggest a similarity between this discussion we are having about judge, prosecution and jury, and rail privatisation. In the case of rail privatisation, there is a rail regulator who is totally separate from the franchising director who hands out well over £1 billion a year to the passenger train operators in return for their operating a certain pattern of services. The two organisations are totally separate and to my knowledge neither has any capability at all to bring criminal prosecutions against a train operator for non-performance. That is not perhaps quite so likely as in the case of some landlords but the principle is the same. I support the amendment of my noble friend Lord Williams of Elvel.
Lord Lucas: I am still struggling somewhat to imagine what lies at the heart of the concerns which are being expressed by Members of the Committee on the Benches opposite. It does not seem to me that this is anything more than a sensible and convenient way for things to be done. One example has been drawn to my attention which relates to the Companies Act 1985. Sections 447 and 451 of that Act concern prosecutions which may be brought by the industrial insurance commissioner. To some extent the powers that we are looking at today have been in existence for a long while also in the Housing Act.
Lord Williams of Elvel: With respect, the industrial insurance commissioner is not a regulator. This is the problem; namely, that one has a regulator who regulates, and a regulator who is also a prosecutor. That seems to me to be the problem. The noble Lord said that he did not understand the problem of Members of the Committee on this side of the Chamber. However, that is the problem. One either has a regulator or one has a prosecutor because we have an adversarial system of justice in this country, or at least we did until recently—
Lord Lucas: I hear what the noble Lord is saying. I clearly need to give myself more time to get my mind around the difficulties which he envisages. A solution does not immediately spring to mind. As I said, this is a system which has been operating for some years, albeit to a smaller extent within the previous Housing Act. Indeed, another place has criticised the Housing

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Corporation for not employing its powers more frequently than the two or three times a year on which it does so. It is only an infrequently used power and does not require a special department, any more than bringing a private prosecution requires a special department in the case of an individual. It is just something which is done by the corporation when it is required to be done, in the way that any ordinary prosecution would be brought. I do not see the problems which seem to be in the minds of Members of the Committee opposite. However, I am quite happy to contemplate this dichotomy of the regulator and prosecutor to see whether there is anything which comes to our mind that suggests that the two cannot live in the same body.
Lord Williams of Elvel: I am grateful to the noble Lord for what he said. He does not see the problem. It seems to me there is a clear problem which I have tried to explain on about three occasions now. I am sure he will go away and think about it. The Housing Corporation has been given massive new powers by this Bill. That is not given without our approval; I am not trying to quarrel about the new powers. I repeat that I do not see why there should not be some restraint at some point on the corporation. The point at which it seems to me there might be a restraint—depending on whether the Government think it is right or wrong—is the point of being prosecutor, because if the Housing Corporation is going to prosecute, it means that the Housing Corporation will be adversarial. The idea of a regulator is that he should not necessarily be adversarial. The whole point of the Housing Corporation—and any regulator—is that it should try to encourage, and to a certain extent regulate, the industry which it is regulating or encouraging. If at the back of it—unlike Customs and Excise and other departments—there is a prosecuting authority there, I believe that the role of the Housing Corporation slightly changes. I accept that these are minor matters but they are matters which this House, as a guardian of the constitution—if I may put it like that—should consider rather seriously. I beg leave to withdraw the amendment.
Amendment No. 46A, as an amendment to Amendment No. 46, by leave, withdrawn.
[Amendment No. 46B, as an amendment to Amendment No. 46, not moved.]
On Question, Amendment No. 46 agreed to.
Schedule 1, as amended, agreed to.
Clause 8 agreed to.
Clause 9 [Consent required for disposal of land by registered social landlord]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 47:
Page 5, line 37, at end insert ("which shall be set out in guidance issued by the Corporation before the commencement of this Part").
The noble Lord said: We are now back to the main part of the Bill as opposed to the schedule. We are dealing with the control by the two corporations—that is to say, the English and the Welsh corporations—of transactions in land and disposal of land. In Clause 9 the
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consent of the corporation is required for any disposal of land by a registered social landlord. As drafted, the clause states:
"The consent of the Corporation … may be given subject to conditions".
Amendment No. 47 is a probing amendment which asks the Government to explain the conditions that the corporation might have in mind when it gives its consent. Social landlords would find difficulty in accepting an open ended "subject to conditions" provision. When the noble Lord replies, perhaps he will specify the conditions and in what circumstances they might be applied. I beg to move.
Lord Lucas: As the noble Lord said, Clause 9 requires a registered social landlord to seek the consent of the corporation before disposing of land, including houses and other property on it.
Subsection (2) provides that when the corporation gives its consent to the disposal of land, this may be given subject to conditions. Amendment No. 47 proposes that the corporation must issue guidance on these conditions and do so before the Bill is enacted.
The corporation is required under subsection (3) to consult on any general consent. It may be helpful if I outline how the existing provisions work in practice.
The corporation revised its general consent last year after extensive consultation. The object was to reduce bureaucracy while maintaining adequate accountability for public funds. There are only two main categories where specific consents are still required: first, where a charge is granted to a private lender. The corporation must be satisfied that this will not endanger the viability of the landlord, and hence past public investment. And, secondly, where existing stock financed by public funds is to be sold on the public market. Neither of these cases is suitable for general consents. Nor do they lend themselves to establishing key principles, except at the highest level of generality.
There is no intention to make any significant change to this tried and tested approach. On that basis, I hope that the noble Lord, Lord Williams, will agree that we are in practice going as far as we can in the direction that the amendment suggests.
Lord Williams of Elvel: I am grateful to the noble Lord for his response. However, will these matters be spelt out in some guidance from the corporation, or are we to rely on what the Minister said this evening?
Lord Lucas: I am sure that the noble Lord can always rely on what I say, as long as I am right.
Subsection (3) states:
"Before giving any consent other than a consent in relation to a particular landlord or particular land, the Corporation shall consult such bodies representative of registered social landlords as it thinks fit".
That process embraces most required consents. The resultant general consent is consulted on and published. Other than the two main exceptions, and others, that I have described this evening, there is in effect a document which constitutes guidance because it is the

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general consent which has been consulted on. That is what the noble Lord, Lord Williams, appears to be seeking.
The guidance is either covered by parts which are in the general consent or involves bits which could not easily be covered by guidance. Therefore there is no need for more guidance than that provided by the general consent.
Lord Williams of Elvel: I am sure that whatever the Minister says is right. However, I cannot understand why we have the expression "may be given subject to conditions". Subsection (3) states that the corporation shall consult such bodies, as the Minister said. Why do we have the expression "subject to conditions"?
Lord Lucas: I do not immediately see how one can avoid the expression "subject to conditions" if one wishes to be able to give a consent in any terms other than "yes". If one wishes to say, "Yes, if you do such and such", one has to be able to put a condition in place, particularly if one is considering a rather complex proposal of the type that I described as a difficult area. It is quite reasonable for the corporation to be able to put conditions on its consent. The general consent would presumably not be subject to conditions. If it is a general consent, people can do it; the consent is given.
Lord Williams of Elvel: I do not wish to prolong this argument. If there is a general consent which is agreed, and a specific consent which is covered by subsection (3) involving consultation and so on, why do we need those words in the Bill? They arouse suspicions in some people who are not as familiar with the Bill as is the noble Lord. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 48:
Page 6, line 1, leave out ("A disposal") and insert ("An agreement to dispose").
The noble Lord said: In moving Amendment No. 48, it may be for the convenience of the Committee if I speak also to Amendment No. 49.
It is a small and possibly legal point. What is a disposal? I have always believed that there was something called an agreement; that an agreement provided for certain matters including a disposal; and that an agreement can be void, but a disposal cannot be void because it is only the result of an agreement to dispose.
It is a drafting point that I have raised previously with the Minister. However, I shall be glad to hear his views on whether I am right or wrong. I beg to move.
Lord Lucas: I find myself asking the same question. I have not yet been able to satisfy myself that the problem which the noble Lord describes does not exist, although many are confident that it does not. I hope that the noble Lord will allow me to assure myself one way or the other as to what this wording means when viewed by a lawyer as opposed to a rather confused accountant. Perhaps I may come back on the matter before Report stage.
Lord Williams of Elvel: I am grateful to the noble Lord for sharing my confusion. However, the Government have put forward a Bill which contains the text. I am not a lawyer by training, but certain of my noble friends who are take the view that I have described. An agreement can be void; a disposal can only result from an agreement. Therefore, a disposal by itself cannot be void. I understand that although I gave the Minister notice, he wishes to take advice. I look forward to hearing from him before the Report stage as to what the advice was. It may be that the advice will be disputed, if it comes down in what some of my noble friends feel is the wrong way. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 50:
Page 6, line 16, after ("sale") insert ("or").
The noble Lord said: It may be for the convenience of the Committee if, in speaking to Amendment No. 50, I speak also to Amendment No. 51. The definition of "disposal" gives me and some of my noble friends trouble. I can easily accept that if the rubric of the clause were "disposal of land or interest in land", then the words in Clause 9(7) would be appropriate. I understand that the rubric is not part of the Bill and will not be part of the Act in law. Nevertheless "disposal" in ordinary language means "sale", but it does not mean "mortgage, charge or any other disposition". That is a disposal of an interest in land. I do not believe that the drafting is quite correct. Having given notice of the point to the Minister, I am sure that he has considered the matter with great care. I beg to move.
Lord Lucas: I am sure that the noble Lord and I are of one mind that mortgages and charges should be subject to the protection given by this clause. At issue is the difference between the ordinary English meaning of the word "disposal", which does not include a mortgage, and the meaning given to it in this clause, where it does. I am advised and am myself sure that within its context the clause achieves what it sets out to by misusing—if you will have it that way—the word "disposal" to bear meanings that it does not ordinarily bear.
I am not concerned that the clause will do less or more than it is supposed to do. I share the noble Lord's distress that the poor word "disposal" should be abused in that way. We cannot devise anything better that satisfies us and certainly not in the time that we have had to consider it since the noble Lord brought his amendment to our attention. Our distress is merely at the abuse of the English language rather than any possible consequences for people affected by the Bill. In the absence of any suggestions as to how the problem might be got around without damaging the Bill, as the amendment would, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Williams of Elvel: Yes, I have some suggestions. It seems to me easy to produce them. If we take the rubric of the clause:
"Consent required for disposal of land",

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and add to that, "or disposal of an interest in land", it would then feed through in the drafting of Clause 9. It seems to me that it covers the point. "Disposal" is a word used not just in this Bill but also in many other Acts of Parliament. It seems odd to have a definition of "disposal"—and I accept that if the Bill says "disposal" should mean that, then it is right—which cuts across disposal of shares under the Financial Services Act, disposal of interests in property under the Housing Act and disposal of companies under the Companies Act, and all kinds of other things.
It seems to me that the wording could easily be drafted to take account of disposal of interest. That would cover lease, mortgage, charge or other disposition, because that is what it is about. I would have no problem with it. However, it seems odd to use the word "disposal" when we could easily use the words "disposal or disposal of interest in". I offer that suggestion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 51 not moved.]
Clause 9 agreed to.
Clause 10 [Lettings and other disposals not requiring consent of Corporation]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 52:
Page 6, line 24, after ("paragraphs") insert ("3, 3A and").
The noble Baroness said: With Amendment No. 52, I wish to speak to Amendments Nos. 53, 54 and 55 all standing in my name. Amendment No. 52 seeks to refer to two additional paragraphs of Schedule 1 to the Housing Act 1988. Many housing associations are charities and will look to let homes to persons at rents which their prospective tenants can afford. For example, it could be a rent of less than £1,000 a year in Greater London or £250 elsewhere. The housing associations can do that if there is a secure tenancy but they cannot do it without Housing Corporation consent where the tenancy is not a secure tenancy because of the exclusions contained in the paragraphs.
The accommodation may be, for example, not self-contained; housing associations may let a room with the shared use of a kitchen. That will not be a secured tenancy and may not be an assured tenancy. I query the need for Housing Corporation consent. In the amendment, I seek to extend the scope of the work that can be done by a registered social landlord without consent.
Amendment No. 54 also seeks to allow a letting without consent to another registered social landlord. Earlier today we referred to the management of housing association properties by another body. A management agreement may include a letting. A housing association may think it quite right to let a building to another registered social landlord which may specialise in a particular field. One area of work could be hostels for special needs clients. In the amendment I suggest that Housing Corporation consent ought not to be required when both parties are registered social landlords.
On Amendment No. 55, it has been suggested to me that as registered social landlords have a statutory obligation on the face of the Bill under Clause 16 to
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dispose of dwellings to tenants under the right-to-buy, they ought to be able to do so here on the face of the Bill. It is a drafting amendment which has been put to me as being useful, although it is perhaps less of a substantive point than the first three amendments. I beg to move.
9 p.m.
Lord Lucas: Clause 10 specifies certain categories of lettings and other disposals by registered social landlords which do not require the consent of the corporation under Clause 9. These include an assured tenancy or an assured agricultural occupancy, or which would be regarded as such other than they are used for the purposes listed in paragraphs 4 to 8 of Schedule 1 to the Housing Act 1988—that is, including business purposes, licensed premises, agricultural land and holdings, holiday lettings and lettings to students.
Amendment No. 52, tabled by the noble Baroness, Lady Hamwee, would extend the list of disposals not requiring corporation consent to include tenancies under which for the time being no rent, or a defined low rent, is payable. This amendment would, if accepted, enable a registered social landlord to set a rent for a particular tenancy at an artificially low rent or not charge rent at all, for a short undefined period, as a means of avoiding the need for corporation consent and circumventing the sensible safeguards contained in Clause 9 of the Bill.
Amendments Nos. 53 and 54 would extend the categories of letting not requiring corporation consent to include the letting of land, and dwellings on them, by one registered social landlord to another.
This amendment would again reduce the effectiveness of the corporation's regulatory powers as the arrangement proposed would provide an opportunity for a non-charitable registered social landlord to let land to a charitable subsidiary as a means of avoiding creditors if it is in difficulties.
I now turn to Amendment No. 55, which seeks to state that the provision in Clause 10(2) is to be extended to include disposal under Part V of the Housing Act 1985 (the right to buy) and Clause 16 of the Bill (the right to acquire).
These categories of disposal are already exempt from the need to seek corporate consent by way of subsection (3) of Clause 8 of this Bill. The amendment is therefore unnecessary.
I am sorry that I gave the noble Baroness comfort only in relation to what she indicated was the least important of her amendments. I hope, nevertheless, that she will feel able to withdraw them.
Baroness Hamwee: I shall withdraw the amendment and not seek to move the others in this group. However, I am interested in the Minister's reply, which is all to do with anti-avoidance rather than the more positive way in which I put the points. I am surprised if the anti-avoidance provisions are confined to these clauses. I shall take that away and have another look at it. I take the point that the Minister makes about seeking to avoid creditors. My immediate reaction was that it was an interesting but perhaps slightly strained response. For the moment, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
[Amendments Nos. 53 to 55 not moved.]
Clause 10 agreed to.
On Question, Whether Clause 11 shall stand part of the Bill?
Lord Monkswell: First, I apologise to the usual channels for not being available this morning when the Marshalled List was determined and therefore being unable to have an input where my name appeared on the list of amendments. At this stage, I shall speak only to the Question whether Clause 11 stand part, and then speak separately to the Question whether Clause 12 stand part. I had intended to speak to Amendment No. 70 as part of the "global debate" on this subject; but it would probably be best for the Committee if that amendment is taken separately at its rightful place on the Marshalled List next week, and similarly with the Question whether Clause 20 stand part, which might have been included in a much larger debate than we need to have in relation to Clause 11.
While speaking about the arrangement of the groupings, it may be useful if I advise the Committee that my Amendments Nos. 59 and 81 can be debated separately rather than being grouped together.
In relation to Clause 11 stand part, I seek some government explanation as to why the normal procedures of the market place and our property-owning democracy should be departed from in this particular case. I refer to the inclusion within the clause of what is effectively a covenant requirement that if a house is disposed of within three years, any discount given to the purchaser should be repaid, albeit in declining amounts depending on the time.
Normally when one buys something in this country, one buys it outright. One then has the right to do what one will with it. That is the free expression of the market. The Government have made great play of that aspect. It is curious that when we talk in relation to this clause about the purchase of a home for people to live in, for three years they should not have the unfettered right to dispose of it without penalty.
Let us think of various different situations that might pertain. It may be that those living in the house find alternative employment some way away as a result of which they need to move house. It may happen that, by conscious decision and acts on their part, they have improved the house and thereby increased the value of their property and seek to dispose of it in order to realise the extra value to enable them to move on in the market. Why should there be this restriction on the new owners of the house to dispose of it as they see fit in an unfettered way without penalty? I suspect that I may have some inkling of what the Minister may say, but it would be interesting to hear the Government's response to the questions I have raised on this subject.
Baroness Gardner of Parkes: Having listened to the noble Lord. I feel that he shows no understanding at all of the fact that people are being given a large discount. There is no question of people not being free to sell at
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full price if they repay that discount. The whole argument that he put forward is completely fallacious. I cannot agree with it.
Lord Monkswell: Perhaps I may respond to those remarks. If the discount is so significant, why is it expunged after three years? Why should it not last for 10 or 20 years? Why should it last for only one year? The Government need to answer why there should be that penalty and why that particular timespan is enshrined in the Bill.
Baroness Gardner of Parkes: That is not the point that the noble Lord raised in his speech on this matter. He has now introduced an entirely different point. Arbitrary dates are chosen for many things: for inheritance tax and lifetime gifts, for example. In this country there are many occasions on which we are used to a specific time over which things are phased out. It is not at all an unusual practice.
Baroness Hamwee: I have no sympathy with the first remarks of the noble Lord, Lord Monkswell, but he has raised a point on which it is worth spending a moment or two; namely, the period of time within which—I shall not call it a penalty; it is not a penalty but simply repayment of a discount—that repayment is to have effect. Clearly, there has to be a balance in these matters. However, the repayment is not payment of a penalty; it is repaying a benefit. That is the whole thrust of this legislation. But I too would be interested to know the Government's thoughts on the choice of the three-year period.
Lord Lucas: There are two points to make. One is obvious; namely, that this is a provision which has been in force since 1985. It has been running for some time. Secondly, I do not know the Government's original reason for proposing the three-year period, but I can suggest a very good reason for a period to be retained.
If there were a short period, or none at all, there would be a great trade in these goods. There would be middlemen coming along who would say, "Buy your house. I'll buy it off you two weeks later and we'll split the profit." The length of time needed to avoid that is the length of time over which the interest on the amount that the tenant has to pay would extinguish the discount that he was getting. In my rough calculation that would be about three years. I should view it as an anti-avoidance provision, so that the people who can take advantage are the real tenants and not people motivated by middlemen looking to share a quick profit.
Lord Monkswell: I am rather curious about the Minister's explanation that after three years the interest has been paid. I may have misheard him, but it seems a curious view to take of the situation. I can understand the argument that to prevent a trade in housing and people benefiting from that trade, the point at which they can reasonably put the house on the market is delayed.
It is a penalty in the sense that one has to pay something extra for doing what would otherwise be one's own unfettered right to do. Surely, if the

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Government believe in the market place, they would see nothing wrong in people making an arrangement with a third party to buy something and then sell it on. I should have thought that that was exactly what happens every day on the Stock Exchange. In happens every day in market places and in shops. Surely the Government are not saying that this is a bad thing to happen in the market place.
We have probably chased this argument round enough. I shall not press my opposition to the clause standing part of the Bill.
Clause 11 agreed to.
Clause 12 [Priority of charge for repayment of discount]:
Lord Lucas Lord Lucas moved Amendment No. 56:
Page 7, line 24, leave out ("in writing").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 57, 138 and 142. The effect of these amendments is to correct a minor drafting error in Clauses 12, 40 and 41. Each of the clauses requires a notice to be in writing, but it is not necessary to specify that as Clause 62 gives the definition of "notice" as being in writing. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 57:
Page 7, line 28, leave out ("written").
On Question, amendment agreed to.
Lord Dubs Lord Dubs moved Amendment No. 58:
Page 7, line 40, leave out ("purports to authorise") and insert ("authorises").
The noble Lord said: As the Bill stands, Clause 12(4) states:
"in so far as it purports to authorise".
The amendment would delete the words "purports to authorise" and replace them with the word "authorises". I am puzzled as to why the subsection says "purports to authorise". I have looked up the word "purports" in the Concise Oxford Dictionary. It says that "purports" means "be intended to seem" or "the ostensible meaning". Although this may seem a little circular, the word "ostensible" means "professed for show" and so on. It seems to me that if someone purports to authorise, the person is not actually authorising. He is giving the impression of authorising. I do not see how that can be void. Surely the only thing that could be void is the full authorisation. I do not see the force of this provision. It would be much clearer if the subsection stated,
"is void in so far as it authorises",
rather than it is void if someone may seem to have authorised. I beg to move.
9.15 p.m.
Lord Lucas: The problem is that if the agreement authorises a forfeiture, it does not purport to authorise the forfeiture and is therefore not void. It is only void if it purports to authorise the forfeiture without authorising it and therefore it is of no effect anyway. As the noble
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Lord said, it is a question of circularity. Which comes first: the chicken or the egg? One way or another, this is a confusing set of words which may not achieve what it sets out to achieve. We all understand, having read the clause, what it means to achieve and we are uncertain as to whether the particular wording chosen actually achieves that. We shall look at it again and return to it in one form or another at Report.
Lord Dubs: I thank the Minister for agreeing to look at the subsection again. As I listened to his explanation, I became even more confused than I was to begin with. Therefore, I am grateful that he is going to have another look at it to see whether we can get it into a form of English which means what it is intended to mean. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 12, as amended, shall stand part of the Bill?
Lord Monkswell: One of my concerns about Clause 12 relates to subsection (4) which the Government have now accepted is in need of rewording. I shall maintain my opposition to Clause 12 if only to enable any other Member of the Committee who had intended to speak on this point to do so. Failing that, I shall not pursue my objection to Clause 12 stand part.
Clause 12, as amended, agreed to.
Clauses 13 to 15 agreed to.
Clause 16 [Right of tenant to acquire dwelling]:
Lord Monkswell Lord Monkswell moved Amendment No. 59:
Page 10, line 30, leave out from beginning to ("sector") in line 31.
The noble Lord said: This is a probing amendment to ask the Government why there should be certain restrictions on the right to buy. It has been accepted now for a good many years that council tenants should have the right to buy. It has been accepted, although there is still some tidying up to do, that leaseholders—private tenants—should have the right to buy. What we are discussing in this clause is the right to buy for people living in what one might generically term housing associations.
If there is a general agreement—it is almost a cross-party agreement—that the right to buy is a good thing, why should that right to buy which is so widely accepted be restricted? Why should some people have the right to buy and others not have the right to buy? The intention of the amendment I am moving is to take out of Clause 16 those provisions which seek to restrict the right of people to buy. I am interested in the Government's response to this amendment. I beg to move.
Lord Mackay of Ardbrecknish: Perhaps, if only for my benefit, but I suspect also for the benefit of the rest of the Committee, I can be clear that the noble Lord is moving only Amendment No. 59 at this stage, that he has unbundled Amendments Nos. 70 and 81 and that we shall come to them in their turn. He is simply asking—I do not know if "simple" is quite the right word—that Clause 16(1)(b) be deleted from the Bill.

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The noble Lord gave us a fairly eloquent account of his views on the right-to-buy at Second Reading. I hope that I am not paraphrasing him wrongly, but essentially he feels that the system is unfair. He is in favour of tenants being able to buy their homes. He recognises the benefits this has brought to communities in breaking up huge monolithic estates and creating mixed and responsible communities. But he does not want to see public money used to support this policy. If tenants want to buy, he told the House, they should pay the full market price. In the interests of fairness, he would also like to see all tenants, even those with private landlords, given the right to buy their homes. This amendment and the others which have been unbundled, and his opposition to Clauses Nos. 20 and 21, are all in pursuit of what I hope I have fairly described as "his position".
As regards this particular amendment and the removal of paragraph (b), that is a condition that in order to qualify for the new scheme the property shall have been provided with public money. Where a property has been provided with private donations—for example, by a charitable foundation—the landlord can participate in the voluntary purchase grant scheme and sell to the tenant, if he chooses. But I do not believe, and I suspect that not many of the charitable foundations will believe, that it is right that we should compel a landlord to sell where absolutely no public funding has been given. That would be unfair. There would be some reasonable voices raised in complaint if I came forward with that proposition. Perhaps there may be opposition from the Bench of Bishops because all the Churches are involved in housing of various kinds across the country where they have provided the land and the money either themselves or with other institutions and without the use of any public money.
I do not believe that it would be right for Parliament to legislate in order to compel those landlords to sell to their tenants. As I say, they can do so voluntarily if they wish, but I do not believe that it would be right to compel landlords in these circumstances to join in this particular scheme. With that explanation of the Government's firmly held position, I hope that the noble Lord, Lord Monkswell, will withdraw his amendment.
Lord Monkswell: I am curious about the way in which the Minister has articulated the Government's opposition. He has suggested that it would be forcing private or charity landlords to sell their properties. But that is not what we are talking about. We are talking about conferring on others the same rights that apply to some of our citizens. It seems to me that that is rather different from the way in which the Government describe the position. They describe it as forcing people to sell. But that is not what I understand to be the purpose of this legislation. If that is the Government's intention with this Housing Bill and they are forcing social landlords to sell their properties, I suspect that that is not the way most people will view this particular section of the Bill. I am rather disturbed that the Government should use that language.
I return to my original argument. Why should some tenants, citizens of our fair country, not have the same rights as other tenants? I can see that there are certain
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fairly good reasons for some tenanted properties being considered differently from others. We shall consider the situation in rural areas and small communities later. I suspect that there may be other exceptions that could be made for very good social reasons. However, to suggest that a blanket denial of the rights of tenants to buy the house in which they live should be required in this situation is wrong.
Furthermore, why is there such a distinction between public money and private money? We shall consider that point in later debates, but I raise this point now: what is the situation where a house is procured or built with a combination of public and private money, and perhaps with charitable money also? The Government have not explained how we shall tease out such problems. I should be interested to hear any comment from the Government about the way in which they have described their opposition to my amendment as forcing people to sell rather than as giving tenants a right to buy their property.
Lord Mackay of Ardbrecknish: I shall try to help the noble Lord, Lord Monkswell, who seems to be making a mountain out of a molehill. It all depends which side of the coin you are looking at, because it is the same coin. Clause 16(1) states:
"A tenant of a registered social landlord has the right to acquire the dwelling of which he is a tenant if',
and paragraphs (a), (b) and (c) then follow. Paragraph (b) states:
"the dwelling was provided with public money".
If the tenant has a right to acquire that dwelling, that must mean that the landlord has an obligation to sell it. I do not think that I am splitting hairs because, if a tenant has a right to buy and if he exercises that right and buys the property, the landlord must be selling. However, it is totally wrong to jump from that and to say that we are placing on landlords a compulsion to sell. The trigger, if I may call it that, will be pulled by the tenant. That is what happens in all the right-to-buy legislation that we have introduced. We have said that tenants have a right to buy and Clause 16(1) states that a tenant has the right "to acquire".
I believe—the noble Lord and his party may not believe this—that there is a distinction to be drawn between money provided by the public purse and private or charitable money. That distinction is obvious to me. If the noble Lord is saying on behalf of his party that the Opposition want to give tenants the right to acquire their property even if absolutely no public money has been involved in any way, shape, or form, I believe that they will find themselves in some dispute with many of the charitable organisations which are involved in the social rented sector and which have not needed public money for their developments.
I think that my position is perfectly clear. I am sorry that the noble Lord does not agree with me. We shall come to some of the other arguments when we reach other amendments which stand in the noble Lord's name. As he has unbundled his amendments, I shall unbundle also and stand my ground and say that I believe that in the social rented sector there is the

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distinction to be drawn between those dwellings that have been provided by public money and those which have not been provided in that way.
Lord Monkswell: I thank the Minister for his response. We are gradually getting to an acceptance by him that the right to buy is not the same as a requirement to sell. He has not quite got all the way there yet, but, on the basis that he is heading in our direction, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.30 p.m.
Baroness Hamwee Baroness Hamwee moved Amendment No. 60:
Page 10, line 38, at end insert ("which accounted for 20 per cent. or more of the total cost of the dwelling").
The noble Baroness said: I beg to move Amendment No. 60. I speak also to Amendments Nos. 66 and 75 in my name, which are grouped with Amendments Nos. 62, 65, 72 and 78. Two of those amendments are in my name and that of the noble Lord, Lord Williams, who will no doubt speak to them, and two are in the name of the noble Lord, Lord Berkeley.
Amendment No. 60 pursues in greater detail the issue just addressed: what is meant by the provision of public money within the definitions set out in the clause. Clause 16(2) allows for dwellings to be bought, and therefore required to be sold—it can be put the other way round, but I do not think it much matters—if they are wholly or partly provided with public money. My concern is what is meant by "partly". The amendment proposes that dwellings are to be regarded as being provided by public money and so included if that money accounts for 20 per cent. or more of the cost of the dwelling. It is perhaps the other side of the coin, or rather quite a lot of coins in the case of property. If the other source of funding accounts for 80 per cent. of the cost, the dwelling will be excluded from the right to buy.
The Minister has referred to resources raised by donations from charitable organisations, individuals and an association's own reserves. I believe that in circumstances where the large majority of funds for a dwelling do not come from public funds the right of tenants to force the association to sell should be questioned. The Minister may say that if there is a particular percentage cut-off there will be anomalies, but "provision in part" may, to take it to extremes, mean the provision of a few pence. One may say that there is a cut-off somewhere. But my real concern is the macro-effect. We are aware that already associations and organisations have placed moratoriums on the development of affordable dwellings. They are concerned that their investment of charitable funds may rapidly be turned to private use and their objective may be thwarted. Quite understandably, they await the outcome of this legislation. Many noble Lords referred to that matter at Second Reading. We should not create a disincentive for the building of more affordable homes; indeed, I suggest the opposite.
Amendment No. 66 proposes that the right to buy will not arise where the dwelling requires repairs that are essential for it to remain habitable within the following
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three years. Many of your Lordships are aware of the problems encountered by leaseholders in blocks of flats because they are leaseholders and their neighbours remain tenants. There is a small, but nevertheless significant, minority of people who have been saddled with high repair bills, sometimes amounting to tens of thousands of pounds. A quite separate situation is one where a housing association may purchase a property which it intends to refurbish in a major way. Long term plans for redevelopment or improvement may be thrown into chaos if a tenant exercises the right to buy at an early stage. For those two reasons it would be fair to both tenants and housing associations if properties which are likely to require major works of repair or improvement within three years—I accept that that is an arbitrary time, or perhaps not; one can perhaps relate it to the discount period—are excluded from the right to buy.
The amendment is confined to dwellings situated in a building, so we are therefore talking about flats. An exemption which is broadly in that form is being included, I understand, in the voluntary purchase grant arrangements, although it is on a discretionary basis.
Amendment No. 75 is similar to Amendment No. 66, but gives the Secretary of State power to use his discretion rather than introduce a statutory exemption. I beg to move.
Baroness Gardner of Parkes: I find the first amendment about a fixed percentage of public funds to be sensible. It would be a pity to designate the dwelling as funded publicly if, as was said, just a few pence had gone in. I do not know whether 20 per cent. is the right figure, but there is an interesting point here.
I am more concerned about major repairs. I do not know whether the amendments solve the problem. When people buy social housing, there is a need for some form of indemnity or insurance to be built into the purchase. I do not know how that could be best done. I do not know whether the Government could write it into the Bill or whether it should be done by the purchaser.
Something should be considered to cover those people who find themselves faced with the most alarming, major structural repairs; for example, where buildings have been found to be constructed of concrete of the type which rusted inside the concrete shell. That is the type of thing which can create terrifying bills for the people who have bought those properties. It is something that has caused great distress. I shall be interested to hear my noble friend's reply to those points.
Lord Hamilton of Dalzell: I have not yet spoken in this debate, so I should declare my interest in the property world. I own estates is Surrey and Shropshire, which include a considerable number of houses, some of which are social houses. I have had no connection with housing associations, but I have been involved in a deal in Shropshire in which the provision of social housing was part of the arrangement for obtaining planning consent.
I am tempted by the amendments, because, unlike the noble Lord, Lord Monkswell, I stand on the other side of the equation. I have never been totally happy with

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the blanket right to buy. I sometimes ask myself whether one's house is a financial asset or liability. If my noble friend Lord Ferrers were here he would probably admit that some houses—I believe that he owns some of them—are liabilities.
To define the matter more accurately, a house in which one lives is only an asset if its price is rising faster than the rate of interest one is paying for the mortgage. Ultimately there are substantial liabilities involved in keeping the property in good repair. Also, if one owns houses in which one does not live, if the rent is too low they become liabilities because ultimately over time they stoke up large bills for keeping them in repair. I wonder whether in this right-to-buy scheme people are being induced into arrangements which they may in the end not be able to afford. I feel that the Government have decided that they do not wish to be a landowner, and I believe that one of the reasons behind the sale of council houses was that they made a very substantial loss on the rents that they charged. Personally, I have been spending quite substantial sums of money restoring houses because they can at last be let at economic rents under assured shortholds. Some restrictions on what actually happens and who is allowed to buy a house would be welcomed.
There is another aspect. I quite understand the philosophy of the Government that when these houses are sold the money should be rolled over to buy more. In the operation which we have carried out in Shropshire, the provision of social housing was regarded by the developer as part of the planning game. It actually amounted to 20 per cent. of the proceeds of the land. Therefore, if you add capital gains tax to that it reaches an effective tax rate of 52 per cent. If one is going to have to keep on rolling over these houses, there are going to be more and more cases in which the planning game element will have to be chipped back into the social housing regime.
As landowners, we are inclined to take the view that as social housing is appearing in the area in which we live perhaps that is pro bono and we ought to put up with it. But we did have the land investment levy which had a tax rate of 60 per cent. A tremendous amount of land belongs to people who simply hold it in land banks and the land investment levy caused a drying up of the supply of land. I was reading in the Telegraph that my right honourable friend the Secretary of State for the Environment thinks that we have to build 4 million houses over the next 20 years. For both purposes—for the provision of land for social housing on a voluntary basis and also in the broader context of making sure that there is a supply of land—I would like my noble friend the Minister to let me know how he believes that will work out.
Lord Berkeley: I rise to speak to Amendment No. 62, standing in my name on the Marshalled List and, if it is convenient, to Amendment No. 72 standing in my name and also to Amendment No. 65 in the name of my noble friend Lord Williams of Elvel and the noble Baroness, Lady Hamwee.
The purpose of these amendments is to protect housing associations against having to sell their houses at a loss, or perhaps I should say below the cost of
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construction, while at the same time not unduly restricting the rights of tenants to buy, effectively through no fault of their own, because they happen to be in a house which might show a loss.
The William Sutton Trust which, I believe, is the sixth largest housing association in the country, has expressed serious concern to me about this since it affects the ability of the trust to invest in new affordable housing stock. This really gives rise to the macro effect mentioned just now by the noble Baroness, Lady Hamwee.
My amendments begin by trying to define a dwelling. That may seem simple. But that trust, and possibly many others, recognises that there is a need to have what it would like to call a cost floor to protect those cases where, for quite proper reasons, the cost of providing the house is greater than its market value. This is rather difficult. Why should the cost of a new housing association house ever exceed its open market vacant possession value? The open market vacant possession capital values are set by the market for private owner-occupied houses, both new and those for resale. However, housing associations often have to provide houses, or homes, with a higher technical specification than in the private sector in order to achieve low maintenance and running costs. For example, double-glazed or UPVC windows, as I call them, are often installed rather than soft wood windows. They are encouraged to do this by the Government and the Housing Corporation, which expects housing associations to keep their running costs low. That is obviously commendable.
The Government strongly advocate energy efficiency measures in new homes and housing associations tend to go further than the private sector in reducing energy costs for their tenants. There are many occasions when one sees a group of housing association houses next to private sector houses and one can see the difference in the standard of construction and the quality of the housing association houses for those reasons.
In support of other government initiatives to create communities on estates, housing associations often expend money outside the dwelling on local offices, good community landscapes, children's play areas and community halls. All those facilities have a cost which does not add to the value of individual properties but adds to the whole. The amendment which I have tabled tries to create a definition of a dwelling which includes that.
It is true to say that the better housing associations tend to build to the same high standards everywhere and construction costs are very much the same throughout the regions. But of course, in some areas, the market value is significantly lower. How do the housing associations achieve those higher standards? It is usually by putting some of their own reserves into the schemes or taking out higher private sector loans. But if there is house price inflation over time, any difference between capital values and the cost of provision may be eroded and that may sort out the problem. But as we heard earlier, the tenant may buy on the first day of occupation if he already has two years of tenancy with another social landlord. Therefore, there is quite a serious problem.

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I can also see some problems which the Government may well put back to me. For example, how could a cost be included in a definition of a dwelling in relation to a community feature? It could cover anything provided that at the same time that the dwelling was built, the construction was an amenity for or to provide services for a dwelling. That would eliminate any subsequent initiatives or expenditure which came after the initial building.
It could be argued that the trust's proposals will take away people's right to buy, but that can be answered with two suggestions. The Government could provide a larger grant so that the tenant could still exercise his right to buy and the housing association would not then lose out; or, secondly, the tenant could be given priority through a tenants' incentive scheme, which is another grant given by the Housing Corporation to enable a tenant to move out and buy a property in the private owner-occupied sector.
I believe that without these amendments there is a real risk that the quality of new, affordable housing or the quality of the upgrading in existing houses which is necessary, and is still covered, I believe, by the Bill, will be reduced and/or the number of new social houses built to replace those sold will also be reduced.
I am not sure that the drafting of the amendments is correct. I certainly commend Amendment No. 65 in the name of my noble friend Lord Williams and the noble Baroness, Lady Hamwee. However, I hope that the Minister will recognise the concern of some housing associations and will be able to respond positively.
9.45 p.m.
Lord Williams of Elvel: Following the intervention of my noble friend Lord Berkeley, I should like to speak to Amendment No. 65 which stands in my name and that of the noble Baroness, Lady Hamwee.
As I understand it, the Government have accepted that there should be an exemption from the right-to-buy where the private loan debt is greater than the open market vacant possession value of the property. But whether or not the Government accept that, it is not on the face of the Bill, unlike the rural exemption. We believe that it should be. If there is to be an exemption like the rural exemption, it should be on the face of the Bill.
The exemption contained in my amendment will be most relevant for local housing companies and large-scale voluntary transfer initiatives, which the Government, with our support, seek to promote. They have a rising debt profile in the early years of their life. In the amendment, we have added to that exemption a complementary one; namely, that,
"the cost of provision (but not repair) of the dwelling",
should not exceed the,
"open market vacant possession value".
The argument here is, first, that that has been accepted in the context of voluntary purchase grant. Therefore, it is hard to see why it should not be accepted equally on the statutory scheme giving right to buy.
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Secondly, although the Government will be contributing social housing grant to the sort of scheme which might be affected by the exemption, the association itself is often contributing its own resources in order to ensure good space standards, high technical energy efficiency, and housing plus environment. That is in order to reduce the cost to both the landlord and tenant over the lifetime of a rented home. If tenants can purchase at a value, further assisted by the Government to meet a discount, which is below the cost of provision, both public funds and the housing association will lose out. Moneys available for the disposal proceeds fund will be less than is needed for replacement, and so there is certain to be a loss of lettings.
For local authority right to buy there is a cost-floor mechanism which is missing from the Bill's provisions as presently drafted. The direct read-across, if I may use that expression, from right to buy is, therefore, broken. It is not easy for us to see how a cost floor could easily operate with the grant and discount system proposed. The mechanism proposed by the amendment is, in our view, simple and straightforward. It would determine very easily, subject to valuation, whether or not a sale could go ahead.
The amendment was debated in another place but without, in our view, a satisfactory answer being obtained. It would exclude homes where the market value was less than the cost of erecting or the cost of acquiring and improving or the amount of outstanding private loan debt available on the dwelling from the effects of Clause 16. In other words, those properties would not carry a right to buy.
Baroness Gardner of Parkes: We have now started to debate a different series of amendments, but, as we are in Committee, I should like to make a few comments on them. I received a brief from the Sutton Trust and I have considerable sympathy with its views. However, there is one part of the brief that I do not understand. It states:
"Private sector homes tend to be under-occupied, whereas the Government encourages full occupation of social housing to make the best use of the asset".
That is clear enough. But the brief goes on to say:
"Therefore the better housing association homes have higher space standards than the private sector, which is not necessarily reflected in value".
That sentence worries me because it takes me back to the days when all local authority housing was built to Parker Morris standards which were far in excess of anything that any builder could afford to build if he was building commercially with a view to sell. In fact, it took many years before it was decided not to continue with such standards.
It worries me if housing associations are now building to an unrealistically high standard. I believe that they should be building to a good standard. Indeed, I agree with the point made by the noble Lord, Lord Berkeley, that such constructions should be of a type that will not require additional maintenance. It is often cheaper to have a better standard at the beginning of the process. If housing associations are actually providing people with

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more space than they could possibly afford if it were a private house, that seems to me to be an argument against themselves.
The point that concerns me most and most encourages me to support the Sutton Trust argument is its statement that at the moment it has a rolling programme to upgrade all its old property. We all know that the Sutton Trust has long-established and old properties, many of which need upgrading. Unless it gets back at least what it has paid to construct the new buildings, it will not continue to invest money to keep the old properties up to standard, as it will not be in its interests to do so. I believe that to maintain old buildings is as important as to construct new ones, as so many people have lived in those old buildings for so long. In principle I support the amendments spoken to by the noble Lord, Lord Berkeley.
Lord Mackay of Ardbrecknish: It may be helpful if, before I address the amendments before the Committee, I try to explain as briefly as I can how the new scheme will work and which properties it will apply to. The right is subject to various exclusions and applies only to properties provided in the future with public money. We have already debated that to a certain extent. The new right does not extend to any existing housing association property. A similar scheme for existing properties was introduced on 1st April this year. But participation by housing associations in this is voluntary. We have already agreed a set of proposals for the voluntary purchase grant scheme. We have based this primarily on the same rules as the proposed statutory grant, although we have agreed certain additional exceptions, reflecting the fact that investment decisions were made before the scheme existed. Housing associations are able (and will still be able) to dispose of particular property subject to approval by the Housing Corporation, without the use of grant.
Where a tenant purchases a property under the statutory purchase proposals (or under the analogous voluntary proposals) he will be required to pay the full market value of the property less a discount. In England this will be a fixed sum of between £9,000 and £16,000 depending on the location. In Wales it will be a fixed percentage or rate. The sums have to be established by secondary legislation. That discount will be paid in the form of government grant to the housing association, so that the housing association will receive the full market value. Once any loans or other legal obligations have been settled, the balance will be kept in a ring-fenced fund to be used to acquire or build further property in the locality.
This is an important feature and one which has often been overlooked in discussion. It means that, in effect, the housing association will have the resources to acquire a property at full market value. In almost all cases, where the property has been partly funded by loan, the association should be in a position to re-finance the loan component when another asset is acquired. Those who have criticised the proposals on the basis that in some areas it will be expensive to acquire replacement properties, should recognise that in those
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areas the market value received by the housing association will be correspondingly high—equivalent to the price of replacement property.
The provisions of the Bill mean that any properties built, acquired or renovated without public money will automatically be excluded from the right to acquire. We have already discussed that. Property renovated by housing associations out of their own resources will not be liable to statutory acquisition. Similarly, properties built on free or cheap land which, as a result of this effective subsidy do not require grant, will be outside the provisions.
I now address a matter which occurs later in the Bill and is a matter which I understand we shall not discuss this evening. I shall not comment on the rural aspect this evening. However, there are powers in Clause 17 to enable the Secretary of State to provide other exemptions, adaptations and modifications to the right to buy provisions in Part V of the 1985 Housing Act. We have already confirmed that the following exceptions will apply: first, the types of supported group developments for the physically or mentally disabled, or the elderly which are excluded from the existing right to buy; secondly, supported housing schemes for special needs accommodation—we have still to define the details of this—and, thirdly, properties where the attributable private debt is more than the market value.
Various proposals have been made this evening about further exemptions. Our position is that we wish to promote home ownership and to establish a clear statutory right. The statutory purchase grant scheme has been introduced so that in the future tenants of registered social landlords will have the same kind of right to buy their own home as do secure tenants of local authorities now. We do not think it is right to introduce a whole raft of additional exceptions which would apply only to those tenants who are now being given the right to buy for the first time.
This group of amendments would limit the number of tenants who will be able to benefit from the schemes. I do not think that noble Lords will be surprised to learn that I am not happy with any of the amendments.
Given the background that I have portrayed, perhaps I may now move to the amendments. Amendment No. 60 in the name of the noble Baroness, Lady Hamwee, would restrict the right-to-buy to tenants of housing association stock which had been produced with at least 20 per cent. public money. The amount of housing association grant paid on a scheme varies by region. At current rates it varies between about 40 per cent. and 70 per cent., but some schemes may receive less HAG; for example, if cheap land has been provided. The noble Baroness's amendment would, therefore, reduce the number of tenants eligible to purchase their homes.
We do not believe that there is a need for this amendment. Registered social landlords will be required, as I explained, to use the sale receipt to provide replacement property for social renting, regardless of the original amount of grant. The benefit of any contribution from reserves or donations in homes which are sold will, therefore, be retained in social housing. I believe that that is an important point which

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I hope allays the fear which I suspect underlies many of the amendments that the quantity of social rented housing will be reduced. In fact, the scheme we have devised prevents that by ensuring that the money is ring-fenced to be recycled into either new build or purchase for new social renting.
The figure of 20 per cent. appears to be an arbitrary one. I believe that it would be difficult to justify it to tenants who would not be too interested whether the contribution was 19 per cent. or 21 per cent.
Amendment No. 62 in the name of the noble Lord, Lord Berkeley, initially puzzled me a little. I have explained that there will be categories of housing which would be exempt—for example, sheltered accommodation which has common rooms and the like used largely but not exclusively for the elderly. As I have already explained, these current developments will be covered in secondary legislation.
However, I listened to the noble Lord. He seemed to be considering examples where there were community facilities, perhaps in housing which was not designed specifically for the groups that I have mentioned. I am sure that he approves of our decision about the specific groups of sheltered accommodation of the kind that I have mentioned.
His fears seemed to concern general social housing which had some community facilities built in, if I understood him correctly. Those community facilities may well add to the value of the individual dwellings, which would be reflected in the purchase price. If the community facilities remain, as I presume they will, in the registered landlord's ownership, they will still be available to the remaining tenants and to any new tenants who become owner-occupiers. Therefore, I hope that his fears on this point are groundless, especially against the background of the exemptions that I have already outlined.
Amendment No. 65 in the name of the noble Lord, Lord Williams of Elvel, would exclude properties where either the cost of provision or the private loan debt was greater than the open market value. Amendment No. 72 in the name of the noble Lord, Lord Berkeley, seeks to introduce a cost floor so that discount will not reduce the receipt below the market value.
Under the purchase grant scheme, the landlords will always receive the full market value of any property they sell. Even if this is less than the development costs, public subsidy will generally cushion them against loss. On the second point, I have already announced that landlords will have a discretion about selling where costs are greater than the outstanding private debt. But, like the other exceptions, this will be included in the regulations amending Part V of the Housing Act 1985, rather than on the face of the Bill. While I know that it only answers one aspect of the concerns of the noble Lord, Lord Williams, I hope that he will be satisfied by my assurance on the point.
Amendments Nos. 66 and 75 from the noble Baroness, Lady Hamwee, would exclude properties where essential repairs were to be carried out in the following three years. My noble friends Lady Gardner
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and Lord Hamilton commented on the issue. The exemption of excluding properties where essential repairs were to be carried out in the following three years does not apply to the traditional—if I may call it that—right to buy which has been operating successfully for the past 16 years. I see no need for the exemption in the new scheme. Registered social landlords will be required to provide tenants with an estimate of any service charges they will have to pay for repair costs in the first five years of their lease. The social landlords will not be allowed to charge more than the estimate. I hope that protection will help to allay some of the fears of the noble Baroness and my noble friends.
Turning to Amendment No. 78 from the noble Lord, Lord Williams, we have already made sure that landlords—
Lord Williams of Elvel: I am sorry to interrupt the Minister. Although I agreed to the grouping of Amendment No. 78 with these amendments, quite properly, it trespasses on rural areas. I should be grateful if the Minister could restrain his comments because many Members of the Committee would like to take Amendment No. 78 with amendments on rural areas with which we shall deal later.
Lord Mackay of Ardbrecknish: I am content to do that since the phrase that springs to mind is that it will help to shorten the evening. I have covered all the amendments in the group. Perhaps I may sum up the situation. The new right to buy which Clause 16 introduces concerns what we believe are important new choices for social tenants. I hope that I have explained the way the exemptions will work and how they were brought about in secondary legislation. So far as they go, I hope that those assurances will be helpful to Members of the Committee who have spoken and that if my explanation of why we are not prepared to go further on exemptions does not satisfy some noble Lords, it will at least allow them to see how the Government have come to their conclusions on the matter.
Lord Hamilton of Dalzell: Before my noble friend sits down, I am totally satisfied concerning tenants of the social housing organisation that the repairs will be done. The question that I raised is this. The Government are encouraging people to buy with liabilities which they may not be able to afford. I wondered what would happen to the housing stock after people had bought the properties if they found that they could not cope with the repairs. I foresee that we may be building up slums for the future.
Lord Mackay of Ardbrecknish: The same point could be made about anyone buying a house, whether it is a tenant or anyone else buying a house on the open market. It is something which people have to take into account. That is why I gave my assurance that any repairs and the costs over the following five years would have to be notified to the tenants so that they would be able to take them into account in calculations.
I can only speak in Scottish terms where the examples are more numerous. I know that the Bill does not apply to Scotland; but if I were to take my noble friend around

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any council estate—for example, in the town which carries his name—he would be able readily to pick out the houses which have been bought. That will not be because they look dilapidated—quite the contrary—it will be that work has been put into improving the houses immeasurably and they will probably stand out from the houses still in local authority ownership.
Lord Monkswell: The Minister makes a rather specious distinction between the short term and the long term. It is quite true that on council house estates one can see where people have exercised the right to buy. Quite often the houses look different.
But looking over the longer term at the difference between the private, owner-occupied sector and the council sector, experience over 30, 40 and 50 years has shown standards of maintenance in the public sector to be markedly superior to those in the private sector. That is borne out by statistics; it has been evaluated many times. We need to recognise the important distinction between the short term and the long term.
We all know of horror cases where people have exercised their right to buy and within a very short space of time have either found that they could not afford the mortgage, or have found faults with the building that were not apparent at the time of the sale. The problem has become insurmountable for them.
The Government may say that people who exercise their right to buy should take out insurance to cover the costs of unforeseen problems with their property. But if you have lived in socially rented accommodation for many years, the chances are that you are already on a low income. The extra cost of the insurance is something in which you would not necessarily engage.
I should like the Minister to reflect on one point that he made. It related to the community facilities about which my noble friend Lord Berkeley was so concerned. Concern was also expressed by the noble Baroness, Lady Gardner of Parkes. The Minister suggested that, as people exercise their right to buy, they will still have rights to make use of the community facilities. I am not sure that that is a sensible approach. Surely, if there is a community facility that is funded effectively out of rent income borne by tenants and one of those tenants decides to exercise the right to buy, that tenant will no longer be making any contribution to the running costs of that facility. Why should the tenant then continue to have the right to make use of that facility? That would surely be the logical way in which the situation would be approached by managers of the facility.
Let us take the situation a stage further. As more and more people within that particular community exercise their right to buy, one could end up with a situation whereby the housing association is stuck with a community facility with no income stream to keep it maintained and provide running costs. Almost by definition one has excluded all those who have exercised the right to buy. One ends up with a community facility that has no funding mechanism and to which those for whom it was built, those living in the community, have no access. It becomes very difficult to see how the situation will work. I hope that the Minister will reflect
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on the response he gave to my noble friend Lord Berkeley on that particular subject and that he will perhaps reconsider.
Lord Swinfen: I hesitate to intervene on this group of amendments since I was not here at the beginning. However, the remarks of the noble Lord, Lord Monkswell, have rather taken me by surprise. A well-known Labour local authority, when costing for people who wished to exercise their right to buy in relation to local authority property, included in the cost to the purchaser the cost of community facilities. Then, after they had bought, the authority insisted on them also paying additional sums on top of their rates to continue using those facilities.
10.15 p.m.
Lord Berkeley: I am grateful to the Minister for his comments on my two amendments. I was aware of the exemptions that he mentioned for certain categories of tenants. I was also aware that this particular clause was confined to new properties that will be built in the future. I understood that it would also include properties which would be subject to major renovation in the future.
I turn to the costs of building—we have been round that subject several times—and whether the costs of affordable houses are more than they should be. I do not know, but from the information that I have been given it looks as though the Housing Corporation encourages building to very high standards with or without the community centres about which we have spoken. But we still end up with the fact that there will be many instances when the associations sell their properties at a price which is lower than the cost, however we define the cost.
I know that the money will be ring-fenced for new properties—I am sure that we shall revisit this matter later tonight or another day—but I was interested in the Minister's reply. If I took it down correctly, he said that public subsidy will push up the market or sale price to the cost of building. Am I correct in assuming, therefore, that the housing association will receive the full cost of building if it is higher than the market price? If that is the case, I am sure that they will all be very happy. I shall be glad to hear the Minister's explanation of that matter.
Lord Mackay of Ardbrecknish: Let me deal with a few of those points and perhaps take first the last point of the noble Lord, Lord Berkeley. I am afraid that he must have misheard me. I quite understand. It was rather a long contribution on a fair number of amendments.
The social landlords will always receive the full market value of any property that they sell. I should have thought that, if the houses are of a higher standard—I do not want to get into an argument about whether they are or not—they will fetch more in the market. Their market price will be higher when that comes to be judged. I do not see a huge gulf between building a new house (if they decide to build) to those high standards and selling a house of equally high standards. I should have thought that the market would reflect that and I do not think there is a problem.

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I am in a little difficulty with the concept of community facilities. It is all rather theoretical. Nobody has given any examples. Those of which I can think are the ones which will be excluded anyway because they are usually in sheltered accommodation or specially designed accommodation for special groups. I can certainly think of things such as community grounds—the grounds around an estate, which have to be maintained. Often in the private sector currently, in the terms of the sales, contributions or service charges are attached to what in England I understand are called freeholds. I believe that in selling to a sitting tenant, a social landlord will be able to take steps to make sure that the costs of any community gardens or the like are shared among all the people in the development, whether they are tenants or owners.
I am not sure that I understood the noble Lord, Lord Monkswell. If any tenant buying his house requires a mortgage—I assume that he will—the mortgager will insist on insurance policies on the property. Indeed, the mortgager may arrange them himself and charge the owner the cost of the premium on the insurances every year when the date comes round.
On the noble Lord's more general point, he seems almost to be saying that because of the risks of private ownership no one should be a private owner. Everyone knows that there are risks. There are risks in us all going home this evening. There are risks to private ownership. I think I explained that if work had to be done to the property within five years it would be notified to the tenant. I have to tell the noble Lord that I suspect that when the tenant consults his man or woman of business the tenant will be advised of the responsibilities one takes on if one becomes an owner-occupier. That refers to absolutely everyone, whether they buy as a tenant or as someone who wants to find a house in the open market.
I made the point initially that if we go around council estates we will see that most tenants who have bought improve their properties far beyond the way they were looked after by the local authority. Certainly I have never seen these mythical local authorities which look after their properties better than the private sector.
Lord Monkswell: Perhaps I may try to explain the problems that occur. The noble Lord said that the mortgage will require insurance. That is true. However, that insurance is usually for total loss, where earthquake or fire leads to the complete destruction of the property and it needs to be rebuilt. That is the kind of insurance my building society requires on my mortgage.
I can give a concrete example of the kind of problems that arise. It concerns some constituents of mine when I was a councillor in the City of Manchester. A couple had exercised the right to buy on their council house on the basis that they thought that as they became older they would have the ability to sell their house and move into a bungalow. That was sensible planning for the long-term future. The husband became disabled and had to retire early. They put the house on the market with a view to moving to the bungalow which, because of the
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husband's disability, became a necessity. When it came to selling their house they found that there was a structural fault and they could not get a buyer. No prospective buyer could raise a mortgage on the house, even if he wanted to.
I agree that that kind of problem is not faced by every tenant who exercises the right-to-buy. However, we have heard of whole estates where there are problems. The noble Baroness, Lady Gardner of Parkes, mentioned the problem of houses that had been built with substandard concrete and had steel rusting from the inside. Those are the kind of problems that can and do occur which are not necessarily covered by insurance and with which the ordinary owner occupier has to deal. It is a problem quite often for people in the vulnerable sectors of society who, almost by definition, do not have the funds to which owner-occupiers historically have had access. It is beholden on the Government to recognise a problem which people will possibly face when they exercise the right-to-buy in the future.
Baroness Gardner of Parkes: My noble friend raised one or two points in his reply to which I feel I must respond. Yes, the housing trust would get full market value but it would be wrong to imagine that one always gets back the money one puts into building. One has only to read the property page in any magazine to be told that if one puts in an indoor swimming pool one should not expect to recover the cost. At present, if one adds on a lean-to conservatory, which is a great current attraction, one will probably get the money back. If one puts in central heating, one will get the money back. However, with many additions—the noble Lord, Lord Berkeley, mentioned the special PVC windows—there is no way one can be guaranteed to get one's money back. So there may well be a gap between the market value of the property and its cost. That can be half dealt with by the housing trusts themselves looking at the way in which they are spending their money in terms of what is good investment and what is not.
I also understood from my noble friend's earlier reply that he was saying that the housing trusts would not lose. I believe that in Hansard tomorrow we shall see such a phrase as, "I do not believe that they will be too much out of pocket". I took that to be good news for the housing trusts, but from his later answer the situation did not appear to be quite so good as what was indicated by the earlier answer.
As regards the case which the noble Lord, Lord Monkswell, spoke about, I would go back to the surveyor and have a word with him about it. If a major structural fault is found in a house which one has bought and which one is moving from quickly, there should be someone to whom recourse can be made. I believe that the real problems are not with the houses, because the surveyor can look at them and come to a pretty good opinion on them. It is the tower blocks which are the trouble. A surveyor is not paid to survey the structure of the whole block. He is asked by the building society to give an estimate of the value. It is in the tower blocks that people are having so much trouble in trying to sell their properties. These are very real problems.
Lord Mackay of Ardbrecknish: Perhaps I may try to clarify one or two points. I am sure that I did not read out my notes wrongly. I shall read them again. Under the purchase grants scheme, landlords will always receive the full market value of any property they sell. Whatever the discount, that is sent to them by the Housing Corporation. I have now said that for the third time and I hope that it is quite clear. I hope that I have not confused anybody. I too shall read what I said in Hansard tomorrow.
Perhaps I may make it clear about charges for repairs. My noble friend Lady Gardner of Parkes, has given me the opportunity to do that. The point of the repairs I am speaking about is that they make for huge bills for major renovations which people who have bought high-rise flats have to pay. I hope the fact that a social landlord has to notify any that may occur in the next five years will be of some help to my noble friend. I was trying to make the point by saying that people have to be aware of such matters wherever they buy a house. I have little doubt that the tenants will be advised—if they do not think of it themselves—to get a surveyor's report and then there can be some comeback on someone if something quite disastrous occurs. As I said earlier to the noble Lord, Lord Monkswell, his criticism of home ownership in this regard is a totally general one because this kind of problem could happen tomorrow to a person buying a house in the private sector.
Lord Hamilton of Dalzell: When the social housing people sell at the full market price, does that mean that they profit from the contribution of the original owner of the land contributed at below the market price or for nothing?
Lord Mackay of Ardbrecknish: Again, I thought that I had made the position clear. Yes indeed, they will get the full market price, which will include that item. In response to people who feel that someone has walked away with their generous charitable donation, the social landlord has that money because he has the gain of the land. He has that money, which is ring-fenced, to supply another house for social letting. If the landowner has given the land for social letting, although it may not be a house on the piece of land that he has given, there will still be a house which can trace back its lineage—if I can call it that—to the value of the land given.
10.30 p.m.
Lord Hamilton of Dalzell: I am sorry to pursue my noble friend on this topic, but does that mean that in due course the planning directive—which insists that local authorities, when giving planning consent, should insist on there being an element of social housing at below the market price—will cease?
Lord Mackay of Ardbrecknish: We shall come to amendments on that very matter later—I am not sure whether that will be tonight or tomorrow. My noble friend Lord Lucas has pointed out to me that the greater
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risk is not of us getting home this evening, but of us not getting home this evening if I go on, so perhaps we can leave this point for now.
Lord Monkswell: I must apologise to the Committee for intervening. It is very late but I ask the Government to think about one point. The Minister advised us that service charges—if I may put it like that—will have to be fixed for five years. The Minister shakes his head. Have I misunderstood what he is saying? It seems to me that a five-year period is a bit short. One of the significant costs facing home owners is external painting, which is generally recommended at seven-year intervals. It could happen, therefore, that the service/repair charges do not include that significant item of expenditure and that they therefore understate the liabilities with which the person exercising the right to buy will be faced.
Lord Mackay of Ardbrecknish: We are moving away from what I would call essential repairs to general maintenance. If the noble Lord does not mind, perhaps I may consider all that has been said in the past hour, especially by his good self, and write to him to try to clarify the point because I suspect that we are talking about different situations. I am referring more to the cataclysmic events mentioned by my noble friend Lady Gardner while the noble Lord is beginning to talk about what most of us consider to be the rather tedious and expensive—and sometimes difficult, if one does it oneself—general maintenance work of painting that has to be done on any house, whether owned by an individual or a local authority. With the promise that I shall look at all that has been said and write to the noble Lord, I hope that we can bring at least this little dual to an end.
Baroness Hamwee: Almost! I shall not attempt to respond to all the points made in the past hour and three minutes, but it is important to say that my approach to this—and, I believe, that of most noble Lords who have taken part in this debate—is not to restrict the right to buy, but relates to ensuring a continuing supply of affordable housing. I should like to put the amendments very firmly in that context.
The Minister rightly talked about the full market price of the property, and I look forward to debating with him at a later stage whether that properly reimburses the landlord. There is a cost to selling as there is a cost to buying. Later amendments have been tabled to ensure that the Bill provides that the landlord is fully reimbursed for all the costs associated with the exercise, but that is a matter for later.
On the question of the 20 per cent.—or whatever other arbitrary figure one applies—the Minister says that there is no need for the provision because of the money to be reinvested. If we can get right the other provisions on reimbursement, I may be persuaded but, at the moment, I am not. My concern arises directly from the comments which are not my comments but which have been made to me by the providers of social housing about the disincentive to creating new lettings or upgrading accommodation which they fear for the future. The other major area is repairs. I do not wish to

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appear to be too paternalistic about this. It is entirely right that prospective purchasers should take decisions for themselves and landlords and noble Lords should not say rather arrogantly that people ought not to buy because they do not know what they are doing. These amendments arise because of the experience of right to buy in the past and the problems in which people have found themselves. It may be that, in a rather different market where tenants have encountered the problems of negative equity, they no longer see home ownership at any price as something to go for, and future possible liabilities will receive rather greater attention than in the 1980s. It is to be hoped that we shall not experience structural problems such as those presented by precast reinforced concrete. As the noble Baroness Lady Gardner has said, in blocks of flats there are future repairs, such as repairs to lifts, which may result in very large bills for the purchaser.
Both my main amendments are born of experience and forecasts which have been made. This is undoubtedly an area to which we need to return, but the Minister has made a good many comments which deserve serious consideration. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendment No.61:
Page 10, line 43, leave out ("Part") and insert ("paragraph").
The noble Lord said: I spoke to Amendment No.61 with Amendment No.2. I beg to move.
On Question, amendment agreed to.
[Amendment No.62 not moved.]
The Lord Bishop of Bristol The Lord Bishop of Bristol moved Amendment No.63:
Page 11, line 16, at end insert—
("( ) The right conferred by this section shall not arise where the dwelling is subject to a restrictive covenant which restricts its provision and future use to affordable housing.").
The right reverend Prelate said: I speak for the first time in Committee. Perhaps I should declare that I am a Church Commissioner and also president of a diocesan board of finance, which means that I may have an interest in relation to some of the matters that I deal with.
I thank the Minister for his explanation of Clause 16, but, when I have shared with the Committee my concerns, some aid and comfort may be required in understanding the implications of the proposals. I say to the noble Lord, Lord Monkswell, that I believe the debate which was concerned with the right to buy and the requirement to sell has to be seen in a wider context. Sometimes rights have to be given up for the sake of the responsibility to the whole so that all may have homes in which to live. Therefore, our major concern is the loss of affordable rented accommodation. I do not believe that the issue is about full market value. The issue is whether one can replace in the right places, both in urban and rural areas, housing which is exactly the same as that which one has to sell. It is that major issue that I wish to address.
In 1992 the General Synod passed a motion which called upon the Church Commissioners, parochial church councils, diocesan boards of finance and glebe management committees together to manage their resources to increase the nation's stock of housing at rents affordable to those on low incomes. It was never the intention to provide housing for sale; the aim was to charge rents which could be afforded by those on low incomes. In response to that Synod motion, which was carried by a large majority, several dioceses and the Church Commissioners found ways of making Church land available to housing associations for the development of rented accommodation. There have been 11 dioceses which have involved themselves in those schemes, both in rural and urban areas and from small schemes to large ones.
At present, housing associations, as we have heard, may choose whether or not to confer the right to buy on their tenants, but in future it appears that any accommodation developed with social development grant from the Housing Corporation will have to be available for purchase by tenants.
We are concerned about that, and all the signs are now, since the publication of the White Paper, that at least three dioceses have put a moratorium on providing the land for the creation of rented accommodation, which will be at low levels for those on low incomes. We are concerned that we want, as a Church, to enter into partnership with the society in which we live, and for that partnership to provide that kind of rented accommodation. It is with those concerns that the amendment is put down in my name. I beg to move.
Lord Mackay of Ardbrecknish: The amendment seeks to exempt from the new right properties with any form of restrictive covenant requiring their continued use as affordable housing. I understand the concerns that lie behind the amendment. The right reverend Prelate explained them briefly, and I shall attempt to answer briefly, as he has set a good example to some of the rest of us. It is a problem as regards landowners which my noble friend Lord Hamilton of Dalzell addressed in an earlier debate. I believe that both can reasonably be taken together.
Of course private landowners and the Church have used their glebes, for example, for social housing. The clergy, whether in the Church of England or the Church of Scotland, seem to have decided that part-time farming is no longer something that interests them. They want to dispose of the land in a sensible and excellent way. They wish to ensure that their gift will be of lasting benefit to the community.
I hope that I can assure the Committee, as I have already tried to do, that the fear that the principle behind the gift will be lost is unfounded. The original tenants will continue to live within the community, but as owner occupiers. They will not have to move away in order to fulfil what are quite reasonable and proper aspirations of being home-owners. And, as I tried to explain earlier, the money that the landlord association receives for the property will be re-invested within the area to provide another home for a family in need. That seems to me to be a good outcome to the community. The tenant who

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wishes to buy has the right to buy and can remain. There is then a mixed ownership which I believe everyone agrees is a good thing, but the value of the property, which will include of course the value of the land that has been given, whether it was given by the Church, a charitable organisation or the landowner, will fall to the social landlord who will then have to use that money to provide this other house. Therefore the money, the principle, the kind thought—if I may call it that—will not be lost. It may not be in the same place or the same bricks and mortar as it started out being, but it will be in a nearby place and equally in bricks and mortar.
If we were to exempt any property where a restrictive covenant applied, as the amendment suggests, my fear is that that could effectively undermine the whole scheme. I know that that is not the right reverend Prelate's aim, but such covenants could be applied freely at the discretion of landlords, and could be used as a device to prevent tenants buying. That would be to the detriment of those tenants who would then be deprived of the right to buy.
As I said, I believe that landowners, the Church, and other charitable bodies should have no worries about continuing to give land at a discount, because if the property is sold the tenant will not receive the windfall gain from their generosity. It will be the social landlord who will receive that windfall gain. It is recycled by that association into a replacement property, which means that the benefit for which the land was originally given will continue. I hope that, in view of that explanation, which largely comes within the larger explanation I gave at the beginning, the right reverend prelate will be able to withdraw his amendment, and—much more importantly—his colleagues around the country will feel able to give land in the generous way that they have done.
Baroness Hamwee: I support the amendment. I have no land within my gift but, if I had, or if I had a connection with an organisation that had, I do not think that I would be reassured by that response. The right reverend Prelate began by explaining that the concern of the associations and organisations for which he spoke was with regard to replacement. I do not believe that one can easily say that the property will be replaced; it may be replaced not quite in the same place, but it will not be very far away. We will come on to debates about rural areas and we will also have debates about urban areas, no doubt, later in this Committee. But those who seek to build property know that it is not that easy to find sites for property, particularly sites which may be developed in an environmentally acceptable way, but which are on land that does not require investment in order to get it up to the point at which one can start to develop. I am talking now about brown field sites.
There are a number of issues raised by this. It is late, so I am not going to speak at too much length about them. I hope that we can return to the difficulties of replacement, which I do not believe are anything like as straightforward as the Minister has suggested. He thought that any landlord might impose a restrictive covenant, restricting the use of a property to affordable housing and, in that way, stop it being sold. That seems
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to me to be fairly unlikely, because he would be cutting off his nose to spite his face, as he would not be getting the income. By definition, if it is affordable, then the rent is going to be low.
I am also interested—and it had not occurred to me until the right reverend prelate began to speak—in the relationship between covenants such as are referred to here and the right to buy. Does the covenant become unenforceable because of the legislation? It seems to me that is the case. If that is so, the Government should say so quite directly.
Lord Berkeley: I rise very briefly to support the right reverend prelate in this amendment. I am astounded that a restrictive covenant placed by the Church or some other body on a new potential development for affordable housing can be overturned by anybody coming along and saying that they would like to buy it. It is like compulsory purchase, by any other name; it is appropriation. I am not persuaded that there would be another piece of land or property around the corner which could conveniently be substituted. Life is not quite like that and, as the noble Baroness, Lady Hamwee said, we should come back to this later. It seems to me that this requires much more examination and consideration if people are to continue to covenant land for this very important purpose without the fear that, in two or three years' time, just after the house has been built, it may be sold off to whoever happens to be in there at the time.
The Lord Bishop of Bristol: I thank the Minister for his response. While I accept his explanation about market value, I still do not believe that he has answered the issue about replacement within a community, the availability of land and the possibility of rebuilding. That is one of the major concerns that we have.
I thank those Members of the Committee who have supported me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamwee Baroness Hamwee moved Amendment No. 64:
Page 11, line 16, at end insert—
("( ) A registered social landlord may with the approval of the Corporation decline to sell a property which is part of a group of properties with special facilities or support which enables them to cater for vulnerable tenants, and where the sale of individual dwellings might jeopardise the economic viability of the development if—

(a) the dwelling is one of a number located in a block designated as a special need scheme, or

(b) the dwelling is isolated but identifiable as part of a number of dispersed properties which have been together designated as a special need scheme, and where the provision of the support facilities cannot practicably be transferred to another dwelling.").

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 80. They are similar.
This amendment seeks to exclude special needs dwellings from the right-to-buy provisions. I believe that in another place the Government expressed sympathy for that approach, understanding that without it, the viability of well-established supported housing

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schemes might be jeopardised. Of course, if the Government are proposing to bring forward their own amendments, I shall be more than happy to withdraw my amendment.
The principle is to exclude homes which are part of special needs schemes where the special supported facilities cannot easily be transferred to other homes. The amendments propose regulation and monitoring by the Housing Corporation to ensure that the exclusion is not abused. The Housing Corporation could, of course, lay down guidelines about the sort of properties which would be covered by the exemption.
It may be that the Minister will suggest that Clause 17 brings in the provisions of Part V of the Housing Act 1985 and that, therefore, this amendment is unnecessary. If that is so, perhaps to pre-empt that I should say that that provision is not sufficient. Since the introduction of the right-to-buy scheme in 1980, special needs housing has become very much more diverse and far more integrated into general needs housing. It requires different definitions from those contained in the original right-to-buy legislation. It is important to exclude self-contained supported housing in the community where lost dwellings would mean loss of revenue and would threaten the viability of a particular scheme. I beg to move.
Lord Williams of Elvel: I support this amendment. It was discussed at some length in another place and I do not wish to rehearse all the arguments. I very much hope that the Government have taken on board the arguments which were put forward in another place. They expressed some sympathy and I hope that that sympathy will be translated into some action in this Chamber.
Lord Mackay of Ardbrecknish: I can go further than merely expressing sympathy. I fully support the purposes behind these amendments. We have already confirmed that we intend to exclude certain supported housing schemes for special needs accommodation from the purchase grant scheme through the regulations, as the noble Baroness, Lady Hamwee, predicted I would say, amending Part V of the Housing Act 1985. We are currently working on the draft wording for that exclusion and we shall be consulting on the regulations in due course.
We believe that neither of these amendments is necessary to achieve the result which we all agree is desirable. It is a difficult drafting problem to define precisely the kind of properties we wish to exclude, as the noble Baroness pointed out when she said that there had been considerable changes to the arrangements which were made. We are agreed that a dwelling in a block that is designated for vulnerable tenants, and which has special facilities and perhaps a resident warden, should be kept out of the scheme. But, generally, we should not wish to deny the right to acquire to tenants just because they need additional support. There is no reason why, for example, an ex-offender who is now working should not be able to buy his home if the support that he has been receiving could equally well be provided to someone with similar
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needs living in another property. Therefore, it perhaps should not be just property-related, as is the sheltered home for the elderly or physically or mentally handicapped.
The current wording of subsection (2) of Clause 17 allows the amending regulations to make other exceptions to the new right to acquire in addition to those already provided for under the traditional right-to-buy. We shall use that power to exclude further special needs dwellings, such as, for example, groups of houses for women who have suffered domestic violence. Part V of the 1985 Act already excludes certain properties for people with mental or physical disabilities and for the elderly.
Before the regulations are finalised, we shall consult widely with housing associations and others to ensure that the new exclusion is both workable and fair. With those assurances, and the suggestion to the noble Baroness that it would be quite difficult to devise on the face of the Bill the kind of all-encompassing exclusions that I am sure she wishes—and, indeed, we certainly wish to see many exclusions in this regard—I hope that she will feel able to withdraw the amendment.
Baroness Hamwee: Clearly it would be churlish not to withdraw the amendment in the light of that assurance. However, can the Minister tell us exactly when "due course" will be? I understand the point that he made regarding the fact that the definitions are difficult; but the very fact that they are so might suggest that it would be better for us to deal with them on the face of the Bill rather than leaving them to regulation, in which case noble Lords would have less input into the final outcome. Can the Minister give us an idea of what he thinks the timetable may be for the consultation and the proposals?
Lord Mackay of Ardbrecknish: I normally hear such argument about secondary legislation from the noble Earl, Lord Russell, who is the noble Baroness's friend. However, in this case, I am sure that the noble Baroness appreciates the complexities of the necessary instruments which we will have to bring forward in order to cover all the exclusions that we want. I am afraid that I cannot tell her what kind of timetable we envisage, but clearly this is one of the things that we want to deal with as soon as we possibly can. To a certain extent it depends on the responses to consultation and how many difficulties are encountered, and, thereafter, how long the whole process takes. Before the legislation can be enacted and the procedure introduced, the necessary negative resolution will need to be placed before both Chambers. As I said, I cannot give the noble Baroness a timetable, but if one is being considered in the back of our minds, I shall write to her on the matter.
Lord Williams of Elvel: The Minister used the words, "before the legislation is enacted". Does he mean before the Bill leaves this Chamber?
Lord Mackay of Ardbrecknish: I am sorry; I must be clear on the matter. Clearly, before the provisions can be brought into effect so that the tenant can have the right-to-buy, the negative resolution in respect of the

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exclusions will have to be approved. Indeed, we cannot have the right-to-buy being exercised before the nature of the exemptions is known.
Baroness Hamwee: I am glad that I have learned something from my noble friend Lord Russell. As I said, it would be inappropriate to pursue the matter at this late hour. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 65 and 66 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 67:
Page 11, line 16. at end insert—
("( ) The right conferred by this section shall not arise where the dwelling is provided in pursuance of the affordable housing policy in a local authority's local plan and is subject to a planning obligation under section 106 of the Town and Country Planning Act 1990.").
The noble Lord said: In moving the above amendment I shall, for the convenience of the Committee, speak also to Amendments Nos. 68, 74 and 76. The proposed amendment would exclude homes from the purchase grant scheme if they had been built specifically to meet local need for affordable housing as required in the local authority's local plan. Such plans are controlled by what are known as Section 106 agreements. I am sure that the Minister is familiar with those agreements and that I shall not have to elaborate at this time of night on what they are because, when informal conversations took place, I mentioned that we would be moving proposals to this effect.
The Government acknowledge the need for affordable housing and Ministers require each local authority to prepare a local development plan—so we are on common ground there. That plan must convey the local authority's plans and objectives for development in the area. Government planning guidance PPG3, issued in 1992, states that,
"a community's need for affordable housing is a material planning consideration which may be taken into account in formulating development plan policies".
Affordable housing is defined as both subsidised housing and low cost market housing.
Therefore it is in line with local authority development plans under the Town and Country Planning Act to build affordable homes. It seems to us that it is appropriate that the Bill should not cover Section 106 housing. This matter was debated in another place and I am sure the Government will have plenty of arguments against it. But it seems to me if the Government do not accept the amendment that I am proposing, they are cutting right across the planning procedure under the Town and Country Planning Act 1990 and the guidance they have given to local authorities. I beg to move.
Baroness Hamwee: I support this amendment with regard to housing provided under a Section 106 agreement. It is too late to spend too long discussing this matter; but I believe that people who have seen the limited benefits of Section 106 feel strongly about it. Planning cannot achieve projects if the resources are not
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there, and affordable housing is more an issue of resources than it is of planning. But nevertheless limited assistance can be given by the use of the section. Local plans and unitary development plans are for the medium and long term. They are subject to local consultation, local discussion and to inquiries. If the Government do not accept an amendment such as this, they will be breaking faith with local people who have contributed to the making of local plans which allow for agreements of this type.
I shall take 30 seconds to share with the Committee a recent experience of a proposal for a development by a housing association where the neighbours were concerned about certain environmental matters, principally parking, and the implications for them as neighbours. The matter was fairly marginal but what swung it and what enabled the neighbours to support the development—it was important that they supported it—was that it fulfilled a socially useful function. It was not just another piece of infill development; it was important, and they saw it as such. They were part of it. These things need to be understood. It is the experience of seeing the reaction of individuals who may not often get involved in this process that is quite telling.
We have talked tonight about the disincentive for future investment in affordable housing. If there is no amendment such as this, it will be impossible to negotiate Section 106 agreements. I cannot see that a developer would be enthusiastic seeing that he might be scuppered by the effects of the Bill.
I now turn to what is quite a long amendment, Amendment No. 68. It proposes the introduction of what I have called a protected area. In a simplified form, it follows a similar amendment proposed in another place by my honourable friend the Member for Christchurch. It proposes local discretion. It is a large topic for this late hour. However, the experience of a local housing authority which sees the effects of a specific policy in its area enables it to have direct involvement and to contribute to the protection of affordable housing. The local authority sees that it is needed because,
"there is substantial unmet demand for affordable housing",
and difficulties in providing replacement dwellings.
The amendment attempts to balance consultation and local input against excessive administration. That was a criticism made in another place. However, the important point concerns local flexibility and the opportunity for local assessment of local needs.
Baroness Gardner of Parkes: The noble Lord, Lord Williams, said that we all know what a 106 agreement is. I am not clear. When my noble friend replies, perhaps he will clarify that point. Does such an agreement permit the building of social housing in a green belt area? My noble friend Lord Hamilton referred to a gift of land. Is a gift of land provided at a reduced price covered by a 106 agreement? I should like to be clear exactly what we are referring to.
Lord Mackay of Ardbrecknish: I have explained this point a few times in the past few moments. I do so again because I believe that it is the basis of the policy that the Government put forward. In this way it differs

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from the traditional right to buy which the Government put on to the statute books in the early 1980s and which has proved to be so successful.
As regards social landlords, when a tenant buys he has to pay the full market value less the discount. Therefore, the social landlord receives from the tenant the full market value less the discount. He then receives that discount from the government grant. The landlord association, therefore, receives the full market value. After any private loans are settled—we shall discuss this, I believe, next week—the balance will be set aside and used to buy or build other property for social renting. These replacements can be used to help other families in housing need.
Hence I do not accept the need for Amendment No. 74 in the name of the noble Lord, Lord Williams, which would allow a power to designate "other" areas as well as rural ones where the new right would not apply. I think that this amendment seeks to address concerns about areas where it would be more expensive to acquire replacement properties such as inner city areas. But in such areas the market value received by the landlord, and the funds therefore available for replacement property will also be correspondingly higher.
The exclusion proposed in Amendments Nos. 67 and 76 could apply widely in both non-exempt rural areas and urban areas. We have agreed—we shall debate the issue at the beginning of the next Committee day—to exclude small rural villages because of the particular difficulties there could be in replacing properties. The supply of land is limited, and there is little scope to buy an existing property in a small village. I have no doubt that we shall discuss that issue on the next Committee day.
However, I do not agree that in larger rural towns and villages the new right needs to be constrained in the way suggested in the two amendments. By using recycled sale proceeds, associations can build or buy replacements on the open market. The social stock therefore should not be reduced over time. The Government endorse the use of planning mechanisms and Section 106 planning agreements to assist in the provision of affordable housing. To try to help my noble friend Lady Gardner, perhaps I may explain that local authorities have wide powers to impose Section 106 agreements in both rural and urban areas. An exclusion could apply widely to the detriment of many tenants who would be deprived of the right to buy their own homes.
An exclusion would be difficult to define in law because a wide range of conditions can be secured using a Section 106 agreement relating to many other factors than affordable housing criteria. Planning guidance states that a Section 106 agreement should not normally be used to control tenure. It may commonly limit occupancy to people with a local connection. But tenure is not normally a concern of the planning process.
To return to the concern that I understand, I believe that our endorsement of the use of Section 106 planning agreements to assist in the provision of affordable
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housing is fully consistent with extending home ownership through this new right to buy and with landlords recycling the sale proceeds for the continued benefit of the local community.
Amendment No. 68 in the name of the noble Baroness would give local authorities the power to designate protected areas. Exclusions from this new right need to be as clear, straightforward and simple as possible. Tenants, landlords and landowners need to understand them clearly. Exclusions need to be fair and they need to be straightforward to administer. The amendment proposed by the noble Baroness would be a bureaucratic nightmare. As local authorities would have the power to decide on designations, there is every likelihood that designations would be applied very inconsistently across the country by different authorities. This cannot be fair to tenants. The designations will need to be continually revisited. They might be reviewed as frequently as every two years and must be reviewed at least every seven years.
We have heard much about the degree of certainty that landowners and others wish to see in exclusions. How can they be reassured by a measure which would introduce so much uncertainty? Our proposed rural designations, which we will come to, will clearly identify the areas where building or buying replacement homes can be particularly difficult. A simple guideline criterion of a population threshold is applied, with provision for special cases. It will not need continual revision. That is the best way to deal with the problem so that a uniform test is applied throughout England and a slightly different uniform test is applied in Wales. With those assurances and explanations of how we see the system operating, I hope that noble Lords and the noble Baroness will feel able to withdraw their amendments.
Baroness Hamwee: Without wanting to go through my proposed Amendment No. 68 line by line, I understand the need for certainty and to some extent for uniformity, but the problem is not uniform. I dare say we will come back to mechanisms for assessing where there should be exclusions. As I said earlier, it is not to do with excluding the right to buy so much as assuring the supply of affordable housing.
In defence of local planning authorities which negotiate Section 106 agreements, without going into the detail of how they operate, perhaps the Minister will allow me to put on record his agreement, if only by a nod, that a Section 106 agreement is an agreement. It is not something which is imposed. I am looking hopefully at him.
Lord Mackay of Ardbrecknish: A Section 106 agreement is a planning agreement. It is what it says.
Baroness Hamwee: The Minister used the term "imposed". I should not like the world to think that we were talking about impositions of such sensitive matters.
Lord Williams of Elvel: I confess that I find the Minister's response rather disappointing. I thought that the Government were open to using the planning system in order to increase the supply of affordable housing.

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That is done at the moment through the procedure of Section 106 agreements by which the use or development of land requiring a certain number of spaces for this, that or the other is authorised for building so long as there is a certain section for affordable housing.
If the Government have now decided that they do not wish to use the planning procedure in order to increase the supply of affordable housing, they ought to come up front and say so. At this hour of the night it is too late for this sort of argument. We shall return to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 16, as amended, shall stand part of the Bill?
Lord Berkeley: I shall not detain the Committee too long at this hour. Our discussions over the past two hours or so have indicated a major concern about the supply of affordable housing. This clause allows associations to sell off houses to tenants to whom government subsidy is given. There is no obligation on the associations to purchase or build new stock in the same area; and there is no assurance, as we have just heard in relation to planning, that land is available. The Government seem a little unsure about how much affordable housing for rent should be provided.
A Department of the Environment memorandum dated 17th May 1995 suggests that a range of between 60,000 and 100,000 new social homes a year are needed; but the expenditure plan targets the lower end of the scale. That is no great surprise.
A report by the Environment Select Committee in another place published in February 1996 states that,
"The lower end of the range of the Government's estimate of the need for social housing is below all the estimates produced by respected organisations and academics".
At a conference yesterday (I quote from the Independent, as a previous speaker quoted from the Telegraph) the Secretary of State for the Environment said that there was a need for 4.4 million new homes in 20 years' time. He said that that was in general largely due to the greater increase in single occupancy. He said that 80 per cent. of the new homes (3.5 million) would be for single occupancy. That leaves only 900,000 homes with more than one person in them over 20 years.
As we have already heard, the Housing Corporation encourages full occupation of social housing. Therefore we must assume that the 900,000 quoted by Mr. Gummer is yet a further reduction in the number of affordable houses. By my calculation that brings the figure down to 45,000 a year, less than half the figure quoted by the Select Committee.
Do the Government have a plan as to where these affordable houses should be built? One hopes that it will be where the need is, because targets are going down and down—120,000 to 55,000 new lettings in just a year. That is an extraordinary reduction in the likely market.
I am forced to conclude that the Government are tending towards a feeling that homelessness is self-inflicted. I almost mentioned this at Second
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Reading. Perhaps there is something in this. There is a will to provide only the minimum in affordable housing. The targets are halved in a year and there does not seem to be any plan for where the 55,000 will go.
This clause seems certain to reduce significantly the supply of affordable housing, for whatever reason. I genuinely support the right to buy; but I believe that the provision of an equal and increasing number of affordable rented houses is an essential prerequisite before selling off the present stock. I am afraid I am not persuaded that the clause as it stands will achieve any of those objectives.
Baroness Gardner of Parkes: The same fallacy arose in the remarks that we just heard as seems always to exist. People imagine that, because someone owns a house, it has suddenly vanished and is no longer there as a dwelling—whereas, whether it is rented or owned, it is still the same house and is still there. We may be talking about the need for more houses, but the fact that they will be sold will not make those houses that exist vanish.
Lord Mackay of Ardbrecknish: I also read the speech yesterday of my right honourable friend Mr. Gummer, in which he looked forward to the year 2020 and the likely growth in the number of households in the UK. I may have read the speech rather hurriedly, but I did not get the impression that the figure was 4.4 million households which all needed social housing. Quite the contrary, that was the total extra that may be needed because of the number of households coming about for a number of reasons. The figure always strikes one as odd in a fairly static population. But there are considerable social factors involved which mean that more and more people wish to live on their own and not in the more traditional family arrangement. However, that is a very much larger debate and I do not want to begin it.
This clause, which the noble Lord has decided to oppose, is the very centre of the way in which we wish to give tenants in the social housing sphere the right to buy, the same right to buy that we gave in the early 1980s to council tenants. If I were to look up the speeches that I gave in the other place during the Committee stage of the first Tenants' Rights (Scotland) Act, I should then have been countering what I fear are exactly the same arguments this evening; namely, that suddenly the housing disappears, as my noble friend said. There are not great gaps in the council estates around the country where people have bought their houses. There are houses there which are still occupied by people. That is the fundamentally important thing.
The Government's right-to-buy policy has helped over a million families in England. Indeed, without going on for too long at this time of night, I say to the noble Lord, Lord Berkeley, that if he checks, he will find that it is the policy of his party to continue the right-to-buy policies. So he will have to be careful when he opposes Clause 16 of the Bill. We are trying to extend the right that council tenants have had to the tenants of housing associations and tenants of the new social landlord. We believe that those tenants should

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have the same kind of rights to buy as their brothers, sisters and cousins who live in council houses. I am sorry that perhaps the noble Lord disagrees with that, but that is the position. We are quite prepared—we had quite a long discussion about the matter—to accept that there have to be exclusions. We have already discussed them and I had hoped that that might have helped the noble Lord a little.
The noble Lord seemed to suggest that anyone in social housing who wishes to buy his own home has to move out and buy in the open market. In fact, the new purchase grant scheme addresses the housing associations' concerns; namely, that they tend to lose the more economically active tenants if that happens. It is important that we try—and we have succeeded in many council estates—to get a better mix of tenancy and owner-occupation. That is to everyone's advantage. We want to help tenants to buy on that open market. Indeed, the successful tenants' incentive scheme has helped over 22,000 tenants since 1990 to buy privately.
As I tried to explain, we give as much importance to the need for social housing as does the noble Lord. But we believe that we can marry together the two principles: the principle that the tenant ought to have the right to buy and the principle that the social landlords ought to be able to keep up their rented stock. That is why the tenants' discount is funded by government grant, ensuring that the landlord selling receives the full market price and, once he has settled any private loans,
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the balance can be set aside and used either to buy an existing property or build new property for further social renting. That is an important aspect.
We shall discuss the problem of rural areas, small rural villages and sparsely populated areas on the next Committee day. I believe that our proposals there ought to satisfy anybody who is concerned about these matters. I hope that with the discussions we have had the noble Lord will see that we take seriously the need to preserve social housing and keep it going. But equally we believe that tenants in social housing have that right to buy. With those remarks, I hope that the noble Lord will be able to withdraw his objection to the clause.
Lord Berkeley: I am grateful to the Minister for his reply. When I referred to 4.4 million new houses there was no question of saying that they should all be affordable or were affordable. I am not against the right to buy. I support it fully. My concern is that there should be no reduction in the amount of affordable houses for those people who will still need them. New people will need affordable houses but cannot afford to buy just yet. The stock should be there and should be increased.
Clause 16, as amended, agreed to.
Lord Lucas: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-six minutes past eleven o'clock.

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