Sitting of 18 June 1996

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    ALLIED IRISH BANKS BILL
    Read the Third time, and passed.
Oral Answers to Questions
  HEALTH

    Travel Vaccines
    Mr. Canavan: To ask the Secretary of State for Health if he will ensure that travel vaccines continue to be made available on the NHS. [31694]
    The Parliamentary Under-Secretary of State for Health (Mr. John Bowls): Yes.
    Mr. Canavan: Is the Minister aware that last year alone 39 million British people made overseas visits, 16 per cent. of them to areas with a high risk of infection? Will he resist any suggestions that vaccination should cease to be available on the NHS? If he does not, many people may not get vaccinated, which would lead to an increase in the number of infected travellers returning to Britain, thereby increasing costs to the national health service and having a detrimental effect on many people's health.
    Mr. Bowis: The hon. Gentleman makes a fair case for the economic health of the nation that enables so many people to travel abroad, and a good point about travellers needing to take precautions. Just as they need to take out travel insurance, they should consider their health protection. I hope that they will read the "Health Information for Overseas Travel" booklet produced by the Government. The position of successive Governments has been that immunisations are free for travellers where there is considered to be a real risk to public health if a disease is brought back to the United Kingdom. That remains the case. I am happy to join him in resisting any change to that.
    Mr. Fabricant: Before my hon. Friend is overcome by generosity, will he bear in mind that many business travellers have their vaccinations paid for by their companies? It is difficult to have sympathy with people who go on exotic holidays to Australia and Thailand who say that they cannot afford to pay for their vaccinations.
    Mr. Bowis: My hon. Friend makes a fair point. That is why there is a balance in the system whereby vaccinations for diseases that would not be a threat to the remainder of the population if someone were to bring them back from abroad are the responsibility of the individual. As he said, they may be paid for by a company, but the cost is small compared with the overall cost of travel abroad, certainly to the remote places that he mentioned. Where there is a potential public health risk, it is right that the NHS system should be able to provide the service through doctors or clinics.

    Purchasing Contracts
    Mr. Touhig: To ask the Secretary of State for Health when he last met the chairmen of NHS trusts to discuss the administrative costs of purchasing contracts. [31695]
    Mr. Bennett: To ask the Secretary of State for Health what representations he has received about administrative costs in the NHS. [31700]
    The Secretary of State for Health (Mr. Stephen Dorrell): I meet NHS trust chairmen regularly. The Government are committed both to the effective management of the NHS and to the reduction of unnecessary bureaucracy.
    Mr. Touhig: While I recognise that an extra £1.4 billion was put into the national health service in 1993–94, every penny of it went on administrative costs. Is that obsession with bureaucracy, as opposed to front-line services, the reason why three quarters of NHS trusts have yet to make a local pay offer to nurses four months after Ministers pledged action on the matter? Is that another broken Tory promise?
    Mr. Dorrell: The Opposition's concern about bureaucracy would be a great deal more convincing if they had not voted against the abolition of the regional health authorities, which was the biggest single element in the £300 million programme for shifting resources out of unnecessary bureaucracy into front-line patient services.
    The Government have made it clear that nurses' pay arrangements are a matter for local agreement between employers and local nurses groups, against the guarantee of a minimum increase of 2 per cent. on a national basis.
    Mr. Bennett: Will the Secretary of State now confirm that there are 20,000 extra NHS managers and 50,000 fewer nurses as a result of the Government's programme? Is that by design on the part of the Government or by accident?
    Mr. Dorrell: The hon. Gentleman persists in deliberately misreading figures, despite repeated explanations of what the figures he quotes mean. He might do well to remember the words of the previous shadow health spokesman, who said:
    "I don't think it's really in question any more that the NHS has been under-managed in the past."
    That is why the Government strengthened NHS management and why the NHS is now delivering more patient care to higher quality more efficiently than it has ever done before.
    Sir Sydney Chapman: Does my right hon. Friend agree that administrative costs in the health service should be kept in proportion? Does he further agree that, if increased administrative costs result in more medically qualified people undertaking less administrative work, and in the more effective targeting of the ever-increasing funding of our national health service for the benefit of patients, they are justified.
    Mr. Dorrell: My hon. Friend is on a very important point. He underlines the interest that every taxpayer and every patient of the NHS has in its efficient management. The question that should be asked of the Opposition Front-Bench team, particularly of the hon. Member for Darlington (Mr. Milburn) in the light of press reports at the weekend, is why the Labour party wishes to disfranchise 6.5 million people who take out private health insurance and prevent them ever playing any part in the management of NHS trusts and health authorities.
    Mr. Thomason: Can my right hon. Friend confirm that the proportion of NHS staff who are involved in the direct care of patients has increased in the past decade?
    Mr. Dorrell: My hon. Friend is on to an important point. We have increased commitment to front-line services, delivering more treatment to more patients than ever before in the history of the NHS. The Labour party is more concerned with dogma. [Interruption.] The hon. Member for Darlington says that I should not believe everything that I read in the newspapers. Perhaps he would like to deny the story in the weekend newspapers, since it appeared in quotation marks, attributed to him.
    Ms Harman: Can the right hon. Gentleman confirm that the bill for bureaucracy for his NHS internal market is an extra £1.5 billion every year? Is he aware that, because of the market, St. Thomas's and Guy's hospitals now have to send out 57,000 invoices every year? How can he justify children being turned away from intensive care and their parents being told, "Sorry, there is no bed"? How can he justify patients waiting for hours on trollies? How can he justify patients being told at the last minute, "Sorry, we are cancelling your operation"? How can he justify any of that while he squanders precious NHS resources on red tape to run the market?
    Mr. Dorrell: Rather than uttering these repetitive soundbites, the hon. Lady might do better to explain to the NHS and to the public what she means when she says that she will abolish the internal market. Her policy document is clear. She retains the purchaser system. She retains the principle that purchasers should be free to place their contracts where their patients' advantage lies. How will she do that while delivering the commitment that she professes to abolish an internal market?
    Mr. Congdon: Does my right hon. Friend agree that one of the benefits of the internal market is that it has enabled health authorities to focus on the real issues of health need and effectiveness of health care? Does he agree that it is nonsense for people to pretend that the NHS can be managed without managers, and managed on a system based on ignorance? Have not the changes led to real improvements in the quality of health care given to the people of this country?
    Mr. Dorrell: My hon. Friend is right. The interest of every patient and every taxpayer is that the health service should be efficiently managed and that health resources should be targeted at real health need. That is the purpose of NHS management. The hon. Member for Peckham (Ms Harman) professes to mean that, but consistently commits herself to undermining the structure that makes it possible.

    Community Care
    Mr. Purchase: To ask the Secretary of State for Health when he last met representatives of local authorities to discuss the provision of care to the elderly people living in the community. [31696]
    Mr. Bowis: I meet them on a wide range of formal and informal occasions and discuss with them an equally wide range of issues.
    Mr. Purchase: Is the Minister aware of the considerable confusion that exists in local authorities and in other agencies, such as Age Concern and widows' associations, and the tremendous anxiety that many older people now feel about their future and about the Government's plans, which seem to be aimed at further commercialising and privatising the health services that older people have a right to rely on, having paid for them all their working lives?
    Mr. Bowis: In that case, I am sure that, if the hon. Gentleman has discerned this concern, he will reassure those people by pointing out that 40 per cent. of NHS health care spending is spent on people over 65, despite the fact that they are only 16 per cent. of the population. I am sure that he will also have reassured them by pointing out that the present Government have enabled social services departments to spend £5.7 billion on their community care needs.
    I am sure that the hon. Gentleman will have noticed—although he does not appear to wish to notice it at this moment—the considerable increase in contact hours for people receiving care in their own home, up 42 per cent. in the past three years. Those are measures of success and care, and show that the Government do care about the future of the increasing numbers of elderly people in this nation—people who can rely on our policies, although, when it comes to the Opposition's policies, they will have to wait for a royal commission.
    Dame Jill Knight: Does my hon. Friend agree that one of the most important things that helps elderly people living in their own homes is the home help service? Is he aware that many local authority social services departments now state that doing the shopping should be top priority for home helps, but that the people they help need a reasonably clean home, whereas neighbours and relatives will often do the shopping? Can he do something about that?
    Mr. Bowis: My hon. Friend is right to suggest that local authorities, which are responsible for arranging social care when that is needed, should listen carefully to the users of those services and their families to discover what type of services they should be purchasing on their behalf. I believe that the Community Care (Direct

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    Payments) Bill, which is passing through the House, will also help people in the coming years as more and more people are able to benefit from that. It does, however, as the Audit Commission pointed out, depend also on the efficient use of the substantial resources that the taxpayer is providing for local government and social services in particular. It is no good, as Liverpool is doing, spending £500 a week on each person in its own care homes compared with the £198 a week that it spends on independent homes, and then wondering why there is not enough for other services.

    General Practitioner Fundholding
    Mr. Chisholm: To ask the Secretary of State for Health what recent monitoring he has undertaken of GP fundholding. [31697]
    The Minister for Health (Mr. Gerald Malone): Throughout the country, general practitioner fundholders are improving services to patients through effective management of resources. Health authorities monitor them monthly, in accordance with the accountability framework; and the national health service executive monitors both health authorities and fundholders through its regional offices.
    Mr. Chisholm: What assessment has the Minister made of the recent Audit Commission report on GP fundholding? Can he confirm that the report vindicates the long-standing criticisms that Labour has made of the scheme, and does he agree that fundholding involves massive duplication of bureaucracy without any significant benefits to patients?
    Mr. Malone: No, of course not. Unlike the hon. Gentleman, I have read the report from beginning to end. It shows that every fundholder has brought benefits to patients. It also says that some, who have not brought as many benefits to patients as others, should be encouraged. I would expect the hon. Gentleman to support that idea.
    This is an investment in patient care which has brought about a better quality of patient care for more than 50 per cent. of the population in England. In the interests of his own constituents, I hope that the hon. Gentleman will ensure that that is emulated in Edinburgh.
    Sir James Hill: Does my hon. Friend agree that the difference between a single GP and a group of fundholding GPs is the collective amount of money available? I already know of several individual GPs in Southampton who have run out of funds long before their group counterparts. Would it be possible to send teams to the new unitary authorities—now in the middle of the reorganisation—to advise GPs and social workers of the benefits of GP fundholding?
    Mr. Malone: It is never very gracious to disagree with a knight of the realm—I congratulate my hon. Friend on that distinction—and in any event I do not disagree with the substance of his question. We certainly expect health authorities to work with fundholders and non-fundholders to build better care for patients. I am sure that that is happening in my hon. Friend's local health authority.
    Mr. Milburn: Does the Minister agree with the Audit Commission's conclusion that GP fundholding has added to management costs in all parts of the NHS? How does he justify wasting £260 million a year on red tape for fundholding when it produces no gains for patients? Will he now accept that the replacement of fundholding by GP commissioning will not only give all family doctors a say in shaping hospital services for their patients but will shift NHS resources from back-line bureaucracy to front-line patient care?
    Mr. Malone: The hon. Gentleman makes exactly the same mistake as his hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm)—not reading the report or understanding its conclusions. The report clearly points out that, for an on-going payment of some two per cent. of total budget, there is a four per cent. gain in patient care efficiency. The hon. Gentleman persistently refuses to understand that that is a benefit for patients. I am glad that he and his hon. Friends have now clearly told the world that that is an advantage that they would abolish—that is their firm policy. The 50 per cent. or so who are GP fundholders will understand that it is the Labour party's intention to abolish them if it ever comes to power, as will the 53 per cent. of the population who benefit from GP fundholding.
    Mr. Anthony Coombs: Contrary to the drivel talked by the Opposition spokesman, is my hon. Friend aware that giving decision-making powers to GPs in my constituency has produced a better standard of primary health care than ever before? Is it not disgraceful that the Labour party should now decide to take away those powers from GPs and give them to the party's own bureaucrats, quangos and councillors? Such a move would be bad for primary care in my constituency.
    Mr. Malone: My hon. Friend is right. The point that he rightly makes is that it is the effective purchasing power of general practitioners which has brought about change. Conservatives welcome the fact that other GPs are becoming involved in the purchasing process, but it has been driven by GP fundholding—the true success story which has brought far better patient care to all constituents, including those of my hon. Friend

    Private Finance
    Mr. Martlew: To ask the Secretary of State for Health what assessment he has made of the progress of schemes costing over £10 million using private finance. [31698]
    Mr. Dorrell: The full potential of the private finance initiative is now being realised. Since the initiative started, seven schemes valued at more than £10 million each have been approved, with a total capital value of £394 million. Another 50 schemes worth between £1 million and £10 million have been approved, with a total capital value of £130 million, and 40 schemes with an estimated capital value of £1.5 billion are currently being tested for private finance.
    Mr. Martlew: The Minister will be aware that we have been waiting for a new hospital in Carlisle for more than 20 years. Is he aware that, for the past two years, the

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    private finance initiative has delayed that hospital? There are currently 556 beds in Carlisle, but the PFI scheme will reduce that number to 274. I understand that AMEC, the only bidder for the scheme, is talking about reducing the number of beds to 400. Will the Minister give us an assurance that 474 beds will be the minimum? Can he confirm that the price of the scheme is still £43 million?
    Mr. Dorrell: The hon. Gentleman understates the extent to which the PFI is bringing forward the hospital. It is not 20 years since the idea was first tabled—it is almost 30 years. The Cumberland infirmary project was first tabled in 1968. It is a source of considerable pride to me that the PFI is making it possible to turn that idea, of almost 30 years standing, into a firm project for the benefit of the hon. Gentleman's constituents. I hoped that the hon. Gentleman would welcome that. As he knows, the project design is the subject of continuing local discussions.
    Mrs. Roe: Is my right hon. Friend aware that the trade union Unison vigorously opposes any use of the private finance initiative in the national health service? Does he believe that there is a link between Unison's continuing financial support for the Labour Front Bench and their attempt to claim that on the PFI they will be able to face both ways?
    Mr. Dorrell: My hon. Friend raises an important point. There is no doubt where Unison stands on this issue—the doubt rests with where the Labour Front Bench stands. The Leader of the Opposition says that the PFI is right in principle and the hon. Member for Peckham (Ms Harman) says that the PFI is a new trick to privatise the health service—both propositions cannot be the Labour party's policy.
    Mr. Barron: Will the Minister confirm the number of hospitals that have been approved and have signed contracts? The people of Norwich and Swindon have consistently had their new hospitals approved, but no contracts have been signed. Earlier this year, the Minister rushed legislation through the House to try to bail out the Government's PFI initiative. Yesterday, in the Financial Times, Martin Laing of the Laing Construction Group attacked the Bill. He said that he wanted more assurances and guarantees from the Government before PFI could go ahead.
    The latest row that besets the Tory ranks is Edgware hospital. The services that will be lost at Edgware hospital should be transferred to Barnett, which has been delayed for the past two years because of the PFI. When will we get some common sense in the debate? When will the Government get proper private and public partnerships that look after the interests of the British people, instead of the dogma that is floating around in the debate?
    Mr. Dorrell: In order to appeal to the hon. Gentleman, I will offer a sotto voce reply. The hon. Gentleman and his hon. Friends simply have to answer the following question: are they in favour of the PFI? Introducing all kinds of questions and red herrings will not get them off the hook. Are they in favour of the Leader of the Opposition's policy or are they in favour of the shadow health spokesman's policy? It is a simple question and the Labour Front Bench has to sort it out.

    South Humber Health Authority
    Mr. Michael Brown: To ask the Secretary of State for Health what is the current number of patients on the waiting list for the South Humber health authority. [31699]
    The Parliamentary Under-Secretary of State for Health (Mr. John Horam): Provisional figures show that at 30 April 1996 there were 6,919 South Humber residents waiting for admission to hospital, all but seven of whom had been waiting for less than 12 months. This is a significant improvement on recent figures
    Mr. Brown: Will my hon. Friend confirm that, in the 1970s, approximately 20 per cent. of the patients were on the waiting list for more than 12 months? Does not his answer indicate that we have made dramatic improvements in South Humber? I refer to one point of concern to local residents: yesterday there was a report that too many operations are being cancelled at the last minute. Will the Minister assure me and my constituents that he will look into this matter, as there is nothing more distressing for a patient than being called to hospital only to have an operation cancelled?
    Mr. Horam: I agree entirely with my hon. Friend's latter comment: there is nothing more distressing than having an operation cancelled at the last minute. There has been a problem in my hon. Friend's area due to the illness of one consultant combined with a sudden increase in the number of emergency admissions. However, all but one of the people whose operations were cancelled were admitted within a month—which is within patients charter standards. Given the excellent performance of South Humberside in reducing its waiting list—my hon. Friend paid tribute to that record—I know that it will make every effort to ensure that it does not happen again.

    Basildon Hospital
    Mr. Amess: To ask the Secretary of State for Health if he will make a statement on his Department's recent inspection of facilities at Basildon hospital. [31701]
    Mr. Malone: There has been no recent departmental inspection but, as my hon. Friend knows, I recently visited Basildon hospital where I was able to see the new Mary Wright unit for general practitioner referrals. I was impressed by the way that the unit speeds up the entry of patients to hospital and reduces the pressure on the accident and emergency department.
    Mr. Amess: Does my hon. Friend agree that the local hospital has been able to develop and enhance services since obtaining trust status? Will he join me in celebrating Hospice Fortnight and in congratulating the staff of St. Luke's hospice in my constituency, of Fair Haven in the constituency of my right hon. Friend the Member for Southend, West (Mr. Channon) and of Little Haven in the constituency of my hon. Friend the Member for Castle Point (Dr. Spink) on their magnificent work?
    Mr. Malone: I am happy to join my hon. Friend in his remarks. The trust in his area has an extremely impressive record. Day case activity has increased by 25.9 per cent. and the trust achieved a maximum wait of 12 months for

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    all day cases and in-patient treatments by the end of March 1996. No patient waits for more than 13 weeks for a routine first out-patient appointment. I also remember visiting the trust when it was awarded a citizens charter mark for excellence in service provision—which is much appreciated by all patients.
    Mr. Mackinlay: Does the Minister visit hospitals prior to their being awarded charter marks or hospitals that are not awarded charter marks? If he did, he might have visited Basildon during the bad times that were endured by my constituents in Thurrock and by the people of Basildon who suffered inordinate waiting times in the accident and emergency department because of the closure of the accident and emergency department at Orsett hospital. The people of Edgware are soon to suffer a similar experience. The fact is that the Minister turns up when there is good news but he is not prepared to face patients during the bad times like those suffered by the people of Thurrock and of Basildon.
    Mr. Malone: I visited the Basildon trust within a few weeks of being appointed Minister in order to see how our policies were affecting it. The hon. Gentleman is quite right: there were bad times. However, the bad times have gone and the good times are here as a result of our policies which the hon. Gentleman has persistently opposed.

    Creutzfeldt-Jakob Disease
    Mrs. Gorman: To ask the Secretary of State for Health if he will make a statement on the reported incidence of CJD worldwide since 1986. [31702]
    Mr. Dorrell: Creutzfeldt-Jakob disease occurs worldwide at an average incidence of up to one case per million people.
    Mrs. Gorman: Given the disgraceful way in which the Opposition—particularly the hon. Member for Peckham (Ms Harman)—sought to exploit the alleged connection between bovine spongiform encephalopathy and CJD, will my right hon. Friend confirm the latest results which show that the new strain of CJD is occurring in countries that are BSE-free, including many European countries? Does he agree with Dr. Paul Brown, the director of the United States Health Authority and a world expert on the subject, who has said that the incidence of three or four cases of the new strain of CJD in Europe will blow out of the water the thesis that the new strain is caused by BSE? The hon. Member for Peckham will then have to apologise.
    Mr. Dorrell: I entirely agree with my hon. Friend about the disreputable behaviour of the hon. Member for Peckham in seeking to feed public fears during the early stages of the argument. As to the incidence of the new strain of CJD, so far there has been one confirmed case outside the United Kingdom in France, although, as my hon. Friend rightly says, it is important that we continue to cast the net widely. That approach was supported by the World Health Organisation in May. The work is being co-ordinated from the British Government CJD surveillance centre in Edinburgh, which is recognised as a world centre of expertise in the matter.
    Mr. Wigley: Does the Secretary of State recall that, when he made his statement on this issue in March, I pressed him about resources for research into CJD? Does he therefore understand my surprise at discovering, when I visited the Western general hospital in Edinburgh a week last Friday, that, although verbal promises have been made about additional resources, it has received nothing in writing and, basically, it has the same team as was working in March; that those doctors still have to carry out their responsibilities without the certainty of additional hands to share the work; and that, in the past fortnight, only advertisements have appeared—produced jointly by the Department for Health and the Medical Research Council—for research to be undertaken by those who are dedicated to the work? Is it not time that we gave priority to that work and made resources available? It is a scandal that, three months on, that is not being done.
    Mr. Dorrell: The hon. Gentleman is absolutely right to say that the people doing the work are leading practitioners in the relevant medical fields. I make no apology for that, since they are best placed to make the necessary judgments to ensure that we understand the issue properly. On resources and the development of the research programme, I announced to the House in March that the Government support such development, and the hon. Gentleman has just reported the fact that that development is going ahead.
    Mr. John Marshall: Will my hon. Friend confirm that the European country that has the highest incidence of CJD is Austria, and that international studies indicate that there is no correlation between the incidence of CJD and behavioural patterns, such as whether one eats beef or meat or is merely a stupid vegan?
    Mr. Dorrell: My hon. Friend expresses his own views about vegans or—possibly—a particular sub-group of vegans. He underlines the fact that any link between beef eating and CJD has not been proven. Indeed, it is some way from being proven.

    Prescriptions
    Mr. Pike: To ask the Secretary of State for Health what percentage of prescriptions issued in the last 12 months were for more than one item. [31703]
    Mr. Bowis: It is estimated that 40 per cent. of prescription forms dispensed in the past 12 months were for more than one item.
    Mr. Pike: Does the Minister recognise that many people on low incomes who have to pay full prescription charges for two items every month have considerable difficulty meeting that cost? They cannot afford to pay for pre-payment certificates and there is a problem. Does he also recognise that there is a particular problem with dual packs, for which people have to pay two prescription charges?
    Mr. Bowis: The hon. Gentleman referred to people on low incomes. If they are on income support, they do not have to pay for prescriptions. I remind him that, when the Labour Government reintroduced prescription charges, exemptions ran at 42 per cent. The rate is now 85 per cent. A further 5 per cent. of people benefit from pre-payment certificates, to which he referred.
    He can set those people's minds at rest. It is true that there are two charges for a combination pack. That is because two drugs are packed together. If it were otherwise, it would be quite unfair on people who pay for multiple prescriptions. Curiously, any change would also be a perverse incentive to manufacturers to package their drugs in combination packs.
    Mr. Bellingham: I am grateful to my hon. Friend for spelling out the exemptions. Will he explain the different categories of people who get free prescriptions?
    Mr. Bowis: Yes, I will. Those who are exempted from prescription charges are men and women aged 60 and over, children under 16, students under 19, a person or partner receiving income support, family credit or disability working allowance, people entitled to full help under the NHS low income scheme, pregnant women and women who have had a child in the previous 12 months, and people who receive a war or Ministry of Defence disablement pension who need medication for that disablement. In addition, some medical conditions carry exemption. A tremendous number of people are exempt. We have one of the most generous exemption systems in Europe, which is why we can say that the vast majority of people who cannot afford to pay are well covered by it.
    Mrs. Mahon: Is it not the case that many students, even those below income support level, do not receive free prescriptions? Would the Minister like to comment on that?
    Mr. Bowis: If the hon. Lady is saying that people below income support level are not receiving free prescriptions, they are entitled to do so. The hon. Lady has only to add up the numbers about which we are talking—[Interruption.] I am sure that she can add up. If the total adds up to the 85 per cent. of British people who are entitled to free prescriptions, and a further 5 per cent. who benefit from the pre-payment certificates, she will see that there is not a problem. She will also see that it is a much more generous system than it was when the Labour Government reintroduced prescription charges.
    Mrs. Mahon: On a point of order, Madam Speaker.
    Madam Speaker: Order. I take points of order after Questions.
    Mrs. Mahon: In view of the unsatisfactory nature of that reply, I give notice that I intend to raise the matter on the Adjournment—
    Madam Speaker: Order. The hon. Lady did not ask the substantive question, so I am afraid that she does not have the opportunity to do that.

    Private Finance Initiative
    >11. Mr. Rowe: To ask the Secretary of State for Health how many private finance initiative projects have been approved in respect of national health service trust hospitals; and how many are awaiting approval. [31704]
    Mr. Horam: Since the launch of the private finance initiative, 41 national health service trust schemes valued at £1 million or above have been approved, with a total capital value of £472 million. Forty more projects, with a total value of approximately £1.5 billion, are testing for private finance as part of the procurement process.
    Mr. Rowe: I thank my hon. Friend for that encouraging reply. Will he undertake to do two things? First, as the experience of his excellent scheme grows, will he make every effort to ensure that the rules governing it become much simpler for trusts and others to understand? Secondly, will he review again the balance between the advantage that the trusts obtain from skilful use of their capital assets and the amount that the central authorities take from those capital assets for their own purposes?
    Mr. Horam: I understand my hon. Friend's points. It is not only a question of making the rules simpler, but of making the contract shorter as well. I am sure that my hon. Friend, with his interest in small companies, will agree that we must make it a process that is as available to them as it is to the large conglomerates. I certainly give him that assurance.
    Mr. Burden: If the Minister thinks that the PFI is as successful as he says, would he care to comment on the position of the Rubery Hollymoor primary health care centre in my constituency? It was promised to local people four years ago, they were told that the money was available from the NHS two years ago, it was trumpeted as a great new project by the then regional health authority, but it has been held up by the PFI and not one stone has yet been laid. Does the hon. Gentleman think it right that the working of the PFI should deny local people the services that the Government promised them?
    Mr. Horam: I do not know the particular scheme to which the hon. Gentleman refers, but I shall look into it. None the less, the PFI is accelerating the process. We are breaking out of the traditional system whereby everyone has to wait for the Treasury—waiting for Godot, one might say. If the scheme is good and provides value for money, and the risk is properly apportioned, it can obtain private sector finance. We are talking about a new era for hospital building in Britain, yet we still do not know what the Opposition think about it.
    Mr. Jacques Arnold: Is my hon. Friend encouraged by the splendid progress being made by the £100 million PFI project for a new hospital at Darenth Park to serve the people of Gravesham and Dartford? Will he do the best he can to sweep out of the way any obstacles that might arise, particularly those that might arise from the scaremongering of the Labour party and the hon. Member for Peckham(Ms Harman)?
    Mr. Horam: Yes, I confirm to my hon. Friend that that is an important scheme, which I am anxious should go ahead and to which I am giving constant attention.

    Dentists
    Mr. Gordon Prentice: To ask the Secretary of State for Health what steps he is taking to increase the number of dentists offering treatment in the national health service. [31705]
    Mr. Malone: There are nearly 16,000 dentists on health authority lists in England—an increase of 500 since 1992 alone. The reforms that I announced in the House last week should provide a further boost to NHS dentistry by removing uncertainty for the dental profession and creating a firm foundation for future development.
    Mr. Prentice: That answer will be cold comfort for my constituents in Barnoldswick. The Minister will recall that, last Wednesday, I told him that there was one NHS dentist in Barnoldswick—a town of 10,000 people. Today, there is not one NHS dentist in that town. Are not the Government's proposals to revitalise NHS dentistry a complete sham? Is it not the case that they are, as I described them last Wednesday, fraudulent?
    Mr. Malone: The hon. Gentleman's point is as absurd today as it was last week because, by implication, he is saying that dentists, who are self-employed practitioners, had been nationalised under a Labour Government and directed to work in certain places where he wished them to work. I have examined the situation in his constituency, and in Barnoldswick. Dental treatment is available in Colne, some five miles away, or in Burnley or Nelson.
    He and his right hon. and hon. Friends say that the service has been destroyed. I must say that they have some argument. We have allegedly killed off NHS dentistry since 1979—by spending 57 per cent. more on it in real terms than was being spent then. We have also increased the number of dentists who provide general dental service by 3,500. If the hon. Gentleman could get such a pledge from his Front Bench about funding the service, he might have a point to make.

  PRIME MINISTER

    Engagements
    Mr. Berry: To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [31724]
    The Prime Minister (Mr. John Major): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Berry: Is the Prime Minister aware that he spoke for the whole nation on Friday when he said that he had had "a bellyful" of the Tory party?
    The Prime Minister: I have to tell the hon. Gentleman that his quotation is inaccurate, but it could certainly be applied to questions such as that.
    Mr. Peter Ainsworth: Is my right hon. Friend aware that more and more people in Germany wish that their economy was run like ours—with low inflation, steady economic growth, flexible labour markets and falling
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    unemployment? Will he take an early opportunity to invite the leaders of the German opposition parties to Britain so that they can see what can be achieved with Conservative policies?
    Mr. Faulds: More, more.
    The Prime Minister: I am glad to see that it evokes such approval on the Opposition Benches.
    It is certainly true that we have at the moment the most competitive economy in western Europe, that we are in a very good position on inflation, and that unemployment is a good deal lower—and we are at the top of the growth league. That, as my hon. Friend says, is an enviable position, and I know that it is envied by many of my European partners.
    Mr. Blair: Will the Prime Minister join me in condemning the appalling outrage of Saturday in Manchester and send our thanks to the emergency services and our sympathy to the victims? Is this not a moment of truth for Sinn Fein? Does it not show the wisdom of demanding a ceasefire before Sinn Fein participates in any talks? Does not the responsibility now lie squarely on it if it is to play any part in the future progress of peace?
    The Prime Minister: I agree entirely with the right hon. Gentleman. Saturday's bomb in Manchester was a callous and inhuman act. It is a miracle that many more people were not injured and that many people were not killed. What is so startling is the total indifference of the people who left that bomb to what could well have happened to many people who have no connection whatever with the disputes in Ireland or the disputes that the IRA may have with the British Government or others.
    The right hon. Gentleman is right. The time has come for Sinn Fein to make up its mind. Either it will be a democratic organisation taking part in democratic politics or it will stay side by side as the reverse side of the coin to the IRA, with intermingled membership, in which case it has no part in democratic politics whatever. I believe that, when the right hon. Gentleman says that the moment of truth is here, it is for Mr. Adams and his colleagues, and everybody wishes to hear precisely what their views are—and let us have no more of the measly nonsense that we have had from them in recent years.
    Mr. Blair: I join with that entirely.
    Does the Prime Minister also agree that there has been progress in Northern Ireland? The British and Irish Governments are agreed on the way forward; all nationalist parties in the Irish Republic and Northern Ireland, apart from Sinn Fein, are agreed on peaceful means to achieve their ends; and the United States and others abroad may have been given a telling lesson on the realities of the IRA. Is not the only course now open to Sinn Fein to ensure that the IRA ceases its violence? If it cannot—or will not—the process should proceed with the democratic parties, and an agreement should be reached and put to a ballot of the people.
    The Prime Minister: It is entirely right that the talks must continue. We have no intention of allowing the search for a political settlement for Northern Ireland to be

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    derailed by the activities of the IRA and Sinn Fein. I hope that all the constitutional parties in Northern Ireland will continue to demonstrate the leadership and courage necessary to make rapid progress, and to show the IRA that it cannot stop the process with bombs in Manchester, London or anywhere else.
    If the IRA and Sinn Fein wish to have any future interest in this process, they will clearly need to declare an unequivocal ceasefire. They will need to declare it immediately. They will also have to show that that ceasefire is credible and lasting, and is not just a tactical device to enable them to enter the talks until such time as it is convenient for them to leave. It is now up to them to demonstrate their credibility; it is not up to us or anyone else. They must demonstrate their credibility—but the talks will continue.
    Mrs. Roe: In the light of falls in unemployment, interest rates and inflation, does my right hon. Friend agree that Britain is now one of the most competitive economies in Europe? Does he accept, however, that much more still needs to be done to raise standards in our schools? Although things are improving, far too many children still leave school without the basic skills.
    The Prime Minister: Both the premise of my hon. Friend's question and her substantive point are important. She knows that the British economy is in very sound shape; we intend to keep it so. As for education and basic standards, the Government have introduced a programme of reforms that is more comprehensive than any that we have seen at any stage in the past, designed to raise standards in schools, build on the national curriculum and ensure regular inspection and the publication of performance information.
    We have made substantial progress in recent years in raising standards, but there is no doubt that there is a great deal more that we wish to do to ensure that the quality of education for all our children is the equal of the quality of education anywhere else in the world. That is our intention, and we will continue to pursue it, despite the failures of so many Labour-controlled education authorities whose records have held back many children in inner London and elsewhere. [HON. MEMBERS: "Seventeen years."] It is no good hon. Members below the Gangway muttering in this fashion, when it is their party, in control in local government, that could act now to improve education, but does not.
    Mr. Livingstone: To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [31725]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Livingstone: Given the funds that the Government have made available to the Russian Government and organisations in Russia in recent years to help to establish democracy, has the Prime Minister had time to read today's statement by the Conference on Security and Co-operation in Europe expressing the CSCE's regret and concern at the extensive bias in the coverage of the presidential election? Will the right hon. Gentleman now use his contacts with President Yeltsin to point out to him
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    the value of the British precedent of television and radio providing equal time for candidates, to legitimise this final stage of the Russian election?
    The Prime Minister: I have not yet seen the particular statement to which the hon. Gentleman refers. In view of what he says, I shall certainly consider it, but the very fact of the Russian presidential elections, and the way in which they have been carried, out would have seemed inconceivable just a few years ago. It is a welcome sign that Russia is settling into the normal pattern of democracy, and we must give great credit to President Yeltsin for that. I hope that the second round will be conducted well and that there will be a clear-cut and satisfactory result.
    Mr. Stewart: Does my right hon. Friend the Prime Minister agree that the control of business rates under the Government has been of immense benefit to businesses, large and small, throughout Britain and, therefore, to jobs? Will he ask the relevant Government Departments to analyse the consequences for jobs and for prosperity of taking off these controls and handing decisions back to loony Labour councils, as is advocated by the Labour party?
    The Prime Minister: I will certainly consider any mechanism that tries to restrain on-costs on British business. It is clear that the fact that British business as a whole pays less over and above wages in on-costs is one of the principal reasons why are more citizens are in work in Britain than in any other country of similar size throughout western Europe.
    Mr. Welsh: To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [31726]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Welsh: Did the Prime Minister see last night's "Panorama" programme, which catalogued 10 years of evasion and incompetence by the Government on the BSE issue? What does he have to say to Scotland's hill farmers, now awaiting being dragged into the general economic catastrophe created by the Government, while he postures to no effect in Europe?
    The Prime Minister: Of course I did not waste my time watching "Panorama" last night—[Interruption.] I have much more productive things to do with my time than waste it watching nonsense from "Panorama". We have taken account of the scientific advice that we have had throughout this affair, and that is what we will continue to do in the interests of British agriculture and of the British beef consumer.
    Mr. Michael Brown: To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [31727]
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Brown: Does my right hon. Friend recall the exchanges that he and I had in the House last October, when I raised the question of closed circuit television for security purposes in our towns and cities? Is he aware that the initiative that he announced last year is one of the most practical ways of dealing with crime and of introducing crime prevention measures? Although he may not be able to confirm to me today whether my constituency of Cleethorpes is to benefit from the forthcoming announcement, will he guarantee that he will have a word with our right hon. and learned Friend the Home Secretary and advise him that we in Cleethorpes are very supportive of that initiative?
    The Prime Minister: Bringing closed circuit television to all corners of the United Kingdom is a practical effort to create a safer Britain in future. We are investing around £50 million, and our target is to fund 10,000 new cameras in the next three years. I am pleased to hear from my hon. Friend about the Cleethorpes bid. Knowing my hon. Friend, I would have been surprised if there had not been a Cleethorpes bid, but he is right—I cannot confirm to him today whether it has been successful, but I hope that announcements will be made before too long.
    Mr. Litherland: The Prime Minister will understand that there are no words to describe the loathing that Manchester people have for the perpetrators of the crime against our city last Saturday, but it has happened and we must now begin to rebuild Manchester. Mancunians are resilient people, but they require help. Will the Prime Minister today give the assurance to the House that the Government will offer every support, including financial aid, for the restoration of businesses, buildings, jobs and homes in Manchester? Sympathy will not pay the bills.
    The Prime Minister: The hon. Gentleman has commented on three matters of importance. I entirely share his initial remarks about Manchester, and I have no doubt about the courage and determination of the people of that city in recovering from last week's incident. Individuals injured by the bomb are eligible to apply for
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    compensation under the criminal injuries compensation scheme. The Government-backed terrorism insurance scheme will ensure that participating insurers can meet claims by companies that purchased full terrorism cover. Businesses that have not done so are likely to receive limited reimbursement and should contact their insurance companies.
    The financial implications for local authorities are not yet clear. I have asked my right hon. Friend the Secretary of State for the Environment to consider carefully any application for assistance by an authority affected by the incident, and he will certainly do so. In Manchester in the past—and I am sure that this will be so in future—an effective partnership between the Government, the private sector and the city council has delivered remarkable regeneration in many parts of the city. That partnership provides an excellent basis for rebuilding, and we look forward to working with the people concerned.
    Sir Michael Neubert: To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [31728]
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Sir Michael Neubert: Will my right hon. Friend take the opportunity to pay tribute to a great man now gone, the late Sir Fitzroy Maclean? Was there not much to admire in that soldier, diplomat, Conservative Member of Parliament and patriot, who had an enviable ability for getting out of tight corners?
    The Prime Minister: Sir Fitzroy Maclean was a remarkable man with many qualities to admire—from being a founder of the Special Air Services to a Minister of the Crown at this Dispatch Box. In all his many roles, Sir Fitzroy made a remarkable contribution. He also played a crucial role in work with Tito's partisans in the second world war. People will think of Sir Fitzroy Maclean as a man who lived life to the full. From what I know of him, I believe that he would regard that as a satisfactory epitaph.

Point of Order
3.31 pm
Mrs. Ann Clwyd: On a point of order, Madam Speaker. In his statement yesterday on child abuse in Clwyd, the Secretary of State for Wales referred to parliamentary privilege and implied that he did not want further discussion of the matter in Parliament. This morning, Madam Speaker, I conferred with your excellent Clerks and was told that, from this evening, the matter will be sub judice. I appreciate the difficulty of establishing such an inquiry when witnesses are required to give evidence, but I have a copy of the 400-page report and its appendices, and I have read it. I disagree with the Secretary of State's view that it is defamatory. The report should be published. I find it rather odd that, on the day that the report is available in the House, we are to have no further discussion because an inquiry has been established.
Madam Speaker: I am grateful to the hon. Lady for giving me notice of her point of order. It is true that I have power to waive the sub judice resolution, but the House will understand that I am unable to do so in the abstract. I can do so only in respect of some specific proceeding—that is, a debate, motion or Question. If the motion that will come before the House this evening is agreed and if I receive a request to waive the sub judice resolution in relation to a specific proceeding, I shall consider the matter at the time.

Public Order (Amendment)
3.33 pm
Ms Estelle Morris: I beg to move,
That leave be given to bring in a Bill to amend the power of arrest of section 5 of the Public Order Act 1986.
There is general agreement across the House that too many of our constituents' lives are blighted by crime and anti-social behaviour. There is, of course, great concern about serious crime, but many of my constituents express particular concern about an increase in abusive, threatening, disorderly and intimidating behaviour on the streets.
In 1986, Parliament passed section 5 of the Public Order Act, which gave police officers the power to arrest a person if he or she was engaged in offensive behaviour and continued to behave in such a manner after a warning had been issued. That Act tidied up and replaced previous laws that had given police the powers to act in similar circumstances. Indeed, it appears to be one of the few pieces of legislation that gives police the power to arrest in cases of disorderly and intimidating behaviour.
As early as 1987, Professor A. T. Smith, of Reading university, warned that Parliament might have passed a flawed law. As it is written, section 5 of the 1986 Act requires that the police officer who gives the warning must be the same police officer who made the arrest. Almost by definition, scenes of disorder involve many people and are attended by many police officers. It is quite clear that the police officer who gives a verbal warning cannot always be the same police officer who goes on to make the arrest. That clearly is not what Parliament intended.
In October 1993, police were called to a doctor's surgery in Durham, where two men were behaving in a threatening, abusive and insulting manner. They were arrested under the Public Order Act 1986, but were later acquitted of all charges because the officer who gave the warning was not the officer who subsequently made the arrest.
The case went to appeal and was rejected by Lord Justice Kennedy. However, Lord Justice Kennedy said at the time that he was
"unable to discern any Parliamentary purpose in the wording as it presently stands"
and that
"it would merit further Parliamentary consideration at an early date."
Last year in Birmingham, a crowd of youths were involved in a disturbance close by my constituency. They were warned about their behaviour by the duty inspector. When the behaviour persisted, a man was arrested. To the frustration of the police and the public, the Crown Prosecution Service decided not to take the case to court because the arrest had been made under the 1986 Act and was unlikely to stand up in court.
In Hampshire, people involved in scenes of public disorder after a demonstration were taken to court, but the action collapsed because of this flawed legislation. During the recent demonstrations over the Newbury bypass, police again found themselves hampered by the confusion caused by the Act. Manchester police have experienced similar difficulties because of that confusion and have now instructed their officers not to use that section of the Public Order Act 1986 at all.

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It is 10 years since Parliament passed this flawed piece of legislation. It is nine years since warnings were given, and two years since a High Court judge effectively suspended the use of that section and called on Parliament to reconsider it. All that is required is for one word to be changed in section 5(4). That one change is the substance of this ten-minute Bill.
A number of Home Secretaries have failed to take the necessary action. The result is that the police do not have the power to deal with a serious and growing problem.
Defence lawyers inevitably quote Lord Justice Kennedy's High Court judgment as a reason to dismiss future action in the courts. As it stands, the law that we passed gives a licence to those who threaten public order and it fails to protect the public.
Public order offences are not some minor adjunct to criminal offences. Day in and day out, they are a cause of harassment for my constituents, the public and the police. They are the causes of intimidation, disturbance and abuse. They are the incidents of nuisance that make people's lives a misery. They feed the fear of crime that traps people in their homes, because people are too frightened to go out on the streets.
In 1980, one in five crimes resulted in a conviction in the courts or in a caution by the police. By 1994, that figure had slumped to one in 10. Unless we amend the law, the situation will deteriorate even further.
A decade ago, Parliament passed a bad law. Our constituents, the police and the community have a right to expect us to act quickly to put it right. It is our job to close dangerous loopholes that help law-breakers.
With the co-operation of the Home Office and the House, this ten-minute Bill could become law before the recess. We have a long, hot summer ahead of us—a time when, sadly, disorderly and anti-social behaviour often increases. We would be failing our constituents and those we charge with protecting the peace if we lost this opportunity to remedy this flawed piece of legislation. I am grateful to the sponsors of the Bill, who represent both sides of the House, and I hope that it will receive the support of many other hon. Members.
Question put and agreed to.
Bill ordered to be brought in by Ms Estelle Morris, Mr. Terry Davis, Mr. James Pawsey, Dr. Lynne Jones, Mr. Patrick Thompson, Ms Tessa Jowell, Mrs. Ann Winterton, Mr. Richard Burden, Mr. Roy Thomason, Mr. Keith Bradley and Mr. Warren Hawksley.

PUBLIC ORDER (AMENDMENT)
Ms Estelle Morris accordingly presented a Bill to amend the power of arrest of section 5 of the Public Order Act 1986: And the same was read the First time; and ordered to be read a Second time upon Friday 12 July and to be printed. [Bill 154.]
Opposition Day
[15TH ALLOTTED DAY]

Benefit Fraud
Madam Speaker: I have selected the amendment standing in the name of the Prime Minister.
3.40 pm
Mr. Chris Smith: I beg to move,
That this House welcomes the recent report from the Social Security Committee on measures needed to tackle housing benefit fraud; is appalled at the complacency of Her Majesty's Government's response; endorses the proposals made by the Committee; believes that further measures are urgently required to root out organised landlord fraud in the housing benefit system, to step up the number of home visits to claimants, and to clean up the National Insurance number system; and affirms its belief that accuracy and efficiency in the spending of social security funds is vital for those in need and for the taxpayer.
Let us first establish the principle—fraud, wherever perpetrated, in the benefit system or in the tax system, is wrong. In the benefit system, every pound that is defrauded is a pound less for those in real need or for the taxpayer. The accurate spending of the social security pound is good for claimants and for the nation as a whole, and the greater the accuracy that can be achieved, the more we shall be able to restore and maintain confidence and faith in our welfare state.
There should be no dispute on either side of the House about that basic starting point for our discussion. It is when we move on to determining the nature and extent of that fraud and how best a Government can set about tackling it that we start to enter a debate between the parties.
There has been some debate in recent weeks about how much fraud is in the system, and much of that discussion has focused on the extent of housing benefit fraud. In the survey of housing benefit fraud that the Government carried out recently, they estimate that there is £1 billion of fraud. The Select Committee on Social Security heard evidence that it might be twice as much as that. I emphasise the word "might", because the Select Committee was cautious in advancing that figure. It also said that it might be greater than £2 billion. At no stage has the Select Committee or the Opposition said that the amount of housing benefit fraud is £2 billion. We have said that it is likely that the Government's estimate is an underestimate.
Mr. Michael Fabricant: Will the hon. Gentleman give way?
Mr. Smith: I thought that we might get some people up at this point.
Mr. Fabricant: The hon. Gentleman was being so reasonable up to that point. Has not the National Audit Office endorsed the Government's figure? Will the hon. Gentleman be honest enough to go a step further in what he was saying, by pointing out that the Select Committee report was based not on any survey, but simply on the opinions of those who gave evidence to it?
Mr. Smith: First, the National Audit Office has not endorsed the Government's figure; it has commented on

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the Government's survey. Secondly, I shall come in a moment to the hon. Gentleman's point about the so-called assertion that was made to the Select Committee, because it was based on a considerable body of evidence.
The Government are proud of their survey. In their response to the Select Committee, they talked about how rigorous and scientific it was. Their amendment to our motion says that it was "systematic". It was not. The methodology that they used in their housing benefit fraud survey was fundamentally flawed. First, they visited only 5,000 claimants out of a total of 5 million. Secondly, the test that they used to determine the amount of fraud was, in effect, a memory test. If claimants could remember exactly what they had said when they first applied for housing benefit and gave precisely the same answers then as they had previously, the fraud investigator assumed that there was no fraud and that it was an honest, above-board claim.
The Secretary of State for Social Security (Mr. Peter Lilley): May I help the hon. Gentleman to stop digging himself further into a hole? Is he not aware that the investigators required the people they called on in the sample to provide documentary evidence of identity and other facts that related to their claims? The survey was based not on memory but on documentary evidence.
Mr. Smith: The fundamental test was a memory test. The Government continually fail to acknowledge that the determined fraudster, who quite possibly made his original application on the basis of false papers, and certainly of false information, will have been as confident about producing the self-same false documents and information the second time around as he was the first. An approach that takes that as its starting point is flawed.
The evidence to the Select Committee came from one borough. I accept that it is evidence from only one place and that it is not necessarily a scientific analysis of circumstances across the country. However, the Haringey survey, which was reported in great detail to the Select Committee, was comprehensive. Every housing benefit claimant was visited by the fraud investigators. Its emphasis was on the amount of landlord fraud in the housing benefit system. Every landlord with more than 30 properties receiving direct payment of housing benefit was targeted, visited and questioned in detail, and evidence was demanded.
The evidence that resulted from those visits is stark. It was given to the House by my hon. Friend the Member for Birkenhead (Mr. Field), who chairs the Select Committee, in the debate on 11 March. It is worth reflecting briefly on the nature of the evidence. He had asked those who carried out the Haringey survey to provide details of the first 15 landlords they visited and the extent of fraud in each case.
Mr. Alan Duncan: Just so that we know where the hon. Gentleman is coming from, does he think that the estimates of the present level of fraud are overstated or understated?
Mr. Smith: The hon. Gentleman should know, first, that the point that I am coming from is that I do not like
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fraud in the housing benefit system and, secondly, that I have already said that it is extremely likely that the Government's estimate of the extent of fraud is an underestimate. I believe that there is more fraud in the system than the Government assert. I am in the midst of giving the evidence to support that case.
Mr. Eric Pickles: Will the hon. Gentleman give way?
Mr. Smith: I give way to the hon. Gentleman because this is clearly a day for extremely interesting and useful interventions from the Conservative Benches.
Mr. Pickles: I am most grateful to the hon. Gentleman.
So that the House can understand, if the hon. Gentleman feels that the Government's estimate is on the low side, can he explain why Opposition spokesmen have criticised the Government for making too high an estimate of local authority fraud levels? The hon. Member for Manchester, Withington (Mr. Bradley) made just that assertion from that very Bench in 1993.
Mr. Smith: I shall come to that precise point in a moment. The point that my hon. Friend made in 1993 was about the nature of the incentive, or rather disincentive, system that was put in place by the Government, which up to 1993 discouraged local authorities from identifying and rooting out fraud. I shall come back to that in a moment.
Let me return to the compelling evidence from the Haringey survey and the 15 landlords about whom my hon. Friend the Member for Birkenhead spoke on 11 March. In the case of the first landlord, to whom £13,000 a week was paid direct from the local authority in housing benefit, the survey found that 25 per cent. of the money was being fraudulently claimed. In the case of the second landlord, 23 per cent. was fraudulently claimed; the third, 67 per cent.; the fourth, 26 per cent.; the fifth, 16 per cent.; the sixth, 15 per cent.; the seventh, 11 per cent.; the eighth, 33 per cent.; the ninth, 59 per cent.; the 10th, 29 per cent.; and the 11th, 15 per cent. And so the list goes on.
The Haringey survey of landlords with multiple properties, all in direct payment from the local authority of substantial sums week after week, found that the average level of fraud was 20 per cent. That compared with the average level of fraud found by the Government in their survey of somewhere between 6 and 7 per cent.
Mr. Bernard Jenkin: Will the hon. Gentleman give way?
Mr. Robert G. Hughes: Will the hon. Gentleman give way?
Mr. Smith: No, I will not give way because I want to make progress on this point. I will give way later.
Of course I accept that multiple property-owning landlords in one London borough are not typical of landlords across the country as a whole, but the extent of fraud in those cases ought to alarm anyone. One of the things that worries me deeply is that the Government are far too complacent about landlord fraud where multiple direct payments are made.

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The rather arcane argument that the Government and some of their Back Benchers appear to be having about precisely what the level of fraud is—whether it is £1 billion or £2 billion—evades the real problem and the real issue at the heart of the matter. Yes, we need to consider how we can cut down on fraud by claimants, but we also need to ensure that we cut down on fraud by landlords.
Such evidence as exists—the only comprehensive survey in the country is the Haringey survey—shows that the level of landlord fraud is very substantial indeed. The last thing that hon. Members should be is complacent about that.
Mr. Robert G. Hughes: Is it not the hon. Gentleman who is banging on about whether the figure is £1 billion or £2 billion? Of course everyone opposes fraud.
If the hon. Gentleman reads the evidence given to the Select Committee, he will find that, rightly, the decision was taken to survey the worst part of the borough of Haringey first, and that is where the large excess of fraud was found.
This question remains, however: why does the hon. Gentleman seek to prove the higher figure? What is his ulterior agenda? What would he try to do with that figure if he were able to prove it? Are we right to suspect that he wants to say, "Here is a figure; a Labour Government could get that money back easily, so we shall spend it on something else"? In other words, it is the Labour party pretending that it would increase expenditure without there being any pain in doing so.
Mr. Smith: First, I am not banging on about whether it is £1 billion or £2 billion overall—the Government are doing that. The hon. Member for Dover (Mr. Shaw) has written to me about it. The Secretary of State has written to all the local authority associations, asking for the evidence on which the Select Committee based its assertions. We know what the evidence is, we know how the Select Committee reached its conclusions and we are saying that the Government are being far too complacent.
I am surprised that the hon. Member for Harrow, West (Mr. Hughes) asks why we believe that additional measures should be taken to combat fraud, especially landlord fraud. The reasons are simple; we believe that fraud is wrong and we want to do everything possible to eradicate it. We do not believe that the Government are doing enough, and we believe that we could do better. That is our simple agenda. If the hon. Gentleman thinks otherwise, he confirms what I have always thought of him—that he is less intelligent than he looks.
Mr. Bernard Jenkin rose—
Mr. Frank Field rose—
Mr. Smith: I give way to my hon. Friend the Member for Birkenhead.
Mr. Field: Are not the Tories today in danger of doing two things? First, they are in danger of appearing to the public as defending landlords who are ripping off taxpayers. Secondly, in disagreeing with us in our wish to control fraud so that we shall have a larger budget
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available to those who are in genuine need, they appear to be obstructing the wish of the House that money should be spent as taxpayers require, on genuine claimants, not on those who are committed to criminal fraud.
Mr. Smith: My hon. Friend is right. The Department of Social Security budget is £90 billion this year. I want to ensure that every pound of that is wisely and properly spent and goes into the pockets of those who need and deserve it, and are legitimately entitled to it. I want none of that money to go into fraudsters' pockets. I fear, however, that the Government are being complacent.
Mr. Jenkin: Will the hon. Gentleman give way?
Mr. Smith: I will not give way to the hon. Gentleman at the moment because I want to make progress.
In their response to the Select Committee's report, the Government adopted an attitude that seemed to say, "Aren't we doing well as a Government? We have done all these things; we have taken all these steps; we are fighting fraud; we are talking about fraud. Nothing else needs to be done." That is the overwhelming thrust of the Government's response to the Select Committee, even though the Select Committee said, "This problem is urgent. Serious issues are involved. We have evidence that there is massive organised fraud from some"—I emphasise some—"landlords in the private sector." Yet the Government say, "Everything that we are doing is perfectly all right and we have everything under control."
Two passages in the Government's response might repay closer scrutiny. First, the Select Committee had suggested that any landlord receiving direct payments of housing benefit from the local authority should be required to list the other properties for which payments were being made, either in the same borough or in a different one. That is a simple enough procedure; it would enable cross-checks to be made automatically between different properties. What did the Government say to that?
"There is a balance to be struck between imposing undue information burdens on landlords … and requiring them to provide information appropriate to the privilege of receiving money direct from public funds. The recommendation would impose an additional burden, whilst being easily evaded by less scrupulous landlords."
So the real reason why the Government refused that recommendation was that it would impose "an additional burden" on landlords.
Secondly, the Select Committee suggested that each landlord with more than 20 direct payment claims from a local authority should automatically be investigated as a matter of urgency—again, a sensible suggestion. Such landlords, after all, receive the most money, week after week, in direct payments sometimes amounting to thousands of pounds. The Government replied:
"The Government is unable to accept that the Committee's blanket approach to larger landlords would be appropriate at this stage".
Yet these "larger landlords" receive the largest amounts and thus constitute the greatest risk to public funds. This is just sensible targeting at the top of the range where fraud can lose the greatest amount to the public purse. Still, the Government dismissed the idea as a "blanket approach" that they were unable to accept. Well, they ought to accept it and in general they ought to accept more of the Select Committee's proposals.

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We know how landlord fraud operates. We know that landlords create fictitious tenancies; sometimes there are even fictitious properties. We know that sometimes there is collusion between landlords and their supposed tenants. We know that they spread their fraud across local authority boundaries. We know that they sometimes claim that higher rents are being paid than actually are. There is a host of ways in which fraudulent payments of housing benefit can be obtained.
We have proposed a series of detailed steps that we believe should be taken to help to stamp out landlord fraud. They include giving local authorities the right to obtain proof from landlords and managing agents of their right to control a property for which they are claiming direct payment of housing benefit, with the provision that a local authority could refuse payment if it was not satisfied with the information obtained.
We believe that landlords should be required to list other properties in their control for which direct payments are being received. We believe that local authorities and the Benefits Agency should be allowed lists of all redirected mail for claimants from the Post Office. We believe, too, that landlords of multiple-occupation dwellings should be required to have a licence. A self-financing licensing scheme would both help to deter fraud and do much to improve safety standards and maintenance in such houses. However, when my hon. Friend the Member for Greenwich (Mr. Raynsford) proposed such a scheme during the passage of the Housing Bill, the Government rejected it.
We believe that special teams of investigators should be established across all local authorities, not just in London—which the Government, rather grudgingly, have come to accept, and we welcome their conversion. We believe that at least 10 such teams should be established around the country and that they should deliberately target organised landlord fraud. We believe that all landlords who receive 20 or more direct payments should be investigated as a matter of course.
We believe that the finders keepers rule—which encourages competition rather than co-operation between the Benefits Agency and local authority fraud investigators—should end, so that we do not end up with the same investigators chasing the same fraud, thereby duplicating effort. We believe that there should be an automatic link to the tax system, so that information about all direct housing benefit payments made to landlords will automatically be passed by local authorities to the Inland Revenue. That would be a fairly powerful deterrent to landlords claiming housing benefit, which was not genuinely directed at the needs of a tenant.
Mr. Bernard Jenkin rose—
Mr. Smith: Finally, we believe that a proper monitoring system should be in place to ensure that local authorities fulfil their obligations in this respect. I see that the hon. Member for Colchester, North (Mr. Jenkin) has now returned to the Chamber, so I shall give way to him.
Mr. Jenkin: I assure the hon. Gentleman that I did not leave the Chamber and that I was elsewhere in the Chamber. I am interested in the source of his innovative
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ideas, as they are familiar to me—the vast majority of them were put in the Social Security Committee's report by me and other hon. Members, including the hon. Member for Birkenhead (Mr. Field). Why is it that the hon. Member for Islington, South and Finsbury (Mr. Smith) has got all his ideas from the hon. Member for Birkenhead? Should not the hon. Member for Birkenhead be the shadow spokesman on social security? It is obvious that the Labour Front Bench does not have any ideas of its own.
Mr. Smith: I am proud that the Labour party has looked at the Social Security Committee's report, at the evidence that it received and at the sensible recommendations that it made. We want to implement its recommendations. I am surprised that the hon. Gentleman is not leaping to his feet to defend the Select Committee—he is a member—and arguing that the Government ought to be implementing its recommendations, rather than dismissing them as a burden on landlords, or saying that this is a blanket operation that they will not adopt now, or saying that they will set up an inter-departmental ministerial working party to look at fraud. That has been the Government's response to what he and his colleagues have said. Instead of complaining about me picking up the Select Committee's report and running with it, he ought to be complaining loud and clear about the way in which his Government have not done that.
Mr. Jenkin rose—
Mr. Smith: A considerable number of our proposals for cutting down on landlord fraud go further than the Select Committee recommended. If the hon. Gentleman does not know the content of his own Select Committee's report, perhaps he ought to read it.
Mr. Jeff Rooker: My hon. Friend referred to monitoring. We have to address the issue of accountability. No single official at local authority level is responsible for the housing benefit budget. For example, in my local authority the official who was responsible for the operation of the system refused to accept responsibility for the housing benefit payments—£300 million—but accepted responsibility only for the administration. When it all went wrong and the official was moved elsewhere, it was as if no one was responsible for that huge sum.
This issue has to be dealt with—there has to be accountability at the local level, so that there is a proper reporting system from those responsible for administering the system, through to the local auditors, through to the Benefits Agency and then to the Secretary of State. It cannot be left as a paperwork exercise, as it is now.
Mr. Smith: My hon. Friend has made an extremely good point. Clear lines of accountability exist in some of the best local authorities. That is not the case in many local authorities. We should ensure that best practice is disseminated among local authorities so that proper accountability can be achieved. That could be accomplished through the monitoring procedures that we advocate.
Mr. Frank Field: The accounting officer is the chief officer in the agencies. That is the proper procedure which

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I think should be followed in all spheres. For example, the Prime Minister, as First Lord of the Treasury, should be clearly accountable for the Budget and for any fraud. Similarly, the chief executive in local authorities should be the chief accounting officer who should be responsible for the money spent by that authority.
Mr. Smith: My hon. Friend makes a good point.
Mr. David Congdon: It is meaningless.
Mr. Smith: It is not meaningless, because my hon. Friend makes a precise point about accountability. If there is a clear responsibility attached to the most senior officer in the authority, the matter should receive proper attention. That is the key point that the hon. Member for Croydon, North-East (Mr. Congdon) should take into account.
The Government claim in their amendment and in some of their statements to the press in the past week or so that local authorities started taking fraud seriously only when the Government introduced incentives.
The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): Hear, hear.
Mr. Smith: The Minister chortles about that point, but it is untrue. Up to 1993, there was a specific disincentive in the system—which was put there deliberately by the Government—designed to hinder local authorities in the fight against fraud. In its January 1993 report entitled "Remote Control: the National Administration of Housing Benefit", the Audit Commission said:
"There are other perverse incentives which may place public money at risk. For example, the lower subsidy received for overpaid benefit means that an authority, which believes that it is unlikely to recover an overpayment, is better off if it ignores any evidence of possible overpayment. Since any benefit paid following a fraudulent claim is treated as an overpayment, this creates an incentive to ignore possible fraud."
In 1993, the Audit Commission made that clear analysis of the way in which the Government had created a system that actively discouraged local authorities from following up fraud. The Government then introduced a system of incentives that made the situation better. However, they are now making it worse again. None the less, in 1993 the Government recognised that there was a problem and they decided to improve incentives.
Although a discouragement was built into the system before 1993, local authorities up and down the country had an extremely good and active record of combating fraud. I shall give just three examples. Swansea introduced a separate fraud team in 1987 comprising two anti-fraud officers and clerical back-up. In 1990—three years before the Government woke up to the disincentives problem—it was increased to a team of four plus clerical support. In 1989, the borough of Camden set up a dedicated anti-fraud team of three staff, which was later expanded to four. It also began carrying out many residency checks, with home visits, prior to 1993.
The city of Southampton appointed its first full-time designated housing benefit fraud officer, with clerical support, in July 1991. Before then, it had an inner-city fraud team that examined housing benefit fraud and other fraud issues across the board. In April 1993, it appointed
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two further people to the team. The Government started collecting statistics on fraud, let alone doing anything about it, only in 1986, which was precisely when good authorities such as Swansea were already starting to take practical action to tackle the problem.
If the actions of individual local authorities were not enough, the London boroughs fraud investigators group, which draws together investigators from different London boroughs across the capital city, was set up in 1991. For four years, it called on the Government to set up a Londonwide anti-fraud team. Although it is pleased that the Government have now acceded—rather belatedly—to that request, it does not quite know why the Government took so long to wake up to the need for such a team. So when the Government try to claim, as they do in their amendment, that it is only because of the incentives that they have put in place that local authorities have started to tackle fraud, they are wrong. Local authorities were way ahead of the Government in the actions that they were taking.
Mr. Heald: Does the hon. Gentleman concede that weekly benefit savings have almost trebled since the incentive scheme came in, yet local authority associations, which are dominated by Labour, are saying that our increased targets are too high? Why is that? Will he condemn it?
Mr. Smith: The complaint that the local authorities are making is not that the targets are too high, but that the nature of the incentive system that the Government have put in place takes an incentive up to a certain ceiling and then gives much less of an incentive for local authorities to go beyond it. Local authorities have pointed out the flaws in the incentive mechanisms.
However, a new problem is about to hit us. It lies in the bringing forward of compulsory competitive tendering in housing benefit.
Mr. Pickles: Will the hon. Gentleman give way?
Mr. Smith: I will not give way; I have done so extremely generously, and must make some progress.
The advent of compulsory competitive tendering in housing benefit payments and, perhaps most alarmingly, in fraud investigation in local authorities, was revealed in a written answer to me from the Under-Secretary of State for the Environment, the hon. Member for Croydon, Central (Sir P. Beresford):
"Our proposals for changes to the framework for compulsory competitive tendering for professional services include a proposal to raise the percentage of financial services work which must be exposed to competition from 35 per cent. to 65 per cent., and limit the availability of exemptions from CCT for authorities which cannot meet that requirement without exposing benefits work to competition. The legal definition of financial services work includes benefits work and relevant authorities may well choose to expose this work to competition in order to meet their competition requirements."—[Official Report, 12 June 1996; Vol. 279, c. 163.]
If the Government are intent on forcing local authorities to put out to private tender the payment of housing benefit and council tax benefit, and the work to detect fraud in the receipt of those benefits, any shred of a pretence of having a serious anti-fraud strategy goes out of the

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window. Targeting organised landlord fraud, which is probably the biggest area in housing benefit fraud, takes highly skilled and trained professional investigators.
Mr. Pickles: Will the hon. Gentleman give way?
Mr. Smith: It also requires a bona fide and entirely confidential exchange of information between local authorities and the Government. That is not the sort of activity that should even be considered for privatisation. Conservative Members do not seem to understand the enormous importance of the need to protect, with publicly accountable officers in charge, the confidentiality of information for the general public, while at the same time cracking down on fraud. That need must be paramount. If the Government force CCT on the payment of housing benefit or on fraud investigation, they are opening the gates to inadequate, sloppy procedures in investigation and the destruction of that important principle of confidentiality.
Mr. Pickles: Will the hon. Gentleman give way?
Mr. Smith: I will give way for the last time to the hon. Gentleman, who has been very persistent.
Mr. Pickles: I am grateful to the hon. Gentleman. He is in danger of not fulfilling a promise that he made to me earlier. He promised that he would reconcile the statements made by the hon. Member for Manchester, Withington (Mr. Bradley) in July 1993 and by the hon. Gentleman at the Dispatch Box today. To remind him, three years ago the hon. Member for Withington made two substantive points. His first point was that there was a danger of overestimating the level of fraud—if the hon. Gentleman wants to check, the speech begins at column 1253 of Hansard on 16 July 1993—and his second point was that there was a danger of the incentive figures being set too high. If the hon. Gentleman would care to reconcile those figures, I would be most interested.
Mr. Smith: I gave the hon. Gentleman the answer for which he is looking when I spoke specifically about what the Audit Commission had said back in 1993 about the nature of the disincentives in the system at the time. I also draw the hon. Gentleman's attention to the very fine words of the Minister for Social Security and Disabled People, the hon. Member for Bury, North (Mr. Burt), then the Under-Secretary of State for Social Security, referring precisely to the speech made by my hon. Friend the Member for Manchester, Withington (Mr. Bradley) on 16 July 1993. The hon. Member for Bury, North said:
"The Opposition spokesman has been equally determined to show that the Labour party is as rigorous about fraud and abuse as it is about ensuring that everyone gets his just deserts."—[Official Report, 16 July 1993; Vol. 228, c. 1296.]
My hon. Friend the Member for Withington held that view at the time and he still holds that view.
The second area where the Government need to take some action is in stepping up the number of home visits that are made to claimants. Back in 1979, about 3.5 million home visits were made during the course of a year. In 1994, that figure was down to about 500,000, so the Government had made the situation much worse.
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Now the Government have realised that home visits are quite important, so they are stepping up a little bit the number of home visits that are made. Some 300,000 more home visits are now being made during the course of a year.
However, we believe that the Government should expand substantially the number of home visits that are made. Of course, there should be a dual purpose in visiting at home. There should be a determination to identify where a fraudulent claim is being made or paid, but there should also be a determination to ensure that people are receiving that to which they are properly and legitimately entitled. Accuracy in the spending of social security funds is a two-sided coin. That always used to be the purpose of home visiting under the previous Government, when 3.5 million home visits were made in the course of a year. It should continue to be the purpose of home visiting.
The work that has been done by the National Audit Office demonstrates clearly that, in terms of inaccuracy of payment of income support, the balance of inaccuracy weighs heavily to the current detriment of the Department rather than to its benefit.
We believe that the Benefits Agency can and should organise its home visits much more efficiently. Figures from the Department of Social Security show that the average cost per visit is £54. Yet the most efficient local authorities manage to achieve a far lower cost per visit.
Mrs. Maria Fyfe: Will my hon. Friend comment on the experience of a constituent of mine? A few weeks ago, when a benefits fraud check was carried out in my constituency, two officers knocked on his front door at half-past 7 in the morning, entered and then knocked on his bedroom door until he woke up. This was a person about whom there was no suspicion whatever. He was in fact a perfectly legitimate claimant. Part of the debate should focus on the purpose of home visits, and we must ensure that people are not treated as if some kind of Gestapo was going around.
Mr. Smith: My hon. Friend is right to draw attention to that, and she has written to me about the case.
We must ensure not only that home visits are conducted efficiently—to which I shall return in a moment—but that they are conducted in a manner that respects the liberties of the citizen, and that should be one of the elements of the system that the Department puts in place.
As I said, home visits could be organised more efficiently. The best local authorities have detailed software back-up, which provides all the information to ensure that the most is got out of every single visit: properties are grouped street by street and estate by estate, so that unnecessary travelling is avoided, and so on. That is the way in which they should be organised, and it is possible to achieve greater efficiency in doing so.
Mr. Lilley: Before the hon. Gentleman goes any further, will he confirm the figures given in his document on that subject, in which he says that he expects his fraud investigators to carry out 50 visits a day, which means that they will have eight minutes between ringing the bell on one door, completing the interview and ringing the bell

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on the next? How much time will be spent on benefit advice; how much time will be spent on fraud advice; and how serious does he consider that objective to be?
Mr. Smith: It is an entirely serious objective, because it is precisely what is being achieved by the best local authority officers who currently carry out home visits. Some home visits, of course, will be much shorter than that, but others will take longer. The Department's figures seem to assume that a visiting officer will sit down and talk through the entire life history of the claimant, his or her reading pattern, what films he or she last saw and the network of relationships of every single claimant in great detail over several cups of tea, taking several hours at a time. That is the current performance of investigators from the Department, but the best local authorities do it far more efficiently.
Mr. Heald: Will the hon. Gentleman give way?
Mr. Smith: No, because I have already given way to the hon. Gentleman's boss.
The third area where the Government need to improve their performance is national insurance numbers. The Government have given us different totals at different times of the year, in different debates and different answers, for the precise number of national insurance numbers that are in circulation. We had an interesting answer on 5 March from the Under-Secretary of State, who said that it was all terribly simple. He said that there were two different computers, and that, yes, they had different totals on them. The national insurance recording computer system, which is based on contributions that are paid, contains 63.6 million records. The departmental central index system, which is based on entitlement to claim benefits, contains 77 million numbers.
Thanks to the clarity with which the Under-Secretary of State explained the arrangements to us, we all understand them. What the Government have so far failed to explain, however, is a discrepancy identified by the Select Committee. It relates to national insurance numbers classed as inactive because they belong to deceased persons. Although, by virtue of having existed, a deceased person must surely be listed on both computers, there are nearly 1 million more numbers on one computer than on the other. That is a dramatic disparity.
Even if the Government were able to explain why nearly 1 million numbers are unaccounted for, however, it would still be far too easy to establish a national insurance number and use it for fraudulent purposes. There is a good deal of organised big-time fraud at present: people with portfolios of national insurance numbers are using them to claim benefits to which they are not entitled because their identities are entirely fictitious. The swipe card technology which the Government are now introducing—and which we support—may bear down on the level of error in payments that are made, but it will not tackle the fundamental problem of the fraudulent obtaining of national insurance numbers.
The Government should take a series of steps to cleanse the national insurance number system of numbers that go astray in that way. They include greater vigilance in preventing people from using false identities to apply for national insurance numbers, and more frequent checks by the Contributions Agency to reconcile benefit claims with
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contributions paid. At present, such checks are carried out annually, and do not pick up frauds that intelligent fraudsters perpetrate between checks.
Local fraud investigators should be allowed access—currently denied—to the Contribution Agency's departmental central index. On-line data matching across departments should be introduced, with a timetable for rapid future progress. Special checks should be run on all inactive numbers, and there should be a flagging system to ensure that any number that is inactive for any reason is targeted. There should also be a special unit to co-ordinate the cleansing and investigation of all suspect numbers. The Government are coming up with some bits and pieces, but they are not yet doing enough.
We believe that the Government should deal with another small problem. It is highlighted by the case of Mr. Mark Lee, which was described in The Sunday Telegraph a couple of weeks ago. Mr. Lee, a convicted fraudster, had obtained a mortgage by fraudulent means and was sent to prison as a result, but the income support system continued to pay the interest on his mortgage, even though the mortgage had been fraudulently obtained. The Department of Social Security's answer was, "This is not a matter for us because there is no specific fraud in the claiming of benefit for the interest payment."
Clearly there is a loophole in the law. If the mortgage was obtained fraudulently, surely the taxpayer, via the Department of Social Security, should not be picking up the tab for keeping up the mortgage payments. The Government should urgently consider that matter, to find out how that legal loophole can be tightened.
In the past year or two, the Government have talked a lot about fraud. They have done a little bit about it. Labour Members welcome much of what they have done—the measures are sensible—but the Government are being far too self-congratulatory about what they have done. Their response to the Select Committee report is riddled with complacency. They are going backwards on what they have achieved because of their ideological attachment to compulsory competitive tendering.
The Government should adopt at the least the spread of measures proposed by the Select Committee. They should go further than that and embrace our recent ideas and proposals. There is far more to be done to tackle fraud, and it is a Labour Government who will set about doing it.
4.36 pm
The Secretary of State for Social Security (Mr. Peter Lilley): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'welcomes the priority given by Her Majesty's Government to tackling all aspects of benefit fraud; endorses the Government's successful work in detecting and preventing fraud which has resulted in the benefit savings target of £1.3 billion being exceeded in 1995–96; congratulates the Government on carrying out the first systematic review of the amount and type of Housing Benefit fraud; notes that Housing Benefit administration is the responsibility of local authorities and that local authorities only started tackling fraud seriously once the Government introduced financial incentives for them to do so; welcomes the new fraud strategy which will result in savings of £2.5 billion a year by 1999; deplores the Labour Party's attempt to exaggerate the amount of fraud as a pretext to spend more money; and condemns the Labour Party's continuing half-heartedness in tackling benefit fraud and abuse.'.
No one will be fooled by the cynical speech of the hon. Member for Islington, South and Finsbury (Mr. Smith). He tried to con people that Labour is no longer soft on

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fraud and deliberately exaggerated the amount of fraud, so that Labour can pretend that its spending plans could be painlessly financed by cutting fraud. He wanted to disguise the flimsiness of that claim by peddling a plethora of spurious statistics and dubious detailed policies. His speech shows not the zeal of the convert, but the guile of the con man.
Rooting out fraud and abuse always has been, and remains, my top priority. I am happy to say that that was recognised by the Select Committee on Social Security, which said that the Secretary of State
"has shown himself to be"—
I pass over the kind remarks about my intellect and ability—
"the most determined to counter fraud".
Mr. Frank Field: It was better than that, but the Secretary of State's side toned it down.
Mr. Lilley: No: it responded to my natural modesty.
Since I became Secretary of State, we have saved record amounts on fraud, and we have plans to go on breaking those records year after year. In a moment, I will spell out what we have achieved and what we will achieve, but first I want to dismiss the ridiculous claim of the hon. Member for Islington, South and Finsbury that he and his party are—suddenly—tough on fraud.
The simple truth is that Labour has always been at best indifferent, and at worst hostile, to tackling benefit fraud. Nothing Labour Members have said today should be allowed to conceal that fact. The hon. Member for Sheffield, Brightside (Mr. Blunkett) castigated the Labour party for being
"for too long linked with the freeloader"—
and so it has. The fact that, before this debate, Labour has never initiated a debate on fraud illustrates its sheer indifference to the subject. When we have had such debates, Labour has invariably tried to play down the amount, and the importance of the issue.
I remember the hon. Member for Manchester, Withington (Mr. Bradley) accusing us of overstating the amount of fraud in the system. He argued that, even if our estimates were true, the amount was not significant. His words were:
"We should continually bear in mind the fact that, in the context of the overall budget, even £1 billion is not a large amount".
Today, the Labour Front-Bench team are
"overstating the amount of fraud in the system"
precisely because they now realise that £1 billion is a large amount, and they desperately need to conjure it up from somewhere to cover part of their spending plans.
Stopping housing benefit fraud is the responsibility of local authorities—most of which happen to be Labour. Most of them made little or no effort to tackle fraud—until I set each authority a target, backed by tough penalties and incentives, to galvanise it into action. In the first year, local authorities doubled the amount of fraud they detected, and increased the figure dramatically again the second year—yet members of Labour's Front Bench condemned those targets when I introduced them.
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The hon. Member for Withington, Labour's Front-Bench spokesman at the time, said:
"the recovery targets set for local authorities are unrealistically high. I know that there is a lower level and a higher level, but my investigations across the country convince me that many local authorities will find it extremely difficult to hit even the lower targets … the Government have set the targets unrealistically high".—[Official Report, 16 July 1993; Vol. 228, c. 1254–55.]
Since then, the Opposition have opposed our measures to prevent abuse of housing and other benefits.
In January, we introduced a reform to ensure that taxpayers no longer pay rents in full to any new claimant who chooses to occupy a property with a rent above the average for the type of property suitable for the household in that area—and Labour opposed it. That measure will make collusive deals between landlord and tenant to rip off the taxpayer harder, yet Labour opposed it.
From the autumn, a further reform will ensure that housing benefit does not pay higher rents for unemployed young people than they would normally be able to afford out of work. Labour opposed that reform too, just as it opposed other measures to prevent abuse—such as the objective medical test for incapacity benefit, to stop fit people abusing the system, and the removal of entitlement to housing and other benefits from bogus asylum seekers.
Although Labour said that asylum seekers were mostly genuine and came to the United Kingdom to escape persecution, not to acquire our benefits, the figures tell a different story. Our benefit changes were made in February. The number of people claiming asylum in that month fell 7 per cent. below last year's level. In April, the figure was down a quarter, and in May it was down one half.
Of course it is too early to be certain that trend will be sustained, or whether it will be reinforced when the Asylum and Immigration Bill is enacted—but the first signs that the flow of bogus asylum claims is being stemmed are encouraging. That is good news above all for genuine refugees, as it will be easier to deal speedily with their claims.
The Opposition's indifference and hostility to tackling fraud is in marked contrast to our commitment and success. I have consistently given the issue the priority it deserves. I put in place the organisation to pursue fraud effectively, appointed a senior official with exclusive responsibilities, set up a fraud board and appointed a Minister with specific responsibility for tackling fraud—my excellent hon. Friend the Under-Secretary of State, the Member for North Hertfordshire (Mr. Heald).
I developed for the first time a method of measuring the extent and incidence of fraud in each benefit. I increased funding for the fraud effort, and ring-fenced it against running cost cutbacks. I introduced home visits for new claims. I gave local authorities the incentives to tackle housing benefit fraud to which I have referred, plus extra guidance and help.
All those measure are already showing up in increasing success in detecting and stopping fraud. In each of the last four years, savings have exceeded targets—and targets have been sharply increased.
Mr. Jon Owen Jones: Does the Minister, in his attack on fraud, intend to ensure that his party pays back the money paid to it by the fraudster Asil Nadir?
Mr. Lilley: That is not a responsibility of mine, and nor is it relevant to today's debate. One of my main responsibilities is dealing with the frauds perpetrated by Robert Maxwell—the only Labour Member ever to take a serious interest in occupational pensions.
Total savings for last year as a result of my measures are expected to exceed £1.3 billion, including some £220 million of fraud discovered by local authorities—which, together with the Benefits Agency, discovered about £390 million of housing benefit fraud over the past year. We know how much fraud is detected. The question is, how much at present remains undetected? If one is to plan an effective fraud protection strategy, it is essential to know how much fraud there is, of what kind and what type of fraudster commits it.
In the past, no Government in this country or abroad had succeeded in measuring fraud, but we have developed a reliable method of doing so. It involves taking a representative sample of claimants, examining all available information on each claimant, sending trained investigators to visit claimants at home, carrying out visits unannounced and repeatedly until contact is made or non-residence established, and requiring the claimant to prove his or her identity and facts relevant to the claim.
Mrs. Fyfe: Does the Secretary of State set any parameters for the hours during which home visits should be made or for the conduct of the officials who make them?
Mr. Lilley: I will certainly look into the case that the hon. Lady mentioned earlier, which would not have been a routine visit. They are not made any more—any more than I imagine the hon. Member for Islington, South and Finsbury intends 4 million such visits as part of his unbelievable campaign.
Mrs. Fyfe: I was talking about the spotlight campaign in Glasgow.
Mr. Lilley: The hon. Lady reminds me that she opposed our spotlight campaign in Glasgow. Unlike her, a large number of Glasgow citizens co-operated with that campaign, which succeeded in making considerable savings.
Mrs. Fyfe: On a point of order, Mr. Deputy Speaker. The Secretary of State is in danger of misleading the House. I said that the Government should put as much energy into identifying people who are due benefits but not receiving them.
Mr. Deputy Speaker (Mr. Michael Morris): That matter has absolutely nothing to do with the Chair. The hon. Lady has been in the House long enough to know that there are other means of seeking such redress as she believes is appropriate.
Mr. Lilley: With the co-operation of the citizens of Glasgow, some £2.8 million has already been saved in that city, which means that we are better placed to meet the needs of genuine claimants in that part of the world.
Mr. Chris Smith: In the light of my hon. Friend's point of order, will the Secretary of State withdraw the slur against her views that he just perpetrated?
Mr. Lilley: If I have in any way slurred any hon. Member, of course I withdraw my remarks—but the hon. Lady gave the clear impression that she was not supportive of the spotlight campaign.
The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans): She said money should not be spent on that campaign.
Mr. Lilley: My hon. Friend recalls the hon. Lady saying that she thought money should not be spent that way. She may have said that.
Mrs. Fyfe: For the record, when the Secretary of State came to Glasgow specifically to blitz benefit fraud, I commented—and I stand by this—that the right hon. Gentleman would do well to put equal effort into assisting people who have been awarded benefits running into thousands of pounds but have not received them. Of course I do not condone fraud, but it is contemptible to chase people for fraud and do nothing about claimants who are due benefits.
Mr. Lilley: The hon. Lady has done her best to save her reputation from her previous comments.
The systematic surveys undertaken by fraud officers have enabled them to establish the amount and type of fraud. The results show that about 10 per cent. of income support and housing benefit claims are fraudulent.
Criticisms of the survey methodology simply do not hold water. The interview was not a just a memory test, as the hon. Member for Islington, South and Finsbury said. It required documentary proof of identity and other facts. Far from ignoring landlord fraud, the survey was particularly well designed to detect it. The hon. Gentleman should understand enough about landlord fraud to know that it requires either a bogus property or a bogus tenant. Visits established with absolute certainty whether or not the property existed, and with near certainty whether the tenant was genuine. Finally, the methodology was endorsed by the National Audit Office.
I have no incentive to understate the amount of fraud. Indeed, until today, the Opposition have always accused me of exaggerating it. By contrast, Labour now has every incentive to exaggerate. It wants to appear tougher than the Government, so as to con people that it is no longer soft on fraud. Above all, it needs to conjure up imaginary "savings" to offset the real cost of its spending plans. That is why Labour Members leaped uncritically at the suggestion that housing benefit fraud could amount to £2 billion, instead of the £1 billion established by our rigorous and systematic study.
The hon. Member for Islington, South and Finsbury said that those are not the bases for Labour's figures, and that Labour Members do not endorse the £2 billion figure, but the Leader of the Opposition seized on that very figure in his speech in the Southwark cathedral series, which preceded my speech.
The £2 billion figure is, to say the least, flimsy. The figure is mentioned by the Select Committee in its report, but the Committee does not examine it, let alone endorse it. The figure relates to a guesstimate made by the local authority investigative officers group. It is not based on any systematic survey, representative sample or audited methodology.

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LAIOG members are professional investigators, but they are not trained in statistics, sampling or survey methodology. They sensibly target their efforts on areas in which they are most likely to detect fraud. However, they then scaled up the percentage of fraud found on those drives and applied it to the population as a whole. In other words, the LAIOG figures vastly exaggerate the amount of fraud.
For the Opposition to set aside an audited, thorough figure for that type of guesstimate is irresponsible, and demonstrates that they are less interested in truth than in propaganda.
Today the hon. Member for Islington, South and Finsbury placed much weight on a single survey carried out by Haringey into 15 highlighted cases, and mentioned fraud levels of up to 50 per cent. Haringey claims that there is a very high level of fraud in its area, and has increased significantly the amount of fraud it has discovered since I gave it incentives and subjected it to penalties if it failed to do so. But the total amount of fraud it detects and stops is less than 3 per cent. of its housing benefit budget.
Across its budget, Haringey does not seem to have identified, let alone stopped. the levels of fraud suggested by the hon. Member for Islington, South and Finsbury. Perhaps he would care to explain the discrepancy between the figures he gave and the average savings that Haringey is achieving.
Mr. Frank Field rose—
Mr. Lilley: The hon. Member for Birkenhead (Mr. Field) rushes to his aid.
Mr. Field: The Secretary of State realises perfectly well that Haringey has, sensibly, started in those areas in which it will gain the biggest rewards for taxpayers. As he is almost limbering up to attack and to dismiss the Haringey survey, as he did before the Select Committee, would he like to provide us with evidence from other local authorities that have conducted similar surveys on landlords with many claims, and have come up with figures different from Haringey's?
Mr. Lilley: In a moment, I shall mention the figures produced by the London fraud investigators group, which believes that, in total, there is £40 million of landlord fraud in London. That figure is based on figures from its members in London, and it tallies with our figures.
Mr. Field: I am sure that the Secretary of State will quote that figure again shortly, but it does not answer the question that I asked him. Because he was knocking the Haringey survey, I asked him whether he could cite a single survey from elsewhere that deals with the same problem and the same issue—landlords with many housing benefit claims—that disproves Haringey's figures? Can he or can he not do so?
Mr. Lilley: I am not trying to knock the figures provided by Haringey. I am suggesting that its figures relating to a section of its claims—the percentage of fraud discovered—should not be used across all claimants in the
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borough, and even less so for all claimants in the nation. That is the only point that I am making. I have no doubt that there will be subsections of claimants in any borough with a very high level of fraud and abuse, and it is right and proper that fraud officers should target them and make them their first priority.
Mr. Field: I am grateful to the Secretary of State for distancing himself from his Back Benchers by making a clear statement to the House that he thinks that landlords with large numbers of properties are a real problem, and that fraud among that group should not be taken as representative of fraud among all claimants.
Mr. Lilley: Some landlords with many tenants are a problem, but, of course, the landlords with the most tenants are councils and housing associations. There are some very reputable large private landlords, and it is as absurd to lump them all together as it would be to try to blackguard the name of all housing benefit claimants.
The Opposition, having seized on the flimsy figure of an extra £1 billion of fraud, then had to invent even flimsier claims that they could get it back. So they put together three rather tenuous fraud programmes, and plucked savings estimates for each of them out of the air. By an extraordinary coincidence, the savings from those three fraud programmes add up to exactly £1 billion.
Today, it was noticeable that the hon. Member for Islington, South and Finsbury singularly failed to defend or even to mention the detailed savings figures, which, elsewhere, he has proposed are realistic.
He proposes, first, to get back an additional £310 million of landlord fraud. The problem is that, on all the best evidence, in total there is only about £150 million of landlord fraud. That figure emerged from our survey, and, as I mentioned, our survey should be particularly accurate in identifying and estimating the amount of landlord fraud.
As I said, our estimate is also consistent with the estimate of the London fraud investigators group, which believes that there is about £40 million of landlord fraud in London, where it is particularly rife. London accounts for a fifth of all properties; therefore, grossing up—but allowing for a slightly higher rate in London—produces a similar figure. So it is simply impossible for Labour to save an extra £310 million when there is only £150 million of such fraud to be stopped. One cannot get a quart out of a pint pot Labour proposes a programme of 4 million home visits to all benefit claimants. Allegedly that would save an extra £520 million net of the cost of those visits, over and above the savings that we intend to make. But we know from our surveys that about 10 per cent. of claimants are defrauding the system. To visit 100 per cent. of claimants, therefore, means 90 per cent. of visits will be wasted or ineffectual.
We want to target visits so as to catch likely fraudsters, but to minimise ineffective and costly visits. Therefore, I initiated a programme to visit almost a third of all income support claimants each year, including 600,000 visits to check existing claimants. Those visits will be targeted on likely fraud, using the most powerful data matching system in Europe.
Visits need to be thorough to be effective, which takes time and costs money. Our visits take an average of 80 minutes, cover about 80 questions and cost £21 each.

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However, Labour's proposal—which is quite explicit in its document—relies on each investigator doing 50 visits a day, at a cost of £3 each. That means that the investigator will have only eight minutes to move from one address to the next and to carry out the interview. It might be possible for my hon. Friend the Member for Falmouth and Camborne (Mr. Coe), sprinting fast between doors, to achieve that.
I challenge the hon. Member for Islington, South and Finsbury to tell us what identity checks he proposes to undertake in the fewer than eight minutes that will be available. What documentary proof must be found by their breathless investigators? What further proof will be required of other facts in the claim? Will investigators return if no one is in? My understanding is that Haringey counts "no one at home" as an effective visit. Can he confirm that his proposals rest on the same assumption?
Mr. Frank Field rose—
Mr. Lilley: I shall give the hon. Member for Islington, South and Finsbury a chance to gird himself to answer the question.
Mr. Chris Smith: The Secretary of State asks a direct question, so it is perhaps courteous to give him a direct answer. Of course the system used by Haringey and other local authorities—because it groups properties by area, and achieves very great efficiency by doing so—means that some people who are out are not visited again immediately. Then, of course, one goes back to that area and tries again. The important thing is the grouping of property by street and area, so that efficient visiting can take place and the cost to the taxpayer can be reduced. That does not happen now with the DSS, which is grossly inefficient in its organisation, but it does happen in the most efficient local authorities.
Mr. Lilley: I can correct the hon. Gentleman's error. We operate a similar system of grouping—
Mr. Smith: At vastly greater cost.
Mr. Lilley: That is because they take 80 minutes, not eight. That is the big difference. Subsequently, we follow up the work that we have done.
The hon. Member for Islington, South and Finsbury proposes to save an extra £170 million from stopping abuse of national insurance numbers. He implied that there must be national insurance number fraud because there are more NINOs than people in the United Kingdom. We keep the national insurance numbers of dead and emigrated people, not least to prevent fraud.
The reason there are more dead people on the departmental central index computer than on the national insurance records computer is that, as well as including those with national insurance contributions, the DCI computer includes those who make benefit claims but have no national insurance record. It keeps records of them when they are dead. I hope that that sets to rest the hon. Gentleman's spurious point about the difference in the numbers.
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What is more, the records are clearly marked, so that, if someone tries to claim on a dead person's national insurance number, alarm bells ring. We do not pay them benefit unless they happen to be called Lazarus.
Mr. Frank Field: Mr. and Mrs. Lazarus.
Mr. Lilley: I can assure the hon. Gentleman that all our evidence suggests that resurrection is a rare phenomenon in this country at this time.
The hon. Member for Islington, South and Finsbury, who is obviously busy trying to find support for his spurious points, assumes that one national insurance number in 500 is involved in identity fraud. The only justification for that number is to arrive at the hon. Gentleman's spurious savings figure of £1 billion. One United Kingdom citizen in 500 implies some 110,000 people, which would mean that one income support claimant in 50 was using a false national insurance number. There is no evidence that multiple identity fraud is that extensive.
It is not easy to get a new national insurance number. The applicant must first explain why he does not have one already, because virtually every British-born citizen is allocated a number as a consequence of the child benefit system. The fraudster must usually claim to be from abroad. If they claim to be from the European Economic Area or a British citizen brought up abroad, they will now have to pass the habitual residence test.
That route is distinctly unattractive for the multiple identity fraudster, but it would be reopened by the Opposition, who propose to abolish the habitual residence test. [Interruption.] Oh, the hon. Member for Islington, South and Finsbury said that he does not intend to abolish that test.
Mr. Chris Smith: The Secretary of State said that the Opposition have promised to repeal the habitual residence test. When? Where? What is his evidence?
Mr. Lilley: I am prepared to accept the hon. Gentleman sedentary comment, which he did not repeat, that the Opposition now say that they will not repeal it.
Mr. Smith: Give us the evidence.
Mr. Lilley: Quite honestly, I thought that the Opposition had promised to repeal it. I will check in the Official Report to see whether that is so. If the hon. Gentleman is saying that they intend to keep it, that is interesting. If he is saying that they do not know, that is as ineffective and will have much the same effect as his lamentable failure to answer the questions on "Newsnight" the other evening. I suggest that in future, for this sort of debate, he should find out what his party's policies are before criticising ours.
The alternative to claiming to be someone who is subject to the habitual residence test is to claim to be an asylum seeker. There are currently 46,000 asylum seekers claiming benefit, which is far short of the 110,000 people the Opposition claim are involved in national insurance number fraud, even if all of them were fraudsters using multiple identities.
Alternatively, the Opposition's multiple identity fraudsters must be involved in what is called piggy-back fraud, which means that they pretend to be a citizen who

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is not currently claiming benefit. That sort of fraud would have been exposed by the identity checks during our fraud survey. If Labour's estimate of one in 50 claimants was correct, 100 of our 5,000 sample would have been found to be involved in those frauds. In fact, the survey showed that only two were involved in such fraud. There may also have been some in the non-resident category who were involved in multiple identity claims, but they would have been picked up in our estimate of the total of fraud.
En passant, I should mention that, under the type of home visiting proposed by the Opposition, non-resident fraud will not be established, because the visitor will simply note down "not at home" and will not go back. We go back repeatedly until we establish contact with the person or non-residency.
The comprehensive measures to combat this type of fraud, of which tightening up on all aspects of NINO issues is important but only a partial element, will eliminate a large part of the national insurance number fraud that already takes place. Any genuine element within Labour's figures simply represents double counting of the savings for which we are already budgeting.
Since I became Secretary of State, we have been unprecedentedly successful in tackling benefit fraud, but I want to exceed our successes. That is why, last year, I announced a comprehensive fraud strategy for the next five years. We are already implementing that programme with investment and information technology. We are increasing the resources that we devote to fraud. This year, we are making home visits to a third of all income support claimants to reduce the risk of fraud, and we are also spotlighting different parts of the country for intensive fraud efforts. Early returns from Operation Spotlight suggest that it is already having excellent results, not just in Glasgow.
We are investing heavily in state-of-the-art technology. We are setting up a new computer system to enable us to match and verify housing benefit claims in different parts of the country. Last month, I announced the winning consortium to develop the new benefit payment card. That will mean that claimants no longer have to carry valuable order books around with them, and will largely eliminate fraud by people stealing or forging order books and girocheques.
Cumulatively, my new fraud strategy should be saving £2.5 billion a year before the end of the century. That will help to control the cost of the welfare state, and will help us to continue to support the people who need it.
Labour's document on fraud contained the first detailed proposals to emerge from the party's interminable review of social security.
Mr. Chris Smith: Before the Secretary of State finishes dealing with the figures, perhaps he might like to correct what I am sure was an inadvertent error in what he told the House earlier.
He said that Haringey's savings from its work on fraud amounted to only 3 per cent. of its budget. As I understand it, the savings achieved so far—we are not yet at the end of the process—amount to £6.5 million out of an overall housing benefit budget for the borough of £120 million. That means that the figure is more like
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5 per cent. than the 3 per cent. that the Secretary of State gave. I hope that he will seek the leave of the House to correct that information.
Mr. Lilley: I was using the figure for the last full year that has been reported. The hon. Gentleman is correct to say that, in 1995–96, the figure is £6.4 million—not £6.5 million—but the total housing benefit fraud has not yet been reported. It is still only a fraction of the level that he tried to suggest existed. He should apologise to the House for the impression that he has falsely created.
Labour's document on fraud contains the first detailed proposals to emerge from its interminable review of social security. Six months ago, the hon. Gentleman promised that he would think the unthinkable. In his document, he has merely produced the unoriginal, the unworkable and the unscrupulous.
The issues in fraud are simple. We need to understand the amount and type of fraud. We need to provide the right incentives to encourage local authorities to tackle it, and to deploy the Government's anti-fraud resources to give the best value for money. Labour fails on all three counts. It deliberately exaggerates the amount of fraud, ignores the role of local authorities and proposes to squander taxpayer's money on tasks that would have negligible returns. It ducks the real issues and offers quack remedies.
If Labour fails so spectacularly on fraud, where the issues are simple, how can it hope to offer solutions to the more complex challenges of the welfare system, such as helping people off welfare and into work? Indeed, how can a party so incompetent even in opposition possibly claim to offer competence in Government? However, Labour's fraud policies are not just incompetent: they are fraudulent. Bogusly high fraud figures offer bogus finance for all too genuine spending plans. The higher the fraud numbers it claims, the deeper it will have to dig into our pockets when, if it is elected, it has to implement policies that it cannot finance.
Our fraud programme, by contrast, is based on real numbers and real action. Tackling fraud has always been my top priority, and it will go on being my top priority. We have already achieved record savings, and we plan to break those records again. Our fraud programme means that help can be given to the people who need it and that taxpayers can afford to give that help. Our policies aim to keep fraudulent claimants off benefit, and to keep fraudulent politicians out of office.
5.11 pm
Mr. Frank Field: The Secretary of State's response was somewhat uncertain. I am sorry that he was not able to read the original comments that I drafted for the Select Committee report. They were much more favourable to him than those that appeared. The problem is that Conservative members of the Committee always think that the Chairman is up to some plot when such words appear, so they watered down my comments. I am happy to explain that there is no plot and pay him credit because, in respect of tackling fraud, he is the most serious figure to hold his office.
We must understand why the Secretary of State is so anxious about this debate and his response to the Select Committee report. He has a difficult task. It was not merely to wrong-foot him that our first report was on

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housing benefit fraud. We did not intend to make him look soft on fraud or the causes of fraud, although some of the interventions of Conservative Back Benchers in the speech of my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) suggest that that is the image that is being put over to the country. Rather, the Select Committee was anxious to change the House's image in respect of fraud and to bring it into line with the image that most voters have of fraud.
The report was meant to concentrate minds on the fact that it would be amazing if there were little fraud when the largest single departmental budget—of more than £90 billion—is involved. We suggest that fraud is very large indeed. I do not fall for the Secretary of State's trick question about what I would suggest the level of fraud is. By its nature, we can never know the extent of fraud in a system. Good government requires, as does the defence of freedom, that we should be vigilant all the time and seek new ways to crack down on fraud.
The report said that the country's image of fraud as having a dual nature is correct. An element of serious criminal fraud operates against our budgets, an aspect to which I shall return in a moment. In examining housing benefit fraud, we had, because of its nature, to concentrate on landlords because that benefit is peculiar in that, although it helps claimants, it is often paid direct to the landlords. In doing that, I have no wish to put forward the image that claimants do not commit fraud; they do and that is wrong. We may sympathise more with those who have few funds who commit fraud when compared with those who have large funds who commit it, but fraud is wrong whoever does it.
In case there is any doubt in the House, I shall read a letter that I received today from someone who did not know about today's debate. She wanted to relay her anguish about her experiences and wrote:
"Do you and others at Westminster know the depth of my anger and anguish when I stand in line in the Post Office to pay £2.95 to send a letter by special delivery and at the same time watch a foreigner in front of me collect seven £10 notes and take his mobile phone out of his bag? I am just one of those contributing towards the £70 but could not afford a mobile phone or the cost of the calls. I want to know when anyone is going to do something about all this because I know the people of this country are being destroyed. I write to you although I know Peter Lilley is actually the man in charge".
There is fraud that is committed by determined individuals who should not be claiming such benefits and there are people in gangs who commit fraud against our budget. There is also a third category of people who do small jobs on the side, or who have boyfriends and do not declare them. Most of my firepower is directed at those claimants who deliberately work the system and commit fraud, and at the gangs.
The report aimed to change the image of the House's concern with fraud away from one that was concentrated on individuals towards the serious criminal fraud element that operates against the social security budget. The Secretary of State was careful not to say that the Select Committee was wrong to estimate the figure at £2 billion because no one knows what figure for fraud he will find next year. He was anxious not to knock his feet away in case he is able to say before the general election that £2 billion is the figure involved. Such figures grossly underestimate the element of serious criminal fraud in our system.
I want to dwell on three points that show why I am worried. The Secretary of State has commissioned the most expensive investment programme that any
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Department has introduced so that we can have smartcards in the system. The group that has won the contract gave the Select Committee a seminar about how the process will work. It was at pains to point out that it is responsible for security, once it has been told that somebody should be paid, until the actual payment.
If I am right in saying that the Secretary of State underestimates the extent of organised fraud against our system, the new and expensive smartcard system will be given many instructions to pay benefit to people who should not get it. In other words, taxpayers will pay a massive sum to invest in high technology that will make it easier rather than more difficult for people to commit fraud in claiming benefits to which they are not entitled. It will, we hope, prevent some fraud in stolen giros and impersonations, but it will not deal with fraud committed before that part of the operation. That is the part on which I am concentrating. [Interruption.] The Secretary of State disagrees from a sedentary position. I am happy to give way if he wants to put something officially on the record. Time will tell which of us is right—those who disagree from a sedentary position or those who are on their feet. That is the first issue.
The second issue is our national insurance numbers. I go much further than the careful and cautious remarks that my hon. Friend the Member for Islington, South and Finsbury made to the House today. I believe that our national insurance number system has been overrun. At some stage, the Government will have to face up to that and introduce a new system. They will need identity checks, fingerprinting and DNA testing for such a system. That is how large I believe the overrunning of the system is. It is not the system's fault, for of course it was born in 1948 to serve another purpose than the service that it now carries out, which is both to allot benefits and, in some instances at least, we hope, prevent fraud.
The third issue of concern is the impossibility that the Secretary of State faces in getting any one of those wonderful computers in any one area talking to computers in other areas. He was at pains today to blame Labour councillors for not jumping to and responding more vigorously to the incentives that he now gives to crack down on fraud in the housing benefit system. However, his Government introduced the housing benefit system and allowed the anarchy that we now face to reign.
Some hon. Members may be shocked to know that the Government allowed every local authority to design its own form. So the forms ask different questions in different ways of different claimants. In those circumstances, it is impossible to do a data-matching exercise without incurring massive costs. So, although the Secretary of State wants computers to talk to computers, as he and the House will know, they can do so only in one area—Westminster. The data in that borough are such that the computers can talk to one another; but computers cannot talk across borough boundaries.
The carelessness and casualness of the Government in designing the housing benefit system, the faults which they are trying to blame on other people, are such that it is difficult to crack down on the extent of fraud that we believe exists in the current system.
I end with a challenge. The Secretary of State was kind to the Select Committee report in his comments today. How else could he respond, for there is a Conservative majority on the Committee? Once or twice he had a go at

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us. That was fair enough. He suggested obliquely here and there that perhaps we had not probed our evidence properly or that we had been too simple or trustful in accepting the figures that we put in our report. So let the debate be joined properly.
The Secretary of State is giving challenge money to local authorities to help them improve their fraud prevention techniques. Will he allot some to the Select Committee so that we can undertake some of the surveys that we would have liked to undertake? To take one example that he mentioned, we could find out whether the piggy-backing that he described in the national insurance system is as small a problem as he suggested. I believe that it is much more serious. The Secretary of State was right to say that we did not have the resources to conduct the detailed memory plus other survey that his Department conducted.
I make a plea in the debate tonight that the Select Committee should receive challenge money so that we can more seriously set about our business in defining the true proportions of fraud. The aim of the Select Committee report was to change the debate—hence the unease of the Secretary of State—away from the idea that much fraud is committed by individual claimants. Although the Secretary of State did not suggest that most fraudulent claimants acted in Labour-controlled areas, we know his line of thought. The report showed that there was another side to fraud.
The housing benefit budget is the largest of all Government budgets. It is inconceivable that it is not under attack by serious criminal fraud. We said in the report that it was. We listed four whole pages of recommendations, most of which the Secretary of State says he is still thinking about. The question that taxpayers are asking is: when will the Secretary of State make up his mind?
5.24 pm
Mr. Bernard Jenkin: There is no real disparity of intent or objective between the hon. Member for Birkenhead (Mr. Field) and my right hon. Friend the Secretary of State. Indeed, the principal purpose of the rhetoric adopted by our report was to encourage vigilance and to test assumptions. I make no apology to my right hon. Friend for being part of the exercise to challenge things that are currently accepted as true, to test the validity of arguments and to come up with new ideas.
I wish to point out the place of the figure of £2 billion in that report. It does not appear in any written evidence that we received. Although it features in our findings, it does not appear in the relevant paragraphs to which the summary of findings refers. The figure of £2 billion was not even uttered by the man who gave evidence when it entered the debate.
The figure of £2 billion came from the hon. Member and my former hon. Friend—I use the word "former" in the merely technical sense—the Member for Stratford-on-Avon (Mr. Howarth). On page 56 of the evidence, the hon. Gentleman himself extrapolated the figure from comments made by Mr. Webster of the Local Authority Investigation Officers Group, saying:
"But we are talking here of trivial sums"—
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hon. Members will understand that he was using the term in its ironic sense.
"If your assessment of the scale of fraud is right, the totality of fraud is somewhere nearer £2 billion."
Mr. Webster replied:
"I agree with you."
The figure was introduced into the debate by a Labour Member of Parliament. The witness was led into talking about a possible figure of £2 billion. As my right hon. Friend the Secretary of State rightly says, it is not based on any scientific or methodological survey.
As my right hon. Friend the Secretary of State also said, if one extrapolates to the entire United Kingdom figures from one of the worst boroughs, which is targeting some of the worst properties in London, one might reach such a figure. Until we have harder and firmer evidence, it would be irresponsible to base policy on that extrapolated figure. Yet that is exactly what the hon. Member for Islington, South and Finsbury (Mr. Smith) has done. He has changed his whole policy as a result of that extrapolation by one of his hon. Friends, not even uttered by the witness who was being interviewed at the time.
Mr. Chris Smith: I note that it is in paragraphs 49 to 51 of the Select Committee report that the figure of £2 billion is adumbrated. I have never endorsed that figure as a specific figure, but the hon. Gentleman suggests that I have for the purposes of his argument. I notice in the proceedings of the Committee an item that says:
"Paragraphs 23 to 58 read and agreed to."
The hon. Gentleman agreed to those paragraphs. Why is he now disagreeing with something that he agreed to when the Committee report was accepted?
Mr. Jenkin: The hon. Gentleman's problem is that he cannot see the difference between a speculative guess, used tentatively to highlight the potential for fraud, based on what one witness said, and a hard and fast figure. Although he says that he has never endorsed the figure, he appears to have adjusted his party's policy on the basis that it is gospel. That is nothing short of hypocrisy—if I may use that term.
Mr. David Shaw: Does my hon. Friend accept from me, as a fellow member of the Social Security Select Committee, that what we were trying to do was to come up with an order of magnitude of fraud in relation to total housing benefit of £10 billion? We were considering the possibility that fraud might be higher than the £1 billion that many people were accepting, and whether it could be as high as £2 billion. We were trying to consider all the implications of that in relation to a total figure of about £10 billion, but in my view we never said that it was a hard and fast figure that could be relied upon. We were simply trying to ensure that it was not £3 billion, £4 billion, £5 billion, £6 billion, £7 billion, £8 billion or £9 billion.
Mr. Jenkin: With some qualifications, I agree with my hon. Friend. The important reason for including the figure in the report was to attract attention to the problem of social security fraud, to encourage vigilance and to encourage a questioning and exploratory attitude. My right hon. Friend the Secretary of State has exemplified such an attitude in his quest to deal with the problem of

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social security fraud, and the hon. Member for Birkenhead has given a lead in promoting such an attitude, but that attitude was consistently resisted by Labour Front Benchers until suddenly they recognised that there might be a political opportunity in it. That typifies the way that the so-called new Labour party works; it is all for effect and there is little substance behind it.
Mr. Frank Field: Would it not help us to gather evidence, and thereby help the debate, if the Secretary of State gave the Select Committee some challenge money, so that, for example, we could study the hon. Gentleman's constituency to discover the extent of fraud there, and study my constituency and four others with different characteristics throughout the country? Then we would be in a better position to know whether the problem is localised, as the hon. Gentleman would say, in bad authorities, or whether the bad people are evenly spread throughout the country.
Mr. Jenkin: I think the hon. Gentleman is trying to bribe me with my own Government's money. Of course I very much like the idea of the Select Committee on which I serve becoming an agency of the Government, but that would be contrary to the spirit of independence of Select Committees from the Executive, and it would be a precedent-setting event if such a thing were to occur.
Nevertheless, I very much hope that my right hon. Friend the Secretary of State listened to what the hon. Gentleman said in his speech about the type of survey evidence that is necessary. Surveys are cheap compared to the costs of social security fraud, and I very much hope that, specifically, survey evidence on the security of the national insurance number system might be undertaken, to give confidence in the system if confidence is due and to expose how we might better police the system if that proves necessary. The questions have been asked, and surely it is the Government's duty to ensure that we have either confidence or action.
Mr. Barry Field: My hon. Friend, serving on the Select Committee, has vastly more knowledge of this complicated subject than I do. When the continuing spotlight programme on benefit fraud is introduced to constituencies such as mine, which has finite boundaries, if its results are known, it should surely be possible to extrapolate from those figures a figure per thousand benefit claimants. Surely that would not be a million miles, statistically, from the reality.
Mr. Jenkin: I think that that is right, depending on the nature of the area surveyed. The important thing about my right hon. Friend the Secretary of State's survey of housing benefit fraud, which included 5,000 respondents, was that it was based on a genuinely random sample, not selected from one specific authority. The survey was genuinely investigative; the strings were pulled until the investigators found what was on the end of them. Therefore, it could reasonably be taken to be a fair picture of social security fraud—at least, the fairest concrete picture that is as yet available to us. It produced the figure of £1 billion, on which it is prudent to base policy, not a more inflated figure, which was speculative and was included in our report to promote debate and questioning rather than as a basis for policy and recommendations.
Mr. Barry Field: There does not seem to be, in the Select Committee, or across the Floor of the House, much disagreement about the fact that housing benefit is one of the major areas of fraud and that there has been tremendous growth in the payment of that benefit. Has the Select Committee considered the possibility of making direct payments the norm, on the basis that landlords own fixed assets so they are not transient and do not move around? One might have a starred service for the better landlords, to whom direct payment was made.
Instead, that is currently at the discretion of the local authority. In the Isle of Wight, we had a very good system. Now that we have a unitary authority, it has scrapped it and returned to paying the money to tenants, who are often vulnerable and on the move. That is where a great problem occurs with the type of fraud that I am sure the Select Committee has considered.
Mr. Jenkin: Whether the local authority pays housing benefit direct to the tenant or direct to the landlord, it is obviously essential that there should be an actual building and a real tenant with a genuine national insurance number and a genuine basis for a housing benefit claim, that the amounts claimed should be the amounts that are required and fairly due in rent, and that there should be no skimming off in between.
I do not know whether it is possible or desirable to make it the norm to pay the landlord rather than the tenant, because very often the tenant might pay at a slightly different time from when the landlord expects the rent. I think that that matter should be at the discretion of local authorities, although I am interested to know what my hon. Friend the Under-Secretary of State for Social Security, the hon. Member for North Hertfordshire (Mr. Heald), might say about the suggestion when he replies to the debate.
I was pleased to support the report because it encourages the questioning attitude that I have discussed, but I was especially pleased with the Government's pretty generous response to that report. Of 33 recommendations—I notice the hon. Member for Islington, South and Finsbury sniggering—only six were totally rejected. Eleven were fully accepted, eight were partly accepted and six are still under consideration. That is not a bad record of influence for a Select Committee—certainly not one to be sneered at, or one to suggest that the Government are resistant to many of our suggestions.
One recommendation is vital for combating that type of fraud, or frauds where there are technical breaches or technical impersonation, where the statutory requirements of the payment of benefit are being manufactured. I refer to on-line data matching. The private sector uses vast computer systems to handle vast numbers of transactions. The banking automated transfer system must handle a huge number of transactions; and the credit card companies use a single processing centre located in the constituency of my hon. Friend the Member for Basildon (Mr. Amess).
It should therefore be possible, once it has been decided what to pay and whom to pay it to, to put all the information into a single live database system, so that anyone can look up a national insurance number and see what is coming in and what is going out—including all benefits. That must be the objective. The Secretary of State has kindly accepted it as such, but has refrained from issuing a timetable for its implementation.

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I wish to press the Minister on one point: there should be a target date for putting all receipts of national insurance and all payments of insured and uninsured benefits on one computer system, so that people can see, at the flick of a switch, what is going on in individual accounts. That is why we recommended that people should be sent an account of their national insurance contributions and claims at least once a year—so that they can see for themselves what is being paid in and what they are claiming. If someone who should not be claiming has been claiming, that would quickly become apparent, and we would gain a great deal of information about false claims for insured benefits.
I understand the Government's reticence about pursuing this recommendation. As soon as we start sending people information of this kind, many of them will of course write in for further information, and supplying it will cost the Government a great deal of money. That, however, is not a reason in the long term for not setting up such a system. People increasingly believe that they have a right to such information. They feel a sense of ownership, in terms of what they have contributed to the national insurance system. If we are not prepared to reinforce people's sense of ownership, that will serve merely to underline another fraudulent aspect of the system, which is the fact that people's contributions are really just another form of tax to be distributed by the Government at their own behest, for their own convenience and for their own purposes. All we are really buying in return for our contributions, runs this argument, are the promises of future Governments, which will not necessarily be honoured.
The hon. Member for Birkenhead touched briefly on the wider nature of social security fraud, but the Select Committee dealt extensively with that matter in its report, published on 1 November 1995, on the work of the Department of Social Security and its agencies. The worst fraud perpetrated on beneficiaries of the system lies not in the encouragement to falsify, lie and defraud in a technical sense but in the system's perverse incentives to adjust one's circumstances in such a way that one becomes genuinely eligible for benefits. That is the most corrupting aspect of the system.
It should come as no surprise to find that a state bureaucracy responsible for handing out £90 billion can encounter technical problems. We Conservatives do not believe in the efficacy of the command economy, but that is what the benefits system amounts to at the moment. The system encourages disincentives to work—a fact that the Secretary of State seems to have acknowledged by starting to reduce the advantages that some single mothers appear to derive from the benefits system. Built into the system are some perverse incentives, encouraging the creation of what Charles Murray has termed "an underclass". Its members live a completely different life style; no longer do they have any incentive to look for work or to rely on themselves: they become genuinely state-dependent.
That is the true fraud being perpetrated on so many people. We should applaud and encourage those who climb out of state dependency, and we should look for ways of shaping the future benefits system so as to avoid these detrimental effects. People must have a much more
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genuine stake in what they have invested in the welfare system, thereby giving them more incentives both to save and to work.
Those ideas have been assiduously encouraged by the Adam Smith project on the future of welfare, and would be further encouraged by developing its system of fortune accounts. Every individual would have a fortune account, not the dead letter box that his current national insurance number represents. Such an account would show the money that a person had accumulated over a lifetime, for pensions and for unfortunate eventualities such as disability or permanent illness.
On his recent visit from Chile, Mr. Piniera, the former Social Security Minister of that country, explained how he had introduced such a system there. It would do away with a great deal of fraud and with many of the incentives to fraud and corruption. It would also increase work incentives and improve the economy's savings ratio. That is exactly what we want: a system that does away with fraud by policing it effectively and by creating the right incentives to work.
I hope that the people listening to the debate will not be taken in by the speech made today by the hon. Member for Islington, South and Finsbury—it was the sort of fraud we can do without. What we need is a debate as good as the one between my right hon. Friend the Secretary of State and the Chairman of the Select Committee, the hon. Member for Birkenhead. That would be much better than hearing the ideas that the hon. Gentleman has lent his Front-Bench colleagues to give their arguments a semblance of respectability. Failing that, we shall be destined always to hear a false debate that will lead nowhere—a debate more interested in presentation than substance. Such a debate, if led by Opposition Front-Bench spokesmen, would certainly fail the nation.
5.47 pm
Ms Liz Lynne: I welcome the chance to discuss benefit fraud again, even though we debated it a short while ago. It is a matter of such significance that it warrants another debate.
Benefit fraud undermines confidence in the welfare state. We should not just discuss it; we must take action to prevent it. Housing benefit fraud is a responsibility of local authorities. Whether it amounts to £1 billion or £2 billion, the amount of fraud is still immense. I should like to dwell on the survey done by the Department of Social Security which states that one in five claims is fraudulent or incorrectly based; and that housing benefit errors and frauds are worth £840 million a year. That is immense, even if we take those figures. Fraud was £730 million. As I said, that is bad enough, but when we take into account housing benefit fraud when it is linked to the payment of income support, the figure goes up. The Government have quoted the figure of £1 billion. Of that, £900 million is fraud. As we have heard today, the Social Security Committee said that it could be as high as £2 billion. Whatever the figure, we have to do something to combat that fraud.
Let us look at what local authorities are actually doing. Last month, there was a report—an academic study—by the unit for the study of white collar crime at the Liverpool business school at John Moores university. It sent out survey questionnaires to 360 district, metropolitan and London boroughs. The return rate was

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40 per cent., which I believe was quite good. The report said what the savings were. I would like to blow the trumpet of Liberal Democrat authorities here—Liberal Democrat savings were 2.3 per cent.; the Conservatives' 2.2 per cent.; and Labour's 1.44 per cent.
It was also said in the survey that the fraud investigators in Liberal Democrat authorities actually performed better. The weekly benefit savings were per investigator. In Liberal Democrat authorities, the weekly benefit saving was £209,755; in Labour authorities it was £191,248; and in Conservative authorities it was £179,010. I would like to look at the reasons why this could be the case. One of the main reasons is that Liberal Democrat authorities have employed fraud investigators for longer.
Mr. Bernard Jenkin: It could be that there is less fraud under Conservative authorities. I am not saying that that is any particular credit to Conservative authorities—it could be a reflection on the areas concerned. It could be a reflection on all manner of things. There could be less fraud in Conservative authorities—although I admit that there is only a small number of them at the moment.
Ms Lynne: Yes, there is a very small number of Conservative authorities at the moment—and I am glad that the hon. Gentleman accepts that fact. I was quoting figures for the amount of housing benefit paid within that area. For the Liberal Democrats, it was 2.3 per cent. of the amount of housing benefit paid within that area, and for the Conservatives it was 2.2 per cent—the hon. Member cannot get away with that argument.
Tackling benefit fraud is not just a matter for local authorities; it is a matter for Government Departments as well. I believe that there should be greater co-operation between Government Departments and local authorities. Perhaps if there was greater co-operation, we would get away from the large-scale fraud that we have at the moment. If more fraudsters—I am talking about landlord fraudsters—ended up with convictions, it might be an actual deterrent.
We are not talking about some small-time crime, we are not talking about the individual who defrauds housing benefit—even though that is serious—we are talking about landlords on a large scale who are ripping off the taxpayer by overstating rents, by claiming on empty properties and by creating fictitious tenancies. The book must be thrown at them—and there is little evidence that that is happening.
Prosecution of landlords is often neglected, partly because it would take council staff away from detecting new fraud—because they have to meet Government targets. The only thing that happens to these fraudsters is that the benefits stop, the pay cheques stop. They do not actually get prosecuted. I believe that the lack of prosecutions leads to a climate of acceptance.
I asked a written parliamentary question to the Home Office not so long ago and I got a depressing reply. I asked whether the Home Office looked at the correlation between the number of criminal prosecutions and housing benefit fraud. I also asked whether it looked at the level of housing benefit fraud. I also asked whether there were any joint initiatives between the Home Office and the Department of Social Security. I was told in the reply that it does not know how many offences of housing benefit fraud there have been, and no, it is not working with the Department of Social Security. That is not good enough. We must ensure that fraudsters are prosecuted.
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In the debate in March, we spoke about other fraud—I will not go into the detail of what was said then, except to say that I welcome the home visits being restored. I was worried when the Government cut them, but now they have been reinstated, that will cut down on a lot of benefit fraud.
I now turn to the Child Support Agency and the way that fraud is perpetrated. It is often said that the CSA is effective in detecting benefit fraud. In April, the Chairman of the Social Security Committee, the hon. Member for Birkenhead (Mr. Field), said in The Independent on Sunday:
"By sheer accident we have created a most efficient anti-fraud unit."
I am afraid to say that that is far from the case. The Child Support Agency presented to the Minister a report on "good cause" provisions. The report stated:
"Prior to the setting up of the CSA, the question of maintenance was dealt with as part of the consideration of a benefit claim by the local DSS office. Liable relative officers were charged with the duty to arrange maintenance payments where this was appropriate and possible."
The report went on to say:
"One apparent benefit of their work, often claimed, was the fact that questions were asked about the other parent at a very early stage prior to benefit being awarded, or just after, leading to the deterrence of collusive desertion claims (where couples fraudulently claimed to have split up), or leading to early reconciliations."
The report continued:
"It therefore must be of concern that any part of the claims process which apparently had been effective in deterring some fraudulent claims should not now be used."
Mr. Frank Field: The last time we debated this point, the hon. Lady was being cheered and I was being hissed by campaigners against the Child Support Agency. I accept the validity of the point that she is making. The Government could respond by suggesting that all people begin the CSA proceedings when they make their initial claim for benefits, in which case the questions that were asked in the old days about who the father is and who the husband is would be asked immediately, instead of almost a year down the line. I see the hon. Lady's point but, unlike her, I still support the CSA. The point that she made at the meeting and today is valid. Although the CSA is an agency against fraud, it is not as effective as it could be. This is a reform that we should have.
Ms Lynne: I take the hon. Gentleman's point, but we will obviously disagree on the Child Support Agency. I happen to believe that it ought to be scrapped and replaced with a fair and unified family court system. It could address the problems of fraud that we have here.
Under the current system, it is easy to defraud the system. Prevention is far better than detection. The problem is that, even if fraud is detected, there is such a backlog with the Child Support Agency that it takes months and months for fraudulent claims to be investigated and for questions to be asked.
Mr. Bernard Jenkin: The Social Security Committee was most impressed by—I mean that in a technical sense—the number of single parents who received maintenance application forms and then simply dropped off the benefits system. They ceased to claim because they did not want their circumstances, or the circumstances of

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the absent parent, to be scrutinised. That speaks volumes about the amount of fraud that the Child Support Agency has stopped.
Ms Lynne: A tremendous amount of fraud is occurring at present, and the old liable relatives unit was able to detect fraud better. Fraudulent claims cannot be dealt with because the Child Support Agency has such a backlog. Our argument with the Child Support Agency and our argument today sums up what is wrong with the benefit system generally. Too many people do not look at the facts about benefit fraud and the extent of that fraud both within the Child Support Agency and across the board.
As I said before, people are concentrating too much on detection rather than the prevention of benefit fraud. We owe it to the taxpayers and to the honest claimants to concentrate on detection. There are a tremendous number of honest claimants; they are in the majority and we must not be sidetracked from that fact. Most of those who claim housing benefit do so because they are desperately in need: they do not try to defraud the system. I believe that all hon. Members agree with that. We must tackle benefit fraud in order to save the taxpayer money and to help those who are genuinely in need.
6 pm
Mr. David Porter: This is another Opposition day, so the Opposition have another chance to pick a stick with which to beat the Government. Opposition Members seem to think that benefit fraud is an easy subject to sound tough about and that, by sounding tougher than the Government, they can steal some more Conservative party clothes. I suggest that they are wrong on both counts. Over the years, the Labour party's attitude to spending other people's money, its stress on rights ahead of responsibilities, and its often shameful record on the local government side of benefits, make its claim that it is the taxpayers' friend sound somewhat hollow.
No one has argued—and no one will—that we should not reduce fraud. As has been said, any reduction in benefit fraud has a double benefit: it stops money going to criminals, with the message that that sends in the law and order debate, and it means that more money is available to those who need the safety net of the state.
I serve on the Education and Employment Committee which, among other things, is examining the pilot schemes for the jobseeker's allowance in October. Last week, Committee members visited an Employment Service jobcentre and a Department of Social Security Benefits Agency office in Peckham, which are next door to each other. I drew from that visit the obvious conclusion that we need to merge the administration of employment-related benefits and social security benefits.
When I visit the Benefits Agency office in Lowestoft in my constituency, it seems obvious that the scope for confusion, fraud, error and sheer frustration could be reduced by linking the administration of housing benefit and council tax benefit with social security benefit. In child support cases, when there is a discrepancy between what one parent claims to earn and what the other parent says he or she earns, linking Inland Revenue information with benefit administration would surely
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serve as a disincentive to cheating the system. I believe that going the whole way and integrating the entire tax and benefit system would not necessarily be a bad thing. Such a move would send the right message: benefit fraud is robbery like any other form of theft.
We have laws to stop people robbing banks and each other, but those crimes are still committed. Laws cannot prevent every fraud, but we must make it as hard as we possibly can to commit fraud. With the advent of technology on a large scale and at a reasonable cost, we have a potential weapon against fraud of immense potency. I wonder whether we are harnessing it to the full.
We know already about DSS plans to link local authority and Benefits Agency computers to combat exclusively housing benefit fraud. As my hon. Friend the Member for Colchester, North (Mr. Jenkin) said, multiple claimants can be spotted with any simple package of software. The use of false names, the names of the dead and post office box numbers, and the conniving of householders to help others, are harder to spot, but they are not beyond the realms of current technology.
Smartcard technology and the identification card have been offered by some as a panacea, but we should remember that stolen or forged ID cards would swiftly become valuable items for sale on the black market. We have personal numbers for national insurance, the national health service and the Inland Revenue. A single self-chosen personal identification number might help also. There has been talk about having to amend the Data Protection Act 1984 if dedicated systems freely exchange information. I ask my hon. Friend the Minister to clarify in his winding-up speech whether increased use of technology will mean reform of the Data Protection Act.
Is it not incredible that we can surf the Internet and have a guided tour of the White House for the price of a local telephone call in the United Kingdom, yet my constituents cannot go into the benefits office in Lowestoft and view their Child Support Agency case on a computer screen in front of them? The Child Support Agency situation highlights the need for an integrated system to allow for fairer and more accurate assessments, which would, in turn, encourage compliance.
The need for parents who do not have continuing care—for reasons willing or unwilling—to shape the concept of child support is paramount. The need to assess income so that no one is better off on benefit than supporting his or her children is a separate but related part of the equation. The need for unemployment and training support that does not make it better to receive benefit than to stay in work is also part of the equation. What people earn in employment or through self-employment has a direct bearing on their dealings with the Child Support Agency.
If we had a better system that recognised the need of the absent parent to be in work or training as part of a long-term commitment to the children, that would go a long way towards increasing the credibility of the system. If the system had integrity, that would act as a disincentive to defrauding it willingly. There must also be a little more flexibility. For example, if parents share custody of children regularly during the week on an agreed and working basis, surely child benefit should also be shared on the same agreed and working basis.
My final point relates to the culture of fraud. We know that a downside of the welfare state is that it encourages dependency. Further reform of the welfare state in the next

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decade must increasingly address that problem, but another little noticed consequence is a reluctance to do anything about the problem while getting angry and blaming the Government. I shall give the House an example.
I am sure that all hon. Members have been approached by constituents who are livid because someone near them is working while claiming benefit. We might be given some details of the scam when we ask for them. I was told recently about the existence of a pool of battered, anonymous cars that are shared by a number of people who are fraudulently obtaining benefit while working a night shift at a factory and who return home in a different car every day to throw any observers off the scent.
We often press our constituents for names and for chapter and verse of fraudulent behaviour, but they are reluctant or refuse to give names and addresses—possibly because they are afraid of reprisal. I am told that the Government are to blame, but I am not given the names to report to the fraud department. In my experience, the fraud department and Benefits Agency offices do a good job often with few staff, but they cannot catch the cheats without information.
Mr. Bernard Jenkin: In my experience, when we are given the necessary information, we do not receive any feedback about the results of any investigation. The result is that the fraud continues to be perpetrated, no action is taken and no reason is given, because the Benefits Agency will not discuss individual claims. There must be a more active exchange of information and much better feedback in order to encourage society to police itself and to encourage people to hand over the information so that they can see the results for themselves.
Mr. Porter: My hon. Friend is absolutely right. I understand that there may be difficulties if a fraud investigation is conducted, it proves to be unfounded and a person is identified unnecessarily, but I agree with the thrust of my hon. Friend's comments.
Going one step further, the fraud departments link in with the police, Customs and Excise and with other agencies. I wonder whether there is a case for transferring benefit fraud investigations wholesale to the police in order to strengthen their work. We cannot change overnight the culture of dependency or the view that the benefit system is a legitimate target for theft. I suggest that we need a better run, more integrated, non-overlapping and non-wasteful administrative machine. If that is achieved, the staggering losses resulting from fraud will be cut to a minimum.
I agree with the hon. Member for Rochdale (Ms Lynne) that prison sentences should reflect the seriousness of crimes involving fraud. If we do all of those things, rather than inspire the same feelings as does European bureaucracy—loathing of a monster that is out of control—our system will inspire confidence in the service by, from and to the taxpayer.
6.9 pm
Miss Kate Hoey: I very much agree with the hon. Member for Waveney (Mr. Porter), which shows that there can be—and is—cross-party consensus on this important issue.
As a member of the Select Committee on Social Security, whose report we are debating, I am pleased to have the opportunity to raise once again some of the
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important issues that the Committee uncovered in its investigations into housing benefit fraud. I am also pleased to be able to challenge again the whole attitude to fraud at national and local authority level.
This debate must put to bed for good any lingering doubt that anyone has ever had that attacking benefit fraud is somehow attacking the poor. It is quite clear that such an attitude was held in certain parts of the country by certain people, but that is no longer so. It is clear, certainly to Opposition Members, and generally on both sides of the House, that the people who suffer most from benefit fraud are those in greatest need.
I want to refer to the Select Committee's recommendation on the Data Protection Act 1984. It is important to point out that the evidence that members of the Committee took questioned whether the Act was working in the interests of people who were trying to root out fraud. We took evidence from Andrew Webster of the London boroughs fraud investigators group, who said:
"I have to say that I sometimes wonder who the Data Protection Act is actually protecting, because obviously the genuine honest claimant has nothing to fear. The genuine honest person in this country has nothing to fear. The only people who hide behind the Data Protection Act are the criminals."
I am not interested in protecting the civil liberties of large landlords who are perpetrating housing benefit fraud and I hope that the recommendation on the Data Protection Act is considered seriously.
The Association of Chief Police Officers told the Committee:
"There appears to be no clear authority for police to give Local Authority investigators details of previous criminal activity or other potentially useful intelligence."
It is absolutely certain that there is a need for co-operation between agencies. Indeed, one of the Committee's recommendations says:
"the Department of Social Security and the Data Protection Registrar should review the data protection legislation, and any law and practice on which data protection legislation is based … to ensure that the legislation does not constitute a barrier to counter-fraud work."
Data protection is fine, but it must not be allowed to get in the way of information on fraud coming forward.
Earlier, the Secretary of State challenged the Opposition's assessment that there is £2 billion-worth of fraud, and other hon. Members have said that the figure was an exaggeration. No one can say that the figure is an exaggeration, because no one knows the real extent of fraud in the benefit system. I wonder how many people in Haringey, when asked to put a figure on the extent of benefit fraud before the investigation began there some years ago, would have come near the figure that has emerged from the small pilot study.
I certainly do not have any hidden agenda on exaggerating the amount of fraud, because I happen to represent a borough whose name was, until recently, synonymous with fraud and corruption. I am proud to represent the area that includes the London borough of Lambeth. Indeed, I am even more proud now that the borough is starting to get its act together and beginning to adopt an approach that is in the interests of its residents.
Lambeth has had a history of problems relating to allegations of fraud and corruption, especially in the late 1980s and early 1990s. During the past two years, however, the council has been committed to breaking with

723
the past and tackling the root problems in its management and culture. That commitment was epitomised by the appointment of the new chief executive, Heather Robbatts, in April 1995. With the support of all the political parties on the council—it is, of course, a hung council—she has implemented a programme of sweeping changes in the council's management, personnel and operations. With the support of its members, she is beginning to change the whole culture of the council and its attitude to fraud.
A key part of that approach has been to improve the council's arrangements for dealing with allegations of fraud and corruption, which has involved the reorganisation of the internal agencies, responsibility for the investigation of fraud and corruption and the creation of a corporate anti-fraud team—CAFT—which reports directly to the chief executive.
The effectiveness of the new arrangements was demonstrated in the first few weeks of the establishment of CAFT by something known as Operation Jobson. In April 1995, the council and the Benefits Agency initiated the provision of a complete listing of the council's payroll data on employees for the Benefits Agency. The agency checked every employee against its computer records. No one queried civil liberties there. When the corporate anti-fraud team was set up in October 1995, 120 employees appeared to be fraudulently claiming benefit. By December 1995—only six months ago—the figure was 150.
CAFT took on responsibility for that exercise in October, and a team of hand-picked officers from the council's internal audit department were seconded to investigate and facilitate disciplinary action. That action has continued. Interestingly enough, 59 of the employees identified instantly disappeared from the council's employ—if they ever existed. The lessons learned from the exercise were that effective action required the detailed co-ordination of investigation and management action, and that CAFT, the chief executive and the head of personnel should establish a team that had power to intervene and co-ordinate work across all the council's departments.
There is no doubt that, in some local authorities, for different reasons in different departments, there is a culture of not really wanting to get to the bottom of what is happening. It was crucial to the setting up of the Lambeth team that it reported to the chief executive, was given high status and was seen as permeating the entire council and having everyone's commitment.
An anti-fraud policy statement was drawn up and circulated to every member of the council. The matter was taken very seriously. The matter may seem trivial to some people who think that people would not do anything other than be against fraud. The reality is that because of our attitude towards fraud, some people did not feel that it was their responsibility or had anything to do with them. They perhaps felt that attacking fraud was picking on the poor. Such an attitude had to be changed; a corporate attitude had to be taken.
The council is promoting whistleblowers. Wanting to shop one's mate if he or she is involved in a fraudulent act is no longer seen as something of which to be ashamed. At the end of the day, such people are working against the interests of those whom they have been employed to represent and support.
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CAFT' s duties are to consider not only benefit claimant fraud but contract fraud and educational awards fraud. The latter is another big type of fraud which certainly occurs in inner-city areas. Education grants are sometimes awarded when people do not attend college or use false names. Sometimes, the college for which people have been given grants in my borough has not existed. Employees claiming benefit is also a big type of fraud in local authorities. Other types of fraud include housing improvement grants fraud, private use of council resources, selling of council house keys—unauthorised tenancies—theft and misappropriation of council funds and equipment, and investigation of anonymous allegations.
CAFT brings all those types of fraud together. Fraud does not mean simply benefit fraud. All sorts of other public frauds are taking place and need to be taken on board as part of a partnership approach, which includes building an anti-fraud culture in the council, implementing a programme of fraud awareness seminars and maintaining close liaison with local police and the Benefits Agency.
I welcome what my local authority is doing. In a couple of months' time, when the team is complete, it will be leading the battle against fraud in the country. That is a terrific achievement for a borough that has had such a history. It is crucial that boroughs that accept the faults of the past and start to put them right should not be slated in the newspapers. Newspapers, and those who want to investigate fraud and mismanagement, should start looking at the boroughs.
I am not suggesting to the hon. Member for Colchester, North (Mr. Jenkin) that there is huge fraud in Colchester, but the fact that the borough has not even started to consider the matter makes me question whether it has any real determination to discover whether there is a problem. There is not a single borough in Britain that is not deeply involved in some kind of fraud. It is crucial that those boroughs that do the good work, and those chief executives and council leaders who take the initiative, are given credit for it and not slated by the media.
One matter which I keep raising but on which I do not seem to make much progress concerns child benefit fraud, which the Social Security Select Committee may shortly consider. I have a letter detailing someone's experience in trying to report a possible child benefit fraud to the DSS. It states:
"After obtaining the number of my local DSS office … from directory inquiries I initially rang seven times when the line was engaged. On the eighth occasion I got through and was transferred to the Child Benefit Section which was also engaged for three calls. At 11.30 am (an hour after starting the calls) I was successful in speaking to someone, who then just gave me another telephone number to call in Newcastle upon Tyne. This number was also engaged until 12.50 pm, then no answer at all until 1.05 pm, and then engaged again until 14.00 pm. I finally tried Directory Inquiries again who gave me a freephone number … which was engaged on five attempts.
Just after 14.30 pm I was successful in getting through and explained the nature of my complaints against my neighbours, who have claimed Child Benefit for two years whilst renting out their flat in London and living and working"
abroad. The letter continues:
"I gave the name, address, reference number etc. of the errant claimants and was told that they would be written to, but my name and address were declined. I went on to explain that I did not feel that a letter was a practical way of dealing with the matter, and offered the mother's address in London which was also refused.

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My overriding impression of the whole experience is that my time was completely wasted. I am very surprised that it proved so difficult to report a benefit fraud, and fail to see why the DSS staff in London could not take the details and why I had to pay for all the calls."
The Minister, to whom I have written on the issue of child benefit, responded to me at the end of March. He said:
"I appreciate your concern that a family might continue to receive Child Benefit by Automated Credit Transfer … after they have gone abroad. ACT is currently the cheapest and most secure method of payment.
Child benefit is paid to over seven million families in Great Britain, and in the vast majority of cases there are no changes of circumstances which affect benefit entitlement until a child approaches school leaving age."
Earlier, I had asked for information about Operation Rattle, set up by the DSS to investigate child benefit—the title is rather good, given what it was investigating—so the Minister went on to say:
"I should like to explain a little more about 'Operation Rattle', which was launched in November last year. This followed on from a pilot which showed that there was a loss of funds to the Department when people from abroad who were being paid Child Benefit by ACT returned to their home country and failed to notify the Child Benefit Centre.
The Operation involves close working between Benefits Agency"
and so on. He continued:
"To date, overpayments amounting to £3 million have been identified."
I do not know how big the pilot was, where it took place or how such decisions were reached. The Minister went on to say:
"Payment is stopped immediately when a nil entitlement situation is discovered."
He then quoted some horrendous figures about the money that had already been saved as a result of the pilot, which amounted to about £8 million, even in that short time with such a small number of people.
Every year, recipients of child benefit paid by automated credit transfer receive a form asking whether there are any changes in their circumstances; if there are not, nothing needs to be said or done, so the child benefit continues to be paid into the bank account. One can have a baby in this country, register for child benefit, go off to live wherever and continue to receive the money.
People may say that that involves only a few people, but we do not know. I do not believe it is only a few people. I think that large numbers of people are abusing the child benefit system. They receive child benefit from an early age having had their baby here. They may be travelling business people. The irony is that it is not poor people who are doing this but well organised, quite rich people who are using London as a business place. They go into and out of the country, keep an address here, have a bank account and receive the child benefit.
What happens when the children reach the age of 16? Presumably, because child benefit is a means of obtaining a national insurance number, they can continue to claim benefit for the rest of their lives while living in Spain. It is astonishing that this matter has not been investigated more. Such matters must be investigated and fraud made much more difficult. No one ever checks whether a child exists or what school he or she attends. There are no
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means of making such checks. It is a big area of neglect which should be considered seriously. I hope that the Minister will respond to some of the points I have made.
Having got all that off my chest—I feel strongly about it—I welcome some of the Government's responses to the Select Committee's recommendations. I should like to see them all being put into immediate effect, because anything that the Select Committee has done in the past has come to be seen as received wisdom a few years later.
The Select Committee's work in this area is highly commendable and I hope that the Government will implement its recommendations as quickly as possible. The key message that we must get across is that fraud, whether small, medium or large, is not acceptable. It is an insult to the poor. It affects the poor more than anyone else and the House must be united in its determination to stamp it out.
6.27 pm
Mr. Nick Raynsford: I declare an interest: I act as a consultant to HACAS, the social housing agency. I have also written a book in the past on the subject of housing benefit, although it is now out of print and even if I had received any royalties in the past, which I did not, I certainly would not be getting any now.
This has been an interesting debate on an extremely important issue. We have heard a number of valuable contributions. I think particularly of contributions from members of the Select Committee, including my hon. Friend the Member for Birkenhead (Mr. Field), the Chairman of the Select Committee, and my hon. Friend the Member for Vauxhall (Miss Hoey), who has spoken most recently. They both made eloquent and telling contributions to our debate.
We have heard contributions from Conservative Members, revealing their interest and concern in a number of extremely important issues relating to social security and fraud, but in some cases revealing a certain touch of difficulty, if not ingenuity, in trying to reconcile their support for the Committee's recommendations with their opposition to the Opposition motion which seeks to give effect to a number of the Select Committee's important recommendations.
I also apologise to those hon. Members whose speeches I did not hear in full tonight. Unfortunately, tonight's debate has coincided with the sitting of a Standing Committee of which I am a member, and I was required to attend on three occasions, on all of which, I am pleased to say, the Government were defeated.
Housing benefit fraud is big business. It is also unique for, unlike almost any other big business in late 20th-century Britain, housing benefit and housing benefit fraud are immune to downsizing. While British industry and the British people coped with downsizing and recession—many losing their jobs in the process—housing benefit and housing benefit fraud have been oases of unparalleled growth. Indeed, if our gross domestic product were measured in terms of housing benefit expenditure and housing benefit fraud, we would unquestionably be one of the most successful countries in the world.
The scale of the increase in housing benefit expenditure has been phenomenal. It has almost doubled in real terms during the past six years—from £5.5 billion in 1989–90

727
to £10.8 billion in 1995–96. That has not happened by accident; on the contrary, it has been the direct result of Government policy. There has been an increase in the number of people claiming housing benefit—there were about 600,000 additional claims during that period—which reflects an increase in the number of people who are unemployed and the increase in poverty in the early 1990s recession. But the real reason for the huge increase in housing benefit expenditure, as the Select Committee's report so rightly highlighted, has been the exponential rise in rents as a direct consequence of Government policy.
Between 1988–89 and 1994–95, council rents rose on average from £19 a week to £35.80 a week; housing association rents rose from £23 a week to £43 a week; and private sector rents rose from £29 a week to £69 a week. Those huge increases directly reflected Government decisions to cut subsidies to local authority and housing association homes and to deregulate the private market. Ministers knew full well what the consequences would be. When pressed—we did press them—they repeatedly told us not to worry about rising rents because, in that felicitous phrase,
"housing benefit will take the strain".
What a strain it has been. The average weekly payment of housing benefit rose by 100 per cent. between 1989 and 1994.
Mr. Heald: The hon. Gentleman claims that deregulation was such a bad thing. Is he saying that he would go back to what we had before—the regulated private sector?
Mr. Raynsford: If the Minister will bear with me for a moment, he will hear the full argument about the extent to which deregulation has not just led to a huge increase in expenditure but opened the door to a level of fraud that is a disgrace and that, instead of being used to help people in need, is lining the pockets of people who should not be receiving it. [Interruption.] Later in the debate—if the Secretary of State will contain himself—I shall explain some of the measures that Labour will take to ensure proper safeguards against abuse, and at that point the Minister will be well aware of what action a Labour Government will introduce to deal with the problems. We would not tolerate the extraordinary exponential growth in expenditure, which has been to little public benefit, over which his Government have presided.
In the deregulated private sector, average weekly payments rose from £21.06 in 1989 to £47.28 in 1994a staggering increase of 125 per cent. The combination of that rapid expenditure growth and a deregulated environment provided an ideal framework in which fraud could thrive. Deregulation not only allowed huge increases in the amount of rent that could be charged but removed the previous safeguard that allowed local authorities to require a fair rent to be fixed by a rent officer. To add insult to injury, a significant extension of direct payments to landlords—rather than payments being channelled through claimants—offered even more enticing opportunities for fraudsters to cash in on the bonanza.
I ask the Minister to think about these figures. At the current average level of private rents, a landlord will receive for each tenant £2,458 per annum. The landlords
728
investigated by the London borough of Haringey—those with more than 20 claims—were receiving on average more than £49,000 per year minimum. These are the cases that the Secretary of State does not believe it is reasonable to investigate. He believes that it will be too burdensome on landlords to require them to be subjected to certain checks to see whether public money is going in the right direction. That is the legacy of the Conservative Government.
Mr. Bernard Jenkin: I am sure that the hon. Gentleman and his party are committed to the fight against fraud, but will he demonstrate that commitment by referring to paragraph 59 of the Select Committee's report, which he welcomes in the motion? The paragraph refers to the harassment and the attempts to discredit Mr. Bernard Crofton. Will the hon. Gentleman join me in condeming the Labour councillors who are responsible for that authority, and condemn what they attempted to do to Mr. Crofton? Will he undertake on behalf of his party to do something about their appalling behaviour?
Mr. Raynsford: I am second to none in demanding tough action against fraud and in my support of local authority officers who take effective action against fraud, wherever they are. I have played a considerable role in recent weeks in trying to ensure that the London borough of Haringey responds positively and appropriately to the difficult challenges it faces. I hope that, in exchange, the hon. Gentleman will take a similar view of the behaviour of a member of his party who featured in an article in the South London Press, on Friday 22 March, which said:
"A sobbing former Tory chief has been jailed for 18 months for mortgage and benefit fraud."
I suggest that the hon. Gentleman divert his attention to the failures of members of his own party.
The huge escalation over the years in housing benefit expenditure provided both the opportunity and the cover for a literal explosion in the number and scale of fraudulent claims. Rather than seeing the huge increase in public spending as a problem—which they would undoubtedly have done in any other part of public policy—the Tory Government, perversely, saw it as evidence of success. They claim that it achieved a magical recovery in the private rented sector and that therefore it is justified.
The harsh truth, however, is that the "magical recovery" has been far less dramatic than Tory Ministers would have us believe. Although the explosion in expenditure has been disproportionate, the number of new private lettings has not been. Despite all the assistance offered—not just through housing benefit but the equally lavish spending on the business expansion scheme and by abnormally favourable market conditions because of the depressed home ownership market—the total number of private lettings in England has recovered to a little over 2 million, which is almost exactly the figure the Tories inherited from Labour in 1979. Furthermore, with the ending of the BES subsidy and with long-overdue evidence of recovery in the home ownership market, most commentators expect that the revival in private renting, which was achieved at such huge cost, will not be sustained.
Let me make one thing absolutely clear: Labour wants to see a healthy private rented sector, but it must be economically viable in its own right and be dependent

729
on huge transfers of money through the housing benefit scheme. Reducing dependence on housing benefit makes sense in social and in economic terms. In case Ministers look doubtful, let me quote from their White Paper on housing, published a year ago, entitled "Our Future Homes". It stated quite correctly that
"providing a subsidy to a local authority or housing association to enable them to charge a below market rent can be cheaper over time than paying housing benefit on a market rent for several decades".
In the meantime, we must take tough action to tackle the scandalous and expensive abuse of the housing benefit system that has been allowed in recent years as a result of Government action and Government inaction. Both have been prompted by the Government's ideological obsession with deregulation. Even today, that obsession is still rearing its head, being used as a justification for not taking action to tackle landlord fraud more effectively.
My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) rightly pointed out that the Government's response to the Select Committee's report was deplorably vacuous and lukewarm in respect of two specific recommendations for tackling landlord abuse more effectively. The Secretary of State is well aware of the evidence, quoted in the Select Committee's report, of extensive fraud perpetrated by landlords who receive a significant number of housing benefit payments in the London borough of Haringey. The study showed that the incidence of fraud among the claims investigated was more than 20 per cent., yet the Government consider it sufficient to undertake an assessment of fraud risk rather than act decisively to clamp down on such abuse.
The final irony—I urge the Secretary of State to listen; he might even enjoy the next passage—is that the landlords who have been the beneficiaries of this extraordinary largesse from the Government over the past few years are not generous with what they have received. They have not produced many new homes, as we have pointed out, and many of the homes that they have produced have been in poor condition. There are still a disproportionate number of squalid and dangerous properties in the private rented sector. To add insult to injury, the beneficiaries of all that public money resent the suggestion that action should be taken to clamp down on benefit fraud.
Mr. Geoffrey Cutting, representing the Small Landlords Association, is quoted in the 17 May edition of Inside Housing magazine—I invite Ministers to listen carefully—as saying:
"the defrauding of landlords by the state far exceeds the defrauding of the state by landlords … When the state defrauds landlords they can expect landlords to respond by defrauding the state".
I should be interested to hear the Secretary of State's response to that thinly veiled incitement to malpractice. Will we hear an unequivocal, unreserved condemnation of that disgraceful statement?
Mr. Lilley: Yes. For the hon. Gentleman's benefit, I unequivocally condemn such a remark. I was only sorry that he did not join the Select Committee in unequivocally condemning attempts to stop the housing officer in Hackney doing his job.
Mr. Raynsford: I remind the Secretary of State that I made it clear, in my response to an earlier intervention, that I thought it absolutely right for local government
730
officers to be able to continue to pursue the fight against fraud in an effective and proper way. I have no doubt that that should be the case regardless of the London borough, or other local authority, in which those officers work. [Interruption.]
Madam Deputy Speaker (Dame Janet Fookes): Order. I remind the House, and Government Front Benchers in particular, that I deplore seated interventions, especially when they are repeated.
Mr. Raynsford: Thank you, Madam Deputy Speaker.
Much can and should be done, as a matter of urgency, to call a halt to the abuse of housing benefit and to ensure tough action against the fraudsters. My hon. Friend the Member for Islington, South and Finsbury mentioned a number of our policy proposals. He spoke of the need to tighten the rules on direct payment of benefit to landlords, and to insist on proof of the landlord's ownership—or the managing agent's control of the property—and disclosure of other addresses to which housing benefit is paid. All those measures will help to stamp out bogus claims from "paper tenancies".
My hon. Friend spoke of the need for checks on redirected mail, which allow benefit to go on being paid long after entitlement has ceased, and the introduction of a self-financing national licensing scheme for multi-occupied houses. Such a scheme would have many benefits apart from stopping fraud: it would help to improve poor conditions, and would save many tenants from risks that are often life-threatening. My hon. Friend also mentioned the importance of targeted investigation and the use of more specialist fraud-busting teams, able to operate—like many of the fraudsters—across local authority boundaries. Labour believes that every area in the country should be covered: there should be no hiding place or soft-touch area for organised fraudsters.
My hon. Friend spoke of achieving better co-ordination between the various agencies involved, including local authorities, the Department of Social Security and the rent officer service. The latter can play a crucial role, as it has a duty to assess whether rents are reasonable for housing benefit subsidy, and considerable knowledge about appropriate rent levels. Astonishingly, the Government appear to be largely unaware of the scope for anti-fraud activity by rent officers. Similarly, co-ordination between local authorities and the Inland Revenue will help to identify landlords who are defrauding the housing benefit system, the Inland Revenue or both.
Ms Lynne: While the hon. Gentleman is referring to the remarks of his hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), can he confirm that current Labour party policy is not to reverse the habitual residence test?
Mr. Raynsford: No, I cannot. The hon. Lady will appreciate that I have approximately one minute left. Moreover, the question should have been addressed to my hon. Friend the Member for Islington, South and Finsbury, the social security spokesman, rather than to me as housing spokesman.
We believe that all those measures are important and necessary, and should be introduced as a matter of urgency. Under a Labour Government, they will be. We

731
will support the sensible recommendations of the Select Committee, as well as other measures that we have ourselves proposed, some of which I have outlined.
The contrast between our commitment to effective action and the Tories' shameful record could not be more revealing. They created an environment in which fraud could thrive; they ignored the warnings about potential abuse of the system, and complacently interpreted the escalation in housing benefit expenditure as evidence of success; and they have been remiss in tackling organised fraud for fear of upsetting landlords, many of whom have been actively engaged in defrauding the social security system on a vast scale. Even now, they remain lukewarm in their commitment to effective action. Their proposal to put housing benefit out to competitive tendering is sending precisely the wrong message.
There could be no clearer sign of the fundamental difference between the parties on the issues that really count. Labour is determined that there should be a social security system that delivers benefits to people in need, not a social security system that is open to fraud on the scale that we have seen.
6.45 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): We have had a good debate, featuring distinguished contributions from my hon. Friends the Members for Colchester, North (Mr. Jenkin), for Isle of Wight (Mr. Field) and for Waveney (Mr. Porter) and some interesting comments from Opposition Members—although, in many instances, they may not have been quite as distinguished.
Ms Hilary Armstrong: How graceless.
Mr. Heald: It may seem graceless, but it is accurate none the less. The hon. Member for Greenwich (Mr. Raynsford) sits chortling, but let me begin by quoting from the Select Committee's report on housing benefit. Mr. Bernard Crofton of Hackney council is described as
"an inspiration to those working seriously to tackle fraud."
The Committee goes on to deplore the way in which Hackney councillors have treated Mr. Crofton—the way in which they have tried to discredit him—and refers to "selective leaking" of the council's procedures.
Opposition Members are relying heavily on the Select Committee report tonight. I invite the hon. Member for Greenwich to condemn the councillors who are hounding Mr. Crofton—someone whom the Committee has described as
"an inspiration to those working seriously to tackle fraud."
I now give the hon. Gentleman the opportunity to say those words.
Mr. Raynsford: As the Minister was clearly incapable of listening to what I said, let me repeat it a third time. I give way to no one in my determination to ensure that local government officers, whatever the authority in which they work—Hackney, or any other authority—should be able to pursue their work in rooting out fraud
732
in the most effective way. I expect councillors to give full support to an authority that acts to deal with fraud. As I said earlier in response to an intervention from the hon. Member for Colchester, North (Mr. Jenkin), I have been actively involved in recent months in helping to ensure that the London borough of Hackney does precisely that in the months ahead.
Mr. Heald: Well, the words did not come forth.
Mr. Bernard Jenkin: Should it not be pointed out that the councillors responsible for the conduct of that policy against Mr. Crofton are still full members of the Labour party, and that no action is being taken against them? Does that not speak volumes about what the Labour party still remains—an evil in this land?
Mr. Heald: It is a litmus test, and one that the Labour party has failed tonight. The hon. Member for Greenwich holds up a press cutting about a Conservative who has been disgraced for fraud. I condemn that man; but the hon. Gentleman is not prepared to condemn councillors who are hounding a man who is an inspiration to those working against benefit fraud.
It is all part of a picture. We heard about Lambeth from the hon. Member for Vauxhall (Miss Hoey). Lambeth is now improving its position, after so many years of scandalous neglect when it would never have considered taking fraud seriously. The hon. Lady said that Lambeth—a Labour council—did not want to know when it came to allegations of fraud.
The hon. Member for Islington, South and Finsbury (Mr. Smith) is a Front-Bench spokesman and had so much to say in criticising Conservative Members who, over many years, have tried to stamp out fraud. When he was chairman of Islington housing committee, what did he ever do to clamp down on benefit fraud? Nothing. It is all very well to produce sneering comments about small landlords and to attack what the Government are doing, but tonight I should like to stand up and be counted.
The Conservative Government have revolutionalised—[Interruption.] They have revolution—[Interruption.]—whatever the word is. They have radically improved our measures against benefit fraud, which is largely down to the efforts in recent years of my right hon. Friend the Secretary of State, who introduced tough incentives to force local authorities kicking and screaming into the 21st or the 20th century, so that they would investigate benefit fraud effectively.
Ms Armstrong: Classic.
Mr. Heald: It is.
In 1993–94, weekly benefit savings for local authorities amounted to £92 million; now they amount to more than £200 million. They have almost trebled as a result of our measures.
Some hon. Members said that we did not know how much benefit fraud there was. It is true that, for years, we did not. The figures on fraud that had been detected used to go up year by year and we did not know how much fraud there was, but the benefit reviews, which use the best methodology that could be devised and which are approved by the National Audit Office, have shown us the scale of benefit fraud. It is about 10 per cent. In

733
unemployment benefit, income support and housing benefit. It is shocking, but it has been carefully researched and studied and we know the extent of it.
Having found the extent of fraud, in the second year of his period of tenure, my right hon. Friend the Secretary of State took action. He announced a programme that will, over five years, reduce benefit fraud by 70 per cent. Last August, we launched the barcode scanner, which, since its introduction, has saved more than £200 million in relation to the face value of order books.
We introduced, in September 1995, the pilot freephone hotline; in October 1995, the Post Office reward scheme, which has saved £12 million since it was implemented; in November 1995, Europe's largest data-matching computer system of its type, the new NINO—national insurance number—procedures and tougher verification; and, earlier this year, cross-matching with stolen birth certificates to ensure that we have a better system for national insurance numbers.
On 5 March, the date of the previous debate on these issues, my right hon. Friend announced the spotlight on benefit cheats area campaigns. I have been to 15 areas. Yesterday, I launched the campaign in Cardiff and today I launched it in Plymouth.
Mr. Chris Smith: With Labour authorities.
Mr. Heald: Labour authorities are no doubt co-operating.
I have met benefit investigators working for the Benefits Agency, who are experts in their sector. Every area that I visited last year has achieved record weekly benefit savings, and they are committed to doing even better this year. It is wrong for the Labour Front-Bench spokesman to criticise investigators and to pretend that they could not even—[Interruption.] The hon. Gentleman criticised investigators' professionalism. He said that they could not arrange even a route of visits from one door to the next, in order to do their work, but they do that. What is more, they do data-matching.
Mr. Smith: Let me put the Minister right on one simple point. I am criticising not Benefits Agency staff, but the Government for the way in which they have organised things.
Mr. Heald: I am grateful to the hon. Gentleman for changing his position, but the fact is that he criticised the benefit investigators, who have not only trained local authority officials, but provided them with a manual that sets out the procedures that they should adopt. They are working closely together, with agreements that have been hammered out and that work effectively. For the hon. Gentleman to criticise Benefits Agency staff in that way is wrong and deplorable.
Mr. Frank Field rose—
Mr. Heald: I do not have time. I have six minutes left and a bit more to say.
What has Labour's contribution been to tackling benefit fraud? Its local authorities have had to be dragged into attacking housing benefit fraud. Its Front-Bench spokesmen have been here claiming that there has been
734
£1 billion more housing benefit fraud than we say, but Labour's council leaders tell me that our targets for them are too high and that they cannot—
Ms Armstrong: They are not.
Mr. Heald: The hon. Lady says that they are not. I went to the meeting with the local authority associations on 18 March, when they told me exactly that. My right hon. Friend has been creating a raft of measures against benefit fraud which, rightly, have been praised by the Select Committee, but where was the Labour party? It was not suggesting ideas, that is for sure—it was just complaining. There has never been a constructive contribution.
Mr. Raynsford rose—
Mr. Heald: I do not have time.
Now that the scale of fraud is known and the strategy is in place and working, Labour is trying to jump on the bandwagon and to use a crude overestimation of fraud to sound tough and to explain away its expensive spending plans. It is inventing fraud and announcing half-baked measures to detect it.
Mr. Raynsford rose
Mr. Heald: I am not giving way. I have already given way to the hon. Gentleman.
Labour claims that it would detect an extra £310 million-worth of landlord fraud, but it has not done its homework, as it totals only £150 million. Why did it get it wrong? It wanted to. It does not know anything about fraud detection and it has never had an interest in it. It says that its home visits would save an extra £520 million. It talks about 4 million visits at £3 a go, allowing only eight minutes for each visit. I have asked benefit investigators how they would get on if they had eight minutes between investigations and how they could fit in the 77 minutes that they normally take to interview someone thoroughly to check his documents, to consider his position and perhaps to advise him about what benefits were available to him. One of them told me: "I would need a rocket tied on my back." Another said: "I couldn't do a proper job."
That is just Labour all over. It has not done its homework. Why has it got it wrong? It wanted to and it does not understand fraud detection.
Labour talks about stricter procedures on national insurance numbers, ignoring the fact that such procedures are being put in place. In November 1995, we tightened the registration procedures. In February, the new database for stolen birth certificates was introduced. In October, the new P46 procedure to check new workers' claims against national insurance numbers will be introduced.
My right hon. Friend has revolutionised the battle against benefit fraud, but Labour authorities have had to be dragged into helping. Labour spokesmen have had no ideas—just complaints—and now they are trying, belatedly, to jump on the bandwagon, but without doing their homework.
Ms Armstrong: The Minister has read this before.
Mr. Heald: No, I have not. Labour has had no new ideas.
My hon. Friend the Member for Colchester, North raised a number of important questions about the way in which national insurance number surveys should be conducted in future. Apart from the measures that I mentioned, we should have the detailed strategy for national insurance numbers that we have for benefit fraud generally and housing benefit—which the Government will be announcing. We should also improve the approach to fraud through the spotlight process. My hon. Friend the Member for Isle of Wight referred to the programme in his constituency, where claimants have been given two weeks to get their benefit claims in order. We are about to start active operations and take focused measures.
Every time we launch a new spotlight campaign, we learn something—which is the way in which the Government should approach benefit fraud. Apart from the strategy and measures that we have in place, we must constantly investigate and make improvements. We do not need any lessons from the Labour party, which has done nothing over the years. Opposition Members speak as if they have spent 17 years giving us fantastic new ideas for cracking benefit fraud. Nothing could be further from the truth.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 239, Noes 266.

Division No. 151]

[7.00 pm

AYES

Adams, Mrs Irene

Church, Judith

Ainger, Nick

Clapham, Michael

Ainsworth, Robert (Cov'try NE)

Clark, Dr David (South Shields)

Allen, Graham

Clarke, Tom (Monklands W)

Alton, David

Clelland, David

Anderson, Donald (Swansea E)

Clwyd, Mrs Ann

Anderson, Ms Janet (Ros'dale)

Coffey, Ann

Armstrong, Hilary

Cohen, Harry

Ashdown, Rt Hon Paddy

Connarty, Michael

Barron, Kevin

Cook, Robin (Livingston)

Battle, John

Corbett, Robin

Bayley, Hugh

Corbyn, Jeremy

Beckett, Rt Hon Margaret

Cousins, Jim

Benn, Rt Hon Tony

Cox, Tom

Bennett, Andrew F.

Cunliffe, Lawrence

Benton, Joe

Dafis, Cynog

Bermingham, Gerald

Darling, Alistair

Berry, Roger

Davies, Bryan (Oldham C'tral)

Blair, Rt Hon Tony

Davies, Chris (L'Boro & S'worth)

Blunkett, David

Davies, Rt Hon Denzil (Llanelli)

Boateng, Paul

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

Bradley, Keith

Denham, John

Bray, Dr Jeremy

Dewar, Donald

Brown, Gordon (Dunfermline E)

Dixon, Don

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

Dowd, Jim

Burden, Richard

Dunwoody, Mrs Gwyneth

Byers, Stephen

Eastham, Ken

Callaghan, Jim

Etherington, Bill

Campbell, Mrs Anne (C'bridge)

Fatchett, Derek

Campbell, Menzies (Fife NE)

Faulds, Andrew

Campbell, Ronnie (Blyth V)

Field, Frank (Birkenhead)

Campbell-Savours, D N

Flynn, Paul

Canavan, Dennis

Foster, Rt Hon Derek

Cann, Jamie

Foster, Don (Bath)

Chidgey, David

Fraser, John

Chisholm, Malcolm

Fyfe, Maria

736

Galbraith, Sam

Martlew, Eric

Gapes, Mike

Maxton, John

Garrett, John

Meacher, Michael

Gerrard, Neil

Meale, Alan

Godman, Dr Norman A

Michael, Alun

Godsiff, Roger

Michie, Bill (Sheffield Heeley)

Golding, Mrs Llin

Michie, Mrs Ray (Argyll & Bute)

Gordon, Mildred

Milburn, Alan

Graham, Thomas

Miller, Andrew

Grant, Bernie (Tottenham)

Mitchell, Austin (Gt Grimsby)

Griffiths, Nigel (Edinburgh S)

Moonie, Dr Lewis

Griffiths, Win (Bridgend)

Morgan, Rhodri

Grocott, Bruce

Morley, Elliot

Gunnell, John

Morris, Rt Hon Alfred (Wy'nshawe)

Hain, Peter

Morris, Estelle (B'ham Yardley)

Hanson, David

Morris, Rt Hon John (Aberavon)

Hardy, Peter

Mowlam, Marjorie

Harman, Ms Harriet

Mudie, George

Harvey, Nick

Mullin, Chris

Hattersley, Rt Hon Roy

Murphy, Paul

Hill, Keith (Streatham)

O'Brien, Mike (N W'kshire)

Hinchliffe, David

O'Brien, William (Normanton)

Hodge, Margaret

O'Hara, Edward

Hoey, Kate

Olner, Bill

Hood, Jimmy

O'Neill, Martin

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

Orme, Rt Hon Stanley

Howarth, George (Knowsley North)

Pickthall, Colin

Howells, Dr Kim (Pontypridd)

Pike, Peter L

Hoyle, Doug

Powell, Sir Ray (Ogmore)

Hughes, Kevin (Doncaster N)

Prentice, Bridget (Lew'm E)

Hughes, Robert (Aberdeen N)

Prentice, Gordon (Pendle)

Hughes, Roy (Newport E)

Prescott, Rt Hon John

Hughes, Simon (Southwark)

Primarolo, Dawn

Ingram, Adam

Purchase, Ken

Jackson, Glenda (H'stead)

Quin, Ms Joyce

Jackson, Helen (Shef'ld, H)

Radice, Giles

Jamieson, David

Randall, Stuart

Janner, Greville

Raynsford, Nick

Jenkins, Brian (SE Staff)

Reid, Dr John

Jones, Ieuan Wyn (Ynys Môn)

Rendel, David

Jones, Jon Owen (Cardiff C)

Robertson, George (Hamilton)

Jones, Lynne (B'ham S O)

Robinson, Geoffrey (Co'try NW)

Jones, Martyn (Clwyd, SW)

Roche, Mrs Barbara

Jones, Nigel (Cheltenham)

Rooker, Jeff

Jowell, Tessa

Rooney, Terry

Kennedy, Charles (Ross,C&S)

Ross, Ernie (Dundee W)

Kennedy, Jane (L'pool Br'dg'n)

Rowlands, Ted

Khabra, Piara S

Salmond, Alex

Kilfoyle, Peter

Sheerman, Barry

Kirkwood, Archy

Shore, Rt Hon Peter

Lestor, Joan (Eccles)

Short, Clare

Lewis, Terry

Simpson, Alan

Liddell, Mrs Helen

Skinner, Dennis

Litherland, Robert

Smith, Andrew (Oxford E)

Livingstone, Ken

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

Lloyd, Tony (Stretford)

Smith, Llew (Blaenau Gwent)

Llwyd, Elfyn

Snape, Peter

Loyden, Eddie

Soley, Clive

Lynne, Ms Liz

Spellar, John

McAllion, John

Squire, Rachel (Dunfermline W)

McAvoy, Thomas

Steel, Rt Hon Sir David

McCartney, Ian

Steinberg, Gerry

McFall, John

Stevenson, George

McKelvey, William

Stott, Roger

Mackinlay, Andrew

Strang, Dr. Gavin

McLeish, Henry

Sutcliffe, Gerry

McNamara, Kevin

Taylor, Matthew (Truro)

MacShane, Denis

Thompson, Jack (Wansbeck)

Madden, Max

Tipping, Paddy

Maddock, Diana

Touhig, Don

Mahon, Alice

Trickett, Jon

Mandelson, Peter

Turner, Dennis

Marek, Dr John

Tyler, Paul

Marshall, David (Shettleston)

Vaz, Keith

Marshall, Jim (Leicester, S)

Walker, Rt Hon Sir Harold

Martin, Michael J (Springburn)

Wallace, James

737

Walley, Joan

Wise, Audrey

Wardell, Gareth (Gower)

Worthington, Tony

Welsh, Andrew

Wray, Jimmy

Wicks, Malcolm

Wright, Dr Tony

Wigley, Dafydd

Young, David Bolton SE

Williams, Rt Hon Alan (Sw'n W)

Williams, Alan W (Carmarthen)

Tellers for the Ayes:

Wilson, Brian

Mr. Greg Pope and Mr. John Cummings.

Winnick, David

NOES

Ainsworth, Peter (East Surrey)

Dover, Den

Aitken, Rt Hon Jonathan

Duncan, Alan

Alexander, Richard

Duncan Smith, Iain

Alison, Rt Hon Michael (Selby)

Dunn, Bob

Allason, Rupert (Torbay)

Durant, Sir Anthony

Amess, David

Dykes, Hugh

Arbuthnot, James

Eggar, Rt Hon Tim

Arnold, Jacques (Gravesham)

Emery, Rt Hon Sir Peter

Atkins, Rt Hon Robert

Evans, David (Welwyn Hatfield)

Atkinson, David (Bour'mouth E)

Evans, Jonathan (Brecon)

Atkinson, Peter (Hexham)

Evans, Nigel (Ribble Valley)

Baker, Nicholas (North Dorset)

Evans, Roger (Monmouth)

Banks, Matthew (Southport)

Evennett, David

Banks, Robert (Harrogate)

Faber, David

Bates, Michael

Fabricant, Michael

Batiste, Spencer

Fenner, Dame Peggy

Bellingham, Henry

Field, Barry (Isle of Wight)

Bendall, Vivian

Fishburn, Dudley

Beresford, Sir Paul

Forman, Nigel

Biffen, Rt Hon John

Forsyth, Rt Hon Michael (Stirling)

Body, Sir Richard

Forsythe, Clifford (S Antrim)

Bonsor, Sir Nicholas

Forth, Eric

Booth, Hartley

Fowler, Rt Hon Sir Norman

Boswell, Tim

Fox, Rt Hon Sir Marcus (Shipley)

Bottomley, Peter (Eltham)

Freeman, Rt Hon Roger

Bottomley, Rt Hon Virginia

Fry, Sir Peter

Bowden, Sir Andrew

Gale, Roger

Bowis, John

Gardiner, Sir George

Boyson, Rt Hon Sir Rhodes

Gare-Jones, Rt Hon Tristan

Brandreth, Gyles

Garnier, Edward

Brazier, Julian

Gill, Christopher

Bright, Sir Graham

Goodlad, Rt Hon Alastair

Brooke, Rt Hon Peter

Gorman, Mrs Teresa

Brown, M (Brigg & Cl'thorpes)

Gorst, Sir John

Browning, Mrs Angela

Grant, Sir A (SW Cambs)

Bruce, Ian (South Dorset)

Greenway, Harry (Ealing N)

Butcher, John

Griffiths, Peter (Portsmouth, N)

Butterfill, John

Hague, Rt Hon William

Carlisle, John (Luton North)

Hamilton, Neil (Tatton)

Carrington, Matthew

Hampson, Dr Keith

Carttiss, Michael

Hannam, Sir John

Cash, William

Hargreaves, Andrew

Channon, Rt Hon Paul

Hawkins, Nick

Chapman, Sir Sydney

Hawksley, Warren

Churchill, Mr

Hayes, Jerry

Clappison, James

Heald, Oliver

Clark, Dr Michael (Rochford)

Heath, Rt Hon Sir Edward

Clifton-Brown, Geoffrey

Heathcoat-Amory, Rt Hon David

Coe, Sebastian

Hendry, Charles

Congdon, David

Heseltine, Rt Hon Michael

Conway, Derek

Higgins, Rt Hon Sir Terence

Coombs, Anthony (Wyre For'st)

Hill, Sir James (Southampton Test

Coombs, Simon (Swindon)

Hogg, Rt Hon Douglas (G'tham)

Cope, Rt Hon Sir John

Horam, John

Cormack, Sir Patrick

Hordern, Rt Hon Sir Peter

Couchman, James

Howell, Rt Hon David (G'dford)

Cran, James

Howell, Sir Ralph (N Norfolk)

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

Hughes, Robert G (Harrow W)

Curry, David (Skipton & Ripon)

Hunt, Rt Hon David (Wirral W)

Davis, David (Boothferry)

Hunt, Sir John (Ravensbourne)

Day, Stephen

Hunter, Andrew

Deva, Nirj Joseph

Hurd, Rt Hon Douglas

Devlin, Tim

Jack, Michael

Dorrell, Rt Hon Stephen

Jenkin, Bernard

Douglas-Hamilton, Lord James

Jessel, Toby

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Johnson Smith, Sir Geoffrey

Rumbold, Rt Hon Dame Angela

Jones, Gwilym (Cardiff N)

Ryder, Rt Hon Richard

Jones, Robert B (W Hertfdshr)

Sackville, Tom

Kirkhope, Timothy

Sainsbury, Rt Hon Sir Timothy

Knight, Mrs Angela (Erewash)

Scott, Rt Hon Sir Nicholas

Knight, Rt Hon Greg (Derby N)

Shaw, David (Dover)

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

Shephard, Rt Hon Gillian

Knox, Sir David

Shepherd, Sir Colin (Hereford)

Kynoch, George (Kincardine)

Shepherd, Richard (Aldridge)

Lait, Mrs Jacqui

Sims, Sir Roger

Lamont, Rt Hon Norman

Skeet, Sir Trevor

Lang, Rt Hon Ian

Smith, Sir Dudley (Warwick)

Leigh, Edward

Soames, Nicholas

Lennox-Boyd, Sir Mark

Speed, Sir Keith

Lester, Sir James (Broxtowe)

Spencer, Sir Derek

Lidington, David

Spicer, Sir James (W Dorset)

Lilley, Rt Hon Peter

Spicer, Sir Michael (S Worcs)

Lloyd, Rt Hon Sir Peter (Fareham)

Spink, Dr Robert

Lord, Michael

Spring, Richard

Luff, Peter

Sproat, Iain

MacGregor, Rt Hon John

Squire, Robin (Hornchurch)

MacKay, Andrew

Stanley, Rt Hon Sir John

Maclean, Rt Hon David

Stephen, Michael

McLoughlin, Patrick

Stewart, Allan

McNair-Wilson, Sir Patrick

Streeter, Gary

Maitland, Lady Olga

Sumberg, David

Malone, Gerald

Sweeney, Walter

Marland, Paul

Sykes, John

Marlow, Tony

Tapsell, Sir Peter

Marshall, John (Hendon S)

Taylor, Ian (Esher)

Martin, David (Portsmouth S)

Taylor, John M (Solihull)

Merchant, Piers

Taylor, Sir Teddy (Southend, E)

Mills, Iain

Temple-Morris, Peter

Mitchell, Andrew (Gedling)

Thomason, Roy

Mitchell, Sir David (NW Hants)

Thompson, Sir Donald (C'er V)

Moate, Sir Roger

Thompson, Patrick (Norwich N)

Molyneaux, Rt Hon Sir James

Thornton, Sir Malcolm

Monro, Rt Hon Sir Hector

Thurnham, Peter

Needham, Rt Hon Richard

Townend, John (Bridlington)

Nelson, Anthony

Townsend, Cyril D (Bexl'yh'th)

Neubert, Sir Michael

Trend, Michael

Newton, Rt Hon Tony

Twinn, Dr Ian

Nicholls, Patrick

Vaughan, Sir Gerard

Nicholson, David (Taunton)

Viggers, Peter

Norris, Steve

Waldegrave, Rt Hon William

Onslow, Rt Hon Sir Cranley

Walden, George

Ottaway, Richard

Waller, Gary

Page, Richard

Ward, John

Paice, James

Wardle, Charles (Bexhill)

Patnick, Sir Irvine

Waterson, Nigel

Pattie, Rt Hon Sir Geoffrey

Watts, John

Pawsey, James

Wells, Bowen

Peacock, Mrs Elizabeth

Wheeler, Rt Hon Sir John

Pickles, Eric

Whitney, Ray

Porter, Barry (Wirral S)

Whittingdale, John

Porter, David (Waveney)

Widdecombe, Ann

Portillo, Rt Hon Michael

Wiggin, Sir Jerry

Powell, William (Corby)

Wilkinson, John

Rathbone, Tim

Willetts, David

Redwood, Rt Hon John

Wilshire, David

Renton, Rt Hon Tim

Winterton, Mrs Ann (Congleton)

Richards, Rod

Winterton, Nicholas (Macc'f'ld)

Riddick, Graham

Wolfson, Mark

Rifkind, Rt Hon Malcolm

Wood, Timothy

Robathan, Andrew

Yeo, Tim

Roberts, Rt Hon Sir Wyn

Young, Rt Hon Sir George

Robinson, Mark (Somerton)

Roe, Mrs Marion (Broxbourne)

Tellers for the Noes:

Ross, William (E Londonderry)

Mr. Simon Burns and Dr. Liam Fox.

Rowe, Andrew (Mid Kent)

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the priority given by Her Majesty's Government to tackling all aspects of benefit fraud; endorses the Government's successful work in detecting and preventing fraud, which has resulted in the benefit savings target of £1.3 billion being exceeded in 1995–96; congratulates the Government on carrying out the first systematic review of the amount and type of Housing Benefit fraud; notes that Housing Benefit administration is the responsibility of local authorities and that local authorities only started tackling fraud seriously once the Government introduced financial incentives for them to do so; welcomes the new fraud strategy which will result in savings of £2.5 billion a year by 1999; deplores the Labour Party's attempt to exaggerate the amount of fraud as a pretext to spend more money; and condemns the Labour Party's continuing half-heartedness in tackling benefit fraud and abuse.

Nuclear Industry (Privatisation)
Madam Deputy Speaker (Dame Janet Fookes): I have to tell the House that Madam Speaker has selected the amendment in the name of the Prime Minister.
7.15 pm
Mrs. Margaret Beckett: I beg to move,
That this House notes that the publication of the Pathfinder prospectus for the sale of British Energy confirms the suspicions of Her Majesty's Opposition that the sale is a bad deal for the taxpayer; further notes that the proceeds are anticipated to be less than the cost of building Sizewell B whilst the other seven reactors are being given away free, that boardroom pay will rise by 40 per cent. whilst one in 20 employees have lost their jobs in the last year, that it has yet to be demonstrated that the sale proceeds will cover the shortfall in the Magnox liabilities, that the bulk of the initial Segregated Fund to pay for British Energy's clean up costs comes in the form of a `dowry' from the balance sheets of the pre-privatisation publicly-owned companies and that the Government has not sufficiently settled issues relating to the ability of a privatised nuclear industry to compete in the electricity generating industry on an equal footing with other private generators; and condemns the privatisation as a reckless and cynical attempt to raise short term cash at the expense of the long term interests of taxpayers.
The context of this debate, like the one that preceded it, is value for public money and an assessment of where the overall public interest lies.
Only a few weeks ago—following a Select Committee report on privatisation of nuclear power stations, and in the absence of any sign that the Government intended to have a debate on the issues raised by that report—Opposition Members took the opportunity of Opposition time, as we do today, to focus on some issues of public policy over which, as is all too evident, the Government would much prefer to draw a veil.
On that previous occasion, we said that this was an extraordinary privatisation, and that it was extraordinarily difficult to justify. That view is not only maintained but enhanced by the lack of answers to the questions raised then, and by the new information that has since emerged, despite the Government's best efforts to conceal it.
In one respect, this privatisation may be unique. Concerns about whether the taxpayer is getting a good deal have often been raised, but with this sale there are also questions about whether the shareholder is getting the full picture. I accept at once that, at first glance, it seems unlikely—it certainly could be argued that it would be difficult—for anyone to construct a deal that is disadvantageous, first, to the taxpayer and, later, to the shareholder. But I suspect that, if anyone can do it, this Government can.
Before the previous debate, the Government said that a response to the concerns raised by the Select Committee would be available, and would be debated within "the normal time scale". However, as we suspected, it seems that the Government did not intend such a debate to precede the sale.
The Minister's basic case in that debate was that all the questions raised either had been dealt with already or would be dealt with in the prospectus, which we now have available. I shall remind the House of some of those questions.
There is first the issue whether liabilities will follow assets into the private sector—an assertion that the Minister of State has made repeatedly—without it ever

741
being made wholly clear whether that really means all rather than part of those liabilities. It is on that basis that, despite the money that taxpayers have to cough up at the front end of the sale, the Minister claims that this sale is to the taxpayer's long-term benefit. Not only many Opposition Members but many analysts argue that there is considerable risk attached to that aspect of the Government's case.
Revenues to meet those liabilities in the long term are intended, at least in part, to be available from the segregated fund. It is now much clearer—even clearer than it was in our previous debate—that, to offset liabilities assessed on an undiscounted basis at £14 billion, it is anticipated that revenue secured for investment in and by the segregated fund will cover only a sum of the order of £4 billion. It seems to be anticipated that the rest of the liabilities will be covered from the operating revenues earned by the company.
So key to the Government's basic case is the assumption about the company's financial performance in the private sector. In fact, the more we study that case, the more it appears that some of those key questions remain unanswered, and that such answers as do exist might give potential shareholders pause for thought.
To begin with, there is obscurity about the issue of the segregated fund itself. The last Red Book shows a cost to the Exchequer in respect of the industry of some £230 million—precisely the sum that has appeared on the balance sheet of British Energy, and will be the dowry it provides to start off the fund.
It is presumably on the basis of the scale of the dowry from public funds that the level of yearly contribution from the privatised company is assessed at a mere £16 million a year, as compared to previous estimates from City analysts that funding would have to be about £30 million to £50 million a year—more than double, at the very least. I say "presumably", because the Government have, up to now, failed to publish or place in the Library of the House the report that they claim provides the justification for such a low contribution, on the spurious grounds that it is not yet completed. However, that does not seem to have prevented the Government from reaching a judgment on the report.
The potential of the revenue stream for the company and what that means for shareholder returns is also key to the value of the sale. Here too, considerable questions remain unanswered. For a start, in our previous debate it was pointed out that the assumptions that underlay the value placed on the company were heavily influenced by the load factor at which it was argued that the stations to be privatised could be run. It was pointed out in that debate that a load factor of 82.5 per cent. had been assumed—a level which, it was argued, had never been attained, and which few analysts believed could ever be attained.
To put the matter in perspective, we can see in the prospectus a method of presentation of the performance of the advanced gas-cooled reactors which gives a figure for best ever performance of 74 per cent. in 1995. In the year to 31 March 1996, those reactors achieved a performance of just 71 per cent. Despite the fact that that assumption must be crucial to assessing either the value of the sale or the assumptions of future revenues and hence future dividends, the Government are saying little or nothing about how they now view those assumptions. I hope that the Secretary of State will remedy that omission today.
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This is particularly relevant because, in the past couple of days, we have learnt of the existence of a legal review of the sale carried out by Clifford Chance, which is said to have been made available to the company and the Government. I hope that the Secretary of State will comment on the matters it raises in this debate, and either publish the legal review or place it in the Library.
I ask that because a document that I have seen, which purports to be a draft of the report, draws attention to two issues that have substantial implications for the commercial aspects of the sale. Discussing design and technical issues, it says:
"Several on-going and major generic technical problems either affecting, or potentially affecting the stations"
to be privatised are identified. It is said that, in the case of carbon deposition, that may affect output. It is said that the problems may have "high commercial penalties".
The review raises issues of staffing levels, and the need to have sufficient qualified and experienced staff. It highlights doubts about whether that can all be provided, especially if there is to be substantial contracting out of work. Again, the quality of the human capital of the company is said in the report to raise issues with considerable commercial consequences. That is probably because of the assessment that some 60 per cent. of incidents causing loss of output are thought to be due to human error.
Those issues are relevant not just to the value of the company but to the revenue stream that can be anticipated. Yet, from the prospectus, it is obvious that that revenue stream is key to the statement that liabilities will follow the assets and will be covered in the private sector.
Let me remind the House that it is now evident that it is anticipated that some £10 billion of the undiscounted liabilities will be expected to be covered by the company's revenues, so questions about the security of the revenues go to the heart of the coverage of liabilities.
The prospectus raises another question about the degree to which liabilities are following assets. On page 73, the prospectus refers to liabilities falling due after the closure of the existing stations and outside the scope of the segregated fund, so not covered directly by the company's revenues. It says that they will have to be covered by further investments to provide funding to meet the payments as required.
I should be grateful if the Secretary of State could shed some light on what that means. Does it mean that a further segregated fund would be set up, and, if so, does that not suggest that the present fund is inadequate to bridge the gap between liabilities and the income to cover them? Does it simply mean that, apart from the revenue stream having to meet the cost of liabilities which fall while the station is operating, it is also expected that revenues will have to cover sums set aside to provide a further long-term income stream when the stations have ceased to operate? What interests us in the context of the sale is the implications of that statement for the prospect of future dividends.
Dr. Robert Spink: The initial endowments of £157 million and £71 million or £79 million from Scottish Nuclear have been called prudent by the independent actuaries. Is the hon. Lady challenging what the independent actuaries have said?
Mrs. Beckett: If the hon. Gentleman has had sight of the report from the independent actuaries, we would like

743
to see it as well, and so would the House. How does he know what the independent actuaries have said? It is not in the Library of the House. Can he cast any light on the matter? Is he claiming to have seen the report?
Dr. Spink: My information comes directly from British Energy.
Mrs. Beckett: I am not sure on what basis, as a Government Back Bencher, the hon. Gentleman has this inside track to British Energy. I am sure that other potential shareholders would be delighted to have the same information. He strengthened the case I was making to the Secretary of State for publishing the report. I am sure that the Secretary of State will be able to tell us that he intends to do so.
The prospectus shows that dividend payments from the privatised company may not be covered by profits after tax for a number of years. That brings me to the question of the return for shareholders.
It is hard to know what to make of the extraordinary decision to announce what first year dividend the company will pay, when the sale has not yet taken place. To announce also that the dividend will be about twice the rate of the most optimistic profits forecast for that year so far raises the question what the company is doing promising dividends on such a scale. What makes the whole thing utterly ludicrous is that the dividend is to be paid before potential investors will have had to cough up a second instalment of the price of their shares.
Harold Macmillan once said that selling off state assets was like selling the family silver. The nuclear industry looks like being almost the last item to go in the Tory car boot sale of state assets. As any hon. Member who has read the words of the prospectus carefully will acknowledge, what is on offer here may not be silver—in fact, it looks remarkably like fool's gold.
Mr. John Redwood: The right hon. Lady seems to be rather pessimistic about prospects for the shares, and seems to be telling people not to buy them. Can she assure us that her investment advice will be better than that of the hon. Member for Birmingham, Ladywood (Mrs. Short), who told people not to buy Railtrack shares on the grounds that they would go down rather than up? Does she have any comment on that?
Mrs. Beckett: If I were a shareholder in either of those industries, I would rather have a longer period over which to judge what might happen to the share price than the right hon. Gentleman seems to be taking into account, which, as has been pointed out, is exactly what the brokers are saying. If the hon. Gentleman is concerned about the advice that we are giving, or believes that the observations that we are making about this potential sale are unsound, I suggest that he takes a further look at what is being said about it in the City.
Dr. Spink: Will the right hon. Lady give way?
Mrs. Beckett: No, not again. I want to get on, and I do not want the hon. Gentleman to incur another disaster, as he did on his previous intervention.
744
The company made a loss last year and warns of making one this year, but it still offers a massive dividend payout that seems to have been financed by a bridging loan from Her Majesty's Treasury.
The prospectus suggests that the company's ability to pay dividends at all in future is by no means certain. The directors say in the prospectus that their dividend policy is "critically dependent" on six assumptions, which I shall paraphrase for the benefit of the House.
It is assumed that the pool price of electricity will not fall substantially and that any price review will not affect British Energy's performance; that there will be no major unanticipated station failures; that British Energy will meet its targets, including both extending the life of some stations—running them longer—and making cost savings; that there will be satisfactory returns from reinvestment; that there will be no wider changes in regulation that will have an adverse impact on British Energy; and that there will be no significant rise in inflation.
Those are hefty caveats. It is evident that the assumptions are not only unlikely to be all fulfilled, but that they are mostly entirely outside the control of the directors. The notion that there is unlikely to be any change in regulation or any adverse outcome from the price review is hardly borne out by what has happened with electricity or gas supply.
The hope that there will be no unanticipated station problems is highly dependent, as the legal review to which I referred earlier shows, on some of the technical issues. The prospectus makes it clear that it is possible that unforeseen events or changes in regulatory standards may require the lifetimes of stations to be reduced, yet the background to the dividend policy talks about half of them having their lives extended.
All the assumptions are most heavily dependent on the position in the trading pool in which the price of electricity is set. At present, nuclear power stations have preferential access to that pool. The regulator has previously acknowledged that, if he were asked—for example, by other generators—to review British Energy's access to the pool, he would have to do so. That may in part account for the statement in the prospectus that the regulator has been asked
"to avoid making any announcement during the offer of the sale—and for three months after commencement of dealings—other than in exceptional and unforeseen circumstances".
The prospectus also makes it clear that other regulators have been asked to avoid saying or doing things that might affect the price of British Energy shares.
The fact remains that assumptions about what will happen in the pool, and about the effect of its operation on the price of electricity, are crucial to the assumptions that are being made about the dividends that are said to be on offer to shareholders. Shareholders who read in the popular press references to the new opportunities that this sale offers to Sid should bear in mind what has happened to the original Sids, which was itself a direct result of changes in Government policy of which Sid was given no inkling when the Government sold him or her their shares in British Gas.
The sale contains wider and more profound risks than simply commercial ones. In the previous debate, we drew attention not only to the inadequacy of the insurance cover that is being required of the industry but to the fact that it was substantially less, even on the most generous

745
estimates, than that frequently required elsewhere in the private sector—in the chemical industry, for example. That point was made to the Select Committee by the CBI.
The Minister's response in our previous debate was to talk about the narrow nature of any potential liabilities for the industry, as if a major accident—that is what the insurance is all about—would not have a significant impact, because of the restricted nature of the industry. That argument is bizarre. I call on the Government again, as does the private sector, to re-examine the provision that is being made on that. As matters stand, it is yet another area of financial uncertainty—certainly for the taxpayer, and probably even for the shareholder.
Our motion describes this privatisation as "reckless and cynical". I believe that any impartial observer would agree that that description was well-merited. I suspect that the level of hostile comment, and the degree of reservation expressed in the financial sector, is as unprecedented as the nature of this privatisation. There are certainly hidden consequences for the taxpayer. There may well be hidden consequences for the shareholders.
The only clear beneficiaries are the directors, whose total remuneration, according to the prospectus, is to rise by 38 per cent. on average; and a Government who are desperate to raise revenues that they hope can be used to justify a short-term tax cut and who are entirely indifferent to the consequences for the shareholder or the taxpayer in the longer term.
To say that the terms of the sale of the industry are unfair would be a gross understatement. The expected sale price, which is now said to be about £1.7 billion, is about half the cost of building Sizewell B alone. The other power stations have been thrown in for free. It is a tenth of the £13 billion that taxpayers have already laid out from their own pockets to build reactors.
This is not a sale. Ministers no doubt hope that potential shareholders will believe that it is a free lunch. Yet the Government tell us constantly that there is no such thing as a free lunch. Whatever the potential benefits of the sale, the potential losses seem increasingly likely to outweigh them. The Government have long ceased to act in the public interest. The sale may be one of the most blatant examples of their indifference and neglect; it is certainly one more reason why they should be driven from office.
7.35 pm
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
`welcomes the publication of the Pathfinder prospectus for the sale of British Energy which confirms that the sale fulfils the Government's commitment to ensuring that liabilities follow assets into the private sector and is a good deal for the taxpayer who will benefit from equity proceeds, debt repayment and the permanent transfer to the private sector of responsibility for almost £4 billion of nuclear liabilities, for British Energy employees who will now have the opportunity to take a real stake in the future of their industry, for Magnox Electric which will be a robust public sector company capable of meeting its liabilities as they fall due; and further notes that the privatisation of British Energy serves the long term interests of the taxpayer, the industry, and consumers; and condemns the persistent attempts by the Opposition to undermine this and other privatisations.'.
Once again, the Opposition are parading their familiar themes of doom and gloom and of misconception. Time and again, we have listened to Labour Members criticise
746
any privatisation proposals. When will they learn that such scaremongering has never proved to be correct? The right hon. Member for Derby, South (Mrs. Beckett) quoted the words "reckless" and "cynical" from her motion. They are a good summary of her attempt to undermine the privatisation.
I invite the House to consider first the general picture. It is worth reminding Labour Members that, in 1979, nationalised industries were costing the taxpayer more than £50 million a week. By contrast, in the past financial year, privatised companies paid about £55 million a week into the Exchequer.
Mr. Brian Wilson rose—
Mr. Lang: I shall give way, although I have barely started.
Mr. Wilson: The fact that the right hon. Gentleman has barely started does not mean that he has not entered the field of inaccuracy. Will he confirm figures from the Library that show that, at least until last year, the electricity industry had never delivered so much in taxation to the Exchequer since privatisation as it used to in profits before privatisation?
The Minister for Industry and Energy (Mr. Tim Eggar)indicated dissent.
Mr. Wilson: The right hon. Gentleman shakes his head, but that is one of the many facts concealed by all this bombast. The Exchequer got more from the profits of the electricity industry before privatisation than it has from taxation since.
Mr. Lang: If the hon. Gentleman wants to examine the history of electricity, I remind him that, under the last Labour Government, the price of electricity went up in cash terms by 2 per cent. every six weeks—4 per cent. a quarter, or 16 per cent. a year. I do not think that I need to trade records with the hon. Gentleman.
Mrs. Beckett rose—
Mr. Lang: I want to make some progress in answering the right hon. Lady's points. However, I shall give way, although it may be more difficult for me to do so later.
Mrs. Beckett: I take that warning, and assume that it means that there are a few rude remarks to come.
Thje right hon. Gentleman has used those figures before, so I have had them checked, but I have not yet been able to stand them up; I shall keep trying. Even assuming that they are accurate, he might bear in mind the fact that, in the mid-1970s, the price of oil increased by four or five times, which is not insignificant in determining the price of electricity. The Government always ignore that.
Mr. Lang: A large amount of electricity was generated by coal, nuclear power and water. The right hon. Lady cannot hide behind that argument. The Labour Government's record was appalling. I have quoted the

747
figures that show the cost to the taxpayer of nationalised industries, and the benefit now that they have been privatised.
I had hoped that the right hon. Lady would set out more clearly her party's policies on energy and privatisation. Sadly, I was disappointed, but I should have realised, that on one of the rare occasions on which her party allows to her appear in public, the last thing she would be permitted to do would be to let us hear her views on those matters.
Does she agree with the last Labour Secretary of State for Energy, the right hon. Member for Chesterfield (Mr. Benn), who is, alas, not here to receive the plaudits of the House? He was the man who said:
"the Government believe that the nuclear component is necessary for the energy policy of the United Kingdom".—[Official Report, 15 May 1978; Vol. 950, c. 177.]
He commissioned Heysham 2 and Torness, and embarked on the pressurised water reactor programme that gave us Sizewell.
Or does the right hon. Lady agree with the hon. Member for Clackmannan (Mr. O'Neill), who I am delighted to see in his place? He said:
"a future Labour Government will not undertake any measures to prolong the workings of those nuclear power stations already contributing to electricity generation"?
Her motion talks of short-termism, but if ever there was a glaring example of short-termism, it is that. How can she have the effrontery to talk of the long-term interests of the taxpayer? What can be more cynical and short-termist than to refuse to extend the life of perfectly useful power stations, as the Labour party's policy proposes to do?
Mr. Andrew Miller: Will the Secretary of State give way?
Mr. Lang: In a moment. I must make a little progress.
The right hon. Lady has made various cynical attempts to undermine the successful privatisation of British Energy, but she has not yet told us what her policy will be next month when the company is sold. Logic dictates that she would want to renationalise it. If so, today provides her and her party with an opportunity to explain her party's position.
The Labour party is often accused of making U-turns. It is true that Labour Members often display a remarkable flexibility of principle. We know, for example, that in government the Labour party set in train a massive programme of building nuclear power stations. In opposition it declares itself against nuclear power and seeks to undermine it with scaremongering. The one thing in which it has been consistent is in opposing every privatisation proposal that the Government have introduced. It is opposed to privatisation, because it is opposed to free enterprise. It does not like freedom, and it does not understand enterprise.
The rest of the world does understand privatisation. Privatisation is one of Britain's biggest export success stories. Germany, Spain, Italy,, eastern Europe, south-east Asia, South America and Africa—all over the world, countries are following Britain's lead and embarking on privatisation in the confident expectation of benefits to the
748
economy and to consumers. The Labour party takes its place along with Cuba and North Korea in the elite group of socialist utopias for which privatisation is still a dirty word.
Mr. Michael Fabricant: It is the privatisation, after all, of gas—controlled by the regulator—which has produced such a windfall for consumers. What estimates has my right hon. Friend made of the windfall, if you like, in terms of lower electricity bills that would result from the privatisation of Nuclear Electric? Come to that, if Nuclear Electric was not privatised, what would be the cost to each household?
Mr. Lang: Sadly, we can only speculate on the Labour party's windfall profits tax policy. The fact is that, if it has a tax-raising policy, windfall taxes seem to be part of it. Our purpose is to look at utilities as a source not of revenue for the taxpayer but of advantage in terms of reduced prices to the consumers. That is the difference between us and the Labour party.
We are now on target to complete electricity privatisation in the United Kingdom. The flotation of British Energy, one of Britain's three largest generating companies, marks the culmination of the Government's privatisation plans for the industry. This final burst of energy will extend the benefits I outlined a few moments ago. It will free the industry to make its own investment decisions. It will encourage improvements in the generators' overall economic efficiency, and enhance their competitiveness. Surely even the Labour party would not seek to deprive industry of the opportunity to serve us better.
Privatisation has helped millions to become shareholders. It has encouraged countless employees to take a stake in their future. It has given real power to the consumer by developing choice and competition. I hate to disappoint the Labour party by reporting that public interest in privatisation issues is undiminished. As of today, more than 1.3 million people, and rising, have registered for the public offer. I am confident that the Government are set for another successful sale. I trust that that puts the record straight about the benefits of privatisation and the level of public interest in our programme.
Now I should like to put the record straight about some of the other misconceptions which have been cast about. One of these—the right hon. Member for Derby, South spent some time on it this evening—is the level of proceeds we expect to receive from the sale. Of course, that is a matter for the market to decide, on the basis of the information in the prospectus. It is clear from some of the statements that Labour Members have made that they are not expert in that area. It may assist them in their understanding if I briefly explain some of the relevant factors.
When calculating the total proceeds from the sale of British Energy, it is important to take account of three components. First, there are the proceeds from selling the shares in the company. That amount will be decided by the market at the time of flotation. That will reflect the value of the assets in their current state, and the competitive market in which they operate. Prospective purchasers look into the future at profit and cash generation. They do not look into the past at the historic cost of the assets.

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Secondly, there are the proceeds from the debt due from British Energy to the Government. That will be realised either by repayment or by selling the debt on to third parties. As a result of the restructuring of the industry, British Energy now owes £600 million to the Government that was not owed before the restructuring. Repayment or sale of that £600 million represents proceeds to Her Majesty's Government.
Mr. Michael Clapham: Is the Secretary of State aware that the total liabilities for the advanced gas-cooled reactors and the one pressurised water reactor are £14.6 billion? Can he tell us whether the total liability will follow the asset?
Mr. Lang: Yes, I can confirm that the total liability is following the asset. I shall come to that important point soon.
Let me emphasise the third of the three components that should be taken into account when calculating the proceeds from the sale of British Energy. The third one, and arguably the most important, is the liability that will now be met by the private sector, but would previously have been met by the taxpayer.
At 31 March this year, British Energy had accrued nuclear liabilities of £3.7 billion. These are calculated using a prudent discount rate of 3 per cent. real and the actual cash payments that they represent will be significantly higher, but spread out over a number of years. It is, however, important not to confuse discounted with undiscounted, as the right hon. Member for Derby, South appeared to do in her speech.
These liabilities have arisen from running the nuclear power stations, and they are predominantly associated with spent nuclear fuel that is awaiting reprocessing. Without privatisation, those liabilities would have been met by the taxpayer. Following privatisation, they will be met by the private sector British Energy.
The total proceeds for the taxpayer, therefore, include £3.7 billion for past liabilities passed to the private sector and £600 million for debt taken on by British Energy, in addition to the proceeds from the share flotation, of course.
Mr. Llew Smith: Will the Secretary of State inform the House whether the plutonium that the Government intend to transfer to private ownership as part of the sell-off of Nuclear Electric and Scottish Nuclear will be listed as an asset or a liability?
Mr. Lang: That is a matter entirely for the company and its advisers. I suggest that the hon. Gentleman has a good look through the prospectus.
Let me develop a little more the question of liabilities. Liabilities are another area in which the Opposition—they demonstrated it again tonight—have difficulties appreciating the true position. I can only repeat yet again that liabilities have followed assets.
As long ago as last May, on publication of the nuclear review White Paper, we made it clear that we expected nuclear liabilities to follow their associated assets into the private sector. Again, when the Government gave evidence to the Trade and Industry Select Committee in November last year, we made it clear that it was a principle of privatisation that liabilities should follow their
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assets. In March 1996, when the nuclear industry was restructured, the principle was again followed: liabilities followed assets.
Let me say again categorically, for the record and for the avoidance of doubt, that British Energy is and will remain responsible for the liabilities associated with its stations.
Mr. Alan W. Williams: The general public find it incredible that the prospectus requires British Energy simply to set aside £16 million a year. Somehow, over 100 years, at the 3 per cent. discounted rate, that is supposed to accumulate to £14 billion. I did my arithmetic this afternoon. Compound interest of 3 per cent. over 100 years requires twentyfold growth. Does anyone believe that, at the end of the next century, Britain will be 20 times richer in terms of gross domestic product? That is the crazy accounting system that the Government have used in arriving at the figure of £16 million.
Mr. Lang: The hon. Gentleman is confusing total liabilities with the decommissioning fund. There will be an initial capitalisation of some £230 million. There will also be an annual contribution of £16 million a year, which will increase in real terms, will be reviewed quinquennially and is calculated on the basis of the best possible actuarial advice, to provide a substantial and good margin for error above the actual anticipated needs. That position will continue in the longer term.
We have established an independent, segregated fund to cover all the longer-term post-closure costs of decommissioning British Energy's nuclear power stations and their sites, with the aim that all licensed nuclear sites will be cleared and returned to other uses. Obviously, it has been necessary to strike a balance between the need to reassure the public that British Energy will meet its liabilities and the need to recognise the company's commercial freedom. I believe that we have the balance right, and I would add that the scope of the fund has been agreed with the nuclear installations inspectorate.
The scope of the fund is not, however, set in stone. If, for example, British Energy changed its decommissioning strategy, the scope of the fund could also be altered to include new on-site activity not currently carried out on the site. I emphasise that any liabilities not covered by the fund remain the responsibility of British Energy. There is no question of any exemption. I say categorically that British Energy is, and will remain, responsible for the liabilities associated with its stations.
Mr. Martin O'Neill: Will the right hon. Gentleman give way?
Mr. Lang: I will, but then I must make progress.
Mr. O'Neill: Does the President of the Board of Trade agree that, if any of the assumptions on the basis of which this contribution to the fund is made prove unfounded—it is generally agreed that £16 million is the lowest possible figure that one can calculate, assuming every optimistic scenario—the result will be either more expensive electricity or a reduction in dividend to the shareholders?
Mr. Lang: The hon. Gentleman may jump to conclusions of that kind. Those figures have been struck

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on the basis of the best possible advice and which will be reviewed quinquennially. Independent trustees are responsible for those matters, and it is the best estimate that those figures will be adequate. As I have said, nothing is set in stone, and they can be reviewed as required, but we are talking about a long-term accumulation of resources.
The final misconception on which I want to put the record straight arises from the stories of a dividend sweetener of £100 million being paid by the taxpayer from a special reserve fund. The first dividend that will be received by investors is an interim dividend in respect of the year ending 31 March 1997. That dividend will be paid by British Energy, using its own cash resources, and there is no question of payment by the taxpayer from a special reserve fund.
Opposition Members have also sought to create fears that the uncovered dividend will be paid for with money needed for long-term liabilities. Again, that is totally untrue. The company is satisfied on cash flow grounds that it will be able to meet all its liabilities. Were there ever to be a question of priorities, of course, liabilities would always come first.
I shall now discuss another benefit arising from this privatisation.
Mr. Ken Purchase: Will the President give way?
Mr. Lang: No; I want to make a little more progress in this short debate.
Opposition Members may have read that the Director General of Electricity Supply announced last week that he expects to be able to announce a reduction in the fossil fuel levy following privatisation from 10 per cent. to 3.7 per cent. That reduction will have been made possible by the nuclear privatisation, because premium payments to Magnox Electric are expected to end at the time of privatisation, except as necessary to recover moneys that were originally due to Magnox but unpaid before privatisation.
The reduction in the levy rate should lead to a reduction in bills of more than 6 per cent. in a full year, or about £15 to £20 in a typical domestic consumer's bill. I look forward to hearing Opposition Members welcome that during the debate.
Mr. John Battle: Can the Secretary of State confirm that that figure is contingent on the performance of the company, and may well not be anywhere near that level, given that the prospectus says that the company does not even intend to make a profit in the first few years?
Mr. Lang: No. The position is clear, as it has been announced by the Director General of Electricity Supply, and the outstanding payments due from Magnox are held over by agreement and are being collected, so there is no uncertainty about that matter.
Mr. Miller: Will the President give way?
Mr. Lang: I want to press on and talk about the reorganisation of the nuclear industry to form British Energy and Magnox Electric, which I believe will bring wider benefits than those associated with privatisation.
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Magnox Electric, which will be staying in the public sector, has been established as a robust independent player in the electricity market. It will be a substantial baseload generator, with about 7 per cent. of electricity output in Great Britain. The objectives we have set require Magnox Electric to operate in a commercial manner, judging any investments by commercial rates of return. We intend that Magnox should be a full competitor in the electricity market, and that this increased competition will be of clear benefit to consumers.
Moreover, focusing management time and expertise on one type of reactor—Magnox—will bring significant benefits in improved efficiency. The Opposition talk only about the downsides of assets and liabilities being left in the public sector, but the Magnox liabilities have always been in the public sector, and that will not change. What has changed as a result of restructuring, however, is that there is now a much clearer focus on Magnox issues, with a renewed enthusiasm at every level of the company.
Magnox Electric is a first-class generator with a proven track record in station decommissioning, and I have every expectation that the creation of an independent Magnox company and its eventual integration with British Nuclear Fuels plc will enable them to build on and further develop that expertise, and will bring significant reductions in costs from greater efficiency in the management of liabilities.
Magnox Electric is a robust public sector entity, which will enhance competition in the electricity market and aims to secure the best possible value for the taxpayer.
Mr. Alan W. Williams: The Minister said that Magnox had a proven track record on station decommissioning. I am astonished by his comment, in view of Trawsfynydd nuclear power station, which closed only a few years ago and will be there for 100 years. Where is this proven track record on station decommissioning?
Mr. Lang: The fact that it takes a long time to decommission a station does not undermine the capacity, skill and efficiency with which decommissioning is undertaken by the company. It has already made enormous progress with Berkeley, at costs substantially less than had been anticipated and provided for.
Mr. Wilson: Will the President give way?
Mr. Lang: I give way to the hon. Gentleman, as this is a matter that concerns his constituency.
Mr. Wilson: Since the possibility of a Hunterston C appears to be precluded by privatisation, it is very important for employment in my constituency to know whether there would be any inhibition to Magnox Electric building on the Hunterston A site, which it will inherit, perhaps for non-nuclear generation. Would be there be any such inhibition?
Mr. Lang: That is not a matter on which I have any decision or any position to announce tonight, when we are debating the privatisation of British Energy. That is a matter for the future. Magnox will remain in the public sector.

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We have seen tonight that not only is the Labour party deeply embedded in the old attitudes of clause IV of its constitution, but Labour Members do not understand what privatisation is about.
Last week, Labour launched another of its great attacks on the Government, which was going to be the greatest assault on this privatisation exercise, called its triple whammy—and it was wrong on every point. First, Labour alleged that the Government would not ensure that Magnox had sufficient assets to cover its nuclear liabilities. That simply is not the case. Secondly, Labour said that the cost of reprocessing British Energy's spent fuel would be left with the Government. It will not. That will be met by British Energy as part of its normal commercial operations.
Thirdly, Labour said that the United Kingdom's insurance arrangements are not in accordance with international conventions on civil nuclear liability. In fact, the United Kingdom's own insurance requirement is many times higher than the minimum required under the Brussels convention, and among the highest of all the signatories to that convention. Each and all of those accusations were wrong: not only wrong but fundamentally ignorant of the basic principles of privatisation—not a triple whammy, but a triple boomerang.
Far from nuclear privatisation being a disaster, as the Opposition would try to have people believe, excellent progress is being made. All the major milestones have been reached successfully and to timetable. The next stage will be the issue of the retail prospectus next week, on 26 June.
I remain confident that the final burst of energy will be as successful as the earlier sales, for the industry, the taxpayer and the consumer. I urge the House to reject the motion and to support the Government's amendment.
7.57 pm
Mr. Martin O'Neill: I welcome the debate. We are in the middle of the nuclear flotation. We have discussed the nuclear industry three times in the past two years—at the time of the nuclear review, on the announcement of the Government's intention to privatise and, recently, following the publication of the Trade and Industry Select Committee report.
Many right hon. and hon. Members were, and are, opposed to the principle of privatisation. My all-party colleagues on the Select Committee expressed their greatest concerns about the taxpayer's interests and were worried that there would be a quick, cut-price sale. Their anxieties centred on the main issues of the valuation of the assets, the definition of the liabilities and the liabilities' subsequent valuation. A distinction must be drawn between what constitutes a liability and what that liability is valued at.
My right hon. Friend the Member for Derby, South (Mrs. Beckett) has already described the doubts that surround the valuation. It seems strange that power stations costing more than £3 billion to construct should be sold for between £1.6 billion and £2.6 billion. At the time of the initial valuation discussions, parallels were drawn with the car leaving the showroom and the change in its value at that time. Of course we all recognise that the price will fall; but when VAT, excise duty and delivery charges do not have to be taken into account, the price will fall very quickly.
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Since the last debate on this subject, and since the announcement of the flotation, a report has been published on the annual segregated fund changes by Professor Sadnicki. The paper was prepared for a local authority pressure group that is opposed to nuclear power. There has never been any secret about the author's concerns about the economics of nuclear power. Nevertheless, he and Dr. Gordon McKerran of Sussex university have been influential in constructing models on which the pricing of nuclear energy has been estimated. It is no secret, either, that their work in large measure informed the Government's nuclear review, in terms of the pricing of units of nuclear energy. It could also be argued that their work was influential in persuading the Government not to proceed with the construction of any more nuclear power stations. It certainly influenced British Energy's intentions not to proceed with any nuclear power station construction in the foreseeable future.
The report cannot be lightly dismissed. I do not agree with everything in it; some of its assumptions are over the top and are not necessarily designed to impress accountants—ultimately it is their view that must be taken into account.
Perhaps the Minister will deal this evening with the point that contributions to the initial transfer of the assets may constitute a subsidy under European law. Would they contravene European legislation? It would indeed be embarrassing for the Government if the money that they used as a sweetener for privatisation were found to be contrary to European policy.
The author of the report takes as his outside limit for such contributions a sum of £208 million a year, which compares with the £16 million that the Government have been talking about. I do not think that a realistic figure. I think that £127 million is rather closer; it is achieved by assuming average economic growth of about 2 per cent. until 2026. I am not altogether confident that the Labour Government who will take office next year will stay in power that long, but the lamentable economic growth record of the past 17 years will not necessarily prove to be the model for what will follow.
Why do not the Government mention long-term items such as post-operation waste charges and post-operation payments for BNFL decommissioning? The report's author doubts whether British Energy's commercial freedom can be squared with reassurances that, where liabilities arise, they will be met. If liabilities fall where the assets are, that may restrict British Energy's ability to perform according to the market's wishes. It is pointed out in the report that any surpluses from the constituent elements of BE will be given not to the taxpayer but to Magnox for its liabilities. No one will have been convinced by the superficial gloss that the Secretary of State put on the question of the Magnox liabilities.
The report also raises the issue of post-operational reprocessing and stage 1 decommissioning of the advanced gas-cooled reactors. There is also the problem of the ability of Sizewell B to make contributions after 2025. The lifespan of Sizewell B cannot be guaranteed, so it would be imprudent to make early financial forecasts on such an optimistic view of its time in service. The point is underlined by questioning of the estimates for decommissioning and waste disposal.
We have been repeatedly told by Ministers that liabilities will follow assets, but the figures in the report suggest that the accounting procedures will not be

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sufficiently transparent. Throughout its history, the nuclear industry has been shrouded in secrecy. To some extent, that was inevitable because the industry's purpose in the early days was the production of nuclear weapons, but when the veil has been lifted, there have always been expressions of false optimism—about the value of certain technologies, the cost of certain projects and the predicted cheapness of units of electricity.
Those shortcomings have been seized on by the industry's detractors, and when combined with the—often wholly unsupported—assertions about safety, the technology has been dismissed out of hand.
I believe that the case for nuclear power can and should be made. However, I have never made any secret of my opposition to privatising nuclear power. I am realistic enough to know, though, that once it has been sold off, it will not, barring a catastrophe, be brought back to the public sector. I hope that the debate will give due warning to those considering investing in the industry that the sums do not add up. Later on, taxpayers will not take kindly to being asked to cough up more so as to subsidise the segregated fund.
If the Government cannot meet their responsibilities, the sooner we get a Government who are prepared to do that, the better. The plain fact is that we do not know with any certainty what the costs will be. The Government have consistently chosen the rosiest scenarios, and the figures on which they have based their expectations have almost always been those that are most trouble free. I am not a Jeremiah when it comes to the nuclear industry—I happen to think that it has performed well in some ways—but I am not prepared to watch the industry being handed over to the private sector with no proper consideration being given to the costs of decommissioning or even to the form of that decommissioning. Neither am I convinced that the quinquennial review will be sensitive enough to deal with the problems as they arise.
Within two or three years, and before the five-year cycle is up, there could be serious financial difficulties which taxpayers, not shareholders, will be called upon to deal with. The industry is of great strategic importance. Consequently, it should not be thrown away, and its problems and disadvantages should not be treated as lightly as the Government have approached them this evening.
8.8 pm
Mr. Piers Merchant: I suppose that these days I should begin by declaring a transient interest, in that my wife and I were taken to the ballet about a year ago by Dr. Robert Hawley and his wife. He, of course, is the former chief executive of Nuclear Electric and the current chief executive of British Energy. I hasten to add that we did not discuss the nuclear industry or its privatisation. I mention that—apart from feeling that I ought to—because I know Bob Hawley well. In fact, I worked with him when he led Northern Engineering Industries, the north-east engineering conglomerate.
I am in a position to make a judgment—which is that this man has a tremendous ability in engineering, as well as great experience in private industry. I believe that he will give great leadership to the industry in the private sector. That is important because the House and the public are right to be concerned about the quality of leadership, particularly in an industry that is obviously sensitive.
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I strongly support the movement of the nuclear industry into the private sector. I have become a great believer in privatisation, based on my judgment of the experience of privatised industries over the past 15 years. I did not come to the subject in any dogmatic sense and, unlike many of my hon. Friends, I did not start with a strong presumption that only the private sector could deliver the quality and efficiency that we now see in the industries that have been transferred from the state. I have applied my judgment and watched as the industries have been transferred. We have seen a watershed in the development of industry in this country. In industry after industry, successes and efficiencies have sprung from competition.
My right hon. Friend the President of the Board of Trade referred to just one statistic week, but it tells a story. Before privatisation, the industries were costing the taxpayer £50 million a week; the taxpayer is now gaining, in terms of tax paid, approximately £55 million a week. That is only one aspect of it. The benefits that have flowed to consumers are tremendous and the opportunities that the industries have been able to develop are significant.
Three areas in the nuclear industry will gain. First, the consumer will gain because the electricity industry will have additional competition, which will produce greater efficiency. We have already heard that the average electricity bill is likely to be reduced by some £20 as a result of the fall in the fossil fuel levy, which has been made possible as a result of the privatisation that is now going into effect. That benefit will be felt by every consumer of electricity.
Secondly, taxpayers will benefit directly from the proceeds of the sale. They will also benefit as a result of the transfer of liabilities. I have done a quick calculation in my head—approximately £4.4 billion-worth of liabilities will be transferred from the taxpayer to the private sector. That is a significant benefit to the taxpayer.
Thirdly, the industry will benefit in a number of ways: it will be able to make its own commercial judgments, to run its affairs free from political interference, to decide on its investment programme and its capital plans, and—perhaps most significant of all—be free to operate competitively in the international market.
That is a significant market, and a market in which British experience excels. More than 30 countries have nuclear plants in operation or are building plants that are yet to be commissioned. The expertise that the British nuclear industry has to offer is tremendous. Significant markets can be grasped and, if the industry is free to do so, it will benefit significantly. Privatisation will enable that to happen.
Understandably, there is bound to be some public concern about this privatisation. There is always public concern about change. The public have always been sceptical, if not hostile, about privatisation—but they have slowly changed their views as they have seen the successes and benefits that it has brought. This is a particularly sensitive industry and it is understandable that people should be concerned and need to be assured about the safety aspects. It is regrettable that the Labour party has, at times, sought to exploit that fear, which it knows is groundless. The subject has been examined in great detail by a number of bodies involved.
Mr. Jack Thompson: Does the hon. Gentleman recognise that there is no such thing as total

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safety? Therefore, we can predict that, some time in the future, there will be safety problems. Is he confident that the insurance arrangements, and the premiums that have to be paid, are sufficient? Chernobyl is often referred to, but it was a different type of power station. I refer also to Three Mile Island in America and to the PWR, which was a forerunner to Sizewell. That is an important element. There is a lack of public confidence in the industry and the only way that it can be restored is by ensuring that there is proper provision to protect the public when an accident happens.
Mr. Merchant: The hon. Gentleman is right: there have been problems relating to safety in the nuclear industry. However, I remind him that it is not the only industry to be affected in that way. We cannot guarantee total safety in any industry or in any walk of life. However, it is particularly important in this industry that the safety measures, and the policing of them, are taken to the highest level possible. I believe that they have been, and I shall return to that point in a moment.
The hon. Gentleman referred specifically to insurance. He is absolutely right: it is important that the industry is properly and fully insured. He asked me whether I believe that it is adequately insured. Yes, I believe that the arrangements that exist for the industry, and the international arrangements that underpin it, are satisfactory and sufficient to ensure proper protection in the unlikely event of something going seriously wrong.
There are nuclear power stations in this and many other countries. It is true that they pose a potential risk. However, if the hon. Gentleman imagines that there is a link between the extent of safety protection involved and the nature of the ownership, I hope that I can convince him that that is not the case. The Trade and Industry Select Committee looked at this issue thoroughly, and it concluded that there was no reason why there should be any greater safety risk under privatised ownership than there had been under state ownership.
The Health and Safety Executive has examined the problem, and it has said that there is no evidence to suggest that there would be any greater risk under privatisation.. The industry has also been examined by the World Association of Nuclear Operators, which has said that there is no evidence to suggest that a privately owned industry carries with it any greater safety risk.
I believe that the reverse is true. The hon. Member for Wansbeck (Mr. Thompson) mentioned the horrific accident at Chernobyl. I remind him that the Russian nuclear industry was not in private hands. Indeed, one could say that the Russian nuclear industry was operating in a society that had taken state control to its ultimate conclusion. The significance of that is that there is a tendency in a command economy for the individuals within the structure not to feel a personal responsibility. Therefore, corners are cut, the buck is passed and the system—in this case, the vital safety system—collapses. That is precisely what happened at Chernobyl.
Mr. Purchase: Will the hon. Gentleman concede that the incident at Three Mile Island occurred while the industry was in private ownership? Is he aware that the costs resulting from that incident have not yet been resolved?
Mr. Merchant: I am aware of those factors, but the worst nuclear accident occurred at Chernobyl. I do not
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intend to divert attention from accidents that have occurred in the private sector, and the hon. Gentleman points correctly to one of them. I do not suggest that privatisation automatically means that there is no risk at all: I am merely rebutting the claims made by some members of the public—egged on by Labour Members—that privatisation in itself brings a greater risk. That is palpably not true.
Lady Olga Maitland: Does my hon. Friend agree that there is a great danger of unfounded scaremongering on that point? The allegations made by the hon. Member for Wolverhampton, North-East (Mr. Purchase) about the Three Mile Island incident are not properly founded in fact, and that point has been well established.
Mr. Merchant: My hon. Friend is correct. I wish to quote the comments of two organisations on the safely issue as I believe that it is important to lay to rest the myths that have been propagated in that area. The leading economic consultants, NERA, recently published a report on the impact on safety of privatisation in a number of industries, including the nuclear industry. It concluded:
"Occupational safety standards have improved in nearly all of the privatised firms and industries. In some cases the extent of improvement"
in safety standards
"has been significantly greater than elsewhere in the economy … the incidence of such injuries"
to members of the general public
"is very low on average across the privatised firms and industries … the performance of privatised companies has improved strongly since privatisation".
My second quotation comes from British Energy. I think that it is important to take account of its view, as it will ultimately be responsible for the industry. Peter Haslam, the director of public affairs, wrote to me in March. He said:
"Whilst the regulatory regime in relation to safety will remain fundamentally unchanged, some people may see the relationship between the NII and the Company as more transparent than whilst both were in the public sector. Safety is paramount and both Nuclear Electric and Scottish Nuclear have a Director with responsibility for safety who reports directly to their respective Chairmen. Each event of any nuclear safety significance is investigated with the utmost rigour and importance is placed upon creating a culture of openness. Moreover, the companies achieved a very real improvement in their safety records from the time of Vesting hand-in-hand with a much improved commercial performance. Profit and safety are not antithetical".
I stress that it is clear that the nuclear industry will maintain safety as paramount. None of the structures that have been set up will be diminished—indeed, they will be enhanced. The independent role of the nuclear installations inspectorate and other agencies responsible for safety will be retained. Those independent bodies will ensure that standards are maintained.
Significantly, the people within the industry will ultimately ensure that high standards are achieved. Within British Energy, we have highly qualified, highly motivated engineers, nuclear scientists and managers who have an absolute interest in safety. They will not compromise their standards, quality or integrity in any way. I have complete faith in them. If their integrity is questioned, they know that they ultimately carry personal

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responsibility within a privatised set-up—far more than in the state sector. If anything goes wrong, there will be no hesitation in pointing the finger at them as individuals. Therefore, they will not take any risks.
If that assurance is not sufficient, we know that they are driven by a commercial motive. They know that, at the end of the day, far from putting profit before safety, the maintenance of the profitability of their company is absolutely dependent on their ensuring that safety is paramount. If anything were to go wrong, the enormous costs incurred would wipe out the company's profit for years to come.
For all those reasons, I believe that a myth has been propagated about safety in a privatised nuclear industry. I believe that the industry will be safer in privatised hands, and that any concerns are misplaced. Above all, I believe that privatisation of the industry will bring enormous benefits to the country, to its people—to the consumer and the taxpayer—and to a great, innovative British industry. For those reasons, I congratulate my right hon. Friend on the verve with which he has pursued the privatisation, and I am delighted that it is virtually in place.
8.25 pm
Mr. Matthew Taylor: I shall keep my remarks fairly short. I have spoken about this matter twice before in the House and I do not intend to restate the issues. Even at this late stage in the Government's plans, I stress that the privatisation is wrong and will prove hugely costly to the British taxpayer. It also carries some risks that I do not believe the people of this country will accept. Therefore, I urge the Government to think again.
The privatisation and the sweeteners that have been offered to the private sector have incurred criticism from the Select Committee on Trade and Industry. The European Commission has launched an investigation into illegal state aid and we have watched the barely concealed warring between British Energy and the Government over the scale of the liabilities that should follow assets into the private sector.
In spite of the Minister's remarks, it now appears that the war has been well and truly won by private sector interests. We have yet to count the costs that the public will pay through job losses and a tax bill that is likely to run into billions of pounds. There have been repeated ministerial pledges that the taxpayer will not lose out, but the recently published prospectus does not back them up. Amid confusion about the detailed figures, one thing is striking: the taxpayer will be significantly worse off after privatisation.
As the motion points out, proceeds from the sale of the nuclear power stations that are up for grabs are likely to be less than the cost of building Sizewell B alone. In a previous debate on the subject, I described the nuclear industry as a white elephant. Although I was taken to task on that occasion by the hon. Member for Ayr (Mr. Gallie), I stand by my words. How can something that is eventually sold for less than it took to build, and which will be a cost to the taxpayer well into the next millennium, be described as anything but a white elephant?
The money that must be paid out will go towards decommissioning the white elephant. Pledges that the private sector would shoulder the cost of cleaning up the
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power stations after privatisation have been quietly and comprehensively ditched. Long-term bills for the seven advanced gas-cooled reactors and the Sizewell B pressurised water reactor—amounting to an estimated £6.9 billion—will fall on the taxpayer. Even taking into account the likely proceeds from the sale, that leaves the public sector at least £1.2 billion poorer after privatisation. Why must the taxpayer cover that huge cost? The answer is simple: the privatisation would be impossible if the private sector took on all liabilities as well as the so-called assets of the nuclear industry.
Sir Michael Grylls: The hon. Gentleman is talking about the costs of an industry or a product. If he were selling his car, its cost would be quite irrelevant. The price that he gets for it is the price in the market. The price at which people who have applied for shares in this privatisation is the price that they are prepared to pay. He must understand that the price has nothing whatever to do with the cost of the industry.
Mr. Taylor: When we sell a car, that should be the last we see of it. The peculiarity of the nuclear industry is that, once the individual who has bought the car has finished with it, the car is returned and we face an even larger cost for scrapping it safely.
We now know that British Energy is to be exempted from at least some of the costs of reprocessing spent fuel—worth £17 billion. We now know that British Energy is paying only £16 million a year into the fund to pay for the cost of the clean-up operation—which is estimated to be a £3.6 billion saving in comparison with a more realistic and appropriate amount. We now know that the long-term fund assumes investment rates that are likely to leave the taxpayer with a lump sum bill of at least £1.6 billion. Whichever way privatisation is viewed, it is difficult to escape the reality that, yet again, the taxpayer is expected by the Government to subsidise shareholders' profits.
As I have said in the House before, the British public have already paid towards decommissioning through the fossil fuel levy on electricity bills, which has raised £1.8 billion. That public money was diverted to building Sizewell B. Given that the taxpayer is being asked to fork out again for decommissioning, will the Government return that money to the British public? Clearly, the answer is no.
Let us not forget that the privatised power stations are not the only nuclear power stations that will, at some point, need to be decommissioned. What of the Magnox stations—the dirtiest nuclear power stations in the world? They are too much of a liability for even the Government to attempt to privatise them. Who is to pay for that decommissioning? The answer, once again, is the taxpayer. Any profits from the advanced gas-cooled reactors should be going into a decommissioning fund that will cover the eventual cost of all the power stations, but instead it will go into the pockets of British Energy shareholders.
I simply do not believe that there is any way in which private sector efficiencies can cover the liabilities, or the loss of the income stream that the Government would have had for meeting those liabilities—an income stream that we know was inadequate because the Government accept that it is unlikely that the privatised industry will

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be building any further nuclear power stations. In other words, it is not worth their while. Profits will simply not cover the real costs of the industry.
At the very least, do the Government agree that proceeds from the privatisation should be specifically designated to help meet Magnox public sector liabilities? The proceeds would probably not cover the cost of decommissioning the Magnox stations, but they would certainly go some way towards doing so. The proceeds should be placed in a segregated fund, and perhaps, the Government could add to them the £228 million gifted by the taxpayer to British Energy in the form of an endowment—a gift that remains totally without justification.
As we have already heard in this debate, this privatisation raises serious questions about safety in the nuclear industry. I do not agree with the hon. Member for Beckenham (Mr. Merchant) that safety issues should be underrated, although I am glad that he accepts that the nuclear industry carries safety risks. Not all Conservative Members would even accept that. I credit him with being honest. After that, we can disagree or not about whether those risks are worth bearing.
When I spoke in a previous debate on the nuclear industry, I was accused by a Labour Member of scaremongering about safety. I do not think that it is scaremongering to remind the Government of the submission made to the Select Committee on Trade and Industry by Captain Killick, the former director of safety and quality at Scottish Nuclear. He sought to remind the Government that a privatised nuclear industry is likely to
"seek to make small erosions into safety margins for commercial gain."
I do not think that that personally criticises individuals. It is simply in the nature of the profit-centred job that they will be carrying out. The hon. Member for Beckenham was over-optimistic on that front. If a former director of safety and quality in the nuclear industry is concerned at the safety implications of privatisation, surely it is not scaremongering to take those concerns seriously.
Leaked internal documents from the Clifford Chance law firm show that the Government have been warned that cuts in manpower are compromising safety. Do the Government accept that advice, or do they dismiss it, too, as scaremongering? We have learnt that vital safety information was omitted from the privatisation prospectus. We have learnt that nuclear inspectors are increasingly concerned about the loss of skills in the industry and the ability to cope with an emergency. Do the Government consider them to be scaremongering too? As more and more details about privatisation are brought into the public domain, this privatisation makes less and less sense.
Standing in the Chamber today, it is difficult not to feel a sense of deja vu. We are debating for the third time what everyone knows, but which the Government in their quest for privatisation and short-term Government revenue at any cost still refuse to admit: the proposed sale of the nuclear industry is an expensive error of judgment that will cost the taxpayer dear. The Government's approach to the privatisation can be described only as deceitful and inept. We have received assurance after assurance from Ministers that liabilities will follow assets into the private sector. Those assurances have been steadily watered down over recent months, as the extent to which Parliament has been misled has been slowly uncovered.
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The Liberal Democrats have not opposed every privatisation that the Government have proposed. We have sought to address them one by one.
Mr. Eggar: I think that I heard the hon. Gentleman say that Parliament had been misled. I am sure that he did not mean to say that; perhaps he could withdraw that comment.
Mr. Taylor: I think that what the Government have said is misleading. For example, in the previous debate on this subject, I said that the Government had gifted £265 million of taxpayers' money to the privatised nuclear industry. Ministers and others argued that it was not taxpayers' money, but the truth is that that money would otherwise rest with the taxpayer. On a number of other issues, the way in which this privatisation has been addressed is misleading. I do not think that that is unparliamentary or inaccurate.
As I said, the Liberal Democrats have not opposed all privatisations. We have been open to some, and criticised others because of concerns about the way in which industry will respond to those who use the privatised industries, especially utilities such as water. I think that we have been proved right on that.
On nuclear privatisation, the error goes more to the heart of the way in which the Government approach such issues. The Liberal Democrats believe that this privatisation is wholly financially mistaken. Since the Government are not stupid, the privatisation must be about getting short-term returns before the general election and the need for short-term tax cuts. In the long run, the proposed privatisation will be a financial disaster for the British public, and the House should put a stop to it.
8.37 pm
Sir Michael Grylls: I should like to follow the remarks of the hon. Member for Truro (Mr. Taylor), but I think that the point I made in my intervention was right. The value of something is its marketplace value, and that is what we should be considering, but we have been around that course. Decommissioning costs, as the hon. Gentleman knows very well, since he has been talking about them, have been dealt with very effectively through the segregated fund. I know that some of my hon. Friends have been very patient and want to speak, so I shall be brief.
Privatisation of the nuclear industry is one more step down the path of the innumerable privatisations that we have successfully launched and seen through during the past 16 years. The hon. Member for Truro said that it is all about money. Governments need money, and taxpayers resent being robbed of too much money, but a much more important reason for privatisation—I say this seriously to the hon. Gentleman—is freeing industry from the dead hand of government. I include our Government in that. I may be able to take the hon. Gentleman with me at least some of the way, because he has just said that his party has not opposed all the privatisations. My recollection is that the Liberal Democrats have not been very enthusiastic about them, but I shall not go down that path.
The real point is that Governments of all complexions have been bad owners of businesses. Business is the real bottom line. Our post-war history shows that to be true. Governments have been bad owners because they have

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not looked at businesses in a commercial or industrial way. Too often we—I include the Labour party, and I am sure that the Conservative party has done this in the past as well—have been tempted by short-term political advantage to freeze prices in the Post Office or, when the Post Office ran telecommunications, to say that it should not put up prices because a general election was coming up, or to tell British Airways, when it was owned by the Government, that although it had plenty of passengers it could not buy any more aircraft because the Government thought that the electorate would be more impressed if they spent money on schools or hospitals.
The argument has only to be put in that way to show how absurd is the ownership of industry by government. We are bad owners. We look at things in the wrong way. We are politicians. Let us be frank: we are concerned with garnering the votes when a general election or a by-election comes along. We would not be here otherwise. Those are the things that guide us; we should not have industries near us with which we can play around.
I remember Sir Ian MacGregor saying, when he was looking after British Coal—he also successfully guided British Steel to privatisation—that when he made decisions they reverberated all the way down the organisation, and the Secretary of State would be on the telephone asking why he was doing what he proposed, was he sure it was the right thing to do and might it not be better to think again because there was to be a question in the House, or the Select Committee wanted everyone up in front of it. Businesses cannot be run in that way.
My first point is that freeing this industry is just one more step down the path of getting industry out of the hands of government—out of state control, freeing it to make its own decisions, get its own investment and recruit its own people. Some of my hon. Friends will remember when some nationalised industries could not recruit, for example, the best finance director for their businesses because they were not allowed by statute to pay them more than a certain sum of money. The Minister was nervous of saying that a finance director should be paid X in case people said that that was a lot of money and he was blamed. Putting it that way shows the absurdity of it all, but that was the world in which we lived before. Changing that world is what privatisation has been about.
If there is change, and people are allowed to run businesses properly and efficiently according to private sector rules and away from politics, in the end—as we have seen with the other privatisations—consumers will benefit. I believe that exactly the same will happen with the nuclear industry. There will be price cuts for the benefit of consumers.
We in the House of Commons should be proud that, in the earlier privatisation of the rest of the electricity industry, we were one of the first countries, including the United States of America, to try—to a large extent we have been successful—to create a competitive market for electricity. That was done not for the Conservative party, not for doctrinaire reasons, not to bring in the money, but for the benefit of consumers. Consumers who gain from a competitive marketplace.
All sorts of clever people can write articles saying that the present electricity market, with a regulator, the pool and all the complications, is not perfect—I am sure that
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they can make some cogent arguments—but we should take some credit from the fact that we have started, and the market will be refined as the years go by. It is right that we should have privatised electricity generation and that we are now successfully introducing privatisation of the nuclear industry.
I grant the hon. Member for Truro that the establishment of the segregated fund is a fudge in a sense, because nuclear is special. His riposte to me was right, but I think that I, too, am right to say that the actual cost has no relationship to the market price. The hon. Gentleman is right to say that it is a fudge, but it is a balancing act between the contribution that the Government rightly feel that taxpayers should pay for decommissioning, and the contribution that the shareholders will pay for decommissioning. We can argue that the figures should be different, that there should be more for one and less for the other, but that again is a judgment that the Government have had to make. That judgment has to be right, or the privatisation will not be successful.
Mr. Matthew Taylor: My problem is that the Government are sacrificing a known income stream. If someone is to take it over, they have to make a profit, so there must be a loss on that. The only way of making that up is by making efficiency gains in the industry, but nobody will be building new privatised nuclear stations—so how can there be a sufficient gain for the shareholders and how can the Government's return make up for the loss of the income stream? The figures do not add up and nothing the Government have published suggest that they do.
Sir Michael Grylls: The hon. Gentleman will have to wait and see what the efficiency gains will be. We cannot prejudge the matter. It would be ridiculous for me to say that they will be X, Y or Z, and it would be equally ridiculous for him to say that they will not be X, Y or Z. We can, however, make a judgement on the basis of experience. There is no doubt in my mind that the Government underestimated the costs that could be taken out of the regional electricity companies. They were even more inefficient than we thought they were when we privatised them, and huge costs have been taken out of them. I do not know whether there will be such a big cost reduction in the nuclear industry. Let us say that it will not be so much, but I am sure that there will be a large cost reduction in getting away from the Government and running the industry efficiently.
We should also knock on the head the question of safety. Of course it is paramount. In a way, that is a ridiculous thing to say. That is true of any industry. There is nothing particularly special about the nuclear industry, except that a disaster such as occurred at Chernobyl is horrific. In an ordinary factory, a few people are hurt, which is terrible, but it is not a massive disaster that affects thousands of people. It is a question of scale, but the principle is the same.
Parliament has laid down, as hon. Members know, in the Health and Safety at Work etc. Act 1974, how industries should be run safely. The Health and Safety Executive has clearly said that it is happy with the arrangement. If it is not, it will tell the company, and the company will make changes. Once an industry is in the private sector, its directors have a clear responsibility for

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safety and, ultimately, they can end up in prison if they neglect their duties. It is a serious business for the people who run companies.
I am sure—I think that the House will agree—that the industry will take the same rigorous approach to safety whether it is in the public or the private sector. It could be argued that it might be even more rigorous in the private sector, because people's personal futures and the shareholders will be involved. I believe that it will be exactly the same. I compliment those who have worked for so long in the British nuclear industry on the very high standards that have been attained, and which I am sure will be maintained in the future—so we need not have any concerns about that. The structure is in place, through health and safety legislation, the Health and Safety Executive, the duties of the directors and the general responsibilities of the nuclear inspectorate. It is a tightly regulated industry, and quite rightly.
I am confident that this privatisation will follow the path of earlier privatisations, and be another success. I hope that it will be. Some hon. Members have always been against the nuclear industry. I do not want in any way to deride them, because we are all entitled to our view, but it is wrong to carry those views forward to an industry that is successful, has a good safety record, and now has the opportunity to proceed into the private sector. I hope that it will do very well.
Perhaps we should compare the nuclear industry with the mining industry, which has now been successfully privatised. Nobody suggests that, in private hands, coal mines are less safe than they were under public ownership. I do not think that anyone has made that claim. Perhaps they did during debates on privatisation of the coal industry, but I do not think that any hon. Member has said since privatisation that they are being run dangerously. The coal industry has applied stringent and strict safety measures, just as the nuclear industry will when it is in the private sector.
I compliment the Government on this privatisation, and believe that the House will see that it is one more successful privatisation, and one more toy taken out of the hands of government and placed where it should be—in the hands of professional managers.
8.52 pm
Mr. Michael Clapham: The hon. Member for North-West Surrey (Sir M. Grylls) recognised the uniqueness of the nuclear industry but failed to develop that point. Had he done so, he would have recognised that that uniqueness marks it out as an industry that should remain in the public sector.
The United Kingdom's nuclear industry is unique in that it is made up of a mix of stations that are peculiarly British in design, with the exception of the pressurised water reactor. Although the industry lacks the uniformity that is found in some countries—for example, France—the stations are linked in most important ways, so it just does not make any economic sense to privatise the advanced gas-cooled reactors and PWRs and separate them from the Magnox stations.
Together, the AGRs and PWRs have massive liabilities. Magnox stations will be the first stations to be decommissioned, and as a PWR station costs some £3 billion and may have a life of some 30 years, it should be part of the public sector so that the income stream that it
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generates can go towards meeting the enormous liabilities that will have to be met. The House may be aware that the Sadnicki report, which was published on 5 June this year, showed that it is likely that the public sector will be left with liabilities of some £6.9 billion as a result of this privatisation.
I must question some of the points that the Minister made, because on this privatisation the Government have been consistently economical with the truth. They know full well that, if they put their cards on the table, they would not attract investors to the industry. Even though they have kept a veil over certain information, they have still had to use at least £100 million to attract investors.
In the nuclear review, the Government said that the full liability would follow the asset. This evening, I heard the President of the Board of Trade confirm that from the Dispatch Box, but there is still much scepticism. I share some of the fears voiced by the hon. Member for Truro (Mr. Taylor), who speaks for the Liberal Democrats. The House will be aware that the Select Committee on Trade and Industry reported after making a thorough study, yet it was, to some degree, sceptical about the breadth of the segregated fund.
The Select Committee made two recommendations in that regard: first, that the Government should establish more reliable arrangements to ensure that long-term liabilities arising after the closure of the stations are discharged; and secondly, that the Government should set out in detail in the prospectus for British Energy their conclusions about the appropriate level of contributions to the segregated fund, and that the level of provision for that fund should be prudent.
As far as I am aware, that detail has not appeared in the prospectus; because it has been light on information, people are sceptical of the Government's motives. Liabilities for both Magnox and the AGRs, with PWRs, are massive. In undiscounted terms, they are £31.6 billion. Those for the AGRs and PWRs are £14.6 billion. If the Government are correct in what they have been telling the House, the whole of that £14.6 billion will follow the asset.
When we examine the position a little more closely, however, we see that there are certain questions to be raised. The Sadnicki report, published on 5 June, claims that liabilities of £6.9 billion will be left in the public sector. The report begins by looking at the segregated fund. The fund provides for British Energy to contribute just £16 million annually, but the report suggests that that sum should be increased by 800 per cent., to £127 million a year, if the liabilities are to be met.
The report also discusses the discounting of liabilities that already rest with British Nuclear Fuels plc, which—in terms of fuel that has been reprocessed by BNFL—is estimated to be worth some £4 billion. Sadnicki's analysis suggests that the Government will reduce that to just £1.7 billion. The report also examines the way in which the Government are applying the interest rate. It considers the 2 per cent. that Government actuaries advise to be insufficient to ensure that the fund will accrue enough to meet all its liabilities.
Let me sum up the report's analysis. It suggests that the public sector will be left with liabilities of £6.9 billion, but that is not the end of the story: the £6.9 billion will be in addition to the £17 billion of liabilities already created by the Magnox stations. In other words, the public

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sector is likely to be left with a massive £23.9 billion of liabilities as a result of privatisation. It would seem to any sensible person that an industry that creates the liabilities created by the nuclear industry must provide the income stream that the newer stations are able to provide in order to meet such liabilities; in this instance, however, the income stream will go into the private sector, and those massive liabilities will fall on the taxpayer.
Much has been said about safety. I do not want to cover ground that has already been covered in our last debate, but I wish to draw attention to the latest report by the law firm Clifford Chance, which was asked to carry out a survey of the industry and report to the Government. In that report, which has been made available, Clifford Chance stresses that the reduction in skilled manpower in the nuclear industry could lead to error. The industry relies on highly skilled manpower, and in an industry such as this mistakes can be disastrous.
None of that information has been published in the prospectus, but Barclays de Zoete Wedd—the company that has been advising the Government—suggests that the industry will be able to make a profit only by increasing the performance of AGRs from its current 72 per cent. to 82.5 per cent., an enormous leap. The AGRs have so far achieved an operating performance of no more than 74 per cent., back in 1985, and 82.5 per cent. does not seem achievable. Those who are using the prospectus as a guide to investment should have had that information, so that they could make a judgment. The Government know full well however that, if the Clifford Chance report were made available to them, they would decide not to invest after one look at it, because there are so many risks.
The last time we debated the issue, I told the House about the informal network in the industry that passes information from station to station and from engineer to engineer. That is particularly important in relation to safety. When those who gave evidence to the Trade and Industry Select Committee were questioned, they said that there would continue to be no such thing as commercial confidentiality to cut across the network. Since then, I have had the opportunity to talk to senior people in the industry, who now believe that commercial confidentiality is likely to reign. That means that an important network, along which a good deal of information about safety is passed, is likely to be cut. Again, that will add to risk in the nuclear industry.
One of the other things to which the Minister has not referred and which was in the Clifford Chance report concerns liabilities in relation to common law damages. I note, for example, that The Guardian today refers to the report on the issue. The Guardian suggests that the 20,000 "radiation workers" who have been close to radiation—workers who are currently in the industry and who have worked in it—face a high cancer risk, and that, by the end of the century, each year, 200 people who have worked in that nuclear industry sector are likely to develop cancer.
At present, the industry has a no-faults common law system, but if settlements amount to £20,000 on average, 200 people a year means £4 million of common law liabilities. None of that information, however, appeared in the prospectus. Why was that information not in the prospectus?
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The nuclear industry is unique and it needs to be linked together because of the enormous liabilities. When one part of it is privatised, especially the part that comprises newer stations that create an income stream, that income stream is no longer available to deal with the liabilities; consequently, the taxpayer must meet those liabilities.
As I have said, those liabilities are enormous. The segregated fund is not sufficient to be able to cater for them, so clearly the taxpayer will be that much worse off from privatisation. The asset's cash value is extremely low and privatisation would not be possible if sweeteners were not available to investors. If privatisation were abandoned, as it should be, the AGRs and PWRs would be kept in the public sector and the revenue stream that they would generate would go towards dealing with the liabilities. In that sense, it would relieve future taxpayers of having to meet the industry's enormous cost.
9.7 pm
Lady Olga Maitland: I have been listening to a litany of hostile speeches by Opposition Members, bashing the nuclear industry and bashing privatisation.
Mr. Battle: Bashing the figures.
Lady Olga Maitland: The Labour party is bashing the figures without any justification. It is sad that, by running down the industry in that way, it does no—
Mr. Clapham: Will the hon. Lady give way?
Lady Olga Maitland: No. I am going to continue, because the hon. Gentleman has had plenty of time to make his remarks.
Mr. Clapham: I want to return to that point.
Lady Olga Maitland: Nevertheless, I am going to continue.
The nuclear industry has been a source of enormous pride to the country. I am delighted by the idea that, at long last, we are going to privatise it, which is marvellous news for customers, for taxpayers and, ultimately, for the nuclear industry.
I first became interested in the industry in the 1960s, a long time ago, when my father was known as Patrick Maitland and was the prospective Member of Parliament for Caithness and Sutherland. I remember going around Dounreay, which was up and running and a thriving show for the future: there was no doubt about it. Ultimately, we will run out of fossil fuels and everyone, everywhere will have to rely on the nuclear industry. I had an opportunity to learn at first hand how it would become part of our everyday lives and how not only we but our children would depend on it. Dounreay meant a great deal for the whole country and brought a tremendous amount of vibrancy to the local economy in terms of jobs and infrastructure.
Moving on from those early days, it is exciting to think what privatisation will do for the industry and the country. Nuclear energy will undoubtedly gain much greater commercial freedom. It is appropriate for the Government to hand over all management decisions to the professionals, who know the business and should control

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investment—so that they no longer have to be influenced by public spending levels or other considerations. The industry should have the freedom to compete for and win business in overseas markets, like any other venture.
The right to manage the industry professionally matters, but so do the industry's customers. We will all benefit from lower electricity bills. Surely there cannot be anything wrong with that prospect. It is absolutely right to support greater competition in the electricity generation market, which will come from greater efficiency, responding to consumer need and lower prices. A typical household electricity bill is set to fall by £20 as a result of nuclear privatisation and will tumble further as time passes. The taxpayer will also benefit. The proceeds of privatisation will go into the public purse, which must be good news, and the company's liabilities will be transferred from the public to the private sector—which will then take responsibility and run the risks.
I acknowledge that safety is paramount, but I intensely dislike Labour's exploitation of that aspect for political purposes, to frighten people when there are no grounds for doing so. Scaremongering about the nuclear industry has been going on a long time and is unacceptable. In the 1980s, the Campaign for Nuclear Disarmament concerned itself with defence issues; but as soon as it started losing that argument, CND turned its attention to the nuclear industry for political purposes and tried to terrorise the public into feeling uncertain and uncomfortable. If such propagandists think that they are winning, they are wrong. The Government have consistently put a high price on safety. There is no reason, just because the industry is to be privatised, for anyone to believe that safety will be jeopardised.
The existing regulatory mechanisms will remain in place. The nuclear installations inspectorate will continue to enforce safety. Other bodies that have offered an opinion are in no doubt that safety will be properly regulated and rigorously applied. The Select Committee on Trade and Industry, after extensive investigation, concluded that the privatisation of British Energy need not result in any reduction in safety.
The World Association of Nuclear Operators said that it is
"aware of no evidence to suggest that the ownership (i. e. public or private) has any bearing on the level of safety and reliability achieved".
As my hon. Friend the Member for Beckenham (Mr. Merchant) pointed out in his speech, the Health and Safety Executive has made clear its support; it has no doubts about the matter.
In the light of all that evidence and that strong support, I am sorry that the right hon. Member for Derby, South (Mrs. Beckett) should, on a quite unfounded basis, turn up the fear factor.
Mr. Battle: She has not.
Lady Olga Maitland: The right hon. Lady issued a press release on 17 November last year, which stated:
"people have all along feared that safety would take second place to the Conservatives' need to raise money for tax cuts".
If that is not blatant scaremongering for political purposes—without any foundation whatsoever—I do not know what is. That quotation tells me and everyone else one thing: Labour is certainly not fit to govern.
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I am delighted with this debate. I am delighted that we have had the opportunity to welcome the privatisation of a very important part of British industry. I have absolutely no doubt that everyone will benefit, that the electorate will feel comfortable about the way in which we are transferring the industry into the private sector and that they will give it their total support.
9.15 pm
Mr. Ken Purchase: It comes ill from the hon. Member for Sutton and Cheam (Lady Olga Maitland) and from Conservative Members generally to complain that Opposition Members have in some way for political purposes raised the spectre of a nuclear incident. It comes very ill from them because the purpose of this privatisation is completely political—to get a few more quid in the jam jar so that the Government can give it away in tax cuts to sweeten the electorate before the next general election. If anyone is playing politics with the nuclear industry, the blame rests fairly and squarely on Conservative Members. There should be no doubt about that in people's minds.
It is interesting that at least two Conservative Members who have spoken in thisdebate—especially the hon. Member for Beckenham (Mr. Merchant)—made the point that, in general, safety records of former Government-owned utilities have improved since privatisation. A report which came out only a few days ago stated that safety records had improved.
In the years between privatisation and now, would it not be amazing if gains had not been made in industry and plant safety and operation? It would have been even more amazing if, in 1945, we had nationalised the coal industry, for example, on the basis that we wanted to improve safety. It would have been even more amazing had real gains in safety not been made.
As technology moves on, men and women work more safely, and processes, efficiency and effectiveness are improved. Those are normal developments in a dynamic technology, and they have occurred in this and in many other industries. It would therefore be quite extraordinary if the claim that safety records have improved could not be substantiated.
The point is that the nuclear industry's safety record should be second to none—a point that Opposition Members have repeatedly proclaimed. The point is that privatisation—or commercialisation—brings to bear unnecessary pressure on workers to cut corners, to increase productivity to meet specific financial targets. That is particularly relevant to safety in the nuclear industry, because, so far as possible, nuclear reactors must continue working without interruption if they are to operate most economically.
Very often—three times recently—we have heard about incidents in which a reactor should have been closed down but was closed down too late or not at all. Fines have been levied for those incidents. We are introducing an unnecessary commercial imperative into the industry. The British nuclear industry has one of the best safety records. It is continuing to make considerable productivity gains and, for as long as the installations remain in commission, it will continue to produce electricity at a lower and lower cost.
Sir Michael Grylls: I am following the hon. Gentleman's argument carefully. He said that the

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pressures on a privatised nuclear industry would make it less safe. If he could point to any of the industries that we have privatised in all these years in which that has happened, his argument might have some strength. I cannot recall any that have become less safe because of commercial pressures in the private sector.
Mr. Purchase: The hon. Gentleman need not exercise his memory any longer. Right now, the level of injuries in the coal industry is rising.
Mr. Eggar indicated dissent.
Mr. Purchase: It is true. The level is much higher than it was under the National Coal Board.
The issue of ownership is now in the political frame for both sides of the House and there is merit in arguing that it is outcome, not process, that is important. The nuclear industry is special, because the inherent dangers of an accident are tumultuous compared to those from any other form of energy generation. Because of that, it is important that it should remain the responsibility of the Government of the day. The Government should not be attempting to get out from under that responsibility.
I mentioned earlier that the incident at Three Mile Island did not involve just a matter of ownership. That nuclear incident almost led to a catastrophe, and to this day, settlements have not been made in the civil courts for those who claim to have suffered injury.
Anyone considering investing in the British nuclear industry, particularly those intending to hold the shares for any length of time—that is another matter—should recognise that the insurable costs that he or she is likely to have to meet will grow year on year as the underwriters and the industry begin to understand that the risks cannot be properly quantified. The message that should go out is that insurance premiums will rise and there is likely to be an increasing liability on the industry in private hands to meet the unquantifiable risks attached to it.
The Secretary of State mentioned the £100 million dividend that will be provided early in the life of this privatisation. He said that it will come about because the industry has a healthy cash flow. It is true that the industry is generating cash, but the Secretary of State will surely recognise that, although the cash flow might appear to be large, it may not necessarily be positive when measured against the company's liabilities either on or off the balance sheet. Cash flow is simply a measure of ability to pay current bills, not past or future bills. In truth, the present liabilities, on a discounted basis or otherwise, are very large. That is why the Government have to make special arrangements to discount at an inappropriate rate.
It is estimated that, by some miracle—Treasury magic—£7 billion has been knocked off the cost of disposing of the liabilities. That has been done very simply. It is not a miracle and is not even a sleight of hand. It is no more than a cheap trick. The Government have changed the discount rate from 2 to 3 per cent. so that the liability is down from £21 billion to £14 billion. One can play that game for ever.
I was privileged to serve on the Committee that considered the Crossrail Bill. The Government became anxious about the liabilities, the costs and the payback on
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the investment and changed the discount rate the other way. They knocked it down from 8 to 6 per cent. to give a better cash flow. That is merely an accountants's manoeuvre—and they will do what they are told in the interest of serving their political masters. There has been jiggery-pokery in determining the liabilities of the industry.
I shall briefly discuss what the brokers have had to say about the privatisation. [Interruption.] I always listen to what they have to say. I like to see how the shares that I have not got would have been doing had I bought any.
Mr. Lang: Does the hon. Gentleman not let the union do it for him?
Mr. Purchase: I do not at all let the union do it for me.
Justin Urquhart-Stewart of Barclays said:
"This is only for certain people because there are obvious risks. The business isn't even profitable yet."
That bears out what I was saying about paying the dividend from cash flow, which is fully committed before a dividend has been paid. He added:
"Please Sids, don't enter this one."
Eric Hathorn of Henderson Crosthwaite expects stags to make a quick profit when trading starts in the middle of next month. That is because everyone is looking at the short term. No one wants to hold the stock for long; people know that the liabilities will catch up with them. It is good for the stags. Mr. Hathorn will not be classifying the stock as high-quality earnings. He says:
"You cannot feel sure that you will get a steady growth in profits. And if anything goes wrong, you have a scare of BSE proportions."
If that is what the broking world says, other people should be careful.
Finally, decommissioning is a muddle. It was never properly explained or dealt with in the House or in Select Committee. It is estimated that decommissioning costs will amount to some £4 billion, according to the utility's estimates. However, the discounted cost, due to compounding, will be only £700 million. That is what the industry says. The Minister said something similar this evening.
Barclays de Zoete Wedd estimates that decommissioning costs will amount to 11 per cent. of nuclear liabilities. The discount is so large because the period in which funds can be compounded is very long—175 years. Put simply, that means that generations as yet unborn will pick up the price tag for the folly of the Government's privatisation plans for the nuclear industry. It is a special industry for which Government, and Government alone, should bear responsibility. There is no way the Government—in the immortal words of the late John Smith, the "Not me guy, Government"—will properly accept their responsibilities.
The typical lifetime of a modern nuclear power station is 40 years, with perhaps one or two extensions. That is followed by 135 years of decommissioning. That second period starts with three years to remove highly radioactive fuel elements, after which the plant must be left to cool for 130 years.
There are two counts to answer. The liabilities of the industry cannot be properly quantified; nor can the insurance risks. Responsibility for the industry lies solely with the Government of the day. Failure to take responsibility will be paid for not at the next general

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election, or even the one after, but by generations as yet unborn. That is the responsibility that the Government bear and the burden that they should consider. It is the reason that they should not press on with what they call the final burst, which, unfortunately, in historic language, may prove to be a final solution.
9.29 pm
Mr. John Battle: My hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), in an excellent speech, referred to the reaction of some of the City brokers to this sale. I shall begin by quoting a comment that appeared in the Lex column of the Financial Times. It started wonderfully:
"Go to a closing down sale, and you expect to pick up something cheap. Certainly, the final offering of the British government's great privatisation bazaar—British Energy, the nuclear generator—looks a classic bargain in the making. Inevitably, many investors will fall back on yield-based valuations which underrate the company's potential to gear up and churn out cash. Furthermore, daunted by British Energy's vulnerable revenues and heavy long-term liabilities, they may even demand a higher yield than even Railtrack fetched."
It is a disgrace that the House has not had the opportunity to debate this privatisation properly in Government time, as it did the privatisation of Railtrack. It is estimated that this privatisation will, in the short term, perhaps raise as much cash as that privatisation. We last debated nuclear privatisation in Opposition time on 26 March. Since then, our detailed questions on the financial deal and the details have never been properly answered. Indeed, as we have seen since the draft prospectus has been published, those questions are even more pertinent now than when we posed them on 26 March.
We still have not received a proper response from the Government on the Floor of the House to the Trade and Industry Select Committee's report on nuclear privatisation. The Government seem determined to push on with it regardless of the costs and, to some extent, in contempt of consideration in the House. Why? On 8 November 1989, the Government were totally opposed to any sale of the nuclear industry. The nuclear industry was withdrawn from the proposed privatisation of the electricity industry.
The then Minister declared in the House that retaining the nuclear industry in the public sector was
"the best way of ensuring a long-term future for nuclear power in this country."—[Official Report, 8 November 1989; Vol. 159, c.1174.]
Those were the words of the Minister at the Dispatch Box. Now the Government, in a desperate dash for cash, are day by day sacrificing any long-term interests on the altar of the short-term cash fix, in a final bid to buy back what many of us now regard as their irretrievably lost popularity.
Let us recall the history. On 9 November 1989, the then Secretary of State for Energy, now Lord Wakeham, was adamant. He spoke about the unprecedented guarantees that were being sought by the City if privatisation was even mooted. He said:
"I am not willing to underwrite the private sector in this way."— [Official Report, 9 November 1989; Vol. 159, c. 1171.]
Nuclear power stations were originally kept out of electricity privatisation precisely because, if the liabilities were to follow the assets, those power stations would be
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totally unattractive to the market. The power stations would have been unsellable and the Government knew that.
So what did the Government have to do? They realised that they had to make nuclear power stations sellable, and did so by fudging the relationship between the liabilities and the assets and pushing as much as they could on to the public sector.
Ever since 4 March this year, when the marketing programme was launched, we have seen nothing but more and more underwriting, as each week has moved towards the final sell-off. New sweeteners have been revealed week by week to make the industry more acceptable to any prospective buyer. It has been the sweetener deal of the century.
Let us not forget that the Government are not privatising all the nuclear industry. That rather kills off the arguments of Conservative Members who have spoken in eulogistic terms about privatisation in principle. This is the Government who decided to privatise a bit of the nuclear industry. They are privatising the seven modern advanced gas-cooled reactors and the new pressurised water reactor, Sizewell B, which was opened only a few weeks ago. They are leaving the nine aging Magnox stations and BNFL behind, leaving all their liabilities in the public sector.
In other words, the Government are flogging off the current cash-generating end of the business, leaving behind in the public sector a large part of the liabilities for reprocessing spent fuel, decommissioning and shutting down nuclear plants, and the management, treatment and disposal of radioactive waste. All those irradiated liabilities are being left behind effectively in the public sector, yet we have repeatedly been told that yes, liabilities will follow assets.
Our opposition to the privatisation of the nuclear industry has been focused around the financing of the deal.
Mr. Miller: I wanted to put this point to the President of the Board of Trade, but he would not give way. Does my hon. Friend agree that the problem might be even worse than he has described because, in recent years, the Magnox stations have been run at an extremely high output level, thus bringing forward embrittlement problems, benefiting the Exchequer to the disadvantage of the new company? Does he think that the short-term attitude adopted by the company emphasises the way that it has appallingly abused a great asset of the country?
Mr. Battle: My hon. Friend pinpoints in detail the short-termism that is going on. He is absolutely right.
I add as a rider that all that we have seen from the Government and in the prospectus is based on a rosy, most optimistic possible assessment. My hon. Friend the Member for Clackmannan (Mr. O'Neill) said that the assumption of the load of the new industry sector was originally set at 82 per cent. for the seven AGRs and Sizewell B. Never in history has that figure been reached. I gather that the Government have dropped the figure to 75 per cent. now, but the best year's performance was 74 per cent., as my hon. Friend said.
Those are incredibly rosy assessments of what will happen to the privatised bit, but they are based, as my hon. Friend said, on what has been happening to what is

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left behind as a short-term deal to prime the industry for sell-off. In other words, the Government's nuclear sums are skewed in favour of a massively subsidised sweetener deal. That is the reality. Eight power stations are being sold off for less than the price of building one and taxpayers will be left with billions of pounds of nuclear liabilities well into the next century.
Let us look at some nuclear arithmetic. City estimates now say that the sale will raise £1.7 billion. The Government's original estimate was £2.6 billion, yet Sizewell B, the power station that has just been opened, cost £2.964 billion to build in March 1995 prices.
That power station was built from the proceeds of the nuclear levy that was stuck on to everyone's electricity bill, ostensibly to pay for the waste disposal of the liabilities. In other words, electricity consumers paid to build Sizewell B directly, although Parliament was never told about that. The French were, in the deal with the interconnector, but not Parliament.
Then what is revealed to us? On 13 June this year, not in this place but in the House of Lords, the Government conceded that the historic cost of the power station is £9.3 billion. Yes, we do know the difference between market cost and historic cost, but the historic cost does not magically disappear. Even the asset value of British Energy was written down by £1 billion from £6 billion to £5 billion between the publication of last year's accounts and the launch of the prospectus. That £1 billion disappeared from somewhere in the accounts.
In a written reply in May this year, the Minister told his colleague, the hon. Member for Colchester, South and Maldon (Mr. Whittingdale):
"there has been a permanent diminution in the value of certain nuclear fixed assets of about £1.2 billion"
since 31 March 1995. Furthermore, he said:
"the fixed assets will stand in the balance sheet of British Energy at approximately £5 billion."—[Official Report,10 May 1996; Vol. 277, c. 295.]
That was the first time the Government admitted that they had marked down the price by £1 billion at public expense. The liabilities associated with the Magnox stations were valued at £8.5 billion by the Government at the time of the nuclear review, and they were to be met from the £2.6 billion built up from the value of the assets. Now we find that the AGR and PWR sale proceeds will be much less than £2.6 billion, so the shortfall is bound to fall on the general taxpayer.
In that written answer to which I just referred—one of those planted replies that gives us information if we look out for it on a wet Friday afternoon—the Minister said that taxpayers' liabilities would be capped at £3.8 billion—a maximum, not an estimated actual spend. It is reasonable to argue that any gap between the sale proceeds and the amount paid for by taxpayers in this way is a cost to taxpayers—of decommissioning Magnox stations—without the benefits of the revenue stream from the power stations that are being sold off.
I predict that, before many years are out, if the sale proceeds on the terms proposed by the Government, the Public Accounts Committee will find itself exposing a scandal of Pergau dam proportions, as the financial fixing that has gone into preparing British Energy for the market is revealed. My hon. Friend the Member for Barnsley,
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West and Penistone (Mr. Clapham), a member of the Select Committee with great expertise in those matters, used a wonderful parliamentary expression: the best that we can say about the figures, he said, is that the Government are being economical with the truth. My hon. Friend the Member for Wolverhampton, North-East spoke of accountancy manoeuvring. Both expressions accurately reflect what is going on.
Let us consider the liabilities for a moment, not forgetting that the Government are selling off only the more modern half of the industry. The Government promised that a shortfall in the decommissioning of the older Magnox stations would be met by the sale proceeds, not least because the older Magnox stations will lose the income from the newer nuclear generators. As the sale proceeds will be insufficient to cover the decommissioning costs, Ministers have loaded the £3.8 billion back on the taxpayer.
Certainly, the Government have set up a segregated sinking fund to deal with British Energy's liabilities; but while BE puts in £16 million a year, the public sector companies remaining behind will contribute £228 million after privatisation. In other words, British Energy's clean-up costs come in the form of a dowry—the Secretary of State's word. I understand that a dowry is a gift for setting up a new relationship. In this case, the Government will extract it from the balance sheets of the publicly owned nuclear companies.
I want to ask the Minister again for an answer to a question that we have regularly posed. Is he any clearer yet about the financial relationship between BNFL and the Magnox industry? The Government propose a merger, but neither knows what liabilities it will have to pick up. As Mark Baker of Magnox put it in his evidence to the Select Committee, he is still not fully aware of the eventual shape of his balance sheet.
This is a short-term, short-sighted financial fix—aptly advertised as a final burst of energy at the end of the Government's programme. Perhaps it is their last gasp before they disappear completely. The claims that we have heard tonight about cheaper electricity prices are pretty rich coming from the Conservative party, which slapped VAT on electricity bills. If they removed it, there would be much greater savings than there will be under this scheme.
The long-term future of British Energy remains the great unknown. Will the newly privatised entity continue to sell its electricity through the pool to the grid on privileged terms, or will it be asked to compete on an equal footing with other private generators? This week's Utility Week states:
"British Energy faces the prospect of defaulting on a £500 million loan taken out with five banks as part of its leap into the private sector because of changes to rules … This could dent the profitability of the privatised company. Indeed BE's pathfinder prospectus said any Grid Code change having a 'material adverse effect' could be grounds for defaulting on the loan."
I would be interested to hear the Minister's comments on that. What about the dash for gas? It is suggested that British Energy will move away from nuclear energy and move into gas. Everyone is moving into gas, so its prospects as a competitor are being diminished.
No one believes that this is a good long-term investment. Recently, a stockbroker in Yorkshire tried to talk up the prospectus on the radio. He was asked whether

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he would buy shares and he said, "Certainly not in the long term." He was complimented on his honesty. He said that the shares would be of value only in the short term—that people with £300 to spare will buy on day one, but they will sell on day two and pick up a tidy sum on the way out. It is a subsidised sale.
The Government are selling off taxpayers' assets at a massively knocked-down price—they are trying to get as much liquid cash as they can to prime a pre-election tax bribe. This is a desperate last dash for cash. It should be called off because we will all pay for generations to come. Perhaps it is too late for the Government to call this off, but they ought to allow a party with a longer-term vision to put its prospectus before the British people and to call a general election.
9.45 pm
The Minister for Industry and Energy (Mr. Tim Eggar): I congratulate the right hon. and hon. Members who have attended the debate—greater men or women hath made no greater sacrifice than to attend the debate this evening. I have a little reservation about the judgment of the Labour Front Bench in choosing this topic at this time. I think that the Scots are more loyal to the alternative attractions than the English, and I can understand why.
It would have been helpful to the reputation of the hon. Member for Leeds, West (Mr. Battle) and of the House if the hon. Gentleman had made some elementary inquiries before writing his speech. He went on at some length about the absence of accounts for Magnox Electric—yet I have a copy of them in my hand. They were published, and well publicised, at the end of last week. A call to Magnox Electric or to my office would have revealed that, and I would have been delighted to pass them on to the hon. Gentleman.
The main theme of the Labour party's attack—if it can be called that—has been a reprise of the argument that it has used at every privatisation debate. The Labour party has opposed every privatisation over the past 17 years and it has used almost identical arguments every time—although even NERA has come up with a safety analysis that shows that the Labour party's safety scares in relation to privatisation have been ill founded.
We believe that privatisation is good for the customer, good for the company and for the shareholder, and good for the taxpayer. We believe that the privatisation of Nuclear Electric will be as successful as previous privatisations.
I have enjoyed one particular aspect of the debate. The hon. Member for Wolverhampton, North-East (Mr. Purchase) did something quite remarkable: he obviously sat down with the Financial Times and a great mound of brokers' circulars at his side last Sunday night and worked out the best investment opportunities for the Purchase household. He came across selective quotations from particular brokers, on the flotation of British Energy.
I welcome the hon. Gentleman to the capitalist world and to the world of wealth creation. I have a wonderful image of him up there in the north sitting behind his reproduction oak desk. Now that he is a modern new Labour man, perhaps he is linked to the Internet. If the reports were on the screen in front of him, he would not have to look through a great mound of documents. I have obviously impugned the hon. Gentleman, so I shall give way.
Mr. Purchase: I have been involved in wealth creation for almost all my working life. I use the tools of the trade and not the Financial Times. I was the chap who created the production output for the Financial Times to write about.
Mr. Eggar: I am delighted with that rewriting of history. I wish the hon. Gentleman well in his new career as a stock market analyst—I am sure that it will enhance his prospects under new Labour.
Safety was a recurring theme in hon. Members' speeches. I make it absolutely clear that there is no way in which the Government or the company will imperil safety. While I was absent from the Chamber, I understand that the hon. Member for Barnsley, West and Penistone (Mr. Clapham) referred to today's Guardian article. The story was totally predictable—only yesterday afternoon, I guessed that The Guardian would run another nuclear scare story this morning. True to form, it did just that and, true to form, that story proved to be as unfounded as the previous ones.
What I found particularly reprehensible about the article—I understand that the hon. Gentleman referred to this point—was its reference to the national average risk of dying from cancer. It is true that, nationally, the average risk of dying from cancer is one in four. However, in practice and as a matter of fact, it is not the case that nuclear workers are at a greater risk of contracting cancer. Research shows categorically that average cancer rates among workers in the nuclear industry are below the national average. It does the hon. Gentleman no credit to repeat such a scare story.
Mr. Clapham: I raised that statistic in the context of liabilities for common law damages. The article in The Guardian said that, by the end of the century, probably 200 people per year would have a common law claim against the nuclear industry. Therefore, I ask whether there is a no-fault scheme. How do the Government intend to replace that scheme? If we are talking about an average of £20,000 per claim, that amounts to a big liability of about £4 million per year. If that is the case, the information should have been in the prospectus.
Mr. Eggar: The hon. Gentleman is stating, at least implicitly, that cancer is caused by working in the nuclear industry. There is no evidence that that is so. Whatever other debates we may have about the nuclear industry, it does no one any good to promulgate such a scare story.
The hon. Member for Leeds, West referred to statements by my noble Friend Lord Wakeham in November 1989. It is quite true: we decided at that time that it was not in the taxpayers' interest to sell the nuclear industry. It is a great credit to the management and the employees—including the trade unions—in the nuclear industry that they improved the efficiency and the productivity of that industry so that it can now be privatised, with good returns for the taxpayer and benefits for those same employees.
Mr. Wilson: Will the Minister give way?
Mr. Eggar: No, I shall not give way to the hon. Gentleman. He has not been present during the debate except at the very beginning.
Mr. Wilson rose—
Mr. Eggar: I will not give way. The hon. Gentleman did not sit through the debate.

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I must repeat again that liabilities have followed assets in the proposals for the sale of British Energy. We have made it clear in the past that that will happen, and I repeat quite categorically and unreservedly that liabilities will follow assets and that British Energy is responsible and will remain responsible for the liabilities that are associated with its stations.
The right hon. Member for Derby, South (Mrs. Beckett) and the hon. Member for Leeds, West made two particular criticisms. They accused the Government of setting the dividend at too high a level and, almost in the same breath, criticised us for selling British Energy too cheaply. New Labour claims to be the friend of industry and, like the hon. Member for Wolverhampton, North-East, to have learned how financial markets work. It has, however, failed to grasp a very simple point. All other things being equal, a higher dividend being paid by the company increases its value, and in contradistinction, a lower dividend decreases its value. That simple fact means that the Government cannot at the same time be setting too high a dividend, which was one accusation, and simultaneously be selling the company too cheaply. Almost all companies are valued in relation to a multiple of the dividend that is being paid.
The hon. Member for Leeds, West simply does not understand the difference between profits in accounting terms and cash flow. It is up to the directors of the company to decide what they can afford to pay in dividends. As a general rule, from the taxpayers' point of view, the higher the dividend, the higher the proceeds that will be realised. The hon. Gentleman must understand that, by arguing for lower dividends, he is in effect arguing for lower proceeds for the taxpayer. He may not understand that, but it is an irrefutable fact, and it would be welcome if he admitted it.
When I first entered the House back in 1979, the Government owned the gas industry, the electricity industry, the coal industry and, in practice, much of the United Kingdom's rapidly expanding oil industry. As my hon. Friend the Member for North-West Surrey (Sir M. Grylls) said, in effect Ministers decided prices and made investment decisions. Those great utility industries were in practice cynically used as part of micro-economic decision taking by—one regrets to say—Governments of both major parties. As my right hon. Friend the President of the Board of Trade said, under Labour, that system gave us 2 per cent. increases in electricity prices on a six-weekly basis. As he also said, it meant that taxpayers paid £50 million a week in subsidies rather than receiving £55 million a week in taxes as they do now.
In practice, back in 1979, the Government decided what energy we should be provided with in our homes and what we should pay for it. That is all behind us. The sale of British Energy completes the privatisation of the energy sector. The benefits of that privatisation programme for customers are there for all to see. We in Britain have led the world in creating competitive energy markets. This privatisation shows that we are maintaining that lead.
The Opposition have opposed the privatisation of the nuclear industry, just as they have opposed every other privatisation. They said that electricity privatisation would mean that prices would rise. In practice and in fact, prices have fallen. They said that nuclear privatisation would
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saddle the taxpayer with huge liabilities and compromise safety. In fact, liabilities will follow assets into the private sector and everybody has made it clear that safety will continue to be paramount.
Privatisation is good for the company, for shareholders, for employees and for consumers, who will benefit from increased competition and from more downward pressure on prices. Privatisation is good for the taxpayer, who will benefit from significant proceeds and a substantial reduction in the cost of liabilities left in the public sector.
I ask the House to support the Government's amendment.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 235, Noes 266.

Division No. 152]

[10.00 pm

AYES

Adams, Mrs Irene

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

Ainger, Nick

Denham, John

Ainsworth, Robert (Cov'try NE)

Dewar, Donald

Allen, Graham

Dixon, Don

Anderson, Donald (Swansea E)

Dowd, Jim

Armstrong, Hilary

Dunwoody, Mrs Gwyneth

Barron, Kevin

Eastham, Ken

Battle, John

Etherington, Bill

Bayley, Hugh

Fatchett, Derek

Beckett, Rt Hon Margaret

Faulds, Andrew

Benn, Rt Hon Tony

Field, Frank (Birkenhead)

Bennett, Andrew F

Flynn, Paul

Benton, Joe

Forsythe, Clifford (S Antrim)

Bermingham, Gerald

Foster, Rt Hon Derek

Berry, Roger

Foster, Don (Bath)

Blunkett, David

Fraser, John

Boateng, Paul

Fyfe, Maria

Bradley, Keith

Galbraith, Sam

Bray, Dr Jeremy

Gapes, Mike

Brown, Gordon (Dunfermline E)

Garrett, John

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

Gerrard, Neil

Burden, Richard

Godman, Dr Norman A

Byers, Stephen

Godsiff, Roger

Callaghan, Jim

Golding, Mrs Llin

Campbell, Mrs Anne (C'bridge)

Gordon, Mildred

Campbell, Menzies (Fife NE)

Graham, Thomas

Campbell, Ronnie (Blyth V)

Grant, Bernie (Tottenham)

Campbell-Savours, D N

Griffiths, Nigel (Edinburgh S)

Canavan, Dennis

Griffiths, Win (Bridgend)

Cann, Jamie

Grocott, Bruce

Carlile, Alexander (Montgomery)

Gunnell, John

Chidgey, David

Hain, Peter

Chisholm, Malcolm

Hanson, David

Church, Judith

Hardy, Peter

Clapham, Michael

Harman, Ms Harriet

Clark, Dr David (South Shields)

Hattersley, Rt Hon Roy

Clarke, Tom (Monklands W)

Hill, Keith (Streatham)

Clelland, David

Hinchliffe, David

Clwyd, Mrs Ann

Hodge, Margaret

Cohen, Harry

Hood, Jimmy

Connarty, Michael

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

Corbett, Robin

Howarth, George (Knowsley North)

Corbyn, Jeremy

Howells, Dr Kim (Pontypridd)

Cousins, Jim

Hoyle, Doug

Cox, Tom

Hughes, Kevin (Doncaster N)

Cummings, John

Hughes, Robert (Aberdeen N)

Cunliffe, Lawrence

Hughes, Roy (Newport E)

Dafis, Cynog

Hughes, Simon (Southward)

Dalyell, Tam

Ingram, Adam

Darling, Alistair

Jackson, Glenda (H'stead)

Davies, Bryan (Oldham C'tral)

Jackson, Helen (Shef'ld, H)

Davies, Chris (L'Boro & S'worth)

Jamieson, David

Davies, Rt Hon Denzil (Llanelli)

Janner, Greville

781

Jenkins, Brian (SE Staff)

Pickthall, Colin

Jones, Ieuan Wyn (Ynys Môn)

Pike, Peter L

Jones, Jon Owen (Cardiff C)

Pope, Greg

Jones, Lynne (B'ham S O)

Powell, Sir Ray (Ogmore)

Jones, Martyn (Clwyd, SW)

Prentice, Bridget (Lew'm E)

Jones, Nigel (Cheltenham)

Prentice, Gordon (Pendle)

Jowell, Tessa

Primarolo, Dawn

Kennedy, Charles (Ross,C&S)

Purchase, Ken

Kennedy, Jane (L'pool Br'dg'n)

Quin, Ms Joyce

Khabra, Piara S

Radice, Giles

Kilfoyle, Peter

Randall, Stuart

Lestor, Joan (Eccles)

Raynsford, Nick

Lewis, Terry

Reid, Dr John

Liddell, Mrs Helen

Rendel, David

Litherland, Robert

Robertson, George (Hamilton)

Livingstone, Ken

Robinson, Geoffrey (Co'try NW)

Lloyd, Tony (Stretford)

Roche, Mrs Barbara

Llwyd, Elfyn

Rooker, Jeff

Loyden, Eddie

Rooney, Terry

Lynne, Ms Liz

Ross, Ernie (Dundee W)

McAllion, John

Ross, William (E Londonderry)

McAvoy, Thomas

Rowlands, Ted

McCartney, Ian

Sheerman, Barry

Macdonald, Calum

Shore, Rt Hon Peter

McFall, John

Short, Clare

McKelvey, William

Simpson, Alan

Mackinlay, Andrew

Skinner, Dennis

McLeish, Henry

Smith, Andrew (Oxford E)

Maclennan, Robert

Smith, Llew (Blaenau Gwent)

McNamara, Kevin

Snape, Peter

MacShane, Denis

Soley, Clive

Madden, Max

Spellar, John

Maddock, Diana

Squire, Rachel (Dunfermline W)

Mahon, Alice

Steel, Rt Hon Sir David

Mandelson, Peter

Steinberg, Gerry

Marek, Dr John

Stevenson, George

Marshall, David (Shettleston)

Stott, Roger

Marshall, Jim (Leicester, S)

Strang, Dr. Gavin

Martin, Michael J (Springburn)

Sutcliffe, Gerry

Martlew, Eric

Taylor, Matthew (Truro)

Maxton, John

Thompson, Jack (Wansbeck)

Meacher, Michael

Tipping, Paddy

Meale, Alan

Touhig, Don

Trickett, Jon

Michael, Alun

Turner, Dennis

Michie, Bill (Sheffield Heeley)

Tyler, Paul

Michie, Mrs Ray (Argyll & Bute)

Vaz, Keith

Milburn, Alan

Walker, Rt Hon Sir Harold

Miller, Andrew

Wallace, James

Mitchell, Austin (Gt Grimsby)

Walley, Joan

Moonie, Dr Lewis

Wardell, Gareth (Gower)

Morgan, Rhodri

Welsh, Andrew

Morley, Elliot

Wicks, Malcolm

Morris, Rt Hon Alfred (Wy'nshawe)

Wigley, Dafydd

Morris, Estelle (B'ham Yardley)

Williams, Rt Hon Alan (Sw'n W)

Morris, Rt Hon John (Aberavon)

Williams, Alan W (Carmarthen)

Mowlam, Marjorie

Wilson, Brian

Mudie, George

Winnick, David

Mullin, Chris

Wise, Audrey

Murphy, Paul

Worthington, Tony

O'Brien, Mike (N W'kshire)

Wray, Jimmy

O'Brien, William (Normanton)

Wright, Dr Tony

O'Hara, Edward

Young, David (Bolton SE)

Olner, Bill

O'Neill, Martin

Tellers for the Ayes:

Orme, Rt Hon Stanley

Ms Ann Coffey and Ms Janet Anderson.

Parry, Robert

NOES

Ainsworth, Peter (East Surrey)

Arnold, Jacques (Gravesham)

Aitken, Rt Hon Jonathan

Atkins, Rt Hon Robert

Alexander, Richard

Atkinson, David (Bour'mouth E)

Atkinson, Peter (Hexham)

Alison, Rt Hon Michael (Selby)

Baker, Nicholas (North Dorset)

Allason, Rupert (Torbay)

Baldry, Tony

Amess, David

Banks, Matthew (Southport)

Arbuthnot, James

Banks, Robert (Harrogate)

782

Bates, Michael

Freeman, Rt Hon Roger

Batiste, Spencer

Fry, Sir Peter

Bellingham, Henry

Gale, Roger

Bendall, Vivian

Gardiner, Sir George

Beresford, Sir Paul

Garel-Jones, Rt Hon Tristan

Biffen, Rt Hon John

Garnier, Edward

Body, Sir Richard

Gill, Christopher

Bonsor, Sir Nicholas

Goodlad, Rt Hon Alastair

Booth, Hartley

Goodson-Wickes, Dr Charles

Boswell, Tim

Gorman, Mrs Teresa

Bottomley, Peter (Eltham)

Gorst, Sir John

Bottomley, Rt Hon Virginia

Grant, Sir A (SW Cambs)

Bowden, Sir Andrew

Greenway, Harry (Ealing N)

Bowis, John

Griffiths, Peter (Portsmouth, N)

Boyson, Rt Hon Sir Rhodes

Grylls, Sir Michael

Brandreth, Gyles

Gummer, Rt Hon John

Brazier, Julian

Hague, Rt Hon William

Bright, Sir Graham

Hamilton, Neil (Tatton)

Brooke, Rt Hon Peter

Hampson, Dr Keith

Brown, M (Brigg & Cl'thorpes)

Hannam, Sir John

Browning, Mrs Angela

Hargreaves, Andrew

Bruce, Ian (South Dorset)

Hawkins, Nick

Butcher, John

Hawksley, Warren

Butler, Peter

Hayes, Jerry

Butterfill, John

Heald, Oliver

Carlisle, John (Luton North)

Heathcoat-Amory, Rt Hon David

Carrington, Matthew

Hendry, Charles

Carttiss, Michael

Heseltine, Rt Hon Michael

Cash, William

Higgins, Rt Hon Sir Terence

Channon, Rt Hon Paul

Hill, Sir James (Southampton Test)

Chapman, Sir Sydney

Hogg, Rt Hon Douglas (G'tham)

Churchill, Mr

Horam, John

Clappison, James

Hordern, Rt Hon Sir Peter

Clark, Dr Michael (Rochford)

Howell, Rt Hon David (G'dford)

Clifton-Brown, Geoffrey

Howell, Sir Ralph (N Norfolk)

Coe, Sebastian

Hughes, Robert G (Harrow W)

Congdon, David

Hunt, Rt Hon David (Wirral W)

Conway, Derek

Hunt, Sir John (Ravensbourne)

Coombs, Anthony (Wyre For'st)

Hunter, Andrew

Coombs, Simon (Swindon)

Hurd, Rt Hon Douglas

Cope, Rt Hon Sir John

Jack, Michael

Cormack, Sir Patrick

Jenkin, Bernard

Couchman, James

Jessel, Toby

Cran, James

Johnson Smith, Sir Geoffrey

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

Jones, Gwilym (Cardiff N)

Curry, David (Skipton & Ripon)

Jones, Robert B (W Hertfdshr)

Davis, David (Boothferry)

Kirkhope, Timothy

Day, Stephen

Knight, Mrs Angela (Erewash)

Deva, Nirj Joseph

Knight, Rt Hon Greg (Derby N)

Devlin, Tim

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

Dorrell, Rt Hon Stephen

Knox, Sir David

Douglas-Hamilton, Lord James

Kynoch, George (Kincardine)

Dover, Den

Lait, Mrs Jacqui

Duncan, Alan

Lang, Rt Hon Ian

Duncan Smith, Iain

Leigh, Edward

Dunn, Bob

Lennox-Boyd, Sir Mark

Durant, Sir Anthony

Lester, Sir James (Broxtowe)

Dykes, Hugh

Lidington, David

Eggar, Rt Hon Tim

Lloyd, Rt Hon Sir Peter (Fareham)

Emery, Rt Hon Sir Peter

Lord, Michael

Evans, David (Welwyn Hatfield)

Luff, Peter

Evans, Jonathan (Brecon)

MacGregor, Rt Hon John

Evans, Nigel (Ribble Valley)

MacKay, Andrew

Evans, Roger (Monmouth)

Maclean, Rt Hon David

Evennett, David

McLoughlin, Patrick

Faber, David

McNair-Wilson, Sir Patrick

Fabricant, Michael

Maitland, Lady Olga

Fenner, Dame Peggy

Major, Rt Hon John

Field, Barry (Isle of Wight)

Malone, Gerald

Fishburn, Dudley

Marland, Paul

Forman, Nigel

Marlow, Tony

Forsyth, Rt Hon Michael (Stirling)

Marshall, John (Hendon S)

Forth, Eric

Martin, David (Portsmouth S)

Fowler, Rt Hon Sir Norman

Merchant, Piers

Fox, Dr Liam (Woodspring)

Mills, Iain

Fox, Rt Hon Sir Marcus (Shipley)

Mitchell, Andrew (Gedling)

783

Mitchell, Sir David (NW Hants)

Spink, Dr Robert

Moate, Sir Roger

Spring, Richard

Monro, Rt Hon Sir Hector

Sproat, Iain

Needham, Rt Hon Richard

Squire, Robin (Hornchurch)

Nelson, Anthony

Stanley, Rt Hon Sir John

Neubert, Sir Michael

Stephen, Michael

Newton, Rt Hon Tony

Stewart, Allan

Nicholls, Patrick

Streeter, Gary

Nicholson, David (Taunton)

Sumberg, David

Norris, Steve

Sweeney, Walter

Onslow, Rt Hon Sir Cranley

Sykes, John

Oppenheim, Phillip

Tapsell, Sir Peter

Ottaway, Richard

Taylor, Ian (Esher)

Page, Richard

Taylor, John M (Solihull)

Paice, James

Taylor, Sir Teddy (Southend, E)

Patnick, Sir Irvine

Temple-Morris, Peter

Pattie, Rt Hon Sir Geoffrey

Thomason, Roy

Pawsey, James

Thompson, Sir Donald (C'er V)

Peacock, Mrs Elizabeth

Thompson, Patrick (Norwich N)

Pickles, Eric

Thornton, Sir Malcolm

Porter, Barry (Wirral S)

Thurnham, Peter

Porter, David (Waveney)

Townend, John (Bridlington)

Portillo, Rt Hon Michael

Townsend, Cyril D (Bexl'yh'th)

Powell, William (Corby)

Tredinnick, David

Rathbone, Tim

Trend, Michael

Redwood, Rt Hon John

Twinn, Dr Ian

Renton, Rt Hon Tim

Vaughan, Sir Gerard

Viggers, Peter

Richards, Rod

Walden, George

Riddick, Graham

Waller, Gary

Rifkind, Rt Hon Malcolm

Ward, John

Robathan, Andrew

Wardle, Charles (Bexhill)

Robert, Rt Hon Sir Wyn

Waterson, Nigel

Robinson, Mark (Somerton)

Watts, John

Roe, Mrs Marion (Broxbourne)

Wells, Bowen

Rowe, Andrew (Mid Kent)

Wheeler, Rt Hon Sir John

Rumbold, Rt Hon Dame Angela

Whitney, Ray

Sackville, Tom

Whittingdale, John

Sainsbury, Rt Hon Sir Timothy

Widdecombe, Ann

Scott, Rt Hon Sir Nicholas

Wiggin, Sir Jerry

Shaw, David (Dover)

Wilkinson, John

Shephard, Rt Hon Gillian

Willetts, David

Shepherd, Sir Colin (Hereford)

Wilshire, David

Shepherd, Richard (Aldridge)

Winterton, Mrs Ann (Congleton)

Sims, Sir Roger

Winterton, Nicholas (Macc'fld)

Skeet, Sir Trevor

Wolfson, Mark

Smith, Sir Dudley (Warwick)

Yeo, Tim

Soames, Nicholas

Young, Rt Hon Sir George

Speed, Sir Keith

Spencer, Sir Derek

Tellers for the Noes:

Spicer, Sir James (W Dorset)

Mr. Timothy Wood and Mr. Simon Burns.

Spicer, Sir Michael (S Worcs)

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the publication of the Pathfinder prospectus for the sale of British Energy which confirms that the sale fulfils the Government's commitment to ensuring that liabilities follow assets into the private sector and is a good deal for the taxpayer who will benefit from equity proceeds, debt repayment and the permanent transfer to the private sector of responsibility for almost £4 billion of nuclear liabilities, for British Energy employees who will now have the opportunity to take a real stake in the future of their industry, for Magnox Electric which will be a robust public sector company capable of meeting its liabilities as they fall due; and further notes that the privatisation of British Energy serves the long term interests of the taxpayer, the industry, and consumers; and condemns the persistent attempts by the Opposition to undermine this and other privatisations.

TRIBUNALS OF INQUIRY (EVIDENCE) ACT 1921
Motion made, and Question put,
That it is expedient that a Tribunal be established for inquiring into a definite matter of urgent public importance, that is to say, the abuse of children in care in the former County Council areas of Gwynedd and Clwyd.—[Dr. Liam Fox.]
Hon. Members: Object.
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): As there is no Business of the House motion, the debate cannot continue if hon. Members object. The motion must be tabled on a later date.

ESTIMATES
Motion made, and Question put forthwith, pursuant to Standing Order No. 131(2) (Liaison Committee),
That this House agrees with the Report [11th June] of the Liaison Committee.—[Dr. Liam Fox.]
Question agreed to.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

CIVIL AVIATION
That the draft Stansted Airport Aircraft Movement Limit (Amendment) Order 1996, which was laid before this House on 20th May, be approved.—[Wr. Liam Fox.]
Question agreed to.

Orders of the Day

  TRUSTS OF LAND AND APPOINTMENT OF TRUSTEES BILL [LORDS]
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 90(6) (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

  EUROPEAN COMMUNITY DOCUMENTS
  Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees),

  CONSERVATION OF WETLANDS
  That this House takes note of European Community Document No. 8564/95, relating to the wise use and conservation of wetlands; welcomes the call for a Community strategy on the conservation and wise use of wetlands; supports the Ramsar Convention's definition of sustainable use as 'human use of a wetland so that it may yield the greatest continuous benefit to present generations while maintaining its potential to meet the needs and aspirations of future generations'; shares the Government's concern to avoid duplication of existing national and international provisions; and shares the Government's view that the planned Demonstration Programme on coastal management will be a helpful and important means of providing information on broader issues of co-ordination.—[Dr. Liam Fox.]
  Question agreed to.

  LOCAL GOVERNMENT FINANCE (SCOTLAND)
  Ordered,
  That the Order [11th June] that the Special Grant Report on Community Care Special Grant and Supplementary Mismatch Scheme Grant for 1996–97 be referred to the Scottish Grand Committee be discharged and that the instrument shall stand referred to a Standing Committee on Delegated Legislation.—[Dr. Liam Fox.]

  Mr. R. Massey (Blight Compensation)
  Motion made, and Question proposed, That this House do now adjourn.[Dr. Liam Fox.]
  10.14 pm
  Sir Peter Fry: I have introduced this matter for consideration only after protracted correspondence between my constituent Mr. Massey and myself, and between myself and the Highways Agency and the Ministers responsible for roads and for local government. There has also been correspondence between Mr. Massey and a host of public servants. The failure to make any impact, stretching back well into 1994, necessitated my bringing the case to public attention.
  The Higham Ferrers and Rushden A6 bypass was dreamed up before the war, was thought to have died and was forgotten, only to be resurrected in recent years—a welcome, if somewhat unexpected, resurrection. There was such little faith in it ever being built that, when my constituent Mr. Massey bought his house in Elizabeth way, Higham Ferrers, in 1970, he tells me that his solicitor did not bother to tell him that the road was a possibility. The local council built some bungalows for the retired, which will be well within 100 yd of the new road.
  I do not want, however, to spend time arguing the road's merits. It is broadly welcomed as being needed, and I am grateful to my hon. Friend the Minister for Transport in London for his help in ensuring that it is to be part of the private finance initiative, and moves are being made to seek tenders. Like all such projects, however, some people have suffered. One of them is Mr. Massey.
  There are three main concerns. The first is road blight generally. It has increased as a result of the slowdown in new road construction. Uncertainty as to if, as well as when, a project is to be built has grown. Secondly, the guidelines for discretionary purchase under section 246(2A) of the Highways Act 1980 have never been especially generous, but, as amended after the Owen case, they have become much less generous. The statutory and other preconditions seem to ensure that the minimum number of houses will be included in the scheme. Thirdly, as it stands in law, the assessment system for council tax purposes has no mechanism to reflect severe reductions in value resulting from road blight.
  I will take those points in turn and relate them to Mr. Massey's case.
  Road blight can have the most disastrous effects on an individual's finances. Mr. Massey says that, even with the general drop in market values, his house should be worth nearly £80,000 on independent estimates, but an agent puts its current value at £65,000. That is a serious matter for my constituent. There is no guarantee that he could sell even at £65,000 before the road is built, which, at best, is still two years or more away. Made redundant more than five years ago, he wished to sell his house to invest the capital in a new business. He is now in his 60s, but will receive no pension until he reaches the age of 65, so he has been living off his savings.
  In the normal course of events, Mr. Massey could have sold his house, moved and invested, but the bypass plans, together with the legislation on discretionary purchase, have produced the present unfortunate position. Even if

  787
  the date for building the road is fixed, his loss is established, as it will take property prices some time to recover. By then, Mr. Massey, like all of us, will be a few years older.
  There is a need to assess possible purchase guidelines on a more sympathetic premise than currently exists. Mr. Massey's first application for his house to be bought met the condition regarding the closeness of the new road of less than 100 m from his home and the hardship criterion, and it was tacitly accepted that he also met the requirement of not being able to sell his property.
  At that time, the one criterion that Mr. Massey did not quite meet was the estimated level of traffic noise by the year 2013, which was calculated at 63 dB to the human ear. The level set by the Highways Agency at which noise has a serious effect is 68 dB. The agency quotes 62.5 dB as the level at which communication starts becoming difficult, and 70 dB as reflecting the noise made by a passenger vehicle travelling at 60 km per hour at 7 m, yet Mr. Massey—like all of us—is supposed to accept a higher level in his home.
  We are all aware of homes in which communication becomes difficult, but I never realised that it had to meet a standard set by the Department before compensation for road noise became applicable. It could provide an excuse for all sorts of silences in all kinds of families. Even a noise level of 63 dB is clearly an inconvenience.
  Mr. Massey has pointed out in a number of letters that the estimated noise level is based on traffic flows and density 17 years ahead, in 2013. The Department's forecasting record is not encouraging. From my years on the Transport Select Committee, I know that previous forecasts by Ministers, before my hon. Friend began his tenure in office, have been dismally wrong—well on the low side.
  The figure given for 2013 must be a guess, and is probably a poor one at that. The Department has admitted the possibility of a 20 per cent. error either way in some of its other traffic forecasts. In Mr. Massey's case, that would mean that he could suffer noise levels well above those estimated—even approaching that of a modern twin-engine jet—by the year 2013, which is so far away that such an estimate is realistic in view of Mr. Massey's present problems.
  No wonder my constituent feels that the rules or guidelines are made to ensure the minimum number of purchases. My opinion is that the guidelines have been drawn too tightly. If one meets all the criteria, bar one that depends on an unprovable forecast, one does not qualify for purchase consideration. That seems extremely hard law.
  It is obvious from all the communications that the Highways Agency has considerable sympathy with my constituent. In a letter dated 9 February 1995, the agency's Mr. Keith McKenzie wrote:
  "I am sorry to have to give you a disappointing decision after so lengthy an exchange of correspondence. However, there is a slight possibility that this decision may be subject to review now that the Highways Agency's application for leave to appeal to the House of Lords in the Lt Col Owen case has been rejected. New guidelines are being prepared, but I am unable to say when they will be introduced, or exactly what they will contain. However, the main effect of the changes will be that the Highways Agency will need to take into account loss in value of the property attributable to a
  788
  proposed scheme when assessing whether its enjoyment is seriously affected, and therefore whether it falls to be considered for discretionary blight. Your case will be reconsidered when the new guidelines are introduced."
  A change was necessary—as quoted—because the Highways Agency lost its case against Colonel Owen of Gloucestershire.
  What in fact happened? When the new guidelines were issued, there were some sweet-sounding phrases, such as
  "each application for discretionary purchase will be considered on its merits".
  Further on in the document, after listing three major factors constituting "severe effects", it states:
  "The factors listed in these guidelines are not exhaustive. Other factors or combination of factors may cause serious effects and this Agency will take these into account when considering your application".
  The net result of the changes, however, was that they were not helpful. Instead of an applicant having to show that no offer for the property was received within 5 per cent. of the unaffected market value, as under the old guidelines, the figure was raised to 15 per cent. So much for the hints of a promise to Mr. Massey that a change might help him.
  I believe that the whole basis of discretionary purchase needs to be re-examined. There seems to be a case for special consideration in cases of exceptional financial hardship, such as Mr. Massey's. Perhaps it should not be necessary to meet all the criteria to be considered for purchase.
  As for council tax valuation, Mr. Massey's local council and the district valuation officer have been sympathetic, but say that they have no power to do anything. I realise that my hon. Friend the Minister is not responsible for this part of Government policy, but I hope that he will pass on my concerns to his colleagues at the Department of the Environment. It is bad enough to see the value of one's house falling because of market forces, but to see it fall much further because of road blight, to have no redress and still to have no chance of even a lower council tax valuation and banding only adds insult to injury.
  I see my constituent's case as follows. He has been injured because he became redundant, because he is prevented from helping himself, and because of the operation of the law as it is now interpreted. The insult is that the Highways Agency gave him hope that the change in the guidelines might be beneficial. In fact, it made matters worse.
  My constituent and those in a similar position deserve consideration. They deserve another look at the guidelines, and they deserve better.
  I hope that I have shown that Mr. Massey has a real problem and a justified sense of injustice. My purpose in raising this matter is my belief that it illustrates a very real issue for very many people. Governments, whether local or national, take decisions—to build roads, to alter the lines of roads and to improve roads—which impinge greatly on the lives and finances of families.
  To my mind, we have not yet shown, under any Government, the necessary concern or taken the necessary action to help many of those families. I believe that fact is a challenge for my hon. Friend the Minister and for his Department and its policy in the future.
  10.27 pm
  The Minister for Transport in London (Mr. Steve Norris): I congratulate my hon. Friend the Member for Wellingborough (Sir P. Fry) on securing this opportunity to discuss this case, which, as he rightly says, is of wider interest to many hon. Members, precisely because people such as Mr. Massey have been affected.
  It is important to start by setting out the principles on which the Department will compensate those who are affected by schemes introduced by the Highways Agency. Similar arrangements exist for schemes introduced by local authorities, but it might be more appropriate to concentrate in this case on matters relevant to my Department.
  The general principle, as my hon. Friend has rightly said, is that, where properties are required for a scheme and where the property falls within the line that the road scheme will take, the property will be acquired at value. A compulsory purchase order mechanism exists to ensure that a scheme can proceed once it has achieved the necessary powers. Clearly, there will be those" who have properties which are not on the line of route but are adjacent to it, and that is what we are concerned about tonight.
  Parliament quite properly recognised that there needed to be a system that would compensate such people for loss in value. However, I do not believe that it is unreasonable to accept the proposition that it will never be possible to compensate every owner whose property might be affected to a slight degree by a new scheme. Were we to attempt to do so, we would rapidly enter a world in which government would be wholly unworkable, and in which the cost of new pieces of infrastructure would be unaffordable.
  The general principle is clear, and is contained in part I of the Land Compensation Act 1973. It establishes that, a year after a scheme is opened—a year after a road has been built—a property owner, subject to certain qualifications about being in residence and so on, who can establish that there has been a diminution in value will be compensated for that diminution.
  In the direct context of Mr. Massey and the Higham Ferrers and Rushden bypass, let me make one thing clear. A year after the opening of the scheme, Mr. Massey would have an unequivocal right to compensation under part I of the Land Compensation Act.
  If that is so, we turn to the proposition that, in addition to those powers, discretionary powers should be available to the Secretary of State. The circumstances about which we are concerned are those where, essentially, the individual cannot wait. I say that because I suspect that, quite frequently, the nature of discretionary purchase is not as well understood as it might be. I can understand why that is so, because emotions can run high in such matters.
  If we are to have a scheme that advances the claim that Mr. Massey would be able to make under the Land Compensation Act, we need to establish certain things. First, we need to establish that Mr. Massey had no foreknowledge of the scheme when he purchased his property. Secondly, we need to prove that the scheme will have an effect, which it is not possible to determine exactly, because the road has not yet been built.
  My hon. Friend talked about how one calculates the effect of noise. If he will allow me, I must tell him, gently, that I disagree with his view on that. Having established
  790
  that there is a loss of value, a further test needs to be applied, and that is the test of a pressing need to sell. It is the pressing need to sell that ultimately determines that it is right in equity for Parliament and the Department to authorise the purchase of an individual's property in advance of the scheme even being built.
  Let me deal with the calculation of loss of value. As my hon. Friend said, following the reassessment of the guidelines in the wake of the Owen judgment, two elements remain to be proven. One is the effect of noise on the scheme. He said that calculations that predict noise levels many years ahead may be inaccurate. I do not think that I do him any injustice by recalling that he said that they may be wildly inaccurate. That is true, but I remind him that the purpose of using a predictive, rather than an actual, calculation is twofold.
  First, because the scheme has not been built, all calculations of noise level must necessarily be predictive. Secondly, it would be unfair to the occupier of a property to assess noise only at the point at which the scheme was first opened. A date many years in the future is picked precisely because traffic builds up over time.
  Although I admit that such predictive science is inexact, I know that my hon. Friend, with his experience, will acknowledge that the officials who make such calculations do so as objectively as they are able. The test is good for the people concerned, because they get the benefit of the doubt in respect of the growth of traffic on a piece of road, even though it is unlikely to happen for many years.
  In the case of Mr. Massey, much depends on the assessment both of noise and of diminution in value. On noise, I believe that there is no disagreement between Mr. Massey, his agent and the Department on the proposition that the predicted noise is unlikely to reach the levels that are generally considered to trigger the threshold for discretionary purchase.
  On diminution in value, the position is more marginal. I can put some figures on the case that my hon. Friend made. The district valuer, whose opinion is the important one in such cases, assesses the unaffected value of Mr. Massey's property at £70,000, and the affected value at £60,000. He thus calculates a diminution in value of 14 per cent. While 14 per cent. is a material difference, it is less than the figure of 15 per cent. that my hon. Friend mentioned, which was in turn drawn from paragraph 3(a) of the new guidelines.
  My hon. Friend said that 15 per cent. is rather higher than 5 per cent. He is right, but in calculating serious effect and diminution in value, it is necessary to establish that the diminution in value is significant. He will accept that, if one asks for a valuation from any three private valuers, there will be a margin of difference of about 10 per cent. That sort of fluctuation can be tested any day, in any town, anywhere.
  So the figure of 15 per cent. is designed to indicate the figure at which there has been beyond doubt not merely a difference in valuation but an undoubted diminution in value arising from the prospect, if not the reality, of a scheme. That said, the difference in this particular case is 14 per cent. Taking account both of the fact that the noise calculations would appear to indicate that Mr. Massey's particular property will not suffer to the extent of the increase in noise normally taken into account in schemes such as this, and that the value of his property will not be

  791
  diminished by more than 14 per cent. according to the district valuer's calculations, the Highways Agency has concluded that Mr. Massey's claim cannot be met. Let me be clear that it cannot be met on the grounds that he has not passed the tests of serious effect by way of noise or diminution in value.
  I appreciate that the decision will come as a disappointment to Mr. Massey. I understand that he has suffered the loss of his job and that he seeks to use the proceeds of the sale of his property perhaps to re-establish himself in some business for the future. I am therefore concerned that my hon. Friend should be given every opportunity to prosecute his case.
  Although I have not so far been made aware of any exceptional circumstances which would enable me to change my opinion in this case, if my hon. Friend believes that there are exceptional factors which have not been made known to the agency or to me or given adequate consideration, I invite my hon. Friend to write to me about them, and he and I will discuss the matter further.
  I am, of course, concerned that, if it is agreed that the affected value of Mr. Massey's property should be £60,000 if he markets the property properly with a view
  792
  to sale, he ought to be able to receive that figure. If, after he has properly marketed it, the indications are that he is not able to receive that sort of consideration, I should certainly wish to look at the case again.
  I am extremely grateful to my hon. Friend for, as he rightly says, raising an extremely important subject, which is of interest to every Member of the House of Commons. I hope that he will accept that, having wrestled with such difficult cases for several years, I know that we will never be in a position to satisfy all those who feel aggrieved by the existence of a scheme—particularly one which, as he has every right to say, has a long history of not becoming a reality. Nothing is more frustrating.
  In this case, I am satisfied that the guidelines have been properly applied, and, with regret, I concur with the officials, including Mr. McKenzie, who have been in touch with Mr. Massey. I fear that I cannot at this stage exercise discretion on his behalf. I simply underline the fact that, if circumstances prove not to be as predicted or assumed, I should be very happy to go on discussing the matter with my hon. Friend.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes to Eleven o'clock.

PRIME MINISTER

  Engagements
  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [32060]

  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Tuesday 18 June. [32061]

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

  Berlin Bombing 1986
  Sir Teddy Taylor
  To ask the Prime Minister what changes have taken place in respect of Government policy relating to responsibility for the bombing of United States soldiers in 1986 in Berlin; what measures were taken to secure further information relating to Libyan involvement; and if he will make a statement. [32819]

  The Prime Minister
  None. The investigation of the 5 April 1986 bombing in Berlin is a matter for the German authorities.

  Sir Teddy Taylor
  To ask the Prime Minister if he will raise at the next meeting of the European Council the refusal of the United States Government to provide to the German prosecution authorities communication intercepts which the US authorities stated provide proof of the Libyan involvement in the Berlin Bombing in 1986; if he will raise the issue as being of community competence; and if he will make a statement. [32967]

  The Prime Minister
  No. This is a matter for the United States authorities.

HOME DEPARTMENT

  Buckley Hall Prison
  Ms Lynne
  To ask the Secretary of State for the Home Department when he received the board of visitors' first annual report for Buckley Hall prison; and on what date it will be published. [30683]

  Miss Widdecombe
  The board of visitors' first annual report for Buckley Hall covering 1995 was received by my right hon. and learned Friend on 26 March.
  376
  Boards of visitors' annual reports are not published documents. They are made to the Secretary of State who permits the board, if it wishes, to publish its report. In this case, the board decided at its meeting on 4 June to publish its annual report. A copy of the report can be made available to the hon. Member on written request to the vice-chairman of the board of visitors, Mr. J. H. Clements.

  European Union Flag
  Mr. Redmond
  To ask the Secretary of State for the Home Department 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. [31507]

  Mr. Howard
  I gave instructions that, as in previous years, the European Union flag should not be flown from Home Office buildings on 8 May.

  Wandsworth Prison
  Mr. Cox
  To ask the Secretary of State for the Home Department what are the present plans to refurbish A and B wings of Wandsworth prison; what is the estimated cost of such work; when is it proposed that this work will commence; and if he will make a statement. [32467]

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

  Letter from Richard Tilt to Mr. Tom Cox, dated 18 June 1996:
  The Home Secretary has asked me to reply to your recent Question about the present plans for the refurbishment of A and B wings at Wandsworth prison.
  The Prison Service is considering three options for the refurbishment of A and B wings at Wandsworth prison which are not used at present. They are:

  (i) comprehensive refurbishment at an estimated cost of £14m;

  (ii) refurbishment and the installation of sanitation at an estimated cost of £11 m;

  (iii) installation of basic sanitation at an estimated cost of £6m.

  The start date for whichever option is chosen will depend on capital availability. Our aim is to start the work as soon as possible, given the general pressure on space in the prison system.

  Prison Places
  Mr. George Howarth
  To ask the Secretary of State for the Home Department what was the average cost of a place in each prison for the financial year 1995–96. [32353]

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

  Letter from A. J. Pearson to Mr. George Howarth, dated 18 June 1996:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question about the average cost of a place in each prison for the financial year 1995–96.
  These figures are not yet available. They will be sent to you as soon as they are ready.

  Firearms Acts (Home Office Circulars)
  Mr. William Ross
  To ask the Secretary of State for the Home Department if he will place in the Library an index of all Home Office circulars since 1967 relevant to the administration of the Firearms Acts 1968, 1992 and 1994, giving the number of circular, dated of issue and title. [32870]

  Mr. Maclean
  I have today placed an index of such circulars in the Library as requested.

  Domestic Violence
  Ms Lynne
  To ask the Secretary of State for the Home Department when is the next scheduled meeting of the ministerial group on domestic violence. [32697]

  Mr. Maclean
  I expect the group to meet again soon, once a range of work that has already been commissioned for it has been completed.

  Ms Lynne
  To ask the Secretary of State for the Home Department for what reasons it is not possible for his Department to identify separately offences of domestic violence within the regular recorded crimes series collected centrally by the Home Office; and what plans he has to collate such statistics. [32698]

  Mr. Maclean
  There is currently no specific legislation which defines offences of "domestic violence" and therefore such incidents cannot be separately identified in the recorded crime data collection.

  "Domestic violence" incidents could be recorded within one of several recorded crime classifications, that is public order offences, assault occasioning actual bodily harm, wounding or inflicting grievous bodily harm, indecent assault, rape or attempted rape, threats to kill, attempted murder homicide.

  In terms of the recorded crime series, police forces are required to supply information by offence type rather than by victim and no data on the relationship of victim and suspect are routinely collected.

  The ministerial group on domestic violence is currently considering ways of improving the statistical knowledge of the nature and extent of domestic violence.

  Shotguns
  Mr. William Ross
  To ask the Secretary of State for the Home Department how many semi-automatic and pump action shotguns have been certified as shotguns after being modified from section 1 firearms classification under the terms of the Firearms Act 1988 in each year since the Act came into operation. [32882]

  Mr. Maclean
  Since the provisions of the Firearms (Amendment) Act 1988 came into force, I understand that the proof houses at London and Birmingham have certified a total of 61,169 shotguns as modified in this manner. An annual breakdown of this figure is available only at disproportionate costs.

  Crime Statistics (West Midlands)
  Mr. Jim Cunningham
  To ask the Secretary of State for the Home Department what was the clear-up rate of(a) threats or conspiracies to murder, (b) rape, (c) attempted rape, (d) attempted murders and
  378
  (e) woundings with intent in the west midlands for each year since 1990; and he will express the figures as a percentage change from 1990. [32878]

  Mr. Maclean
  The available information is given in the tables. The clear-up rate for offences of attempted rape is included within the clear-up rate for the substantive offence and is not separately identifiable.

  Table I: Clear-up rates for offences of threat or conspiracy to murder and rape recorded by the police in the West Midlands

  Threat or conspiracy to murder

  Rape

  Year

  Clear-up rate percentage

  Percentage point change over 1990

  Clear-up rate percentage

  Percentage point change over 1990

  1990

  97

  n/a

  77

  n/a

  1991

  97

  0

  86

  +9

  1992

  92

  -5

  73

  -4

  1993

  87

  -10

  69

  -8

  1994

  95

  -2

  77

  0

  1995

  93

  -4

  68

  -9

  n/a = not applicable.

  Table 2: Clear-up rates for offences of attempted murder and wounding recorded by the police in the West Midlands

  Attempted murder

  Wounding

  Year

  Clear-up rate per cent.

  Percentage point change over 1990

  Clear-up rate per cent.

  Percentage point change over 1990

  1990

  96

  n/a

  76

  n/a

  1991

  1104

  +8

  76

  0

  1992

  94

  -2

  73

  -3

  1993

  88

  -8

  71

  -5

  1994

  100

  +4

  69

  -7

  1995

  88

  -8

  65

  -11

  1Offences cleared up in current year may have been recorded in an earlier year.

  n/a = not applicable.

  Mr. Cunningham
  To ask the Secretary of State for the Home Department what was the total number of crimes involving serious physical violence or immediate danger to life per 100,000 population in the west midlands for each year since 1990; if he will express the figures as a percentage change from 1990; and if he will give comparable figures for France, Germany and the Netherlands. [32880]

  Mr. Maclean
  The available information relates to offences of violence against the person and is given in the table. Comparable figures for France, Germany and the Netherlands are not available.

  Notifiable offences of violence against the person per 100,000 population in the west midlands

  Rate per 100,000 population

  Percentage change over 1990

  1990

  390

  n/a

  1991

  407

  +4

  1992

  443

  +14

  1993

  417

  +7

  1994

  395

  +1

  1995

  328

  -16

  n/a = not applicable.

  Mr. Cunningham
  To ask the Secretary of State for the Home Department what was the number of(a) rapes, (b) attempted rapes, (c) attempted murders, (d) woundings

  379
  with intent to do grievous bodily harm and (e) threats or conspiracies to murder in the west midlands for each year since 1990; and if he will express the figures as a percentage change from 1990. [32879]

  Mr. Maclean
  The available information is given in the tables. Figures for the number of attempted rapes are included with the substantive offence and are not separately identifiable.

  Table 1: Notifiable offences of rape and attempted murder recorded by the police in the west midlands

  Rape

  Attempted murder

  Year

  Number of offences

  Percentage change over 1990

  Number of offences

  Percentage change over 1990

  1990

  170

  n/a

  25

  n/a

  1991

  214

  +26

  27

  +8

  1992

  207

  +22

  33

  +32

  1993

  204

  +20

  43

  +72

  1994

  211

  +24

  38

  +52

  1995

  237

  +39

  50

  +100

  n/a = not acceptable.

  Table 2: Notifiable offences of wounding or threat or conspiracy to murder recorded by the police in the west midlands

  Wounding

  Threat or conspiracy to murder

  Year

  Number of offences

  Percentage change over 1990

  Number of offences

  Percentage change over 1990

  1990

  9,952

  n/a

  168

  n/a

  1991

  10,330

  +4

  178

  +6

  1992

  11,269

  +13

  232

  +38

  1993

  10,674

  +7

  180

  +7

  1994

  10,149

  +2

  152

  -10

  1995

  8,377

  -16

  127

  -u24

  n/a = not acceptable.

  Customer Charters
  Mr. Donohoe
  To ask the Secretary of State for the Home Department if he will list(a) the customer charters which are currently in use within his Department and its executive agencies and (b) the charters which have been withdrawn. [32838]

  Mr. Howard
  The UK Passport Agency, the Fire Service College and the Prison Service all have charter standard statements. I have today published a new charter for victims of crime, superseding the charter issued in 1990. No charters, or charter standard statements, have been withdrawn.

  Prisons
  Ms Corston
  To ask the Secretary of State for the Home Department when he expects to publish the Coopers and Lybrand report into the comparative costs of publicly and privately run prisons. [33086]

  Miss Widdecombe
  I refer the hon. Member to the reply given to a question from the hon. Member for Rugby and Kenilworth (Mr. Pawsey) on 13 June, column 232.

  Morgan Report
  Ms Janet Anderson
  To ask the Secretary of State for the Home Department, pursuant to his answer of 17 April,380
  Official Report, column 524, if he will list the local authorities engaged in crime prevention partnership as endorsed in the Morgan report broken down by political control. [32883]

  Mr. Maclean
  The information requested is not held centrally and could be obtained only at disproportionate cost.

  Secure Establishments (Young People)
  Mr. Cox
  To ask the Secretary of State for the Home Department what is the present number of secure establishments for young people in England and Wales in which a person can be held while awaiting trial or sentence; and where these establishments are sited. [32877]

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

  Letter from David Scott to Mr. Tom Cox, dated 18 June 1996:
  The Home Secretary has asked me, in the absence of the Director General, to reply to your recent Question about secure establishments in England and Wales in which young people may be held on remand or awaiting sentence.
  There are 25 secure units in England, and two in Wales, approved respectively by the Secretary of State for Health and the Secretary of State for Wales for the purpose of restricting the liberty of children in the care of local authorities.

  These 27 local authority secure units and their location are as follows:

  Location

  The Atkinson Unit

  Exeter

  Aycliffe Young People's Centre

  Co. Durham

  Barton Moss Secure Care Unit

  Manchester

  Beechfield

  West Sussex

  Briars Hey Community Home

  Liverpool

  Dyson Hall Observation and Assessment Centre

  Liverpool

  East Moor Regional Secure Unit

  Leeds

  The Elm Unit, Netherton Park

  Northumberland

  Fairfield Lodge Observation and Assessment Centre

  Southampton

  Glen House Observation and Assessment Centre

  Southampton

  Kesteven House

  Sleaford

  Lansdowne

  East Sussex

  Llwyn Celyn

  Swansea

  Market Street Children's Home

  Chesterfield

  Orchard Lodge

  London

  Red Bank School

  Merseyside

  Red Sands Children's Centre

  Nantwich

  Silverbrook Resource Centre for Children

  Mid-Glamorgan

  St. Catherine's Centre for Girls

  St. Helens

  St. John's Centre

  Tiffield, Northants

  St. John's Community Home School

  Birmingham

  Salters Observation and Assessment Centre

  Peterborough

  Stamford House

  London

  Stoke House (The Coventry Secure Unit)

  Coventry

  Sutton Place Safe Centre

  Hull

  Thornbury

  Oxon

  Vinney Green Secure Unit

  Bristol

  Juveniles may also be sent to Glenthorne Youth Treatment Centre, Birmingham, which is run by the Department of Health.

  Justice and Home Affairs Council
  Mr. Amess
  To ask the Secretary of State for the Home Department if he will make a statement on the outcome of the Justice and Home Affairs Council held on 4 June. [33615]

  Mr. Howard
  I represented the United Kingdom at the Council in Luxembourg. In accordance with the policy outlined in my right hon. Friend the Prime Minister's statement to the House on 21 May,Official Report, columns 99–101, I was unable to agree to any decisions requiring unanimity in the Council other than those which were purely formal or procedural.

  Eleven agenda items, listed in the table, were blocked as a result of the Government's policy of non-co-operation in the European Union. However, I participated fully in negotiations on the substantive issues covered by the agenda. The main matters dealt with at the Council were as follows.

  The presidency reported progress in negotiations on the draft external frontiers convention and noted that two major political problems—a role for the European Court of Justice and territorial application of the convention—were outstanding.

  The Council examined the three draft directives proposed by the Commission for abolishing frontier controls and giving third country nationals a right to travel in member states, known as the "Monti Package". In addition to the United Kingdom's reserve of substance on these proposals, a number of issues of concern to other member states remain to be settled. The presidency undertook to consider whether negotiation on these instruments should be primarily a matter for the Internal Market Council or the Justice and Home Affairs Council.

  The Council agreed that officials should continue work on developing Eurodac, a project to establish a database of asylum seekers' fingerprints.

  The Council considered a compromise proposal for conferring on the European Court of Justice optional jurisdiction to interpret the Europol convention. The presidency concluded that this matter would be studied again at the European Council in Florence.

  The Council approved a report on the implementation of the Europol drugs unit budget in 1995, and deferred a decision on the development of a computer system for Europol.

  The Council considered the question of participation by the European Union in the International Law Enforcement academy in Budapest (ILEA), which is managed jointly by Hungary and the USA. The presidency concluded that, in the light of opposition by France to European Union involvement in the academy, this matter required further thought.

  The Council noted progress in the structured dialogue with the central and eastern European states, and a report outlining continuing action by the European Union against drugs in Latin America and the Caribbean.

  The Council discussed a number of outstanding issues arising from negotiations on the draft Convention on improved extradition procedures, and concluded that further work was required on these points by officials.
  382
  The Council discussed the question of jurisdiction for the European Court of Justice in the draft convention on corruption, and noted progress in drafting a second protocol to the convention on the protection of the Communities' financial interests.

  The presidency invited member states' views on the main issues of principle remaining to be settled in relation to the draft convention on service of documents in civil and commercial matters, and referred the text for further work by officials.

  Measures blocked by the United Kingdom at the Justice and Home Affairs Council, 4 June 1996

  Recommendation on trafficking in works of art.

  Recommendation on fight against counterfeiting.

  Joint position on pre-frontier missions of assistance and information.

  Joint action on liaison officers.

  Decision on measures implementing Article K.1 of the Treaty on European Union.

  Work programme for the Europol Drugs Unit, July-December 1996.

  Budget of the Europol Drugs Unit for 1997.

  Recommendation on combating illegal employment of third country nationals.

  Joint action establishing the Directory of counter-terrorist competences.

  Resolution laying down the priorities for co-operation in the field of justice and home affairs for the period from 1 July 1996 to 30 June 1998.

  Joint position on the Hague Convention on the protection of minors.

  Anti-terrorist Legislation
  Ms Mowlam
  To ask the Secretary of State for the Home Department when he expects to receive the conclusions of Lord Lloyd's review of anti-terrorist legislation. [32923]

  Mr. Howard
  I understand that Lord Lloyd expects to submit his report by the autumn.

  CJD and BSE Research
  Mr. Campbell-Savours
  To ask the Secretary of State for the Home Department what Home Office approval of licensing arrangements exist in the case of testing (1) of milk for the purposes of Crentzfeldt-Jakob disease or bovine spongiform encephalopathy research; [32924]

  (2) of urine for the purposes of CJD or BSE research. [32925]

  Mr. Sackville
  Any testing which might cause harm or suffering to animals, including the inoculation of tissues and fluids into laboratory animals, would need authorisation under the Animals (Scientific Procedures) Act 1986.

  Electoral Registration
  Mr. Barnes
  To ask the Secretary of State for the Home Department if he will issue guidelines to electoral registration officers encouraging the registration of those with no fixed abode at an accommodation address in circumstances where the requirements of permanence and the qualifying date for registration are met; and if he will make a statement. [32968]
  383
  Mr. Sackville
  No; accommodation addresses are not permitted under current legislation.

  Mr. Barnes
  To ask the Secretary of State for the Home Department what action he has taken concerning electoral registration arrangements for homeless persons following the decision in the case of Lippiatt v. the Electoral Registration Officer, Penwith district council. [32969]

  Mr. Sackville
  We aim to issue guidance in time for this year's electoral registration canvass.

  Sentences
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department what assessment he has made of the relative cost of custodial and non-custodial sentences for similar offences; and if he will make a statement. [33128]

  Mr. Maclean
  The target annual unit costs for 1996–97 for the principal disposals available to the courts are:

  Prison place: £24,388

  Probation order: £2,510

  Community service order: £1,840

  The decision whether to impose a custodial or non-custodial sentence is a matter for the courts, within the statutory limits taking into account all the circumstances of the offence and the offender. It is not determined by the costs of these disposals.

  Mr. Carlile
  To ask the Secretary of State for the Home Department what research he has evaluated which identifies a relationship between marginal increases in the prison population and marginal decreases in crime rates; and if he will make a statement. [33129]

  Mr. Maclean
  The Home Office research and statistics directorate continuously monitors research in this area. Its most recent evaluation of such research is contained within "Analysing Offending: Data. Models and Interpretations" by Roger Tarling (HMSO. 1993).

  Mr. Carlile
  To ask the Secretary of State for the Home Department what plans he has published to encourage judges to give shorter average sentences; and if he will make a statement. [33184]

  Mr. Maclean
  The Government have no plans to encourage judges to pass sentences which would mean offenders spending less time in prison. The proposals for mandatory minimum sentences for persistent burglars and drug dealers set out in the White Paper "Protecting the Public" would mean many offenders receiving significantly longer sentences than they do at present.

  Prison Population Statistics
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department if he will provide a breakdown of the prison population for(a) the last date for which figures are available, (b) five years before that date, (c) 10 years before that date, (d) 15 years before that date and (e) 20 years before that date, by those imprisoned for (i) non-violent property crime, (ii) violent property crime, (iii) violent crimes against the person, excluding murder and manslaughter, (iv) murder and manslaughter, (v) illegal drug possession, (vi) illegal drug trafficking and (vii) other
  384
  offences; what percentage of each were men under the age of 25 years; and if he will make a statement. [33130]

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

  Letter from David Scott to Mr. Carlile, dated 18 June 1996:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question asking for a breakdown of the prison population for (a) the last date for which figures are available, (b) five years before that date, (c) 10 years before that date, (d) 15 years before that date and (e) 20 years before that date, by those imprisoned for (i) non-violent property crime, (ii) violent property crime, (iii) violent crimes against the person, excluding murder and manslaughter, (iv) murder and manslaughter, (v) illegal drug possession, (vi) illegal drug trafficking and (vii) other offences; and what percentage of each were men under the age of 25 years.
  Information on the historical sentenced prison population is published in "Prison statistics, England and Wales" for 30 June each year, by sex and offence. No detailed information on the prison population is published before 1976. Table references for the years requested are: 10990-table 1.7 (Cm1800), 1985-table 1.5 (Cmnd 9903), 1980-Table 1.5 (Cmnd 8372). Information for 1976 is given in table 1.5 of the statistical tables of the "Report on the work of the Prison Department" (Cmnd 6884). Summary information for 1995 is given in the table attached. A breakdown of these statistics by age is not available. Copies of these publications are available from the library.
  The available information on drugs offences is published in table 1 (c) of the 1986 edition and table 1 (b) of the 1994 edition of "Prison statistics, England and Wales" (Cm 210 and 3087).

  Population in Prison Service establishments under sentence on 30 June 1995; by offence and sex1

  Offence

  Male

  Female

  Violence against the person

  8,491

  290

  Sexual offences

  3,656

  12

  Burglary

  5,896

  57

  Robbery

  5,264

  108

  Theft and Handling

  3,450

  279

  Fraud and Forgery

  1,071

  96

  Drugs offences

  3,858

  398

  Other offences

  4,174

  132

  Offence not recorded

  1,547

  84

  In default of payment of a fine

  490

  26

  All offences

  37,897

  1,482

  1 Provisional figures.

  Conviction Rates
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department what research he has(a) commissioned and (b) evaluated on relative conviction rates across European countries; and if he will make a statement. [33131]

  Mr. Maclean
  No information is currently collected centrally on conviction rates across all European countries. My Department is participating in a Council of Europe initiative to collect such information and other crime and criminal justice statistics for all member states. The first limited results from this study have been made available in the "Draft Sourcebook on Crime and Criminal Justice Statistics" published earlier this year, a copy of which is in the Library.

  Electronic Tagging
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department if he will make a statement on the electronic tagging pilot scheme. [33183]

  Mr. Sackville
  The electronic monitoring equipment continues to work well in all three trial areas; and the participating courts are making increased use of the curfew order. As of 13 June, 71 orders have been made since the trials began, with over 50 of these being made in the last six months.

  Crime Statistics
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department if he will make a statement on the circumstances in which a crime is considered cleared up for official purposes. [33186]

  Mr. Maclean
  An offence is deemed to be cleared up if any of the following conditions are met:

  1. a person has been charged or summonsed for the offence (irrespective of any subsequent acquittal);

  2. the offence has been taken into consideration by the court or if the unequivocal consent of the offender is obtained by way of statement of admission and desire to have further offences taken into consideration;

  3. the offender has been proceeded against in another police force area for the offence;

  4. the offender dies before proceedings could be initiated or completed;

  5. the offender has been cautioned by the police;

  6. the offender is ill and is unlikely to recover or is too senile or too mentally disturbed for proceedings to be taken;

  7. the complainant or an essential witness is dead and the proceedings cannot be pursued;

  8. the guilt of the offender is clear but the victim refuses, or is permanently unable, or if a juvenile is not permitted, to give evidence;

  9. the offender admits the offence but it is decided that no useful purpose would be served by proceeding with the charge;

  10. it is ascertained that an offence has been committed by a child under the age of criminal responsibility;

  11. an offence is admitted by a juvenile of the age of criminal responsibility and police take no action other than reporting the particulars to a local authority for action under the Children and Young Persons Act 1969;

  12. There is sufficient evidence to charge the offender but

  (a) The police prosecuting department, the Crown Prosecution Service or a senior police officer decide that no useful purpose would be served by proceeding with the charge; or

  (b) for summary offences of unauthorised taking of a motor vehicle or criminal damage value over £20 the time limit of six months for commencing prosecution has been exceeded.

  WPC Yvonne Fletcher
  Mr. Dalyell
  To ask the Secretary of State for the Home Department (1) pursuant to his answer of 21 May,Official Report, column 96, about WPC Fletcher, when he expects the review of the contents of the television programme to be complete; [31915]
  386
  (2) pursuant to his answer of 20 May, Official Report, column 19, about the video in respect of WPC Fletcher, when he expects the Metropolitan police to conclude their consideration of the question. [31945]

  Mr. Howard
  [holding answer 7 June 1996]: I understand from the Metropolitan police that they hope to have reached their conclusions on these matters in the near future.

  USAF Mildenhall
  Mr. Madden
  To ask the Secretary of State for the Home Department what representations he has received from, or on behalf of, the Suffolk constabulary concerning the definition of the powers of the American visiting forces outside USAF Mildenhall. [31952]

  Mr. Maclean
  [holding answer 10 June 1996]: None.

  Mr. Gultasab Hussain
  Mr. Madden
  To ask the Secretary of State for the Home Department what requests he has received from the British high commission in Islamabad to undertake inquiries into the application by Mr. Gultasab Hussain (ref: HO C8645) to join his wife in the United Kingdom; on what date the request was received; what information has been requested; and when the inquiries will be completed. [32957]

  Mr. Kirkhope
  [holding answer 17 June 1996]: The entry clearance officer in Islamabad wrote to the Home Office on 20 June 1995 asking for some inquiries to be made. These were completed and a report was sent to the entry clearance officer in October 1995.

  Animal Welfare
  Mr. Morley
  To ask the Secretary of State for the Home Department how many prosecutions were brought by the police relating to animal welfare; how many were successful in the last available year; and if he will make a statement. [32810]

  Mr. Maclean
  [holding answer 17 June 1996]: Information for 1994 is given in the table. The 1995 data will not be available until autumn 1996.

  Number of prosecutions brought by the police for offences relating to animal welfare by result England and Wales 1994

  Offence

  Police prosecutions

  Convictions

  Cruelty to animals

  284

  204

  Animals (Scientific Procedures) Act 1986, Sec. 22(3), 23 and 25(3).

  2

  2

  Protection of Animals Act, 1911 (as amended).

  217

  160

  Wildlife and Countryside Act, 1981, Sec 8.

  —

  —

  Performing Animals (Regulation) Act 1925

  —

  —

  Protection of Animals Act, 1934.

  1

  1

  Pet Animals Act, 1951.

  2

  1

  Protection of Animals (Amendment) Act, 1954.

  11

  9

  Animal Health Act, 1981, Secs 40–42, 46, 49 and Orders under Sees 8, 9, 37,38,39 and 43.

  5

  1

  Slaughterhouses Act 1974.

  —

  —

  387

  Number of prosecutions brought by the police for offences relating to animal welfare by result England and Wales 1994

  Offence

  Police prosecutions

  Convictions

  Abandonment of Animals Act, 1960, Sec 1.

  6

  3

  Animal Boarding Establishments Act, 1963.

  —

  —

  Riding Establishments Acts, 1964 and 1970.

  —

  —

  Agriculture (Miscellaneous Provisions) Act, 1968, Secs 1, 2 and 6.

  2

  1

  Protection of Badgers Act, 1992

  32

  22

  Wildlife and Countryside Act, 1981, Sec 9

  4

  2

  Wildlife and Countryside Act, 1981, Sec 11

  2

  2

  Breeding of Dogs Acts 1973 and 1991

  —

  —

  Diseases of animals Act

  10

  9

  Wild Birds Protection Acts

  49

  32

TREASURY

  Plastic Banknotes
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer what plans he has to introduce plastic banknotes. [31821]

  Mrs. Angela Knight
  There are no current plans to introduce plastic banknotes, but the Bank of England keeps all aspects of banknote production under constant review.

  Statistics
  Mr. Fisher
  To ask the Chancellor of the Exchequer which statistics his Department has discontinued(a) the collection and (b) the publication of since 1989. [32869]

  Mrs. Angela Knight
  Numerous changes in the basis of compilation, presentation and publication of statistics occur in response to the requirements of Government, business and the wider community, including international organisations, for statistical information. Other changes reflect changes in administrative systems on which some series are based, the development of new statistical techniques and technological developments affecting the compilation and dissemination of statistical data.

  When such changes are made, they are fully documented in the relevant statistical publications. Also, for example, the published annual reports of the former Central Statistical Office since 1991–92 have listed all the surveys of businesses carried out. To bring together all the relevant information on statistics collected and published would involve disproportionate cost.

  Northern Ireland Companies (Employee Schemes)
  Mr. John D. Taylor
  To ask the Chancellor of the Exchequer how many companies in Northern Ireland have set up and operated(a) profit-related pay schemes, (b) employee share ownership plans and (c) approved
  388
  employee share schemes in each of the past five years; and what has been the estimated tax saving in each of those five years. [32179]

  Mr. Jack
  I regret that the information is not available centrally, since the registered addresses of companies—which could, in principle, be analysed—may differ from the regions in which their employees work.

  Balance of Payments
  Mr. Amess
  To ask the Chancellor of the Exchequer what was the next contribution of financial services excluding investment income to the United Kingdom balance of payments in each year since 1992. [32343]

  Mrs. Angela Knight
  The net contribution of financial services—excluding investment income—to the UK balance of payments, in each year from 1992, was as follows:

  £ million

  1992

  4,713

  1993

  5,286

  1994

  5,572

  1995

  5,528

  Sources:

  The Pink Book.

  First Release (CSO(96)68).

  Postage Costs
  Mr. Donohoe
  To ask the Chancellor of the Exchequer how much his Department spent on postage in the financial years 1994–95 and 1995–96; and how many items were posted during these periods. [32854]

  Mrs. Angela Knight
  The information requested is:

  1994–95

  1995–96

  Expenditure on postage

  £70,938

  £70,166

  Number of items (1st, 2nd, parcel post

  356,962

  337,290

  Tax Fraud
  Mr. Simpson
  To ask the Chancellor of the Exchequer what was the budget and staffing level, for the investigation of tax fraud in the last financial year; and what amounts were detected or reclaimed as a direct result of these investigations. [32903]

  Mr. Jack
  It is not possible to isolate the resources and yield which relate to fraud investigations from other tax investigation work. But I refer the hon. Member to the replies I gave to the hon. Member for Darlington (Mr. Milburn) on 26 October 1995,Official Report, columns 727–28, and 3 November 1995, Official Report, column 503. Later figures are not yet available.

  Unemployment
  Mr. Ainger
  To ask the Chancellor of the Exchequer (1) what were the unemployment rates in November 1995 in the constituencies of(a) Bassetlaw, (b) Rotherham, (c) Barnsley, Central, (d) Barnsley, East, (e) Donacaster and (f) Easington; [32756]
  389
  (2) what were the unemployment rates in February in the (a) Newcastle upon Tyne, East and (b) Wallsend constituencies. [32757]

  Mrs. Angela Knight
  [holding answer 13 June 1996]: Information on percentage rates of claimant unemployment is not available by parliamentary constituency. However, information on numbers of people claimant unemployed are published in "Labour Market Trends", and on the Nomis database, available in the House of Commons Library.

  Benefit Statistics
  Mr. Hinchliffe
  To ask the Chancellor of the Exchequer what sums and what proportion of gross domestic product was devoted to(a) social security, (b) benefits for the unemployed, (c) housing benefit, (d) social housing, (e) the national health service and (f) public transport in each since 1979. [32104]

  Mr. Waldegrave
  [holding answer 17 June 1996]: A functional breakdown of general government expenditure from 1978–79 to 1995–96 is given in cash, in real terms and as a percentage of gross domestic product in tables 1.2, 1.3 and 1.4 respectively of the "Public Expenditure Statistical Analyses 1996–97", Cm 3201. A more detailed breakdown of the general government expenditure can be found in table 1.5 of the same publication for the 1990–91 to 1995–96 years. Figures for other functional headings are available only at disproportionate cost.

FOREIGN AND COMMONWEALTH AFFAIRS

  Statistics
  Mr. Fisher
  To ask the Secretary of State for Foreign and Commonwealth Affairs which statistics his Department has discontinued(a) the collection and (b) the publication of since 1989. [32856]

  Sir Nicholas Bonsor
  The Overseas Development Administration collects and reports aid statistics in accordance with internationally agreed directives, which have changed little since 1989; and publishes a selection to meet the needs of customers, including Parliament and others with an interest in the UK aid programme. Some statistics on numbers of experts, students and trainees funded by UK aid are not presently published, pending system reorganising.

  The FCO diplomatic wing collects a range of statistical information for internal management purposes. The nature of this has evolved to support more efficient management of resources. However, no central record is kept of which statistics are discontinued.

  In the past few years, the volume of information published has increased considerably, in line with open government policy. In particular the FCO's departmental report, a copy of which is in the Library of the House, contains a wealth of statistical material.

  Gulf War
  Mr. Fatchett
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards securing compensation for those British citizens held hostage by Iraq during the Gulf war. [33058]
  390
  Sir Nicholas Bonsor
  The governing council of the UN Compensation Commission—UNCC—last met in Geneva on 28 and 29 May and approved the second instalment of 62,122 category 'C' claims—which include compensation for having been held hostage. Some 235 British claimants in this instalment have been awarded a total of $4.6 million.

  Payment of compensation will not be possible until UN Security Council resolution 986—oil for food—is implemented and sufficient money has accumulated in the compensation fund.

  European Initiatives
  Mr. Ron Davies
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the European initiatives which have been blocked by the United Kingdom Government since the current policy of non-co-operation commenced. [33033]

  Mr. David Davis
  As a consequence of the policy of non-cooperation, we blocked the following measures in the period 21 May to 14 June:

  Measures on which the UK has withheld agreement to date for BSE reasons

  Date

  Forum for agreement

  Measure

  22 May 96

  IGC Working Group

  Request for extra briefing meeting with EP

  22 May 96

  CFSP—Coreu

  Presidency initiative on Mongolian election observers

  CFSP—Coreu

  Presidency proposal for EU statement on detention of pro-democracy activists in Burma

  23 May 96

  Signature of Insolvency Convention

  23 May 96

  Civil Protection Council

  Community action programme

  23 May 96

  Civil Protection Council

  Council Resolution on research

  23 May 96

  Civil Protection Council

  Council Resolution on co-operation with CEEs

  28 May 96

  Development Council

  Council Conclusions on emergency aid, rehabilitation and long term development

  28 May 96

  Development Council

  Council Conclusions on operational co-ordination

  28 May 96

  Development Council

  Council Conclusions on decentralised co-operation

  28 May 96

  Development Council

  Council Conclusions on migration and development

  28 May 96

  Development Council

  Council Resolution on environmental impact of development projects

  28 May 96

  Development Council

  Council Decision on financial measures for Centre for Development of Industry

  391

  Measures on which the UK has withheld agreement to date for BSE reasons

  Date

  Forum for agreement

  Measure

  28 May 1996

  Development Council

  EU/Mexico negotiating mandate and political declaration

  28 May 1996

  Development Council

  Council Decision on emergency travel document

  28 May 1996

  Internal Market Council

  Council Resolution on legislative simplification

  28 May 1996

  Internal Market Council

  Council resolution on administrative co-operation

  28 May 1996

  Internal Market Council

  Council conclusions on accounting standards

  28 May 1996

  Internal Market Council

  Council conclusion on European company statute

  28 May 1996

  Internal Market Council

  Council decision on Action programme for EU industry

  28 May 1996

  CFSP—Coreu

  EU reply to UNGA resolution 50/75 (strengthening security and co-operation in Mediterranean)

  28 May 1996

  CFSP—Coreu

  Demarche to Israeli authorities concerning blocking of EU activities and personnel in West Bank and Gaza

  28 May 1996

  CFSP—Coreu

  Draft EU letters on Salman Rushdie

  28 May 1996

  CFSP—Coreu

  Critical dialogue meeting on 19 June with Iran

  29 May 1996

  Former Yugoslavia Working Group (CFSP)

  French proposal for a demarche in Skopje on FYROM participation in the PIC Working Group

  30–31 May 1996

  Political Committee (CFSP)

  Geographical directors (troika) visit to Beijing

  3 June 1996

  ECOFIN

  Draft regulation protecting financial interests of Community

  3 June 1996

  ECOFIN

  Proposal on VAT on cut flowers

  3 June 1996

  ECOFIN

  Response to Hariri on request for Lebanon reconstruction assistance

  3 June 1996

  Social Affairs Council

  Council decision on Year against racism and xenophobia

  3 June 1996

  Social Affairs Council

  Council resolution on transferability of vocational training qualifications

  3 June 1996

  Social Affairs Council

  Council conclusions on demography

  3 June 1996

  Social Affairs Council

  Recommendation on balanced participation of men and women in decision making

  392

  Measures on which the UK has withheld agreement to date for BSE reasons

  Date

  Forum for agreement

  Measure

  3 June 1996

  Heads of EU mission meeting Tel Aviv CFSP

  Proposed visit of Italian Foreign Minister to Israel on behalf of EU

  3 June 1996

  Working Group on external fisheries policy

  Competences for FAO committee on Fisheries Trade

  4 June 1996

  EU consuls, Bangkok—CFSP

  Sending of aide memoire on prisoner transfers and related matters to Thai Justice Ministry

  4 June 1996

  Coreu—CFSP

  Further circulation of Presidency statement on elections in Albania

  4 June 1996

  Coreu—CFSP

  EU approach to US concerning Liberia visa restrictions

  4 June 1996

  Coreu—CFSP

  EU demarche on civil rights in Belarus

  4 June 1996

  Justice and Home Affairs Council

  Recommendation on Trafficking in works of art

  4 June 1996

  Justice and Home Affairs Council

  Recommendation on Fight against counterfeiting

  4 June 1996

  Justice and Home Affairs Council

  Draft 1997 budget of Europol

  4 June 1996

  Justice and Home Affairs Council

  Report on 1995 Europol budget

  4 June 1996

  Justice and Home Affairs Council

  Joint action on directory of counter terrorist competences

  4 June 1996

  Justice and Home Affairs Council

  Joint action on drugs liaison officers

  4 June 1996

  Justice and Home Affairs Council

  Decision on measures implementing Article K1 of the Treaty on European Union

  4 June 1996

  Justice and Home Affairs Council

  Joint action on pre-frontier assistance and training assignments

  4 June 1996

  Justice and Home Affairs Council

  Recommendation on combatting illegal employment

  4 June 1996

  Justice and Home Affairs Council

  Work programme for Europol Drugs unit July-December 1996

  4 June 1996

  Justice and Home Affairs Council

  Resolution laying down priorities for co-operation in the field of justice and home affairs 1 July 1996–30 June 1998

  4 June 1996

  Justice and Home Affairs Council

  Common position on draft Hague Convention on Protection of Minors

  5 June 1996

  CFSP

  Presidency discussion paper on IAEA 93+2 programme

  5 June 1996

  CFSP

  Draft EU contribution to Nuclear suppliers group paper

  8–9 June 1996

  Euro-Mediterranean Ministerial Conference

  Conference conclusions on dialogue on third country energy co-operation

  393

  Measures on which the UK has withheld agreement to date for BSE reasons

  Date

  Forum for agreement

  Measure

  10 June 1996

  General Affairs Council

  EU declaration on Great Lakes (especially Burundi)

  10 June 1996

  General Affairs Council

  TACIS regulation

  10 June 1996

  General Affairs Council

  Common position for EU/Syria Co-operation Council 10 June

  10 June 1996

  General Affairs Council

  Common position for 10 EEA Council

  10 June 1996

  General Affairs Council

  Common position/joint action on biological and chemical weapons

  10 June 1996

  General Affairs Council

  Political decision on resumption of aid to Niger

  10 June 1996

  General Affairs Council

  Decision on financial measures for Centre for Development of Industry

  10 June 1996

  General Affairs Council

  Council conclusions on Barcelona follow up

  10 June 1996

  General Affairs Council

  6th VAT directive— derogation for Neisse Bridge

  10 June 1996

  General Affairs Council

  Adoption of common position on East Timor

  10 June 1996

  General Affairs Council

  Joint Declaration on political dialogue between EU and Andes Community

  10 June 1996

  General Affairs Council

  Assent to Commission decision on ECSC and Kazakhstan on trade in steel products

  10 June 1996

  General Affairs Council

  Appointment to Committee of the Regions

  10 June 1996

  General Affairs Council

  EEA joint committee— ALTENER programme: decision on co-operation

  10 June 1996

  General Affairs Council

  EU/Mexico negotiating mandate and political declaration

  10 June 1996

  General Affairs Council

  Response to Hariri on request for Lebanon reconstruction assistance

  10 June 1996

  General Affairs Council

  Decision on emergency travel document

  10 June 1996

  Fisheries Council

  Decision on implementation of Community Action programme on competitiveness of industry

  11 June 1996

  Culture Council

  Council Resolution on industrial co-operation with other regions and third countries

  11 June 1996

  Culture Council

  Council Decision on ARIANNE Programme

  11 June 1996

  Culture Council

  Council Decision on RAPHAEL Programme

  394

  Measures on which the UK has withheld agreement to date for BSE reasons

  Date

  Forum for agreement

  Measure

  11 June 1996

  Culture Council

  Resolution on access to culture

  11 June 1996

  Culture Council

  Resolution on electronic publishing and libraries

  Beef Imports
  Mr. Austin Mitchell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the date of implementation of(a) the EU ban on imports of United States beef and (b) the United States ban on imports of British beef. [31764]

  Mrs. Browning
  I have been asked to reply.

  There is no EU ban on imports of United States beef. The United States of America appears on the list of countries approved for the export of bovine animal and meat, amongst other products, to the EU. However, Council directive 88/146/EEC prohibits the importation from third countries of animals and meat from animals which have been administered hormones as growth promoters. The use of such hormones is permitted in the United States and the US authorities are challenging the EU import restriction through World Trade Organisation procedures.

  The UK has not received any formal notification from the United States Department of Agriculture of a ban on imports of British beef. However, the United States has not accepted imports of British bone-in beef since 1989. In view of the clear unwillingness of the US authorities to accept such imports, subsequent negotiations have concentrated on securing access to the American market for boneless beef. These were successfully concluded in July 1994 when health certification for the import of British boneless beef was agreed with the USA.

OVERSEAS DEVELOPMENT ADMINISTRATION

  Developing Nations
  Mr. Jamieson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those countries that are currently classified by his Department as developing nations and are receiving Government aid. [33273]

  Mr. Hanley
  The 27 members of the Organisation for Economic Co-operation and Development are generally regarded as the world's developed or industrialised countries. Countries in the rest of the world are broadly divided into two categories—the developing countries and "transition" countries. The latter category comprises Latvia, Lithuania, Ukraine, Slovak Republic, Poland, Czech Republic, Russia, Estonia, Belarus, Hungary, Moldova, Bulgaria and Romania. The Government give aid to around 160 developing and transition countries.
  395
  Mr. Jamieson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those countries that have been classified as developing nations since 1966 indicating the total amount each country has received in aid. [33272]

  Mr. Hanley
  The ODA publication, "British Aid Statistics"—published annually since 1965—provides comprehensive information on UK aid flows. Information on aid flows to and from other countries is contained in the World Bank's "World Development" report—it includes aid receipts by all countries—and in the OECD's publication "Geographical Distribution of Financial Flows to Aid Recipients". Historical data in these publications date back to the late 1960s only. All three publications are held in the Libraries of the House.

  Mr. Jamieson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria determine the eligibility of a country to qualify as a developing nation for ODA aid; and which body determines which countries are eligible. [33274]

  Mr. Hanley
  The OECD's Development Assistance Committee maintains a list of countries to which donors give aid. Part 1 of the DAC list is made up of developing countries. Help to these countries counts as official development assistance. Part 2 of the list is made up of transition countries, plus six graduated countries—Bahamas, Brunei, Kuwait, Qatar, Singapore and United Arab Emirates.

  Governments are free to give aid to whichever countries they wish, but only aid to part 1 countries on the DAC lists counts as "official development assistance".

ENVIRONMENT

  Volatile Organic Compounds
  Ms Walley
  To ask the Secretary of State for the Environment (1) if he will meet the Environmental Industries Commission for the purpose of reviewing the VOC pollution deadlines; and if he will make a statement; [32598]

  (2) if he will now meet the Environmental Industries Commission for the purpose of reviewing the VOC pollution deadlines; and if he will make a statement. [32595]

  Mr. Clappison
  My right hon. Friend is meeting my hon. Friends the Members for Bromsgrove (Mr. Thomason) and for Wyre (Mr. Mans), together with representatives of the Environmental Industries Commission, on 9 July, when any such matters can be discussed.

  Ms Walley
  To ask the Secretary of State for the Environment if he will commission a further report on the costs of reducing VOC emissions with the remit to consider definitive cost estimates for individual sectors. [32593]

  Mr. Clappison
  My right hon. Friend the President of the Board of Trade published a detailed study of costs of reducing VOC emissions from industry on 3 May. A copy is in the Library of the House. My Department will shortly be publishing a study of the costs of implementing the proposed EC solvents directive in relation to three 396
  industry sectors. My Department has no current plans for any further studies, but we will keep the position under review.

  Energy Advice Centres
  Mr. Jon Owen Jones
  To ask the Secretary of State for the Environment what were the aims of the three-year energy advice centres pilot study. [32945]

  Mr. Robert B. Jones
  The study aimed to test the cost-effectiveness of the provision of free, impartial advice on energy efficiency.

  Mr. Jones
  To ask the Secretary of State for the Environment (1) what plans he has to fund the energy advice centres after March 1997; [32949]

  (2) what future funding plans he has made for the energy advice centres. [32948]

  Mr. Jones
  The Government passed control of the local energy advice centre pilot study to the Energy Saving Trust at the beginning of April. It is preparing proposals for the future and will pass them on to my Department for consideration shortly.

  Mr. Jones
  To ask the Secretary of State for the Environment if he will list the 10 top performing local energy advice centres in order of achievement of their targets; and what percentage of their targets they(a) achieved and (b) exceeded. [32947]

  Mr. Jones
  The following 10 LEACs were the top performers in order of achievement of their targets:

  Tyneside

  Cardiff

  Bristol

  Swansea

  Greenwich

  Plymouth

  Tayside

  Lothian and Edinburgh

  Aberdeen

  Belfast

  All 10 LEACs achieved and exceeded their targets.

  Mr. Jones
  To ask the Secretary of State for the Environment what assessment he has made of the energy advice centre pilot scheme; and if he will make a statement. [32950]

  Mr. Jones
  The Government passed control of the local energy advice centre pilot study to the Energy Saving Trust at the beginning of April 1996. The trust is assessing the pilot study, which will be completed at the end of September.

  Mr. Jones
  To ask the Secretary of State for the Environment what percentage of the energy advice centres have(a) achieved and (b) exceeded their targets. [32946]

  Mr. Jones
  Some 24 of the 33 local energy advice centres achieved and exceeded their targets.

  Water Supply (Yorkshire)
  Mr. Redmond
  To ask the Secretary of State for the Environment what action he is taking to ensure that dairy
  397
  farmers in the counties of Yorkshire will have a constant supply of mains water, with particular reference to those whose mains supply is also connected to other domestic households in the vicinity. [32907]

  Mr. Clappison
  Save for small areas at the borders of the counties, Yorkshire Water Services Ltd. and The York Waterworks plc are the appointed water undertakers serving the counties of Yorkshire. These and all water undertakers have the statutory duty to maintain supplies to all existing consumers and I expect them to take all the measures necessary to do so.

  Housing Starts
  Mr. Cann
  To ask the Secretary of State for the Environment what was the total number of housing starts in England in the first quarter of 1996; and what percentage change this was over the equivalent period in 1995. [32956]

  Mr. Clappison
  It is estimated that in England during the first quarter of 1996 there were 31,800 new dwellings started. This represents a fall of 12 per cent. compared to the first quarter of 1995 when 36,100 starts were reported.

  Cemfuel
  Mr. Nigel Evans
  To ask the Secretary of State for the Environment what was the level of heavy metals in cemfuel when tested at Ribblesdale, Clithero, in October 1994. [32823]

  Coal only November 1994

  Substance

  Stack cone mg/m3 STP

  Stack cone mg/m3 actual

  Mass flow mg/s

  MGLC µ/m3 (x1000)

  EQS or EAL µ/m3

  EQ (air) (x100)

  NOx

  1216

  665

  119,737

  836

  83.3

  1.0038

  SO2

  1274

  697

  125,448

  876

  80

  1.0950

  particulate

  47

  25.7

  4,628

  32

  80

  0.0404

  HF

  0.19

  0.1

  18.7

  0.1306

  6.5

  0.002

  HCl

  76

  41.6

  7484

  52.26

  7

  0.7466

  CO

  247

  135.1

  24322

  169.8

  550

  0.0309

  NH3

  3.83

  2.1

  377

  2.634

  170

  0.0015

  Pb

  0.221

  0.12

  21.8

  0.152

  2

  0.0076

  Cr(III)

  0.085

  0.047

  8.37

  0.0584

  5

  0.0012

  Cr(VI)

  0.000255

  0.0001

  0.02

  0.0001

  0.01

  0.00010

  Mn

  0.018

  0.01

  1.76

  0.0123

  50

  0.0000

  Ni

  0.038

  0.02

  3.74

  0.0261

  10

  0.0003

  EQ(air)x100

  —

  —

  —

  —

  —

  2.9293

  EQ(air)

  —

  —

  —

  —

  —

  0.0293

  Table 6.3: Cemfuelµ November 1994

  Substance

  Stack cone mg/m3 STP

  Stack cone mg/m3 actual

  Mass flow mg/s

  MGLC µ/m3 (x1000)

  EQS or EAL µ/m3

  EQ (air) (x100)

  NOx

  1212

  662

  119,147

  832

  83.3

  0.9988

  SO2

  1311

  717

  129,092

  901

  80

  1.1269

  particulate

  72

  39.4

  7,090

  50

  80

  0.0619

  HF

  0.15

  0.082

  14.8

  0.1

  6.5

  0.0016

  HCl

  26

  14.2

  2,560

  18

  7

  0.2554

  CO

  459

  251.1

  45,197

  316

  550

  0.0574

  NH3

  6.7

  3.7

  660

  4.6

  170

  0.0027

  Pb

  0.340

  0.19

  33.48

  0.23

  2

  0.0117

  Cr(III)

  0.539

  0.3

  53.10

  0.37

  5

  0.0074

  Cr(IV)

  0.0016

  0.001

  0.18

  0.001

  0.1

  0.0010

  Co

  0.01

  0.006

  1.08

  0.008

  0.2

  0.0040

  Cu

  0.008

  0.004

  0.72

  0.005

  2

  0.0003

  Mn

  0.062

  0.034

  6.12

  0.043

  50

  0.0001

  Ni

  0.348

  0.19

  34.2

  0.24

  10

  0.0024

  398
  Mr. Clappison
  The concentrations of heavy metals in two samples taken during these trials are on the public register and were as follows.

  Metal

  Sample M1348, mg/kg

  Sample 1349, mg/kg

  Cadmium

  4.3

  4.57

  Thallium

  0.05

  0.05

  Mercury

  0.05

  0.05

  Antimony

  20

  16.7

  Arsenic

  1.02

  0.05

  Chromium

  55

  39

  Cobalt

  2.11

  2.66

  Copper

  48

  46

  Lead

  186

  157

  Manganese

  28

  18.2

  Nickel

  7.3

  2.19

  Tin

  0.05

  0.05

  Vanadium

  4.22

  2.6

  Mr. Evans
  To ask the Secretary of State for the Environment what were the environmental values given to each of the individual emissions from burning cemfuel at Castle Cement, Clitheroe; and which increased as compared to burning coal. [32835]

  Mr. Clappison
  The attached tables show the emissions when burning coal or coal plus cemfuel, the environmental assessment level values and the calculated environmental quotient.
  399

  Table 6.3: Cemfuelµ November 1994

  Substance

  Stack conc mg/m3 STP

  Stack cone mg/m3 actual

  Mass flow mg/s

  MGLC µ/m3 (x1000)

  EQS or EAL µ/m3

  EQ (air) (x100)

  EQ(air)*100

  —

  —

  —

  —

  —

  2.5316

  EQ(air)

  —

  —

  —

  —

  —

  0.0253

  Statistics
  Mr. Fisher
  To ask the Secretary of State for the Environment which statistics his Department has discontinued(a) the collection and (b) the publication of since 1989. [32860]

  Mr. Clappison
  The main statistical series discontinued since 1989 are as follows:

  (a) Collections

  Housing

  Local authority housing schemes

  Proposals to acquire land

  Tender stage—new build; environmental improvement; renovation above/below threshold

  Practical completions—new build; renovation above threshold.

  Tenders accepted for local authority housebuilding/renovation of local authority stock condition.

  General improvement areas (GIA)

  Housing action areas (HAA)

  Declaration of GIA or HAA

  Right to repair

  Housebuilding by police authority

  Homes Insulation scheme

  Local authority insulation activity

  Old style home improvement grants

  Land use

  Land use change statistics for Wales and Scotland

  (b) Publication

  Housing

  Loans for house purchase made by insurance companies (no longer collected independently)

  Land Use

  In this year's publication programme the following district level series will be dropped (still available at regional and national level).

  Section 78 planning appeals against refusal

  Appeal against enforcement notices by district planning authorities

  Listed building and conservation area consent enforcement appeals by region.

  Water Byelaws
  Mrs. Helen Jackson
  To ask the Secretary of State for the Environment (1) when he will complete the consultation over the revision to water byelaws; and when he plans to put draft regulations to replace water byelaws before the House; [33376]
  400
  (2) if he will list the areas covered by the consultation over revising water byelaws; [33377]

  (3) if he has required a proposed water conservation target to be included in his revision of water byelaws; [33378]

  (4) if he will list the members of the Water Regulation Advisory Committee looking into the replacement of water byelaws. [33379]

  Mr. Clappison
  My Department issued a consultation document on the general arrangements for replacement of the water byelaws in January 1995. In the light of the comments received, I announced on 26 March the establishment of a Water Regulations Advisory Committee, whose membership 1 hope to announce shortly.

  Regulations to replace the water byelaws will deal with the prevention of contamination, waste, undue consumption and misuse of water in premises. They are expected to include requirements on water usage by fittings and appliances.

  There will be a further consultation on draft proposals, the timing of which will be determined in the light of advice from WRAC, which will also be asked to advise on the extension of the current water byelaws.

SCOTLAND

  European Union Flag
  Mr. Redmond
  To ask the Secretary of State for Scotland 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. [31510]

  Mr. Michael Forsyth
  I asked officials to make sure that the European flag did not fly on 8 May.

  Development Corporations
  Mr. Donohoe
  To ask the Secretary of State for Scotland what was the amount spent by each development corporation in Scotland in supporting housing associations or co-operatives within their areas in each of the last three years; and if he will list the bodies and the amounts they have received. [32229]

  Mr. Kynoch
  I refer the hon. Member to the answer I gave on 19 July 1995,Official Report, columns 1525–26, which provides the only information held centrally on the expenditure incurred by the former development corporations in East Kilbride and Glenrothes.

  The up-to-date information for the other corporations still in existence is set out in the table.
  401

  Development corporation

  Housing association

  Amount £

  Financial year

  Cumbernauld

  Abronhill

  10,500

  1993–94

  Irvine

  Irvine

  127,413

  1993–94

  181,661

  1994–95

  1-2,837

  1995–96

  Livingston

  Almond

  83,672

  1993–94

  1-15,467

  1994–95

  1 These figures are after deduction of Scottish Homes' contributions of £24,737 to Irvine development corporation and £24,140 to Livingston development corporation in these years.

  Scottish Homes (Former Chairman)
  Mr. Donohoe
  To ask the Secretary of State for Scotland what are the terms of the financial settlement

  Aberdeen

  Dundee

  Glasgow

  Inverness

  Edinburgh

  Indoor

  Indoor/outdoor

  Indoor

  Indoor/outdoor

  Indoor

  Indoor/outdoor

  Indoor

  Indoor/outdoor

  Indoor

  Indoor/outdoor

  Total indoor

  Total in/outdoor

  1992–93

  88

  0

  46

  2

  211

  35

  0

  0

  55

  29

  400

  66

  1993–94

  60

  30

  39

  33

  376

  206

  7

  15

  61

  27

  543

  311

  1994–95

  58

  46

  89

  62

  460

  438

  26

  14

  89

  29

  722

  589

  In the last three years, special funding totalling £2,775,000 has been made available for the provision of powered indoor/outdoor wheelchairs. The scheme has been extended and from 1 April 1996 funding is included in allocations to health boards.

  Council Tax
  Mr. Tom Clarke
  To ask the Secretary of State for Scotland what powers he has under sections 72, 74 and 80 of the Local Government Finance Act 1992 to alter the valuation list bands for dwellings; and if he will use those powers to alter the council tax liability of residents of mobile homes. [33045]

  Mr. Kynoch
  My right hon. Friend has powers under section 74 of the Local Government Finance Act 1992 to alter the valuation bands for dwellings by order. My right hon. Friend has, however, no plans to make such an order.

  Primary School Class Sizes
  Mr. Davidson
  To ask the Secretary of State for Scotland (1) how many children in primary school in Scotland are being taught in classes of more than 30 in the current year; and how many there were in each of the last five years; [32952]

  (2) how many primary classes in Scotland contain more than 30 children, in the current year; and how many there were in each of the last five years; [32953]

  Mr. Raymond S. Robertson
  Information on class sizes is collected biennially in the September school census. The available information is given in the table.402
  made to Sir James Mellon, the former chairman of Scottish Homes, following his departure from this position. [32546]

  Mr. Raymond S. Robertson
  Sir James Mellon's appointment as chairman of Scottish Homes expired on 31 March 1996. There was no financial settlement following his departure.

  Wheelchairs
  Dr. Godman
  To ask the Secretary of State for Scotland how many powered indoor/outdoor wheelchairs have been provided to patients and other users by each of the health boards since 1992; and if he will make a statement. [32706]

  Lord James Douglas-Hamilton
  Information in the form requested by the hon. Member is not held centrally. However, the number of powered indoor and indoor/outdoor wheelchairs issued by each providing centre during the period 1992 to 1995—the latest period for which figures are available—is shown:

  Education authority primary schools

  September 1991

  September 1993

  Number of primary pupils in classes over 30

  72,202

  74,894

  Percentage of primary pupils

  16.4

  17.1

  Number of primary classes with more than 30 pupils

  2,239

  2,341

  Percentage of primary classes

  12.5

  13.2

  Scottish Court Service
  Sir Hector Monro
  To ask the Secretary of State for Scotland what targets he has set the Scottish Court Service for 1996–97. [33702]

  Mr. Michael Forsyth
  Following consultation with the Lord President of the Court of Session and the sheriffs principal, I have set the following key performance targets for the Scottish Court Service for 1996–97:

  1. That no cases should fall as a result of the statutory time limits being breached.

  2. Targets for Waiting Periods

  85 per cent. of diets allocated in the Court of Session within waiting periods set by the Lord President;

  80 per cent. of criminal and justiciary appeals allocated to a roll within waiting periods set by the Lord Justice General;

  80 per cent. of sheriff courts to report summary criminal waiting periods agreed with the sheriffs principal, currently 12 weeks;

  90 per cent. of sheriff courts to report waiting periods between request for ordinary civil proof or debate and diet agreed with the sheriffs principal, currently 12 weeks;

  80 per cent. of sheriff courts reporting lack of time adjournments at 5 per cent. or lower.

  403

  3. Targets for quality of service and provision

  to achieve 95 per cent. of the standards for administrative business in the Court of Session and the High Court of Justiciary set by the Lord President/Lord Justice General;

  95 per cent. of sheriff courts to achieve the overall standards for administrative business agreed with sheriffs principal;

  80 per cent. of courthouses to meet the "coming to court" standards set out in the justice charter for Scotland.

  4. Cost and efficiency

  staff, accommodation and administrative costs to be kept within £1,020 per court sitting day;

  70 per cent. of the total costs of civil business in the Court of Session and in the sheriff courts to be recovered through fee income.

  Full details of the performance measures, including the agreed waiting periods, administrative standards and "coming to court" standards are set out in the Scottish Court Service framework document. Details of performance in 1995–96 will be published in the Scottish Court Service's first annual report.

  Incapable Adults
  Sir Hector Monro
  To ask the Secretary of State for Scotland what response he proposes to make to the Scottish Law Commission report on incapable adults, Scot Law Corn. No. 151. [33703]

  Mr. Michael Forsyth
  I have given careful consideration to the Scottish Law Commission's report on incapable adults. The report raises a number of issues which are both important and sensitive, and proposes many changes in the law relating to legal procedures for looking after the property, financial affairs and personal welfare of mentally incapable adults. Although I fully acknowledge the consultation which has already been carried out by the commission in coming to the conclusions it has reached, I also recognise that many people will have strong views on the proposals which the commission has made.

  Consequently, I have decided that before legislating on the basis of the commission's proposals there should be further consultation. I propose to issue a consultation paper this summer.

  Parliamentary Questions
  Mr. Donohoe
  To ask the Secretary of State for Scotland (1) pursuant to his answer of 28 March,Official Report, column 672, how much his Department estimated it would have cost to provide the information requested; [31454]

  (2) pursuant to his answer of 22 March, Official Report, column 343, how much his Department estimated it would have cost to provide the information requested. [31446]

  Mr. Michael Forsyth
  [holding answer 5 June 1996]: More than £450, the current cost threshold above which answers are deemed to incur disproportionate cost.

  Inverclyde Enterprise Zone
  Dr. Godman
  To ask the Secretary of State for Scotland how many designated sites of the Inverclyde enterprise zone are still awaiting industrial development; and if he will make a statement. [30176]
  404
  Mr. Kynoch
  [pursuant to his reply, 4 June 1996 c. 403–404]: Four of the 11 designated sits within the Inverclyde enterprise zone do not, at present, have any enterprise zone activity.

HEALTH

  Paediatric Intensive Care Beds
  Mr. Callaghan
  To ask the Secretary of State for Health what monitoring he is undertaking of the provision of paediatric intensive care beds. [31706]

  Mr. Horam
  On 29 May, we published a report on provision of paediatric intensive care. This was produced by the chief executive of the national health service executive. Copies are available in the Library.

  The report shows that for most of the year current provision is enough to meet demand, but more beds are needed in the winter. The chief executive will be monitoring the implementation of regional plans to increase provision.

  Ms Glenda Jackson
  To ask the Secretary of State for Health when he last met the chairmen of the national health service trusts to discuss the provision of paediatric intensive care beds. [31723]

  Mr. Horam
  My right hon. Friend has not met chairmen of national health service trusts on this issue. However, my right hon. Friend has had recent detailed discussion with the chief executive of the NHS executive, whose report to him on the provision of paediatric intensive care was published on 29 May. Copies are available in the Library. The report describes plans made by NHS trusts and health authorities to develop this service, and to provide additional beds. The chief executive will keep in close touch with these plans, and will report to my right hon. Friend later this year on progress towards their implementation.

  General Practitioner Fundholders
  Mr. Nigel Evans
  To ask the Secretary of State for Health how many GP fundholders there are currently in the north-west. [31707]

  Mr. Malone
  There are currently 1,857 general practitioner fundholders in the north-west, serving 53 per cent. of the population, and more are applying to join next year.

  Purchasing Contracts
  Mr. Lewis
  To ask the Secretary of State for Health when he last met the Royal College of Nursing to discuss the purchasing contract of district health authorities. [31708]

  Mr. Malone
  I meet the Royal College of Nursing on a regular basis to discuss a wide range of issues.

  Dentists' Contracts
  Mr. Ainger
  To ask the Secretary of State for Health when he plans to meet representatives of the British Dental Association to discuss dentists' contracts.[31709]
  405
  Mr. Malone
  We have no plans for such a meeting. As I announced last week on 12 June,Official Report, columns 313–23, we have agreed a series of reforms of the dental remuneration system with the profession's representatives. The reforms underline our commitment to improving child oral health and seek to ensure value for money.

  Smoking-related Deaths
  Mr. Tony Banks
  To ask the Secretary of State for Health what is his current estimate of the numbers dying in the last year from smoking-related illnesses. [31710]

  Mr. Horam
  It is estimated that in the United Kingdom about 110,000 deaths each year are smoking related.

  Oldchurch Hospital, Romford
  Sir Michael Neubert
  To ask the Secretary of State for Health if he will make an official visit to Oldchurch hospital, Romford, to discuss the future provision of services at the hospital. [31711]

  Mr. Horam
  My hon. Friend the Minister for Health visited Oldchurch hospital on 14 May. My right hon. Friend the Secretary of State has no immediate plans for a further visit.

  Wolverhampton Health Authority
  Mr. Turner
  To ask the Secretary of State for Health what assessment he has made of the adequacy of the level of financial revenue allocations to Wolverhampton health authority to meet its hospital care needs in 1996–97. [31713]

  Mr. Horam
  The 1996–97 revenue allocation for Wolverhampton health authority is £107.3 million, which brings it to within 1 per cent. of its target allocation.

  Care of the Elderly
  Mr. Olner
  To ask the Secretary of State for Health what monitoring he has undertaken of the provision of care to elderly people living in the community. [31714]

  Mr. Bowis
  The Department monitors provision of care to older people living in the community on a regular basis. This includes work by the social services inspectorate, the regular collection and publication of statistics and longer-term research to evaluate progress.

  Mr. Rooney
  To ask the Secretary of State for Health when he last met the Association of Directors of Social Services to discuss the provision of care to elderly people living in the community. [31715]

  Mr. Bowis
  I regularly meet representatives of the Association of Directors of Social Services to discuss a wide range of issues, including community care. My next formal meeting with the association is on 19 June.

  Wiltshire Health Authority
  Mr. Simon Coombs
  To ask the Secretary of State for Health if he will make a statement on the effect on the funding of the Wiltshire health authority of the closure of the Princess Alexandra hospital at Wroughton. [31716]
  406
  Mr. Horam
  We are aware of the difficulties facing Wiltshire health authority as a result of the closure of the Princess Alexandra military hospital. The needs of the health authority is being considered alongside those of other health authorities facing special circumstances in 1996–97 and a decision will be made shortly.

  Bury and Rochdale Health Authority
  Mr. Chris Davies
  To ask the Secretary of State for Health what discussions he has had with the Bury and Rochdale health authority about the timetable for its current review of health services. [31718]

  Mr. Horam
  None; this is a matter for the authority to decide. Any firm proposals which emerge will be the subject to full public consultation.

  Infant and Perinatal Mortality Rates
  Mr. Riddick
  To ask the Secretary of State for Health what measures he is taking to reduce infant mortality rates and perinatal mortality rates. [31719]

  Mr. Horam
  The infant mortality rate in 1995 was 6.1 per 1,000 live births, the lowest ever. The perinatal mortality rate in 1994, the latest figure available, was 8.9 per 1,000 live births —again, the lowest ever.

  The confidential inquiry into stillbirths and deaths in infancy aims to improve our understanding of factors which contribute to infant deaths and in particular ways in which the risks of death might be diminished. The next report will be published shortly.

  Mr. Harry Greenway
  To ask the Secretary of State for Health what assessment he has made of how the health of babies and very young children has changed since 1979. [32106]

  Mr. Horam
  The health of babies and young children has improved, as is demonstrated by the fall in infant and perinatal mortality rates. Deaths in children under one year of age —the infant mortality rate —fell by over half to 6.1 per 1,000 live births between 1979 and 1995. Stillbirths and deaths of babies less than a week old —the perinatal mortality rate —fell by nearly 40 per cent. to 8.9 per 1,000 live births between 1979 and 1994, the latest figure available.

  Private Finance Initiative
  Mr. Burden
  To ask the Secretary of State for Health if he will make a statement on the role of private finance in the national health service. [31720]

  Mr. Horam
  The role of the private finance initiative in the national health service is to enable NHS bodies to obtain best value for money for the taxpayer when developing capital schemes. It gives the NHS access to private capital and to the full range of private sector skills and experience in constructing facilities and providing supporting services. A private finance option has to be tested against a public sector comparator and is used if the overall package —which includes consideration of factors such as risk transfer, building maintenance and facilities management —offers better value for money.

  Hospitals (Beef)
  Mr. MacShane
  To ask the Secretary of State for Health what advice he has issued to national health service trusts about serving beef in hospitals. [31722]

  Mr. Horam
  Whether to offer beef products on patient menus, as part of a varied and balanced diet, is a matter for national health service trusts to determine locally, responding to patient choice. The Spongiform Encephalopathy Advisory Committee considered the risks to human health from eating beef or beef products and concluded that any risk was likely to be extremely small. It also concluded that if human infection with the bovine spongiform encephalopathy agent occurs, which has not been proven, hospital patients were not likely to have increased susceptibility to infection.

  Health of the Nation
  Mr. Barry Field
  To ask the Secretary of State for Health what conclusions he has drawn about the health of the nation from the last census. [31712]

  Mr. Horam
  Census information along with other information helps us to monitor the nation's health. It continues to improve. For example, mortality rates have substantially fallen and life expectancy has increased.

  The 1991 census contained a specific health related question on limiting long-term illness which showed that, overall, 13 per cent. of the total resident population in England had a long-term illness, health problem or handicap which limited the daily activities or the work that a person could do.

  Health Authority Expenditure
  Mr. Harvey
  To ask the Secretary of State for Health what was the total figure for outturn expenditure by health authorities in England for(a)1990–91, (b) 1991–92, (c) 1992–93, (d) 1993–94 and (e) 1995–96. [32701]

  Mr. Horam
  The available information requested is shown in the table. Information on the expenditure for 1995–96 has not yet been collected.

  Total revenue expenditure by health authorities in England

  Expenditure £000

  1990–91

  14,709,888

  1991–92

  18,823,141

  1992–93

  20,112,875

  1993–94

  20,594,071

  Notes:

  1. The figures are as published in the NHS (England) Summarised Accounts.

  2. The figure for 1990–91 is not comparable with later years due to changes in accounting policy.

  Source:

  The annual accounts of district and regional health authorities and the special health authorities of the London postgraduate teaching hospitals.

  Mothers (Support)
  Sir Michael Spicer
  To ask the Secretary of State for Health if he will list the Government's(a) programmes and (b) proposals to help mothers to stay at home to look after their babies aged up to three years; and if he will make a statement. [32749]

  Mr. Bowis
  The Government believe that mothers should be able to choose whether they stay at home to look after their young children or seek to work, whether part or full time.

  Customer Charters
  Mr. Donohoe
  To ask the Secretary of State for Health if he will list(a) the customer charters which are currently in use within his Department and its executive agencies and (b) the charters which have been withdrawn. [32829]

  Mr. Horam
  The following charters and related booklets have been produced for use in England:

  The Patient's Charter and You

  A Framework for Local Community Care Charters

  The Patient's Charter and Maternity Services

  The Patient's Charter and Services for Children and Young People

  Blood Donors (National Blood Service —Interim Charge)

  Customer Service Charter Guidelines (NHS Estates Agency)

  Commitment to Service: Members' Charter (NHS Pensions Agency)

  Working with Business (Medicines Control Agency)

  Code of Practice on Enforcement (Medical Devices Agency

  None has been withdrawn. In addition, numerous local charters have been produced by health authorities, trusts, general practitioner practices and social services departments. No complete central record of these is held.

  Speech Therapy
  Miss Emma Nicholson
  To ask the Secretary of State for Health what is the average waiting list(a) nationally and (b) in Devon, for those of primary school age wishing to be seen by a speech therapist. [33044]

  Mr. Horam
  This information is not available centrally.

  Miss Nicholson
  To ask the Secretary of State for Health what provision he has made in the current year for speech therapy for those of primary school age. [33043]

  Mr. Horam
  Speech therapy is provided by health authorities to adults and children as part of the range of services available to meet health care needs locally.

  Long-stay Hospital Beds
  Mr. Cox
  To ask the Secretary of State for Health what is the total number of hospital long-stay beds for people needing continuous medical care in hospitals covering the Greater London area. [32871]

  Mr. Bowis
  The information is not available in the form requested. The information that is available centrally is contained in "Bed Availability for England", copies of which are available in the Library.

  Postage Costs
  Mr. Donohoe
  To ask the Secretary of State for Health how much his Department spent on postage in the financial years 1994–95 and 1995–96; and how many items were posted during these periods. [32845]

  Mr. Horam
  Expenditure on postage was £1,429,329 in 1994–95 and £1,530,799 in 1995–96. Details of how many items were posted are not available.

  Figures have not been adjusted for inflation.

  The figures do not include the Department's agencies.

  Waiting Lists
  Rev. Martin Smyth
  To ask the Secretary of State for Health what proposals he has to change the standards for charter marks in respect of waiting lists. [32044]

  Mr. Horam
  None.

  Prescribed Drugs
  Mr. Simon Hughes
  To ask the Secretary of State for Health if he will give for each of the last 10 years the list D data on prescribed drugs. [32814]

  Mr. Malone
  Arrangements are in hand for list D, or equivalent information, to be placed in the Library. I will write to the hon. Member when this information is available.

  NHS Pension Scheme
  Mr. Simon Hughes
  To ask the Secretary of State for Health if he will list all categories of NHS employees who are not eligible to join the NHS pension scheme and the number of people currently in each category; what estimate he makes of the extra public expenditure that would be involved in giving full NHS pension scheme eligibility to each of these categories; and if he will make a statement. [32815]

  Mr. Malone
  All national health service employees are eligible to join the national health service pension scheme.

  Physiotherapy
  Mr. Khabra
  To ask the Secretary of State for Health what is the average waiting time for the first appointment for physiotherapy treatment in hospitals in London. [31717]

  Mr. Horam
  This information is not available centrally.

  Breast Cancer
  Mr. Simon Hughes
  To ask the Secretary of State for Health what funding his Department has provided in each of the last five years for research into hereditary breast cancer; and if he will make a statement on progress in research. [32816]

  Mr. Malone
  The main agency through which the Government supports medical and clinical research is the Medical Research Council. The MRC is an independent body which receives its grant in aid from the office of my right hon. Friend the President of the Board of Trade.
  410
  MRC funding for research into hereditary breast cancer is shown in the list.

  1990–91: £539,000

  1991–92: £622,000

  1992–93: £658,000

  1993–94: 1£133,000

  1994–95: £596,000

  1 It has not been possible to obtain financial information for relevant research into MRC's own establishments for 1993–94; those figures, which just cover grant support in universities, are therefore lower than the true total.

  Mr. Hughes
  To ask the Secretary of State for Health (1) how many women have been diagnosed with mutations in BRCA1 or BRCA2 since records began; what estimate his Department has made as to the total number of women in the UK with such a condition; and if he will make a statement; [32817]

  (2) what assessment he has made of the advantages of providing screening and preventive treatment for women at risk of developing hereditary breast cancer; and if he will make a statement. [32818]

  Mr. Horam
  Information on the number of women diagnosed with mutations in BRCA1 or BRCA2 is not available centrally. The Advisory Committee on Genetic Testing was established in January 1996 to advise on developments in testing for genetic disorders and scientific and ethical issues. The Department is also planning to establish a small group to advise on cancer genetics services.

  Partial Birth Abortions
  Mrs. Peacock
  To ask the Secretary of State for Health what instructions he has issued in respect of partial birth abortions. [33031]

  Mr. Horam
  None. Methods of abortion are a matter of clinical judgment. We are not aware of this procedure being used in the United Kingdom.

DEFENCE

  Hawk Trainer Crash, Portugal
  Mr. Gordon Prentice
  To ask the Secretary of State for Defence if he has established the reason for the crash of the Hawk trainer at Beja air base in Portugal in May. [33073]

  Mr. Soames
  No. Under the terms of a NATO standardisation agreement, the circumstances of this accident are being investigated by a Portuguese air force board of inquiry.

  Duke of York's Royal Military School
  Sir Trevor Skeet
  To ask the Secretary of State for Defence what key targets have been set for the Duke of York's Royal Military School in 1996–97. [33598]

  Mr. Soames
  The key targets for the Duke of York's Royal Military School in 1996–97 are as follows:

  1. To achieve 100 per cent. of GCSE passes at grades A* to G in August 1996.

  2. To achieve five or more GCSE passes at grades A* to C for 78 per cent. of candidates in August 1996.

  411

  3. To achieve 88 per cent. of A-level passes at grades A to E in August 1996.

  4. To achieve three or more A-level passes at grades A to E for 80 per cent. of candidates in August 1996.

  5. To achieve 34 per cent. of A-level passes at grades A and B in August 1996.

  6. To achieve 100 per cent. award rate for general national vocational qualification advanced and Business and Technician Education Council national diploma courses in August 1996.

  7. To implement key stage 4 modifications to national curriculum programmes by September 1996.

  8. To achieve places in higher education for 70 per cent. of sixth form leavers by October 1996.

  9. To ensure Wolfe house is prepared as a girl's senior boarding house by September 1996.

  10. To achieve a pupil per capita cost in 1996–97 of £12,180.

  11. To generate income of £410,000 by March 1997.

  12. To achieve 210 applications for the September 1997 intake by April 1997.

  Queen Victoria School
  Sir Peter Lloyd
  To ask the Secretary of State for Defence what key targets have been set for Queen Victoria School in 1996–97. [33599]

  Mr. Soames
  The key targets for the Queen Victoria School in 1996–97 are as follows:

  1. To improve the staying on rate at school for S4 to S5 from 65 per cent. to 68 per cent. on a three-year trend.

  2. To achieve a percentage of pupils attaining at least five credit passes at standard grade at 2 per cent. above the average of all Scottish presentations, based on a three-year trend.

  3. To achieve a percentage of the presentations at grades A to C in higher grade at least equal to the Scottish average, based on a three-year trend.

  4. To review the new schemes introduced in the five to 14 programme in maths, English and environmental studies by March 1997.

  5. To develop new programme in the five to 14 programme in expressive arts, religious education, and technology by March 1997.

  6. To conduct an audit of teaching and learning in S5 and S6 within the classroom environment, to improve the overall quality and effectiveness of teaching and learning and thereby pupil performance by March 1997.

  7. To have implemented a programme of measures to gain at least a satisfactory report for the welfare inspection required by the Children Scotland Act 1995 by January 1997.

  8. To merge individual teaching staff appraisal with the annual subject departmental reviews by April 1997.

  9. To have successfully completed the first phase of admission of girls by August 1996.

  10. To reduce the 1995–96 output costs per pupil in real terms by 1 per cent. while remaining within current long-term costing provision.

  11. To generate commercial income to the school of £20,000 by March 1997.

  Former Yugoslavia
  Sir Wyn Roberts
  To ask the Secretary of State for Defence what is the total number of(a) British troops and (b) troops of other peacekeeping nations on the ground in the former Yugoslavia at the latest available date. [33334]

  Mr. Soames
  There are some 10,500 UK troops and 47,500 troops from other nations with IFOR in the former Yugoslavia.

  Animal Centre
  Mr. Jessel
  To ask the Secretary of State for Defence what key targets have been set for the Defence Animal Centre in 1996–97. [33614]

  Mr. Soames
  The key targets for the Defence Animal Centre in 1996–97 are as follows:

  1. To meet the following proportion of agreed customer requirement in terms:

  DAC military personnel and military working animals for ground and air operations—100 per cent.

  (b) Quality of trained MWAs and personnel measured in terms of customer satisfaction (1)—85 per cent.

  (c) Number of trained personnel and MWAs—95 per cent.

  (d) Timeliness of delivery measured in terms of customer satisfaction—95 per cent.

  2. Ensure success rates for training are:

  MWA—greater than or equal to course specific target figures (2)—95 per cent.

  (b) Personnel—greater than 90 per cent.

  3. Reduce net full cost, as shown in the accruals accounts by 2.5 per cent.

  4. Complete planned stages of DAC "Invertors in People" action plan.

  5. Fully explore private finance initiative options for the rebuild of administrative and single living accommodation at the DAC.

  Notes:

  1. Customer satisfaction figures based on customer satisfaction survey questionnaire.

  2. Different courses have widely varied success rates due to the nature of animal training; therefore separate expected pass rates are reported internally.

  Gulf War Syndrome
  Mr. Alfred Morris
  To ask the Secretary of State for Defence what is the latest number of service men and women who served in the Gulf conflict who have come forward in relation to the Gulf war syndrome; and when he expects to make a further statement about the recommendations contained in the eleventh report of the Defence Committee of Session 1994–95 (HC 197). [32926]

  Mr. Soames
  The Government take seriously the health concerns of all service personnel, and we are committed to ensuring that those who believe they are ill as a result of their Gulf service receive the best possible treatment. Some 937 service and ex-service men and women have so far came forward for assessment under my Department's medical assessment programme. Some 592 have been seen and we have added a second physician so that those remaining are seen as quickly as possible. I intend to update the House next month on our continuing work on Gulf health issues. This will include progress on the establishment of the programme of detailed research, which is being overseen by the Medical Research Council, that I announced on 30 January 1996,Official Report, columns 607–08.

  Mr. Morris
  To ask the Secretary of State for Defence how much money has so far been spent by his Department on the epidemiological survey into Gulf war cases since the issue of the Government reply to the eleventh report of the Defence Committee (HC187 of Session 1995–96). [32927]
  413
  Mr. Soames
  As I announced on 30 January 1996,Official Report, columns 607–08, my Department will be commissioning a detailed programme of research into Gulf health issues. This research will be overseen by the Medical Research Council, which will ensure an objective, impartial and scientific approach. The MRC issued a call for research proposals including epidemiological studies at the end of May. Some preparatory work has already been completed on the database to support such research, but the costs of this work cannot be separately identified. My Department will, of course, meet the full costs of those research projects selected by the MRC as being most appropriate.

EDUCATION AND EMPLOYMENT

  Training Levy (Construction Companies)
  Mr. Nigel Evans
  To ask the Secretary of State for Education and Employment how many firms involved mainly in the construction and erection of agricultural buildings are registered for training levy with the Construction and Industry Training Board. [32822]

  Mr. Paice
  The information is not available.

  Home and School Links
  Ms Corston
  To ask the Secretary of State for Education and Employment (1) what guidance is given to(a) local education authorities, (b) school governors and (c) head teachers on establishing and strengthening links between home and school; [33085]

  (2) what steps she has taken to ensure the dissemination of information about best practice in strengthening the links between home and school. [33087]

  Mr. Robin Squire
  The updated parents charter emphasised the importance of effective partnerships between parents and schools. This has been repeated in guidance on such matters as pupil behaviour and discipline, and special educational needs.

SOCIAL SECURITY

  Benefit Entitlement
  Mr. Hain
  To ask the Secretary of State for Social Security if he will list social security primary and secondary legislation which has reversed benefit entitlements which were originally granted for life since 1979. [33261]

  Mr. Burt
  No such legislation has been introduced.

  Funeral Grants
  Mr. Chris Smith
  To ask the Secretary of State for Social Security what assessment he has made of the adequacy of the current limit on payment by the social fund of funeral grants; and what plans he has to change this limit. [30396]

  Mr. Roger Evans
  Like other social fund payments, funeral payments are not subject to annual uprating. However, we keep the level of all social fund payments under review.

  Asbestos-related Diseases
  Mr. Cox
  To ask the Secretary of State for Social Security what is the number of(a) men and (b) women who are, at present, receiving social security benefits for asbestos-related illnesses. [32873]

  Mr. Roger Evans
  The information requested is not available.

  Reduced Earnings Allowance
  Mr. Hain
  To ask the Secretary of State for Social Security how many people have had their reduced earnings allowance reduced since 24 March; and if he will list their former occupations. [33258]

  Mr. Roger Evans
  Since 24 March, approximately 18,000 over pensionable age reduced earnings allowance recipients who have given up regular employment have been transferred to retirement allowance.

  Information about the former occupations of these retirement allowance recipients could be provided only at disproportionate cost.

  Mr. Hain
  To ask the Secretary of State for Social Security what are the estimated savings to his Department as a result of the recent changes in reduced earnings allowance; and what proportion of his Department's total expenditure this represents. [33259]

  Mr. Evans
  The estimated savings from the changes to reduced earnings allowance introduced with effect from 24 March 1996 are £25 million in 1996–d97. This is, approximately 0.03 per cent. of the Department's total expenditure.

  Means-tested Benefits
  Mr. Cousins
  To ask the Secretary of State for Social Security if he will list the administrative costs of each main group of means-tested benefits including income support and housing benefit in cash terms for the last three complete financial years; and if he will express these costs as a percentage of the total of benefit payments. [30404]

  Mr. Roger Evans
  The information is set out in the tables in 1995–96 prices.

  The information requested is published, in cash terms, in the social security departmental report. The last year that figures are available is 1994–95.

  Year

  1992–93

  1993–94

  1994–95

  Administration expenditure from 1992–93 to 1994–95

  Income support

  1,655

  1,715

  1,710

  Family credit

  46

  55

  57

  Social fund

  224

  283

  215

  Housing benefit

  275

  285

  293

  Community charge benefit

  207

  204

  194

  Benefit expenditure from 1992–93 to 1994–95

  Income support

  15,934

  16,864

  16,838

  Family credit

  1,001

  1,265

  1,481

  Social fund

  433

  463

  463

  Housing benefit

  8,512

  9,649

  10,461

  415

  Year

  1992–93

  1993–94

  1994–95

  Community charge benefit

  1,814

  2,019

  2,126

  Administration expenditure expressed at a percentage of benefit expenditure

  Income support

  10.39

  10.17

  10.16

  Family credit

  4.60

  4.35

  3.85

  Social fund

  51.73

  61.12

  46.44

  Housing benefit

  3.23

  2.95

  2.80

  Community charge benefit

  11.41

  10.10

  9.13

  Benefits Agency (Information Officers)
  Mr. Chris Smith
  To ask the Secretary of State for Social Security how many district information officers are or were employed by the Benefits Agency(a) at present and (b) one year ago by region. [32703]

  Mr. Roger Evans
  This is a matter for Peter Mathison, the chief executive of the Benefits Agency. He will write to the hon. Member.

  Letter from Peter Mathison to Mr. Chris Smith, dated 17 June 1996:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking how many District Information officers are or were employed by the Benefits Agency (a) at present and (b) one year ago by region.
  The information is not available in the format requested. With the creation of the Benefits Agency in 1991 former regions were grouped into Area and Territorial Directorates.
  The attached Annex give details of the number of District Information Officers for each Area Directorate. Some of these officers may combine other duties with their role of information officers.

  I hope you find this reply helpful.

  District information officers

  Area directorate

  Number as at 31 May 1995

  Number as at 31 May 1996

  East London and Anglia

  25

  20

  Chilterns

  25

  11

  London South

  39

  27

  West Country

  22

  18

  Mercia

  20

  13

  West Midlands

  21

  12

  Wales

  15

  13

  North West Coast

  26

  19

  Greater Manchester

  25

  18

  Yorkshire

  21

  13

  Tyne Tees

  21

  15

  West of Scotland

  20

  11

  East of Scotland

  28

  14

  Figures are provisional and subject to amendment.

  Headquarters Staff
  Mr. Frank Field
  To ask the Secretary of State for Social Security if he will detail the number of staff at his headquarters in each year since 1992; and if he will group the staff by the benefit for which they have responsibility in each of these years. [33046]
  416
  Mr. Burt
  The information is not available in the format requested. Such information as is available is in the table.

  Information regarding the resources allocated to particular areas of policy in the current year is contained in the headquarters business plan for 1996–97, a copy of which is in the Library.

  Total staff in DSS (HQ)

  Year

  Staff

  1992–93

  1,527

  1993–94

  1,615

  1994–95

  1,635

  1995–96

  1,481

  1996–97

  1,541

  1. Figures include professional staff.

  2. It is not possible to provide precise figures for the number of staff working on individual benefits over this period.

  3. A substantial proportion of staff are not responsible for any specific benefit or are engaged in management and supportive activities.

  Statistics
  Mr. Fisher
  To ask the Secretary of State for Social Security which statistics his Department has discontinued(a) the collection and (b) the publication of since 1989. [32861]

  Mr. Burt
  The information is in the table:

  Statistical series

  Date collection ceased

  Date publication ceased

  Retirement pension (RP) movements

  1March 1989

  1March 1989

  Widows benefit (WB) movements

  1March 1989

  1March 1989

  Income support annual statistical enquiry (ASE)

  2Still collected

  May 93

  Monthly analysis of new claims for unemployment benefit

  3—

  December 1994

  Quarterly analysis of unemployed claimants.

  4—

  November 1994

  Half yearly analysis of unemployed claimants.

  Analysis of adjudication officers' decisions—unemployment benefit

  5—

  December 1991

  1 RP/WB movements were discontinued from March 1989 to September 1992 because of the change from the existing pensions system to the pensions strategy computer system. They were introduced from March 1993.

  2 The income support annual statistical inquiry was replaced by the IS quarterly statistical inquiry.

  3 This was discontinued at the end of 1994, as the data were also collected and published by the (then) Employment Department.

  4"These were replaced by unemployed claimants summary statistics—a quarterly publication—from February 1995.

  5 The collection and publication of this data was transferred to the Employment Service (part of the then Employment Department) from the end of 1991.

  6 The table excludes a number of other statistics which are no longer collected through lack of demand. However, these mainly provided extra detail on benefits for which the main statistics are still published.

  417
  Mr. Hain
  To ask the Secretary of State for Social Security how many former recipients of reduced earnings allowance are also in receipt of(a) state retirement pension and (b) income support; and what proportion of total claimants this represents. [33260]

  Mr. Evans
  The information is not readily available and could be provided only at disproportionate cost.

  Child Support
  Ms Lynne
  To ask the Secretary of State for Social Security when he will make an announcement on his plans to change the level of benefit deductions for parents with care who do not co-operate with the Child Support Agency without a good cause exemption; and what is the shortest period in which he estimates these changes could be introduced. [32899]

  Mr. Andrew Mitchell
  We hope to make an announcement shortly. It should be possible to implement any changes in the autumn of this year.
  418
  Mr. Frank Field
  To ask the Secretary of State for Social Security what amount of benefit savings were made by the reduced benefit direction under the Child Support Act 1991 in each year since the implementation of the Act. [33060]

  Mr. Mitchell
  Benefit savings resulting from the reduced benefit direction have not been separately identified. However, it is estimated that the value of reduced benefit directions in income support is currently between £5 million and £10 million per annum.

  Mr. Field
  To ask the Secretary of State for Social Security if he will estimate the benefit savings that would be made if(a) the reduced benefit direction under the Child Support Act 1991 was increased to 40 per cent. of the adult personal allowance for a duration of 18 months and (b) the reduced benefit direction was increased to 40 per cent. and applied until the benefit claim ceased. [33059]

  Mr. Mitchell
  It is estimated that the long-term benefit savings would be around £10 million and £15 million respectively.

TRANSPORT

  Motorway Lighting
  Mr. Frank Field
  To ask the Secretary of State for Transport, pursuant to his answer of 10 June,Official Report, columns 28–29, if he will place in the Library a copy of a map showing the locations of all sections of motorway in England that have overhead lighting. [33084]

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

  Letter from Lawrie Haynes to Mr. Frank Field, dated 18 June 1996:
  The Secretary of State for Transport has asked me to write to you in reply to your recent Parliamentary Question about a map of motorway lighting in England.

  Punctuality—former Network SouthEast Lines Percentage of trains more than five minutes late in peak times

  Four week periods 1995/96

  Operating company/group

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  1995/96

  Chiltern Trains

  4.0

  5.6

  5.8

  10.1

  5.0

  6.1

  4.6

  5.7

  7.1

  4.8

  5.8

  7.8

  3.8

  5.9

  Great Eastern

  6.3

  9.1

  14.1

  12.3

  3.2

  6.8

  8.2

  5.5

  19.6

  24.4

  15.9

  14.8

  4.9

  11.8

  LTS Rail

  6.3

  3.6

  7.3

  8.8

  18.7

  16.6

  13.9

  11.2

  11.1

  13.8

  9.4

  9.8

  7.8

  12.0

  Network South Central

  South London Lines

  6.3

  9.2

  8.9

  10.8

  14.5

  5.0

  9.8

  9.8

  23.6

  15.1

  8.7

  8.5

  6.9

  10.4

  Sussex Coast

  13.6

  12.8

  16.4

  17.2

  27.2

  15.8

  16.4

  16.2

  38.0

  18.9

  12.8

  15.5

  10.2

  17.6

  North London Railways

  Northampton Lines

  17.0

  13.8

  7.7

  13.3

  9.7

  7.1

  7.5

  9.8

  13.3

  18.3

  13.5

  27.7

  20.9

  13.3

  North London Orbital

  17.7

  23.2

  14.0

  22.7

  14.1

  10.2

  13.8

  13.1

  9.1

  14.6

  7.6

  12.3

  8.6

  13.3

  Watford Locals

  3.3

  7.1

  5.8

  8.8

  3.8

  8.7

  4.2

  8.0

  18.4

  14.7

  10.9

  16.7

  16.2

  9.6

  South East Trains

  Kent Coast

  8.2

  10.6

  11.0

  14.3

  16.6

  8.6

  11.6

  14.2

  40.9

  24.4

  20.7

  19.7

  13.1

  16.4

  Kent Link

  5.0

  6.4

  7.2

  10.3

  11.9

  9.2

  10.5

  12.7

  33.7

  22.4

  21.0

  19.9

  12.9

  13.9

  South West Trains

  Main Line

  14.6

  8.4

  11.1

  21.8

  14.4

  11.6

  9.3

  14.5

  28.7

  14.6

  10.3

  17.0

  6.3

  14.0

  Suburban

  7.8

  6.7

  7.4

  16.6

  12.0

  7.2

  5.6

  10.1

  12.2

  11.9

  5.9

  11.8

  4.4

  9.9

  Thames

  6.0

  6.7

  6.1

  13.4

  4.4

  5.0

  7.4

  6.2

  12.1

  8.0

  6.7

  7.6

  5.5

  7.3

  Thameslink

  6.1

  11.7

  12.6

  12.8

  14.6

  14.0

  9.0

  11.8

  23.1

  18.1

  16.7

  13.9

  18.1

  13.9

  West Anglia Great Northern

  Great Northern

  6.0

  5.7

  7.5

  12.9

  9.1

  10.9

  8.3

  11.6

  19.9

  18.9

  13.3

  20.7

  10.9

  11.9

  West Anglia

  4.9

  4.1

  5.7

  4.4

  5.3

  7.1

  5.3

  6.2

  12.4

  10.0

  6.1

  9.1

  3.5

  6.5

  Punctuality—former Network SouthEast Lines Number of trains more than five minutes late in peak times

  Four week periods 1995–96

  Operating company/group

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  1995–96

  Chiltern Trains

  37

  55

  56

  91

  50

  59

  47

  61

  76

  40

  62

  79

  41

  754

  Great Eastern

  160

  242

  340

  308

  366

  180

  223

  154

  541

  544

  441

  399

  137

  4,035

  LTS Rail

  219

  213

  114

  130

  294

  253

  227

  190

  188

  160

  160

  157

  133

  2,438

  Network South Central

  South London Lines

  215

  326

  322

  370

  538

  182

  370

  377

  814

  404

  333

  324

  266

  4,841

  Sussex Coast

  178

  177

  226

  224

  387

  217

  227

  229

  474

  186

  180

  220

  145

  3,070

  North London Railways

  Northampton Lines

  163

  142

  84

  136

  112

  68

  86

  112

  137

  143

  155

  250

  176

  1,764

  North London Orbital

  741

  1,010

  663

  825

  583

  470

  675

  735

  536

  671

  469

  501

  516

  8,395

  Watford Locals

  21

  48

  37

  52

  25

  55

  28

  51

  120

  73

  73

  110

  87

  780

  420
  A copy of the Highways Agency Motorway Lighting Map is being forwarded to the Library and a copy is also enclosed for your information.

  Network SouthEast
  Mr. Wicks
  To ask the Secretary of State for Transport (1) how many and what percentage of trains arrived more than five minutes late during peak hours on each of the former Network SouthEast lines in(a) each four-week period during 1995–96 and (b) for 1995–96 as a whole; [33036]

  (2) how many and what percentage of trains were cancelled on each of the former Network SouthEast lines in (a) each four-week period during 1995–96 and (b) 1995–96 as a whole. [33035]

  Mr. Watts
  The information requested is available from citizens charter records and is shown in the following tables.
  421

  Punctuality—former Network SouthEast Lines Number of trains more than five minutes late in peak times

  Four week periods 1995–96

  Operating company/group

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  1995–96

  South East Trains

  Kent Coast

  178

  242

  251

  309

  405

  201

  288

  352

  968

  490

  410

  464

  328

  4,886

  Kent Link

  210

  282

  315

  426

  546

  403

  482

  586

  1,489

  838

  762

  903

  597

  7,839

  South West Trains

  Main Line

  175

  107

  143

  267

  195

  146

  129

  201

  390

  241

  140

  225

  85

  2,344

  Suburban

  242

  230

  256

  540

  435

  247

  204

  368

  777

  301

  216

  416

  158

  4,390

  Thames

  82

  96

  87

  171

  64

  71

  109

  90

  179

  94

  99

  109

  83

  1,334

  Thameslink

  68

  137

  134

  136

  169

  150

  110

  140

  224

  171

  203

  160

  200

  2,002

  West Anglia Great Northern

  Great Northern

  116

  118

  154

  245

  199

  222

  181

  246

  434

  334

  286

  417

  227

  3,179

  West Anglia

  94

  82

  114

  84

  102

  144

  111

  132

  264

  177

  128

  181

  73

  1,686

  Reliability—former Network SouthEast Lines Percentage of trains cancelled

  Four week periods 1995–96

  Operating company/group

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  1995–96

  Chiltern Trains

  0.2

  0.2

  0.2

  0.7

  0.2

  0.6

  0.7

  0.3

  0.5

  0.5

  0.4

  0.8

  0.1

  0.4

  Great Eastern

  0.2

  0.4

  0.3

  0.7

  0.7

  0.5

  0.9

  0.3

  0.9

  0.6

  0.9

  1.1

  0.3

  0.7

  LTS Rail

  2.7

  1.5

  2.1

  1.4

  3.5

  3.6

  2.0

  1.3

  1.5

  3.6

  1.0

  1.4

  1.2

  2.0

  Network South Central

  South London Lines

  0.3

  1.2

  0.6

  0.7

  1.3

  0.3

  0.6

  0.4

  1.9

  0.5

  0.5

  0.6

  0.4

  0.7

  Sussex Coast

  0.2

  0.3

  0.5

  0.5

  0.8

  0.3

  0.6

  0.6

  0.4

  0.5

  0.4

  0.8

  0.3

  0.6

  North London Railways

  Northampton Lines

  2.0

  1.0

  0.6

  1.3

  0.5

  0.6

  0.5

  0.9

  1.2

  1.3

  0.5

  1.1

  1.1

  1.0

  North London Orbital

  5.7

  7.4

  3.9

  11.1

  5.8

  6.6

  5.4

  3.5

  4.0

  10.3

  4.5

  14.8

  6.1

  6.6

  Watford Locals

  1.3

  2.9

  1.2

  4.5

  3.3

  3.7

  2.7

  1.2

  4.2

  2.8

  1.3

  2.5

  1.5

  2.6

  South East Trains

  Kent Coast

  0.8

  0.6

  0.5

  0.6

  1.2

  0.0

  0.5

  0.3

  1.2

  1.0

  0.8

  1.0

  0.7

  0.7

  Kent Link

  0.7

  0.9

  1.1

  1.4

  1.4

  0.5

  0.8

  0.6

  2.0

  1.0

  1.1

  1.3

  1.2

  1.1

  South West Trains

  Main Line

  0.7

  0.2

  0.4

  0.8

  0.8

  0.5

  0.4

  0.3

  1.0

  0.6

  0.4

  0.9

  0.2

  0.6

  Suburban

  0.6

  0.4

  0.6

  1.1

  1.2

  0.7

  0.6

  0.6

  1.4

  1.2

  0.4

  1.3

  0.4

  0.8

  Thames

  0.6

  0.7

  1.2

  2.6

  1.6

  1.7

  1.8

  3.0

  2.0

  1.8

  2.3

  2.1

  1.0

  1.7

  Thameslink

  0.8

  1.2

  2.5

  0.9

  1.6

  2.4

  1.0

  3.1

  1.9

  2.5

  1.6

  1.6

  1.8

  1.7

  West Anglia Great Northern

  Great Northern

  1.2

  0.7

  1.1

  3.1

  1.3

  1.1

  0.4

  0.7

  0.6

  2.3

  0.9

  1.6

  0.7

  1.2

  West Anglia

  0.6

  1.2

  1.1

  0.9

  1.9

  0.5

  0.8

  0.7

  0.7

  2.3

  1.0

  1.2

  0.5

  1.0

  Reliability—former Network SouthEast Lines Number of trains cancelled

  Four week periods 1995–96

  Operating company/group

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  1995–96

  Chiltern Trains

  9

  9

  8

  27

  9

  23

  32

  14

  22

  17

  17

  35

  5

  227

  Great Eastern

  29

  61

  286

  82

  99

  64

  124

  41

  126

  64

  121

  150

  44

  1,291

  LTS Rail

  164

  100

  138

  86

  243

  241

  132

  86

  99

  201

  68

  95

  83

  1,736

  Network South Central

  South London Lines

  47

  181

  97

  107

  222

  45

  98

  62

  323

  63

  80

  107

  67

  1,499

  Sussex Coast

  27

  36

  63

  55

  108

  37

  81

  84

  179

  44

  55

  105

  33

  907

  North London Railways

  Northampton Lines

  73

  40

  25

  48

  21

  21

  19

  37

  44

  38

  20

  36

  32

  454

  North London Orbital

  254

  345

  193

  456

  257

  323

  278

  205

  244

  528

  290

  708

  393

  4,474

  Watford Locals

  37

  90

  35

  124

  103

  108

  82

  36

  128

  65

  41

  76

  37

  962

  422 423

  Reliability—former Network SouthEast Lines Number of trains cancelled

  Four week periods 1995–96

  Operating company/group

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  1995–96

  South East Trains

  Kent Coast

  90

  66

  68

  76

  160

  1

  72

  45

  170

  103

  83

  131

  96

  1,161

  Kent Link

  138

  185

  212

  262

  304

  101

  160

  133

  420

  174

  178

  267

  259

  2,793

  South West Trains

  Main Line

  67

  24

  47

  79

  89

  59

  47

  40

  121

  52

  46

  108

  25

  804

  Suburban

  89

  67

  99

  191

  222

  132

  106

  110

  271

  157

  66

  242

  70

  1,822

  Thames

  88

  106

  176

  376

  251

  270

  269

  448

  306

  221

  352

  321

  159

  3,343

  Thameslink

  43

  63

  124

  44

  88

  128

  57

  177

  86

  116

  90

  84

  45

  1,145

  West Anglia Great Northern

  Great Northern

  102

  65

  98

  252

  117

  94

  36

  61

  49

  174

  80

  138

  62

  1,328

  West Anglia

  58

  118

  106

  85

  179

  48

  81

  67

  70

  203

  104

  114

  52

  1,285

  Highways Agency
  Mrs. Dunwoody
  To ask the Secretary of State for Transport (1) which properties occupied by the Highways Agency have access for the disabled; [32434]

  (2) if he will list the names of the site supervisors for the current building works being carried out at the Highways Agency office in Birmingham. [32435]

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

  Letter from Lawrie Haynes to Mrs. Gwyneth Dunwoody, dated 18 June 1996:
  The Secretary of State has asked me to reply to your recent Parliamentary Questions about disabled access in Highways Agency buildings and the current building works in the Broadway office, Birmingham.
  Firstly, I can list the buildings under Highways Agency management which have access for people with disabilities. These are as follows:

  St Christopher House, Southwark Street, London.

  Federated House, London Road, Dorking.

  City House, New Station Street, Leeds.

  Jefferson House, Park Place, Leeds.

  Falcon Road, Exeter.

  Heron House, Goldington Road, Bedford.

  In addition, we are looking at a list of improvements made as a result of a recent RADA inspection at our offices in the Broadway, Birmingham.
  The current building works at the Broadway offices in Birmingham comprise of a window replacement programme undertaken by the Landlord of the building, Pillar Properties. They are being supervised by Richard Ellis, Surveyors. Mrs Jayne Cresswell of Richard Ellis is currently the main site supervisor for this work.

  Driving Instructors
  Mr. Alex Carlile
  To ask the Secretary of State for Transport what plans he has to change regulations whereby unvetted theory trainers for driving instruction can legally give unremunerated practical driving lessons; and if he will make a statement. [32772]

  Mr. Norris
  The current law regulates persons giving ordinary driving instructions for money's worth as well as money. I do not believe the courts would accept that the loophole suggested does, in fact, exist.
  424
  Mr. Carlile
  To ask the Secretary of State for Transport what restrictions apply in respect to those eligible to be employed as theory trainers for driving instruction; and if he will make a statement. [32773]

  Mr. Norris
  The current law regarding car driving instruction does not apply to theory tuition given, for example, in a classroom or undertaken via distance learning methods. I am not persuaded that imposing a new regulatory regime on persons such as lecturers or authors dealing with driving theory would be justified.

NATIONAL HERITAGE

  Arts Spending
  Mr. Callaghan
  To ask the Secretary of State for National Heritage what is the current level of Government expenditure per capita on the arts. [29930]

  Mr. Sproat
  The arts benefit from a complex system of plural funding. Direct central Government funding for the arts in the UK amounts to £242 million in 1996–97. In addition, local authorities spend an amount on the arts in the region of that provided by central Government through the four arts councils which in 1996–97 is more than £233 million. On top of this, it is anticipated that the arts' share of lottery awards will exceed £300 million this year. This adds up to public funding in the UK for the arts in excess of £775 million. Based on these figures, the current level of Government expenditure per capita on the arts is at least £13.27. There are, however, other sources of arts funding generated through Government expenditure, either directly or indirectly, and it is therefore difficult to give a per capita figure which is a true reflection of the overall picture.

  Civil Servants (Duties Abroad)
  Mr. Donohoe
  To ask the Secretary of State for National Heritage how much her Department spent during the financial years 1994–95 and 1995–96 on sending civil servants accompanying Ministers from her Department on official duties abroad. [32413]

  Mr. Sproat
  My Department spent £23,000 in the financial year 1994–95 and £18,000 in the financial year 1995–96.

  Statistics
  Mr. Fisher
  To ask the Secretary of State for National Heritage which statistics her Department has discontinued(a) the collection and (b) the publication of since 1989. [32866]

  Mr. Sproat
  None.

  Television Licences (Second Homes)
  Mr. Chris Davies
  To ask the Secretary of State for National Heritage (1) what representations she has received regarding the change in policy by the television licensing office to charge owners of second homes licence fees; and if she will make a statement; [32951]

  (2) if she will introduce changes in the television licence charges at the annual review to allow licences for holiday homes belonging to pensioners to be charged at the same rate as an accommodation for residential care licence; and if she will make a statement. [32944]

  Mr. Sproat
  The Department of National Heritage has received representations on this subject from Members of the House, the general public and organisations representing caravan owners and the caravan park trade. The Government have no plans to introduce any changes in the television licence fees for holiday homes belonging to pensioners.

  Mr. Davies
  To ask the Secretary of State for National Heritage if a second television licence is required for temporary use of a television in a mobile home; and if he will make a statement. [33158]

  Mr. Sproat
  The BBC, which is responsible for the administration and enforcement of the television licensing system, recently announced that a licence is required for use of a television in a second dwelling, including mobile homes. Licensing requirements in specific circumstances are a matter for the BBC.

  Customer Charter
  Mr. Donohoe
  To ask the Secretary of State for National Heritage if she will list(a) the customer charters which are currently in use within her Department and its executive agencies and (b) the charters which have been withdrawn. [32825]

  Mr. Sproat
  The information the hon. Member has requested is as follows:

  The Royal Parks agency has a charter standard and the Historic Royal Palaces agency has a visitors charter.

  (b) No charters have been withdrawn.

  English Heritage
  Mr. Gordon Prentice
  To ask the Secretary of State for National Heritage how much income English Heritage generated from ticket sales in the most recent year for which figures are available; and what percentage of the organisation's running costs this represented. [33075]

  Mr. Sproat
  English Heritage generated £7.5 million from ticket sales at its historic properties in 1995–96. It also generated £3.5 million from its membership scheme and a further £4.7 million from retail and catering activities. The total visitor and membership income of £15.7 million represents over 30 per cent. of English 426
  Heritage's total running costs of £50.9 million in 1995–96 and over 50 per cent. of the costs of running and maintaining its 407 historic properties.

  Postage Costs
  Mr. Donohoe
  To ask the Secretary of State for National Heritage how much her Department spent on postage in the financial years 1994–95 and 1995–96; and how many items were posted during these periods. [32841]

  Mr. Sproat
  My Department spent £47,920 posting 98,696 items in 1994–95 and £56,119 posting 110,226 items in 1995–96

  British Tourist Authority Chairman
  Mr. Tony Banks
  To ask the Secretary of State for National Heritage what factors underlay the appointment of David Quarmby as chairman of the British Tourist Authority and the English Tourist Board; how many days a week he will work in this capacity; and at what salary. [32708]

  Mr. Sproat
  [holding answer 13 June 1996]: The qualities that my right hon. Friend sought for the chairman of the British Tourist Authority and the English tourist board were a proven track record in strategic planning in a large-scale organisation; leadership and management skills; the ability to represent British tourism effectively through the media; and an understanding of the public sector.

  My right hon. Friend appointed David Quarmby after extensive consultations, a search assisted by an executive search agency and an interview process assisted by representatives of the tourism industry.

  Mr. Quarmby will be employed for three days per week, one and a half days for each board and his salary will be £54,000 per annum.

  Computers (Millennium)
  Mr. Ingram
  To ask the Secretary of State for National Heritage what assessment has been made of the cost effects of the millennium date change on the computer systems operated by her Department. [32673]

  Mr. Sproat
  [holding answer 13 June 1996]: I refer the hon. Member to the answer I gave to my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) on 3 April 1996, Official Report, columns 227–28.

  Sports (Insurance)
  Mr. Derek Foster
  To ask the Secretary of State for National Heritage (1) what assessment she has made of the impact of civil actions for damages, against members of voluntary and community operated amateur sports clubs with particular reference to the cost of insurance cover; [33094]

  (2) what assessment she has made of the impact of civil actions for damages against individuals engaged in competitive sports at an amateur level with particular reference to the cost of insurance cover; [33093]
  427
  (3) what assessment she has made of the financial liability that may be faced by sports clubs, sports officials and individuals engaged in competitive sport where actions for damages are raised against them in the courts. [33092]

  Mr. Sproat
  [holding answer 17 June 1996]: None. However, I would expect all those involved in sport to ensure that their insurance is in order.

  Council of Europe Meetings
  Mr. Terry Davis
  To ask the Secretary of State for National Heritage, pursuant to the answer on 22 May,Official Report, columns 299–300, if he will make it his policy to keep a separate record of attendance by Ministers and officials of her Department at meetings of, or organised by, the Council of Europe, and if she will make a statement. [33027]

  Mr. Sproat
  [holding answer 17 June 1996]: In future. attendance by Ministers and officials of my Department at meetings of, or organised by, the Council of Europe will be recorded separately.

AGRICULTURE, FISHERIES AND FOOD

  Specified Bovine Offals
  Mr. Heppell
  To ask the Minister of Agriculture, Fisheries and Food what was the(a) recorded and (b) calculated level of specified bovine offal in each year since 1989. [26432]

  Mrs Browning
  Before the introduction of the Specified Bovine Offal Order 1995, all SBOs had to be dealt with in accordance with the Bovine Offal (Prohibition) Regulations 1989, as amended. Enforcement of these regulations lay with the local authorities up until 1 April 1995, when the Meat Hygiene Service took over this responsibility in premises licensed under the Fresh Meat (Hygiene and Inspection) Regulations 1995. The bovine offal regulations required all consignments of SBO to be accompanied by a movement permit, detailing amongst other things the quantity being moved. Once the SBO had reached its intended destination, the completed permit had to be returned to the originating local authority, which then had to keep it for a period of two years. No central records were kept.

  Since the introduction of the Specified Bovine Offal Order in August 1995, which was replaced by the Specified Bovine Material Order 1996 in March, movement permits for SBO are no longer required, in view of tighter controls which have been introduced on approval and record keeping. Persons consigning SBO to an approved premises are required to keep a record of all consigned SBO material for a period of two years. The programme of state veterinary service audits of records kept under the legislation has not yet been running for a full year, so annual data from this source are not yet available. Our best estimates based on returns from the rendering industry show that just over 78,000 tonnes of SBM was handled by it in the 12 months to March 1996. In addition, a small amount will have been destroyed by incineration.
  428
  It is not possible to calculate an exact figure for the weight of SBM that would be generated by the slaughter of a given number of animals. This is because the weight generated per animal is dependent on the dressing procedures in the slaughterhouse concerned. The effects of, for example, whether the guts are sent off full or empty, or whether head meat was removed, when that was permitted, can result in a weight of SBM generated per animal that can vary by a factor of two or more. Based on date extrapolated from the MLC kill figures for the period August 1995 to March 1996, the figure of 78,000 tonnes above lies well within the range of the maximum of about 130,000 tonnes and the minimum of about 57,000 tonnes of SBM that we would expect to have been produced.

  Live Animal Exports
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food how many dealers are registered as engaging in intra-Community trade; and in what form information on that registration is held. [30717]

  Mrs. Browning
  [holding answer 4 June 1996]: The Animals and Animal Products (Import and Export) Regulations 1995 provide for notices to be served on a dealer engaging in intra-Community trade requiring him or her to be registered with the Ministry. Registered dealers are required to keep records of deliveries of animals and their subsequent destination. As at June 1 1996, 95 dealers in Great Britain were registered. Registers of dealers are maintained by divisional veterinary managers.

  Mr. Heppell
  To ask the Minister of Agriculture, Fisheries and Food what response he has received from the authorities in the Netherlands following his inquiry about those authorities permitting British sheep to travel from premises in the Netherlands direct to Greece in contravention of EU directive 91/628. [32474]

  Mrs. Browning
  I refer the hon. Member to the reply I gave to the hon. Member for Glanford and Scunthorpe (Mr. Morley) on 17 June 1996.

  Bovine Spongiform Encephalopathy
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food what was the value on 2 June of the foodstuffs known to be contaminated by BSE whose possession he proposes should be made a criminal offence. [31610]

  Mrs. Browning
  It is not correct to assume that all mammalian meat and bone meal contains the BSE agent but to address the possible risk, the feeding to all livestock of feed incorporating it has been prohibited since 4 April. This has the effect of removing any risk of recycling the disease through its accidental inclusion in cattle rations.

  It is difficult to identify any legitimate use for such material remaining on farms, at feed mills and at feed merchants. Rather than having any value, it represents a storage and future disposal cost for the holder. On 10 June, we announced a feed recall scheme which will provide for its collection and disposal free of charge.
  429
  Mr. Prentice
  To ask the Minister of Agriculture, Fisheries and Food if(a) farmers and (b) others holding BSE-contaminated foodstuffs are to be compensated; and if they will be required to state if they have fed the meal to bovines. [31618]

  Mrs. Browning
  It would be wrong to presume that all mammalian meat and bonemeal is infectious or contains the BSE agent. No compensation will be paid to farmers or others holding animal feed incorporating MBM. Farmed animal feed containing MBM is being collected and disposed of free of charge under the free recall scheme, announced on 10 June.

  Mr. Prentice
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the amount and location of contaminated feedstuff suspected of carrying the BSE agent. [31609]

  Mrs. Browning
  It has been estimated that 5,000 to 15,000 tonnes of pig and poultry feed incorporating mammalian meat and bone meal may be awaiting collection and disposal at feed mills and at feed merchants. It is impossible to estimate how much, if any, of this feed harbours the BSE agent and so poses a risk of recycling the disease if it were fed to cattle, which would be an illegal act. The recall scheme will target all feedingstuffs containing MBM.

  The amount of this material remaining on farms after its feeding to all farmed animals became illegal on 4 April is thought to be relatively small.

  Mr. Prentice
  To ask the Minister of Agriculture, Fisheries and Food what factors underlay his proposal to EU Agriculture Ministers to make possession of BSE-contaminated feedstuff a criminal offence; and for what reasons this policy was not introduced earlier. [31759]

  Mrs. Browning
  The proposed offence to which the question refers would be for farmed animal feed containing mammalian meat and bone meal or for MBM itself to be present on farms, at feed mills or feed merchants, since some MBM may harbour the BSE agent and so pose a risk of recycling the disease if it, illegally, found its way into cattle rations.

  As feed incorporating mammalian meat and bone meal now has no legitimate use on farms and as any residual stocks in the non-ruminant farmed animal feed chain present a possible source of cross-contamination to cattle rations, it is best that it is removed. Making its possession illegal from 1 August, together with a Government-funded recall scheme, will encourage early removal.

  Mr. Campbell-Savours
  To ask the Minister of Agriculture, Fisheries and Food on what date the Government were first informed of BSE-related contaminated feed being fed to cattle. [31249]

  Mrs. Browning
  [holding answer 4 June 1996]: Early epidemiological investigations carried out in 1987 and 1988 showed that the only common facts in herds with confirmed cases of BSE was the use of concentrated animal feed containing, in particular, concentrate containing meat and bone meal. As a result of these findings, the ruminant protein feed ban was introduced in July 1988.
  430
  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what procedures he has evaluated to identify whether animal feed contains the infective agent responsible for bovine spongiform encephalopathy. [31631]

  Mrs. Browning
  [holding answer 10 June 1996]: The ELISA test is currently being used to ensure that animal feed does not contain mammalian protein. Bioassay tests on feed to test for infectivity are possible but the sensitivity of the test at present is such that it is extremely unlikely that infectivity could be detected.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food how many samples of commercial feed have been found to be contaminated with a BSE agent. [31632]

  Mrs. Browning
  [holding answer 10 June 1994]: No attempt has been made to detect infectivity in commercial feed. Bioassay tests on feed to test for infectivity are possible but the sensitivity of the test at present is such that it is extremely unlikely that infectivity could be detected.

  Testing has however been carried out to detect the presence of mammalian protein in animal feed. This is not synonymous with infection, but its presence would be in contravention of past and current prohibitions.

  Of 928 samples of feedingstuffs tested in February and March, eight were positive for the presence of ovine or porcine protein. None showed any evidence of bovine protein. In April, samples taken following an incident at a poultry mill and investigations into the supplier, led to the disclosure of four further positive samples. Again no bovine protein was isolated.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what quantity of material from rendering plants, potentially contaminated with BSE has been disposed of by(a) burial in landfill sites and (b) spreading on open ground. [31634]

  Mrs. Browning
  [holding answer 10 June 1996]: All BSE suspect cases are incinerated. Council regulation 716/96 requires that cattle in the over-30 month scheme be incinerated or processed at rendering plants and destroyed. A number of options for the disposal of meat and bonemeal produced at plants are under active consideration and in all cases full weight will be given to protecting the environment. The options include incineration, use as fuel in power generation and eventual landfill.

  Mr. Campbell-Savours
  To ask the Minister of Agriculture, Fisheries and Food what opinion surveys he has conducted relating to the impact of failures by animal feed mills, rendering plants and abattoirs fully to implement BSE-related regulations on public confidence in beef products. [32308]

  Mrs. Browning
  [holding answer 17 June 1996]: None.

  Local Veterinary Inspectors
  Mr. Heppell
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 23 April,Official Report, column 140, which provision of

  431
  paragraph 4g of part II of the code of practice on access to Government information he refers to when withholding the names of local veterinary inspectors. [32526]

  Mrs. Browning
  Paragraph 4g of part II of the code of practice on access to Government information permits the withholding of information whose disclosure could endanger the life or physical safety of any person, or identify the source of information or assistance given in confidence for law enforcement or security purposes.

  Postage Costs
  Mr. Donohoe
  To ask the Minister of Agriculture, Fisheries and Food how much his Department spent on postage in the financial years 1994–95 and 1995–96; and how many items were posted during these periods. [32843]

  Mr. Boswell
  The Department's expenditure on postage in 1994–95 was £1,853,970.64 and in 1995–96 was £1,596,147.88. No record was kept of the number of items posted.

  Wildlife Trusts
  Sir Kenneth Carlisle
  To ask the Minister of Agriculture, Fisheries and Food when he last met the wildlife trusts; what issues were raised; and if he will make a statement. [33020]

  Mr. Boswell
  The Minister met the wildlife trust in Lincolnshire on 10 June and visited various sites.

  Issues raised included pesticides; soil erosion; set-aside; countryside stewardship; the common agricultural policy and the intergovernmental conference; farmland birds; and agri-environmental schemes.

  In a subsequent interview with the "Natural World", the Minister was asked about reconciling food production with protection of the environment; CAP reform; biodiversity; the uplands; wildlife legislation; and the Government's achievements and aims for wildlife. He emphasised the considerable achievements of the expanded agri-environmental programme.

  Customer Charters
  Mr. Donohoe
  To ask the Minister of Agriculture, Fisheries and Food if he will list(a) the customer charters which are currently in use within his Department and its executive agencies and (b) the charters which have been withdrawn. [32827]

  Mr. Boswell
  The following customer service standards have been produced under the citizens charter and are currently in use within this Department and its executive agencies:

  Department

  Commitment to Service (relating to the regional organisation) second edition)

  Plant Variety Rights Office and Seeds Division Customer Service Standard

  ADAS Dairy Hygiene Inspectorate Code of Practice and Statement of Service

  Agricultural Wages Inspectorate Code of Enforcement

  Egg Marketing Inspectorate: Our Code of Practice and Service Standard

  The Fish Disease Inspectorate and You: Our Service Standards and Code of Practice for Enforcement

  432

  Horticultural Marketing Inspectorate Code of Practice and Statement of Service

  The Plant Health and Seeds Inspectorate and You: Our Service Standards and Code of Practice on Enforcement

  Sea Fisheries Inspectorate Code of Enforcement

  The State Veterinary Service; Service Standards for the Veterinary Field and Investigation Services, including the Code of practice on Enforcement

  Wine Standards Board Code of Enforcement

  Executive Agencies

  Statement of ADAS Service Standards

  Central Science Laboratory; Statement of our Standards and Quality of Service

  Central Veterinary Laboratory Service Statement

  Intervention Board: Customer Care

  Meat Hygiene Service: Appeals Procedure and Customer Service Standards

  Pesticides Safety Directorate: Statement of our Service Standards

  Veterinary Medicines Directorate Customer Service Statement

  No customer service standards have been withdrawn.

  Statistics
  Mr. Fisher
  To ask the Minister of Agriculture, Fisheries and Food which statistics his Department has discontinued(a) the collection and (b) the publication of since 1989. [32858]

  Mr. Boswell
  The Ministry regularly reviews the statistics which are collected and disseminated to ensure that needs are met cost effectively. Information is not held in a form which could identify all changes since 1989 except at disproportionate cost, but the following regular statistical surveys have been discontinued:

  1995: The Production of Syrup and Treacle.

  1994: The Structure and Extent of the Turkey Population.

  1993: The Consumption of Potato Crisps and Snacks.

  1993: The Production of Processed Potatoes.

  1993: The Stocks of Cocoa Beans and Cocoa Products.

  1992: Agricultural Machinery.

  1992: Import Commitments for Sugar within the EU.

  1990: The Structure of the Egg Industry.

  1990: The Canning and Bottling of Fruit and Vegetables.

  Tobacco Producers
  Sir Keith Speed
  To ask the Minister of Agriculture, Fisheries and Food if he will list the countries of the European Union in receipt of EU funds to subsidise their tobacco producers and the total such expenditure to each country for the most recent 12-month period. [33182]

  Mr. Baldry
  Details of expenditure on the tobacco regime by the Community, broken down by member state, are contained in annex 2 of the annual financial reports on the European Agricultural Guidance and Guarantee Fund, EAGGF, guarantee section, copies of which have been deposited in the Library of the House.

  Provisional figures for 1995 are:

  Mecu

  £ million1

  Belgium

  3.5

  2.8

  Germany

  26.2

  21.2

  Greece

  411.4

  332.4

  433

  Mecu

  £ million1

  Spain

  125.7

  101.6

  France

  81.2

  65.6

  Italy

  331.6

  267.9

  Netherlands

  0.1

  0.1

  Portugal

  13.3

  10.7

  Total

  993.0

  802.4

  1£1=1.23759 ecu. Figures may not add to totals shown because of rounding.

  Animal Feed
  Mr. Campbell-Savours
  To ask the Minister of Agriculture, Fisheries and Food on how many occasions in each year since 1989 animal feed producers were prosecuted for failure to comply with regulations relating to bovine spongiform encephalopathy governing the production, distribution and supply of cattle feed. [31248]

  Mrs. Browning
  [holding answer 4 June 1996]: No producers of animal feed have been prosecuted for failure to comply with BSE regulations relating to the production, distribution and supply of cattle feed.

  Action has been taken in conjunction with the animal feed producers where problems were identified to put these right. Feed mills are now being visited on a regular basis and samples taken for analysis. This involves tests for mammalian protein which had to be specially developed and were not available for full use until February 1996.

  Beef Supplies
  Mr. Marlow
  To ask the Minister of Agriculture, Fisheries and Food in what circumstances he will make over 30 months' prime beef available to the United Kingdom consumer. [31829]

  Mrs. Browning
  [holding answer 7 June 1996]: Proposals for the establishment of a voluntary beef assurance scheme for those specialist beef herds reared mainly on grass which had not come into contact with meat or bonemeal and where no cases of BSE have occurred were issued on 3 May. Under the proposed scheme, participants will be able to sell cattle over 30 months for slaughter for human consumption purposes. The detailed rules of the scheme are being drawn up with a view to introducing it in July.

  Animal Feedstuff
  Mr. Alex Carlile
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the measures taken by the Government to ensure that no feed containing meat and bone meal was fed to farm animals over the past 30 months. [31383]

  Mrs. Browning
  [holding answer 10 June 1996]: The Bovine Spongiform Encephalopathy (Amendment) Order 1996, which came into effect on 29 March, prohibits in Great Britain the sale or supply of any mammalian meat and bone meal, for the purposes of feeding to farmed animals, including poultry, horses and farmed fish. The order also made it an offence, from 4 April, to use any mammalian meat and bonemeal, or feed containing it, for feeding to farmed animals. These measures are being reinforced by a programme of inspection and sampling on
  434
  farms and at feed mills. This programme is due shortly to be widened in scope and intensity to increase the current rate of sampling.

  Mr. Tyler
  To ask the Minister of Agriculture, Fisheries and Food what agency will be responsible for identifying proscribed animal feed and for initiating legal proceedings against those holding it; and what estimate he has made of the manpower and budget consequences of this proposal. [31626]

  Mrs. Browning
  [holding answer 10 June 1996]: The state veterinary service and local authorities will be responsible for identifying proscribed mammalian meat and bonemeal and feed containing meat and bonemeal and will initiate proceedings in accordance with the appropriate legislation. Such activities will be carried out as part of their normal enforcement responsibilities.

  Rendering Plant, Thruxted
  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the past and present disposal methods of the rendering plant at Thruxted, Kent, when dealing with potentially BSE-contaminated materials; if he will undertake an investigation into possible contamination of the environment at Eggringe wood arising from this plant; and if he will make a statement. [31629]

  Mrs. Browning
  [holding answer 10 June 1996]: This Department has not made an assessment of the effluent disposal methods of the rendering plant at Thruxted Mill, Kent which is the responsibility of the Environment Agency.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the potential for materials extracted from specified bovine offal entering the water supply at Eggringe wood, near Thruxted Mill, in Kent. [31630]

  Mrs. Browning
  [holding answer 10 June 1996]: A water treatment plant for effluent from the offals has been installed at Thruxted Mill and it is for the Environment Agency to decide if the disposal of treated water to land complies with the Water Resources Act 1991. This Department has not made such an assessment.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what quantity of residue from specified bovine offal is being stored at Thruxted Mill in Kent. [31633]

  Mrs. Browning
  [holding answer 10 June 1996]: Approximately 110 tonnes of meat and bonemeal and 90 tonnes of tallow —the resultant material from rendering —is currently stored at Thruxted Mill.

  Live Animal Transport
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food how many notices under articles 15 and 16 of the Welfare of Animals during Transport Order 1994 have been issued since the order came into force by local veterinary inspectors in the vicinity of Dover in respect of animals destined for export through the ports of(a) Brightlingsea and (b) Dover where they have identified sheep, calves or pigs which are unfit to travel; and if he will make a statement. [32509]
  435
  Mrs. Browning
  [holding answer 12 June 1996]: None. I also refer the hon. Member to the answers I gave him on 13 May, Official Report, columns 379–80, and on 4 June, Official Report, column 436.

  Rabies
  Mr. Tony Banks
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the circumstances surrounding the discovery of a suspected rabid bat in Newhaven recently. [32710]

  Mrs. Browning
  [holding answer 13 June 1996]: I refer the hon. Member to the answer given by my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food to the hon. Member for Staffordshire (Mr. Fabricant) on 11 June 1996, Official Report, column 139.

  Mr. Banks
  To ask the Minister of Agriculture, Fisheries and Food how many cases of bats infected with rabies have been confirmed in England during the past five years; how many were among native populations; and how many were suspected of coming from abroad. [32709]

  Mrs. Browning
  [holding answer 13 June 1996]: There has never been a confirmed case of rabies in a bat in England before the case in East Sussex confirmed on 10 June this year.

  Mr. Banks
  To ask the Minister of Agriculture, Fisheries and Food what was the species of bat with suspected rabies discovered in Newhaven recently; when the bat was first noticed; by whom; what action was taken; and when it came into the possession of his Department. [32707]

  Mrs. Browning
  [holding answer 13 June 1996]: The bat is believed to have been a Daubenton's bat. It was reported to a local bat conservation society by a member of the public in Newhaven in East Sussex as being weak and unable to fly. It was collected by a wildlife ranger on 31 May who took it to the society's premises in Shoreham in West Sussex that day. The bat was euthanased on 3 June following a display of uncharacteristic aggression, a spontaneous abortion and an apparent epileptic fit. The carcass was posted to the Veterinary Laboratory Agency at Addlestone on 4 June and arrived on 5 June. Routine tests were under taken for rabies. Rabies was confirmed on 10 June following positive test results to a fluorescent antibody test and a rapid tissue culture isolation test. The results of a heminested RT-PCR mouse innoculation test are still awaited.

  Mr. Banks
  To ask the Minister of Agriculture, Fisheries and Food what strain of rabies is suspected in the bat discovered in Newhaven recently; if the strain is capable of being passed on to humans; how long it will take to confirm the bat was rabid; and what methods are used to confirm rabies. [32711]

  Mrs. Browning
  [holding answer 13 June 1996]: Following positive test results to a fluorescent antibody test and a rapid tissue culture isolation test rabies, European bat lyssavirus strain 2 was confirmed on 10 June. This strain is capable of being passed on to humans. The results of the heminested RT-PCR mouse innoculation test are expected in the week beginning 24 June.
  436
  Mr. Banks
  To ask the Minister of Agriculture, Fisheries and Food when the bat found in Newhaven and suspected of carrying rabies died. [32717]

  Mrs. Browning
  [holding answer 13 June 1996]: The bat was euthanased on 3 June.

  Computers (Millennium)
  Mr. Ingram
  To ask the Minister of Agriculture, Fisheries and Food what assessment has been made of the cost effects of the millennium date change on the computer systems operated by his Department. [32671]

  Mr. Boswell
  Work is currently under way in the Ministry of Agriculture, Fisheries and Food to assess the impact and likely costs of the millennium date change on the computer systems operated by the Department. Initial planning has been undertaken and a project—which covers applications and systems software, as well as hardware, from our suppliers—has been established under the auspices of the Ministry's information technology steering group. Early activities include an assessment of the impact on selected pilot systems, but until this and other related preliminary work has been completed, likely costs cannot be assessed.

  Dietary Supplements
  Dr. Marek
  To ask the Minister of Agriculture, Fisheries and Food what response he has made to the Shrimpton report on "Essential Nutrients in Supplements"; and what assessment he has made of its recommendations relating to consumer choice dietary supplements. [33177]

  Mrs. Browning
  [holding answer 17 June 1996]: We have noted this report commissioned by the European Federation of Associations of Health Product Manufacturers and will take its conclusions into account in considering issues related to the safety of dietary supplements.

  Beef Ban
  Mr. Marlow
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the extent to which the German Government will be able to delay the partial lifting of the beef ban while not being in conflict with EU law; and what mechanisms are available to the German Government to delay the partial lifting of the ban. [33053]

  Mrs. Browning
  [holding answer 17 June 1996]: The ban on the export of cattle, bovine semen and embryos, meat from cattle slaughtered in the United Kingdom, certain other products of such cattle and mammalian meat and bonemeal has been lifted in respect of semen, and subject to conditions of production, labelling and supervision, in respect of gelatine, tallow and certain other products. That partial lifting of the ban was done by a Commission decision that is binding on all member states of the European Community. Any member state that fails to give effect to the decision will be in breach of EC law.

  Mr. MacShane
  To ask the Minister of Agriculture, Fisheries and Food if he will list those countries which have banned the import of British beef since 1987. [29036]
  437
  Mrs. Browning
  [pursuant to the reply, 16 May 1996, c. 580–81]: Commission decision 96/239/EC of 27 March provided that the UK shall not export from its territory meat and meat products obtained from bovine animals slaughtered in the UK. The following information sets out the position on the day before the Commission decision was introduced, identifying separately those countries which, during the period from 1987, have introduced and/or maintained a ban, and those which had introduced, but subsequently lifted, such a ban.

  Countries which have maintained a ban:

  Algeria Argentina

  Canada

  China

  Bahrain

  Bulgaria

  Iran

  Iraq

  Jamaica

  Japan

  Jordan

  Kazakhstan (CIS)

  Libya

  Lithuania

  Malaysia

  Philippines

  Russian Federation

  Saudi Arabia

  Switzerland

  Syria

  Taiwan

  United Arab Emirates

  Uzbekistan

  Countries which have introduced, but subsequently lifted, a ban:

  Chile

  Cyprus

  Egypt

  Kuwait

  Lebanon

  State of Sarawak (Malaysia)

  Mauritius

  Morocco

  Oman

  Poland

  Trinidad and Tobago

  Tunisia

  Turkey

  Qatar

  Mr. Simpson
  To ask the Minister of Agriculture Fisheries and Food if he will list those non-EU countries which currently ban British beef, indicating in each case the date the ban became effective. [28976]

  Mrs. Browning
  [pursuant to the reply, 16 May 1996, c. 579–80]: Commission decision 96/239/EC of 27 March 1996 provided that the UK shall not export from its territory meat and meat products obtained from bovine animals slaughtered in the UK. The list of third countries
  438
  therefore shows those countries with a ban on imports of British beef on the day before the introduction of the Commission Decision. The month and year when the ban was introduced are shown where available.

  Importing country

  Date of ban

  Algeria

  June 1990

  Argentina

  August 1991

  Bahrain

  —

  Bulgaria

  September 1994

  Canada

  March 1996

  China

  October 1990

  Iran

  June 1990

  Iraq

  October 1994

  Jamaica

  September 1991

  Japan

  July 1990

  Jordan

  September 1990

  Kazakhstan (CIS)

  August 1993

  Libya

  November 1990

  Lithuania

  April 1995

  Malaysia

  —

  Philippines

  October 1994

  Russian Federation

  September 1993

  Saudi Arabia

  September 1990

  Switzerland

  June 1990

  Syria

  August 1990

  Taiwan

  February 1990

  United Arab Emirates

  August 1990

  Uzbekistan

  —

  Water Treatment
  Mr. Martyn Jones
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the annual cost of water treatment to remove pollutants derived from agricultural activity from(a) United Kingdom waterways and (b) United Kingdom drinking water supplies; and if he will make a statement. [32289]

  Mr. Clappison
  I have been asked to reply.

  Government policy is to take measures to reduce the risk of pollution from agricultural sources. Some costs are incurred in dealing with pollutants arising from agricultural activity but information is not collected centrally. Water suppliers in the United Kingdom have spent around £150 million per annum between 1990–91 and 1994–95 on treatment to remove pesticides and nitrates from drinking water supplies.

WALES

  Cattle Slaughter
  Mr. Redmond
  To ask the Secretary of State for Wales if he will list the locations his Department is(a) using and (b) considering using for the storage of the remains of cattle aged 30 months or over following processing of carcasses at rendering plants prior to final disposal; what is the estimated (a) maximum and (b) minimum periods these remain will be at these storage sites; and if he will make a statement. [31557]

  Mr. Jonathan Evans
  The Intervention Board executive agency is currently storing the resultant material from animals rendered under the 30-month scheme at stores in Exeter, Belfast, Liverpool and Gloucestershire.
  439
  Other locations will be considered in due course as it becomes apparent that more storage facilities are required. As announced by my hon. Friend the Minister of Agriculture on 16 April, a number of options for the disposal of meat and bonemeal produced at plants are under active consideration and in all cases full weight will be given to protecting the environment. The options include incineration and energy recovery. The period of storage will vary between stores and will be dependent upon the final disposal route chosen.

  Mobile Homes (Council Tax)
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on the application of the council tax upon mobile homes. [32886]

  Mr. Gwilym Jones
  A mobile home that is someone's sole or main residence and is stationed with a degree of permanence, with its pitch, constitutes a dwelling liable to council tax.

  Health Authorities
  Mr. Dafis
  To ask the Secretary of State for Wales what recent representations he has received from health authorities concerning the level of funding provided to them by the Welsh Office for 1996–97 and the implications for contracts with the providing trusts; and if he will make a statement. [32269]

  Mr. Gwilym Jones
  Since October 1995, six letters have been received by my right hon. Friend and four parliamentary questions have been answered. Contracts are a matter between NHS trusts and health authorities.

  Postage Costs
  Mr. Donohoe
  To ask the Secretary of State for Wales how much his Department spent on postage in the financial years 1994–95 and 1995–96; and how many items were posted during these periods. [32848]

  Mr. Hague
  The information is as follows:

  Financial Year

  Postage (£)

  Number of items

  1994–95

  496,869

  1,178,038

  1995–96

  427,616

  1,203,371

  Enterprise Zones
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his policy on enterprise zones in Wales; and if he will make a statement. [32884]

  Mr. Hague
  In December 1987, the Government announced that the enterprise zone scheme would not be extended other than in exceptional circumstances.

  Cattle Database
  Mr. Barry Jones
  To ask the Secretary of State for Wales what proposals he has to establish a national (Wales) cattle database. [32892]

  Mr. Jonathan Evans
  In the Government's response to the Agriculture Select Committee report on the identification and registration of farm livestock last year, we recognised that a national database might be an appropriate solution to the new arrangements to be 440
  introduced by the EU after 1996. This will need to be looked at in more detail. In the meantime, interested organisations are being consulted about the Government's proposals for compulsory cattle passports. These documents will improve animal identification and traceability and are an important element in the measures being taken by the Government to restore confidence in British beef.

  Pharmacies
  Mr. Chris Davies
  To ask the Secretary of State for Wales if he will list the number of pharmacies in Wales by year since 1979. [33081]

  Mr. Gwilym Jones
  The information is given in the following table

  Number of Pharmacies1

  1979

  676

  1980

  675

  1981

  663

  1982

  664

  1983

  664

  1984

  666

  1985

  676

  1986

  695

  1987

  709

  1988

  704

  1989

  702

  1990

  707

  1991

  706

  1992

  707

  1993

  708

  1994

  712

  1995

  715

  1 At 31 December for 1979 to 1989 and 30 September thereafter.

  Cardiff Airport
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on the future prospects for Cardiff airport. [33162]

  Mr. Gwilym Jones
  The future prospects for Cardiff international airport are excellent. TBI plc, the airport's owner, is investing heavily in new facilities which will help to create one of the most modern regional airports in the United Kingdom.

  Exports
  Mr. Barry Jones
  To ask the Secretary of State for Wales what estimates he has made of the value of goods exported annually from Wales from United Kingdom manufacturing industries; and if he will make a statement. [33168]

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

ATTORNEY-GENERAL

  Driving Offences
  Mrs. Dunwoody
  To ask the Attorney-General on how many occasions in the last five years a charge of manslaughter has been brought as a result of a driving offence. [32802]
  441
  Mr. Maclean
  I have been asked to reply.

  The information available to me shows that 64 manslaughter charges were brought in England and Wales during the period 1990 to 1994, following the commission of a motoring offence.

  Information for 1995 is not yet available.

NORTHERN IRELAND

  Cattle Slaughter
  Mr. Redmond
  To ask the Secretary of State for Northern Ireland if he will list the locations his Department is(a) using and (b) considering using for the storage of the remains of cattle aged 30 months or over following processing of carcases at rendering plants prior to final disposal; what is the estimated (i) maximum and (ii) minimum period these remains will be at these storage sites; and if he will make a statement. [31551]

  Mr. Ancram
  (a) The Intervention Board is currently storing rendered remains of Northern Ireland cattle aged 30 months or over at stores in Belfast and Liverpool.

  (b) Other locations will be considered in due course as it becomes apparent that more storage facilities are required.

  (i) and (ii) The period of storage will vary between stores and will be dependent upon the final disposal route chosen.

  Traffic Wardens
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland in what circumstances(a) performance-related pay, and (b) commission is paid to traffic wardens in Northern Ireland. [32582]

  Sir John Wheeler
  Traffic wardens are not on performance-related pay, nor do they receive commission in relation to their duties. Their present salary arrangements are detailed below. Progression to the maximum of the scale is subject to satisfactory performance and is on an annual basis.

  Traffic warden

  £9,510 (on appointment)

  £9,710 (max)

  Senior traffic warden

  £9,970 (on appointment)

  £10,155

  £10,365 (max).

  Teachers
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many teachers there are in(a) primary schools and (b) secondary schools in (i) Strangford constituency and (b) Northern Ireland; and what have been the figures in each of the past five years. [32175]

  Mr. Ancram
  The information requested is as follows:
  442

  Strangford constituency

  Northern Ireland

  School year

  Primary

  Secondary

  Primary

  Secondary

  1995–96

  359

  353

  8,415

  10,075

  1994–95

  387

  356

  8,766

  10,005

  1993–94

  354

  340

  8,226

  9,688

  1992–93

  342

  341

  8,035

  9,544

  1991–92

  338

  331

  7,920

  9,443

  1990–91

  337

  331

  7,944

  9,553

  Road Gritting
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland if he will list the additions, deletions or amendments to the main line road gritting schedules on each section of the southern division of the Department of the Environment Roads Service, in each of the last 10 years. [32581]

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

  Letter from G. P. Fraser to Mr. Seamus Mallon, dated 18 June 1996:
  The Secretary of State for Northern Ireland has asked the Chief Executive to reply to your question about amendments to the main line road gritting schedules in each section of the Southern Division of Roads Service and in his absence I am replying on his behalf. It is assumed that the question refers to the Craigavon Division of Roads Service.

  The information is as follows:-

  Additions

  Year

  Route

  1987

  B135

  Cullyhanna Road, Crossmaglen

  C222

  Tullynaval Road, Crossmaglen

  C217

  Chapel Road, Camlough Creeve Road, Newry

  C213

  Ballymoyer Road, Newtownhamilton

  1988

  Newry By-pass: Stage 1 Banbridge By-pass (second carriageway)

  1989

  No additions

  1990

  C310

  Diamond Road, Dromore

  C227

  Dundalk Road, Crossmaglen (short section)

  B135

  Carron Road, Crossmaglen (short section)

  1991

  Meadow Lane Link Road, Portadown Link Road, Dromore Anderson Street/Victoria Street, Banbridge

  1992

  M1/M12 Link Road, Craigavon A1 Mullans Corner, Dromore (second carriageway)

  1993

  Kenlis Street Roundabout and Link Road, Banbridge Main Street, Forkhill (short section)

  1994

  No additions

  1995

  Newry By-pass: Stage 2 Fort Street, Banbridge (short section)

  Other additions—precise dates unknown

  Ballynahone Avenue, Armagh

  Victoria Park, Armagh

  443

  Mellifont Park, Armagh

  Linseys Hill, Armagh

  Killuney Manor, Armagh

  Culdee Street, Armagh

  Windmill Avenue, Armagh

  Navan Street, Armagh

  Angela Crescent, Richhill

  Richmond Heights, Richhill

  Laurelvale Road, Tandragee

  Derryhale Road, Tandragee

  Deletions

  Year

  Route

  1988

  Kilmorey Crescent, Kilkeel Riverside Park, Kilkeel Caddels Lane, Rathfriland School Road, Rathfriland Back Road, Rathfriland Cross Heights, Rathfriland Spelga Drive, Rathfriland Kiltarriff Park, Rathfriland Mourne View, Rathfriland

  1995

  C203 Cormalat Road, Newtownhamilton

  I hope you find this information helpful.

  Firearms Deaths
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland if he will arrange for the maintenance and publication by his Department of statistics concerning deaths caused by legally held firearms, to include the particular type of gun, the reason for the grant of a firearm certificate, and a breakdown of the type of death by(a) murder, (b) suicide or (c) accident; and if he will make a statement. [32081]

  Sir John Wheeler
  I have asked the chief constable to consider the feasibility of collating this information. I will then consider whether the costs of producing the figures outweigh the benefits of having them. It is not possible to

  Gross public expenditure

  £ million (1994–95 prices)

  1990–91 Outturn

  1991–92 Outturn

  1992–93 Outturn

  1993–94 Outturn

  1994–95 Outturn

  1995–96 Estimated outturn

  (a) DOE Water Service

  137

  147

  161

  175

  187

  195

  (b) NIES

  54

  61

  62

  —

  —'

  —

  (c) DED

  581

  548

  520

  530

  503

  514

  (d) NIHE

  547

  539

  534

  518

  518

  529

  (e) Social Security Agency (including Social Security Benefits)

  —

  2,263

  2,467

  2,655

  2,786

  2,905

  (f) DANI

  240

  246

  247

  276

  317

  310

  (g) Child Support Agency

  —

  —

  —

  5

  5

  6

  (h) DENI

  1,179

  1,242

  1,277

  1,288

  1,326

  1,338

  (i) DHSS

  3,433

  3,637

  3,892

  4,143

  4,342

  4,535

  (j) DFP

  56

  60

  56

  62

  75

  86

  (k) NIO

  818

  863

  943

  955

  930

  877

  (l) Southern ELB

  101

  200

  216

  215

  215

  215

  (m) Southern HSSB

  136

  140

  170

  179

  185

  192

  444
  estimate when the exercise will be completed, but I shall write to the hon. and learned Gentleman as soon as the information becomes available.

  Northern Ireland Budget
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland if he will list the total annual budget in real terms for Northern Ireland, actual or estimated, for each financial year since 1990. [32583]

  Sir John Wheeler
  The information requested is shown in the table and relates to total gross public expenditure for Northern Ireland, including cyclical social security benefits, at 1994–95 price levels.

  (1994–95 prices)

  £ million

  1990–911

  7,588

  1991–921

  7,923

  1992–91

  8,288

  1993–941

  8,559

  1994–951

  8,872

  1995–962

  8,981

  1 Outturn.

  2 Estimated Outturn.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland if he will list the total annual budget in real terms for the(a) Department of the Environment Northern Ireland Water Service, (b) Northern Ireland Electricity Service, (c) Department of Economic Development, (d) Northern Ireland Housing Executive, (e) Social Security Agency, (f) Department of Agriculture, (g) Child Support Agency, (h) Department of Education, (i) Department of Health and Social Services, (j) Department of Finance and Personnel, (k) Northern Ireland Office, (l) Southern education and library board; (m) Southern health and social services board, (n) Department of Environment Roads Service, (o) the Local Enterprise Development Unit and (p) the Industrial Development Board, actual or estimated, for each financial year since 1990. [32584]

  Sir John Wheeler
  The information is shown in the table and relates to gross public expenditure at 1994–95 price levels for the bodies requested.
  445

  Gross public expenditure

  £ million (1994–95 prices)

  1990–91 Outturn

  1991–92 Outturn

  1992–93 Outturn

  1993–94 Outturn

  1994–95 Outturn

  1995–96 Estimated outturn

  (n) DOE Roads Service

  155

  159

  153

  158

  161

  154

  (o) LEDU

  50

  41

  36

  34

  35

  34

  (p) IDB

  268

  240

  185

  173

  167

  153

  1. The NIE was privatised in 1993.

  2. The Social Security Agency and the Child Support Agency were created in 1991–92 and 1993–94 respectively.

  3. Figures for DHSS include the Social Security Agency, social security benefits (including cyclical benefits), the Child Support Agency and the Southern health and social services board.

  4. The 1990–91 Southern education and library board figure excludes teachers' and lecturers' salary costs. These became the responsibility of the Boards from 1991–92 onwards.

  5. The DENI figures include those shown for the Southern education and library board.

  6. The DED figures include those shown for IDB, LEDU and the NIES.

TRADE AND INDUSTRY

  Research Councils
  Mr. Miller
  To ask the President of the Board of Trade what guidelines he has issued to research councils as to the use of money allocated for expenditure on indirect costs. [31588]

  Mr. Ian Taylor
  My right hon. Friend the President of the Board of Trade has not issued any guidance to the research councils concerning the use of money allocated for expenditure on indirect costs within research grants to higher education institutions. The indirect costs awarded in these grants was set at 40 per cent. of the staff component of the grant in 1992 by the then Secretary of State for Education and Science.

  Arms Exports
  Miss Lestor
  To ask the President of the Board of Trade what measures the United Kingdom will propose to the forthcoming G7 summit on 28 and 29 June to limit export credits for arms. [32700]

  Mr. Oppenehim
  The UK continues to press in international forums that export credits and other financial support extended to the poorest developing countries should be focused primarily on goods and services which will foster and sustain their economic rehabilitation and development.

  Milk Marque
  Mr. John Marshall
  To ask the President of the Board of Trade when the Office of Fair Trading started its inquiry into Milk Marque; and when it is expected to report. [32645]

  Mr. John M. Taylor
  The Office of Fair Trading has been closely monitoring developments in the milk market since its deregulation in November 1994. During this time, the office has received a number of complaints about alleged abuses of monopoly power by Milk Marque. It is for the Director General of Fair Trading to consider whether there are grounds for him to use his powers under the provisions of the Fair Trading Act 1973 to make a monopoly reference to the Monopolies and Mergers 446
  Commission. He hopes to reach a decision at the earliest
  opportunity.

  Recruitment
  Mr. Donohoe
  To ask the President of the Board of Trade how much his Department spent in recruiting staff to his Department and its executive agencies during the 1994–95 and 1995–96 financial years; and how many staff were recruited in each of these years. [31401]

  Mr. John M. Taylor
  I have asked the agencies to reply directly to the hon. Member. As for the remainder of my Department, in 1994–95 46 staff were recruited to permanent positions at a cost of £386, 129. All these staff were at grade 7 or below. In 1995–96, 62 staff were recruited to permanent positions at grade 7 level and below, at a cost of £392,898. In addition, in 1995–96 three senior staff were recruited at a total cost of £104,746.

  Letter from Jim Norton to Mr, Brian Donohoe, dated 18 June 1996:
  Question: To ask the President of the Board of Trade, how much his Department spent in recruiting staff to his Department and its executive agencies during the 1994–95 and 1995–96 financial years; and how many staff were recruited in each of these years.
  I have been asked to answer the question your raised on behalf of the Radiocommunications Agency.
  RA expenditure on staff recruitment was £30,313 in 1994/95, and £35,935 in 1995/96. 10 staff were recruited in 1994/95 and 23 in 1995/96.

  Letter from Peter Joyce to Mr. Brian Donohoe, dated 18 June 1996:
  The President of the Board of Trade has asked me to reply to your question about the amount spent by The Insolvency Service in recruiting staff during the 1994/95 and 1995/96 financial years; and how many staff were recruited in each of these years.
  The numbers and the associated costs for the recruitment of permanent staff into The Insolvency Service were as follows:

  1994/95: 27 staff at a total of £42,830

  1995/96: 1 member of staff at a cost of £284.

  Letter from John S. Holden to Mr. Brian Donohoe, dated 18 June 1996:
  I have been asked by the President of the Board of Trade to reply on behalf of Companies House to your recent Parliamentary Question (as/2400) concerning recruitment numbers and costs.
  The numbers recruited during 1994–95 and 1995–96 were as follows, itemised by grade:
  Recruitment Analysis: By substantive grade. Financial years 1994–95 and 1995–96
  447

  1994–95

  1995–96

  Heads

  FTE

  Heads

  FTE

  G7

  —

  —

  2

  1.65

  EO

  —

  —

  1

  1

  AO

  —

  —

  4

  4

  AA

  35

  29.27

  87

  76.56

  SGB2

  69

  58.38

  61

  49.83

  Totals

  104

  87.65

  155

  133.0

  I should explain that the majority of those particularly at the AA and SGB2 grades were casual staff on short term appointments.

  All recruitment at Companies House is undertaken by our Personnel Section. Recruitment costs are not itemised separately but are included within the general costs of that section.

  Letter from Ron Marchant to Mr. Brian Donohoe, dated 18 June 1996:
  In the absence of the Comptroller General on official business, I am responding in relation to the Patent Office to the your parliamentary question to the President of the Board of Trade about staff recruitment. The information requested is as follows:

  (i)1994/95
  The Patent Office recruited two fixed-term Network Services Technicians at a cost of £1,628.55, which is for the advertisement in the "Western Mail" and "Wales on Sunday".
  In addition, we recruited six graduates as patent examiners at a total cost of £5,722.07 made up from:

  Advertising and Recruitment Fairs: £3,600.00

  Recruitment and Assessment Services: £1,185.00

  Expenses for candidates at interview boards: £937.07

  (ii) 1995/96
  In this period we recruited 12 graduates for the patent examiner grades at a cost of £13,632.58 made up from:

  Advertising and Recruitment Fairs: £7,362.23

  Hiring Board Chairman: £1,856.50

  Expenses for those attending interviews: £1,300.00

  Entry in graduate recruitment directory: £3,113.75

  Letter from Zélie Armstrong to Mr. Brian Donohoe, dated 18 June 1996:
  The President of the Board of Trade has asked the National Weights and Measures Laboratory to reply to your questions about the cost and the number of staff recruited in 1994–95 and 1995–96.
  The figures you require are as follows:

  1994–95 3 staff recruited; £662.50

  1995–96 2 staff recruited; £1,359.00

  Ostrich Farming
  Mr. David Shaw
  To ask the President of the Board of Trade (1) if he will list all companies his Department's investigations showed to be connected to directors and others involved with the Ostrich Farming Corporation Ltd. indicating those companies currently under investigation by(a) his Department and (b) other public bodies; [32929]

  (2) what investigations his Department is making into companies which obtained sales and marketing commissions from the Ostrich Farming Corporation Ltd. and the methods used by those companies to earn those commissions. [32932]
  448
  Mr. John M. Taylor
  Such inquiries are confidential and I cannot comment on whether the companies closely associated with Ostrich Farming Corporation Ltd. in the marketing of ostriches have or are being investigated.

  Mr. Shaw
  To ask the President of the Board of Trade what action his Department is taking to protect the interests of owners of ostriches purchased from the Ostrich Farming Corporation Ltd. [32930]

  Mr. Taylor
  Following inquiries under part XIV of the Companies Act 1985, the Secretary of State presented a petition for the winding-up of the company in the public interest and, at the same time, sought and shortly afterwards obtained the appointment of the official receiver as provisional liquidator of the company. The official receiver is in communication with the farming companies to which the company contracted out the day-to-day care of such ostriches and with owners and representatives of owners, and is continuing to seek the directions of the court in relation to this.

  Mr. Shaw
  To ask the President of the Board of Trade what assessment he has made of the compliance of the accounting records kept by the directors of the Ostrich Farming Corporation Ltd. with Companies Act legislation; and what assessment he has made of the adequacy of the company's records of assets and liabilities. [32933]

  Mr. Taylor
  Following inquiries under part XIV of the Companies Act 1985 the Secretary of State presented a petition to the court for the winding-up of the company in the public interest and has applied for and obtained the appointment of the official receiver as provisional liquidator of the company. The official receiver has taken into his possession the known books and records, including those which are computerised and will, if appropriate, report on any deficiencies he may find in such records to the appropriate authority.

  Mr. Shaw
  To ask the President of the Board of Trade on how many occasions the marketing of ostriches by the Ostrich Farming Corporation Ltd. and the operation of the company contravening(a) financial services, (b) companies and (c) banking legislation. [32931]

  Mr. Taylor
  If the Department discovers possible contraventions of legislation in the course of its inquiries, it considers these carefully and, if appropriate, takes action or reports its findings to those with responsibility for such action, but I cannot comment on individual cases.

  Mr. Shaw
  To ask the President of the Board of Trade what investigations he has conducted into newspapers which carried advertisements for the sale of ostriches by the Ostrich Farming Corporation Ltd.(a) in respect of their carrying out appropriate investigations prior to accepting the advertising and (b) the compliance of the advertisements with the financial services legislation. [32928]

  Mr. Taylor
  In respect of(a) none.

  Under the self-regulatory system of advertising controls in the UK, it is the responsibility of the Advertising Standards Authority to ensure that the advertising industry complies with its agreed codes of practice.

  In respect of (b) none.

  Burma
  Mrs. Fyfe
  To ask the President of the Board of Trade what was the cost of Government funding of the recent business delegation to Rangoon [32357]

  Mr. Nelson
  The DTI provided £23,000 towards the cost of funding the recent business delegation to Rangoon, in the form of £1,000 grants given to eligible UK companies that participated in the Asia Pacific advisory group trade mission.

  Mrs. Fyfe
  To ask the President of the Board of Trade what was the cost of mounting the "Burma—the Next Tiger?" conference in London. [32356]

  Mr. Nelson
  After deducting the income derived from attendance charges, the total cost to DTI of mounting the trade awareness seminar—"Burma—the Next Tiger" on 5 December 1995 was around £4,500.

  Director General of the Research Councils
  Mr. Ingram
  To ask the President of the Board of Trade when the contract for the Director General of the Research Councils expires. [33132]

  Mr. Ian Taylor
  The contract runs to 31 December 1996 in the first instance, with the possibility of renewal for a further two years if all parties are content.

  Framework IV Programmes
  Mr. Ingram
  To ask the President of the Board of Trade what representations have been made to the European Commission on funding for research and development under the European framework IV programmes. [33133]

  Mr. Ian Taylor
  Information on representations made to the European Commission on this subject is not held centrally. The budgets for the fourth framework programme for research and technological development were established in decisions 1110/94/EC and 94/268/Euratom and the decisions which subsequently amended them to take account of the enlargement of the European Union. The Commission has recently proposed an increase of 700 mecu in the funding of the programme. The UK has opposed this through the usual negotiation machinery both because of its implications for the European Union's financial perspectives and because no convincing case has been made for the additional expenditure on its merits.

  Mr. Ingram
  To ask the President of the Board of Trade what is his policy in respect of the principle and structure of the research and development task forces under the European framework IV programmes. [33134]

  Mr. Taylor
  The UK has welcomed the task force initiative. Task forces can play a useful role in improving prioritisation and co-ordination in the fourth framework programme as long as they are not too prescriptive. Experience suggests that they are most effective when they involve member states closely, focus on clearly defined areas where publicly funded R and D can make a real contribution to resolving a market failure and consult widely and meaningfully with industry and other relevant interests. It is important that framework programme IV's450
  established decision-making procedures are fully respected in any implementation of task force recommendations.

  Business Links
  Mr. Sheerman
  To ask the President of the Board of Trade how many business links have a design consultant or consultancy as part of the service they offer to small and medium enterprises. [33548]

  Mr. Page
  All business links are to offer design services and have been invited to bid for funding.

  To date, proposals from 50 business links partnerships have been approved and 27 design counsellors are in post.

  Customer Charters
  Mr. Donohoe
  To ask the President of the Board of Trade if he will list(a) the customer charters which are currently in use within his Department and its executive agencies and (b) the charters which have been withdrawn. [32828]

  Mr. John M. Taylor
  The information requested on customers charters currently in use within my Department and it executive agencies is as follows:

  (a) Charters:

  The Redundancy Payments Service

  Charter Standard Statements:

  Companies House

  The Insolvency Service

  Patent Office

  Radiocommunications Agency

  Overseas Trade Services

  Commissioners for the Rights of Trade Union Members

  (b) None.

  Statistics
  Mr. Fisher
  To ask the President of the Board of Trade which statistics his Department has discontinued(a) the collection and (b) the publication of since 1989. [32867]

  Mr. Lang
  In 1989 responsibility for the collection and publication of economic statistics was transferred from my Department to the Central Statistical Office—now the Office for National Statistics. Since that, there have been no major changes in the collection orf publication of the statistics that remain within the control of my Department. Minor changes in statistical series are made from time to time in response to the requirements of Government and international organisations for statistical information.

  Postage Costs
  Mr. Donohoe
  To ask the President of the Board of Trade how much his Department spent on postage in the financial years 1994–95 and 1995–96; and how many items were posted during these periods. [32842]

  Mr. John M. Taylor
  Expenditure on postal services in each of the years was as follows:

  1994–95: £793,000

  1995–96: £718,000

  451
  Volumetric data are not available for 1994–95. In 1995–96, 1,175,698 items were despatched from headquarters offices. These items account for 92 per cent. of the postal expenditure.

  Companies (Financial Assistance)
  Mr. Jamieson
  To ask the President of the Board of Trade if a financial interest was declared by Mr. Z when he was a director of company Y, the identities having been supplied to him, at a time when this company received financial assistance from his Department; which form this declaration took; if the declaration was voluntary; if Mr. Z absented himself from the relevant meetings; what procedures were followed by his officials in vetting the application(s); and if he will make a statement. [30038]

  Mr. Oppenheim
  [holding answer 20 May 1996]: Members of the South West industrial development board are required as a matter of routine to declare directorships and other financial interests, and Mr. Z complied with this principle in respect of his directorship of company Y. He absented himself from the discussion by the board of the one regional selective assistance case involving the company arising during his period as a member, and officials additionally ensured that he did not see papers relating to that case. The application was appraised by the Department's south-west regional office following the usual procedures for cases of that size.

  Mr. Jamieson
  To ask the President of the Board of Trade if he will list those individuals and consultancies that have advised his Department's south-west regional office on applications from companies for financial assistance since 1980. [28752]

  Mr. Oppenheim
  [holding answer 13 May 1996]: In addition to those listed in my answer of 4 June 1996, Official Report, column 308, the following external advisers have assisted the Department's south-west regional office—now the Government office for the south-west—on applications from companies for financial assistance since 1980:

  Mr. J. A. Strzelecki, Accounting and Marketing Services Ltd.

  Mr. K. E. Holmes, Dellcourts Ltd.

  Mr. J. Thornhill

  Mr. Andrew Holton

  Others may also have provided advice on an occasional basis in the earlier part of the period, but we have been unable to confirm this from surviving records.

  Mr. Jamieson
  To ask the President of the Board of Trade if he will list the applications to his Department's south-west regional office for regional selective assistance that are prepared by company W, whose identity has been supplied to him, by(a) number and (b) percentage; what measures he has taken to ensure that such services are fairly distributed among other accountancy firms; and if he will make a statement. [30027]

  Mr. Oppenheim
  [holding answer 20 May 1996]: It is for applicants to decide whether to retain advisers and, if so, which. The identity of advisers is not necessarily evident from the face of the application and the total number and percentage of applications prepared with the help of company W could therefore be researched only at disproportionate cost.
  452
  Mr. Jamieson
  To ask the President of the Board of Trade what financial assistance has been given by his Department since 1980 to (i) company A, (ii) company B, (iii) company C, (iv) company D, (v) company E, (vi) company F and (vii) company G, whose identities have been supplied to him by(a) type of grant and (b) date, including month. [27737]

  Mr. Oppenheim
  [holding answer 2 May 1996]: Four of the companies have received assistance under the Department's principal regional, enterprise and technology schemes:

  Company

  Scheme

  Payment £

  Date

  A

  Consultancy initiative

  4,835

  November 1992

  D

  Consultancy initiative

  4,681

  July 1991

  E

  Regional Selective Assistance

  9,040

  April 1980

  First project (offered in 1977)

  9,040

  April 1981

  Second project

  40,000

  August 1988

  40,000

  May 1990

  Third project

  300,000

  December 1989

  150,000

  January 1991

  Fourth project

  250,000

  March 1993

  70,000

  January 1996

  F

  Regional Selective Assistance

  60,000

  October 1986

  First project

  30,000

  February 1988

  Second project

  30,000

  November 1995

  Mr. Jamieson
  To ask the President of the Board of Trade what financial assistance has been given by his Department since 1980 to (i) company H, (ii) company I, (iii) company J, (iv) company K, (v) company L, (vi) company M and (vii) company N, whose identities have been supplied to him by (a) type of grant and (b) date, including month. [27738]

  Mr. Oppenheim
  [holding answer 2 May 1996]: Three of the companies have received assistance under the Department's principal regional, enterprise and technology schemes:

  Company

  Scheme

  Payment £

  Date

  J

  Consultancy initiative

  2,562

  November 1990

  L

  Regional selective assistance

  First project

  120,000

  July 1984

  119,000

  August 1985

  119,000

  November 1986

  Second project

  125,000

  September 1986

  125,000

  February 1989

  Microprocessor application project

  100,091

  March 1985

  N

  EUREKA First project

  204,617

  11 payments from May 1991 to July 1993

  Second project

  61,299

  2 payments, March and September 1992

  453

  Company

  Scheme

  Payment £

  Date

  Third project Awareness/demonstrators programme

  7,500

  November 1995

  First project

  3,500

  October 1991

  Second project

  10,000

  March 1990

  Third project Advanced technology programme

  14,927

  March 1992

  First project

  181,229

  6 payments from February 1993 to August 1994

  Second project

  50,000

  4 payments from March to October 1995

  Mr. Jamieson
  To ask the President of the Board of Trade what financial assistance has been given by his Department since 1980 to (i) company O, (ii) company P, (iii) company Q, (iv) company R, (v) company S, (vi) company T and (vii) company U, whose identities have been supplied to him by(a) a type of grant and (b) date, including month. [27739]

  Mr. Oppenheim
  [holding answer 2 May 1996]: Two of the companies have received assistance under the Department's principal regional, enterprise and technology schemes:

  Company

  Scheme

  Payment £

  Date

  O

  Consultancy initiative

  2,513

  July 1989

  U

  Support for innovation—first project

  68,314

  4 payments from January to October 1983

  Second project

  58,431

  4 payments from Marcg to December 1984

  Mr. Jamieson
  To ask the President of the Board of Trade, pursuant to his answer of 29 April,Official Report, columns 363–64, what was the value of the offer to Porthcurno Management Company Ltd.; on what date (a) the application and (b) the offer were made; and what was the nature of the financial assistance offered. [28302]

  Mr. Oppenheim
  [holding answer 7 May 1996]: The offer to Porthcurno Management Company Ltd. was for £500,000 regional selective assistance grant and was made in December 1993, the application having been made two months earlier.

  Mr. Jamieson
  To ask the President of the Board of Trade, pursuant to his answer of 29 April,Official Report, column 365, on what date regional selective assistance was granted for each of the three mentioned projects undertaken by Marine Projects (Plymouth) Ltd.; and what part of this financial assistance was made under the terms of the previous offers. [28303]

  Mr. Oppenheim
  [holding answer 7 May 1996]: In clarification of my earlier answer, the dates of offer and first payment of grant in respect of each of the three projects are as follows:
  454

  Offer

  First payment

  First project

  December 1983

  January 1984

  Second project

  October 1986

  July 1988

  Third project

  March 1989

  January 1991

  These grants were unrelated to the earlier offers of regional selective assistance made to the company.

  Mr. Jamieson
  To ask the President of the Board of Trade what role was played by Mr. Kenneth Holmes in the granting of DTI financial assistance to Marine Projects (Plymouth) Ltd. since 1980. [28267]

  Mr. Oppenheim
  [holding answer 7 May 1996]: None.

  Mr. Jamieson
  To ask the President of the Board of Trade, pursuant to his answer of 29 April,Official Report, column 363, if he will state (i) the advice offered by Mr.Kenneth Holmes on application for DTI financial assistance by Rodelco China Ltd. (ii) the outcome of this application, (iii) the value of the offer made to the company, (iv) if the subsequent offers made to Character Ceramics Ltd. were made in conjunction with the original offer to Rodelco China Ltd. and (v) what was the value of the offers made in 1992 and 1993 to the business when trading as Character Ceramics Ltd. [28298]

  Mr. Oppenheim
  [holding answer 7 May 1996]: Mr. Kenneth Holmes identified various shortcomings in the initial application by Rodelco China which led the Department's south-west regional office to reject the application in June 1992. A second subsequent application was made by Rodelco China in July 1992, which resulted in an offer of £88,000 regional selective assistance in November 1992 to the business, by the then incorporated as Character Ceramics Ltd. A third application resulted in a further offer of £20,000 in March 1993.

  Europa Tool Co.
  Rev. Martin Smyth
  To ask the President of the Board of Trade how many representations he has had concerning the location of the Europa Tool Co. [32244]

  Mr. Ancram
  I have been asked to reply.

  Thirty-eight representations have been made to the Northern Ireland office concerning the Europa Tool Co.

  South West Regional Development Board
  Mr. Jamieson
  To ask the President of the Board of Trade what is the average attendance for his Department's South West regional development board for each year since 1990; what number constitutes a quorum; and what changes(a) have been implemented since 1990 and (b) will be implemented in the future. [30028]

  Mr. Oppenheim
  [holding answer 20 May 1996]: The average number of members attending is as follows:

  1990: 5.75

  199 1: 5.00

  1992: 5.67

  1993: 5.50

  1994: 6.67

  1995: 6.30

  1996 (to date): 5.50

  455
  Members who are unable to attend a meeting may submit views in writing in advance which are circulated to those attending.

  The board has throughout this period generally regarded four members, including the chairman or acting chairman, as constituting a quorum, but it has occasionally agreed to discuss cases—usually as an extraordinary meeting not making formal recommendations—despite attendees falling below this level.

  The Department is reviewing, in the light of the internal report on the implications of the ROM-Data case, the quorums set for regional industrial development boards and the procedural rules covering circumstances in which numbers fall below quorum. The Government office for the south-west hopes to increase membership of its board which should, as well as strengthening the board's expertise, increase average attendance levels.

  Nuclear Industry (Privatisation)
  Mrs. Beckett
  To ask the President of the Board of Trade, pursuant to his answer to the hon. Member for East Lothian (Mr. Home Robertson) of 30 January,Official Report, column 657, and the Government's reply to the second report of the Trade and Industry Committee, Session 1995–96, HC 383, on nuclear privatisation, what is the division of third-party liability for British Energy between the operator and public funds; what is the extent of the liability for compensation from public funds; which other private industries are liable for compensation to be paid out of public funds; and what plans he has to establish the maximum liability of the private operator at 300 million special driving rights. [32502]

  Mr. Lang
  [holding answer 11 June 1996]: Under the Nuclear Installations Act 1965, as amended, the third party nuclear liability of a licensed nuclear operator is limited to £140 million per incident. The Act requires the operator to make provision, through insurance or other means, as approved by Government, for sufficient funds

  Date

  SWIDB members

  Applicant

  Assistance applied for £

  Assistance offered £

  27 March 1990

  Kenneth Holmes

  South West Farm Processors Ltd.

  250,000

  200,000

  26 June 1990

  Roger Harris

  Felix Engineering Ltd.

  175,000

  175,000

  19 March 12991

  Michael Knight

  Western National Ltd.

  210,000

  210,000

  25 June 1991

  Roger Harris

  Redruth Brewery (1792) Ltd.

  200,000

  200,000

  26 November 1991

  Roger Harris

  ROM-Data Corporation Ltd.

  750,000

  750,000

  31 March 1991

  Roger Harris and Graham Stirling

  Barden Corporation (UK) Ltd.

  320,000

  320,000

  27 October 1992

  Roger Harris

  Fibre Data Group Ltd.

  220,000

  220,000

  23 February 1993

  Roger Harris

  Pendennis Shipyard (Holdings) Ltd.

  350,000

  350,000

  27 July 1993

  Roger Harris

  B and S Screw Machine Services Ltd.

  750,000

  750,000

  30 November 1993

  Roger Harris

  Falmouth Oil Services Ltd.

  925,000

  850,000

  Roger Harris

  Porthcurno Management Company Ltd.

  500,000

  500,000

  Roger Harris

  Rittal-CSM Ltd.

  250,000

  250,000

  21 December 1993

  Roger Harris

  Omitec Thin Films Ltd.

  250,000

  222,000

  26 January 1994

  Roger Harris

  Wrafton Laboratories Ltd.

  500,000

  450,000

  23 February 1994

  Roger Harris

  Roach Foods Ltd.

  750,000

  750,000

  23 Marach 1994

  Roger Harris and Michael Jordan

  Magrathea (Pendennis) Ltd.

  400,000

  400,000

  Graham Stirling

  Thomson IBL Ltd.

  500,000

  500,000

  25 May and 29 June 1994

  Roger Harris

  ZoMed International Ltd.

  900,000

  800,000

  25 May and 27 July 1994

  Phil Gregory1 and Roger Harris

  Squaresail Shipyard Ltd.

  150,000

  150,000

  27 July 1994

  Roger Harris

  Tecalmit Systems Ltd.

  475,000

  400,000

  Roger Harris

  Allen and Heath Ltd.

  500,000

  350,000

  11 August 1994

  Roger Harris

  Bairdwear (Bridgwater) Ltd.

  200,000

  150,000

  Roger Harris

  FalFab LLC

  266,667

  250,000

  25 January 1995

  Roger Harris

  Topfoto Services Ltd.

  325,000

  250,00

  12 Apr 1995

  Roger Harris

  Redruth Brewery (1792) Ltd.

  975,000

  700,00

  456
  to be available at all times to ensure that duly established claims are satisfied up to £140 million in respect of each of the cover periods specified in the Act. The Act also provides that Government shall make available such sums, as when aggregated with funds available through insurance, or from contributions made by other parties to the Brussels convention on civil nuclear liability, or other means, may be necessary to ensure that claims up to an amount equivalent to 300 million special drawing rights—currently equivalent to £286 million—may be met. Parliament may also vote further funds.

  These arrangements, which derive from the Brussels convention, are specific to the nuclear industry which is subject to strict liability and legal channelling. They apply whether an operator is in the public or private sector. When the UK limit of operator liability was set at £140 million, it took into account the capacity of commercial insurance available in the market. There has been no significant change in insurance capacity since then. The Government continue to monitor the situation.

  South West Industrial Development Board
  Mr. Jamieson
  To ask the President of the Board of Trade if he will list the occasions since 1990 on which members of his Department's South West industrial development board have absented themselves from board meetings because of potential conflicts of interests, indicating the(a) date, (b) board members, (c) relevant company, (d) value of the financial assistance applied for and (e) value of assistance subsequently offered. [28753]

  Mr. Oppenheim
  [holding answer 13 May 1996]: The table lists the occasions on which members of the South West industrial development board are recorded as having, since 1990, absented themselves—because of potential conflicts of interest—from discussions of cases which have subsequently resulted in offers. On two occasions, as noted, they did not physically withdraw. Members have also absented themselves on 14 other occasions after which applications have been rejected or withdrawn without an offer being made.
  457

  Date

  SWIDB members

  Applicant

  Assistance applied for £

  Assistance offered £

  28 June 1995

  Roger Harris

  CH Brannam Ltd.

  350,000

  225,000

  25 October 1995

  Roger Harris

  2Pall Europe Ltd.

  950,000

  950,000

  29 November 1995

  Roger Harris

  Fryer Workwear Ltd.

  250,000

  200,000

  29 November 1995

  Roger Harris

  Cirbo Ltd.

  150,000

  125,000

  10 April 1996

  Roger Harris

  Harman International Industries Ltd.

  950,000

  950,000

  1 Mr. Gregory was absent from the meeting on 25 May 1994; but he remained for the discussion of the application at the meeting on 27 July 1994 when having declared an interest, it was deemed sufficient for him to remain silent.

  2 Mr. Harris having declared an interst, it was deemed sufficient for him to remain for the discussion without participating in any vote on the application.

  Mr. Jamieson
  To ask the President of the Board of Trade how many offers of financial assistance have been made since 1985 by his Department's South West industrial development board which have remained unpaid due to the liquidation, receivership or dissolution of the relevant companies by(a) date, (b) type of offer, (c) company and (d) reason for withdrawal of the offer. [30037]

  Mr. Oppenheim
  [holding answer 20 May 1996]: The following eight offers of grant under the regional selective assistance scheme have been made following advice from the South West industrial development board but will not as a consequence of the companies concerned having gone into liquidation or receivership or having been dissolved, be paid out in full:

  Date of offer

  Company

  Offer £

  Reasons for non-payment

  25 August 1988

  Orca Aircraft Ltd.

  200,000

  Receivership

  5 December 1988

  Strategic Alloys Ltd.

  500,000

  Receivership

  17 April 1990

  South West Farm Processors Ltd.

  200,000

  Receivership

  27 June 1990

  Crissan Marine Ltd.

  120,000

  Receivership

  458

  Date of offer

  Company

  Offer £

  Reasons for non-payment

  24 July 1992

  Lobbs Clotted Cream Ltd

  215,000

  Receivership

  6 September 1993

  ROM-Date Corporation Ltd

  848,500

  Liquidation

  17 September 1993

  Redruth Brewery Ltd

  480,000

  Receivership

  23 December 1993

  Porthcurno Management Co. Ltd.

  500,000

  Liquidation

  Mr. Jamieson
  To ask the President of the Board of Trade if Mr. X, whose identity has been supplied to him, of his Department's South West industrial development board is required to absent himself from board meetings where there may be a potential conflict of interest due to his partnership in company W. [30036]

  Mr. Oppenheim
  [holding answer 20 May 1996]: Yes, although for one case it was exceptionally deemed sufficient, Mr. X having declared an interest, for him to remain provided that he did not take part in any vote on the case.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwell.
Earl Waldegrave Earl Waldegrave—Sat first in Parliament after the death of his father.

Long-term Male Unemployment
Baroness Turner of Camden Baroness Turner of Camden asked Her Majesty's Government:
What steps they are taking to deal with the continuing problem of long-term male unemployment.
The Minister of State, Department for Education and Employment (Lord Henley): My Lords, we are continuing to pursue the economic and labour market policies which have seen long-term male unemployment fall by almost 230,000 since the beginning of 1994. We have in place a wide range of measures to help long-term unemployed people to compete effectively for jobs, and long-term unemployment has fallen faster than unemployment overall in recent years.
Baroness Turner of Camden: My Lords, I thank the Minister for that Answer. However, is he not aware that in the past three months 225,000 jobs have disappeared and that more than twice as many men as women were made redundant? Is the noble Lord also aware that the overall figure for male unemployment is 10.5 per cent., and that it is much higher in certain areas, especially in those where there was once heavy manufacturing industry? Is the Minister further aware that social problems can be involved in that imbalance?
Lord Henley: My Lords, obviously I am aware of the problems. That is why we devote a great deal of our energies within the Department for Education and Employment and through the Employment Service to the particular problems of the long-term unemployed. That is why most of our schemes are focused on the long-term unemployed. I can tell the noble Baroness that long-term unemployment is now a much smaller share of a smaller total. I think she should welcome that fact. The noble Baroness should also welcome the fact that the biggest improvements we have seen in long-term unemployment have been among the 18 to 24 year-olds and the 50 to 59 year-olds; that is to say, the youngest and the oldest. I believe that that highlights the success of our policies to focus on probably the most vulnerable groups of the long-term unemployed.
Lord Mason of Barnsley: My Lords, is the Minister aware that we welcome the falls in the unemployment figures? Indeed, anyone who has been on the dole would do so. However, is the noble Lord also aware that the figure for the workforce in employment has been
156
falling? In the first four months of this year manufacturing industry shed 46,000 jobs. Therefore, our industrial base is still growing smaller, while the number of service industries is on the increase. Is the Minister further aware that three-quarters of the new jobs created in the service industries were part-time? Does not that trend concern Her Majesty's Government?
Lord Henley: My Lords, I am very grateful for the welcome given by the noble Lord to the fall in the unemployment figures and to the rise in employment. I have to say that, sometimes, it does not feel as though we are receiving a welcome from the noble Lord. However, if the noble Lord looks at the Labour Force Survey figures for the winter quarter, he will see that there has been a rise in employment; indeed, the figure has increased by some 309,000 and some 733,000 since the recovery began.
As regards the number of part-time jobs, I make no apologies for the fact that there are a reasonable number of them. The simple fact is that many people want part-time jobs. Only 14 per cent, of those surveyed who have part-time jobs are actually looking for full-time work. Part-time jobs meet the requirements of a great many people.
Baroness Gardner of Parks: My Lords, does my noble friend the Minister agree with me that it is about time we changed our attitudes to work in this country? There are too many jobs which men believe to be beneath their dignity, whereas women are very willing to be flexible and look at whatever employment opportunities arise. I refer particularly to the service industries where, especially in London, no male waiter ever seems to be British. Is there not an opportunity for training and employment in all those fields?
Lord Henley: My Lords, my noble friend is quite right to draw our attention to the importance of training. Although long-term unemployment has been falling for both men and women, my noble friend is also right to draw attention to the fact that the proportion of men has increased. I believe that my noble friend makes a very valid point when she points out that it is possible that some men will not deign to take on a number of jobs that traditionally have been held by women.
Lord Monkswell: My Lords, are the Government aware that the unemployment figure is still over 2 million? If the Government will not adopt the sensible policies that were deployed by my noble friend Lord Callaghan when he was Prime Minister (under which unemployment never rose above 1.2 million), perhaps they would like to employ the policies espoused by the noble Lord, Lord Lawson, when he was Chancellor of the Exchequer and when the unemployment figure did in fact come down to almost 1.3 million under this Conservative Government.
Lord Henley: My Lords, what the party opposite wants to do, as we all know—I remind the House for the umpteenth time—is to sign up to the social chapter

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and sign up to a minimum wage. We all know exactly what effect that would have on jobs. We would see unemployment rise very fast indeed.
The Earl of Lauderdale: My Lords, can my noble friend enlarge on his earlier replies and tell us what measures are under way in the areas of former mining employment, notably in Fife, Ayrshire and Lanarkshire among others?
Lord Henley: My Lords, I do not think I have time today to go into the detail of all the different Employment Service schemes to assist the unemployed. However, most of those schemes are designed to help particularly the long-term unemployed. That is why we have seen a fall in the proportion of long-term unemployed in relation to the total overall unemployed. As regards the figures for south Lanarkshire which my noble friend asked for, I should be more than delighted to send them to him.
Lord Molloy: My Lords, will the Government bear in mind that when it is the breadwinner of a family of three, four or five who loses his job that is a tremendous tragedy for that family? It is not just a question of unemployment; the tragedy of a breadwinner losing his job can affect an entire family. Will the Government take that into consideration?
Lord Henley: My Lords, as I have made quite clear, I accept that long-term unemployment is higher among men than among women. That might have the effect that the noble Lord points out, but I do not think it would be right to target the various schemes of the Employment Service in such a way as to bring in quotas or the sort of things that the party opposite would bring in. But we will do what we can to assist all long-term unemployed, which is why we shall continue to see the total number of unemployed fall.
Lord Stoddart of Swindon: My Lords, does the noble Lord agree that his noble friend Lady Gardner of Parkes raised an interesting point about male and female employment? Will he confirm that there are 1,600,000 men out of work as opposed to 500,000 women out of work, and the rate is two-and-a-half times greater for men than for women? Does he recall that a reply to this House only the other day revealed that in the Department of Social Security only 33 per cent. of employees were male as against 67 per cent. who were female? Is there something in those figures which might encourage the Government to investigate employment policies not only in the Department of Social Security but in all departments of state?
Lord Henley: My Lords, I do not think it is necessary to investigate the employment policies of all government departments, but I can confirm that the figures the noble Lord gave in relation to unemployment are broadly correct.
Baroness Farrington of Ribbleton: My Lords, is the Minister prepared to comment on the fact that people working, for example, in rail catering services are now
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being expected to work for less than £1 an hour? Is the Minister not aware that labourers ought to be worthy of their hire, and that this Government are seeking to ensure that even those employers making vast profits are able to force pay rates down to a despicable level?
Lord Henley: My Lords, I accept that the labourer is worthy of his hire and I reject the allegations made by the noble Baroness. I remind her that, broadly speaking, for manufacturing the take-home pay of a British worker is much the same as that of a German worker. The simple fact is, however, that the British worker costs a lot less to employ because the non-wage costs are kept down by this Government, unlike the policies that would be pursued by the party opposite.

Museums and Galleries Commission: Report
2.47 p.m.
Baroness Lockwood Baroness Lockwood asked Her Majesty's Government:
What action they propose to take on the report of the Museums and Galleries Commission Museums and Coalmining.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, the report Museums and Coalmining was written by an independent consultant for the Museums and Galleries Commission. It is for the Museums and Galleries Commission to consider the consultant's conclusions and recommendations.
Baroness Lockwood: My Lords, I thank the Minister for that reply. In pursuing the matter I first of all declare an interest as chairman of the National Coalmining Museum for England. Does the Minister agree that the report reveals a rich heritage indicating the contribution that coalmining has made to our economic, social and industrial history, and indeed to our imperial history as coalmining was fundamental to our becoming the workshop of the world during the industrial revolution? Moreover, is the Minister aware that there are only two of these museums that have an underground element: the National Coalmining Museum for England and the Big Pit in Wales? Both of those museums face an acute financial crisis. Have the Government any contingency plans to help those two museums until the Museums and Galleries Commission is able to establish a long-term strategy on the lines of the report?
Lord Inglewood: My Lords, the noble Baroness is absolutely right to outline the contribution of the coalmining industry. The Government are bringing forward a national museums review which is due in the summer. That will deal with the problem of museums in general. That will make particular reference to the kind of issues that the noble Baroness described.
Lord Ezra: My Lords, does the noble Lord recall that during the debates on the coal Bill this issue attracted all-party support and that as a result the Government

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provided short-term financial help for three years for the three main museums? Nevertheless, that is not likely to solve the longer term problem to which the noble Baroness referred. Is the noble Lord aware that unless a long-term solution is reached fairly soon the underground elements in particular, which are fairly costly and have to conform with safety measures, could well have to be closed down? That would be a serious loss in Britain's industrial heritage.
Lord Inglewood: My Lords, I am aware of the point that the noble Lord makes about the underground galleries and the costs that they entail. I understand that the National Coalmining Museum for England is shortly to submit a lottery bid. It is not simply that the transitional funding is coming to an end. Wider problems afflict these museums; for example, admission numbers are declining and local authority support is not as strong as it was.
Lord Mason of Barnsley: My Lords, I reinforce the point made by the noble Lord, Lord Ezra. The continuation of these national coalmining museums has all-party support in this House. As the noble Lord has read the independent consultant's report which has been submitted to the Museums and Galleries Commission, can he give an indication to the House as to whether any recommendations in the report or funding proposals will be accepted?
Finally, have any discussions taken place on the long-term funding between the Government and RJB Mining with the Government helping, possibly with grant in aid, the survival of those museums? What is the possibility of a rate support grant as part of such a package?
Lord Inglewood: My Lords, the noble Lord asks a number of questions, most of which will be addressed in the museums' review to which I previously referred. RJB Mining is already contributing to the English museum.
Baroness Park of Monmouth: My Lords, does the noble Lord agree that those museums represent an important resource for archaeology? Does he also agree that we as a Conservative Party have a particular duty to remember and conserve the past? Those museums are an important part of that past. Brave men lived and worked there. I do not believe that we can treat this simply as an issue which the Museums and Galleries Commission will consider. It is a central, national issue.
Lord Inglewood: My Lords, my noble friend is right. This is an important issue. It is an important museum and is given the recognition of being a national museum by the Museums and Galleries Commission.
Baroness Masham of Ilton: My Lords, is the Minister aware that if he visited the mining museum in Yorkshire he would find some excellent facilities for all the community, including disabled people? Those facilities are much better than some nearer at hand.
Lord Inglewood: My Lords, I have not had the good fortune to visit the museum in Yorkshire but, like everything in Yorkshire, it sounds as though it is the best.
Baroness White: My Lords, the Pwll Mawr (Big Pit) is not a museum, it is an experience. Going right down into the pit is the kind of experience which I believe no one who has visited it will ever forget. It is far more important than simply looking around a museum and seeing various matters of interest. Such a visit is genuinely an experience which lasts for the rest of your life.
Lord Inglewood: My Lords, I have been down only one pit—the West Herrington Pit—when I was a Conservative candidate for County Durham. It was a very worthwhile experience. I have no doubt that the same applies to the Big Pit.
Lord Morris of Castle Morris: My Lords, perhaps I may declare with pride an interest as a former chairman of the Museums and Galleries Commission and ask the Minister whether he recalls the commission's own summary of the Shorland-Ball Report, which says:
"We would … call on the Department of National Heritage and the relevant departments in Scotland and Wales to give serious consideration to Museums and Coalmining and its recommendations, in the first instance within the DNH's major review of museum policy, which is now expected to be completed by Summer 1996".
Can the Minister tell the House what stage consultations with Scotland and Wales have currently reached and whether solutions are to be proposed in the DNH policy review?
Lord Inglewood: My Lords, the review is not complete and therefore I am not in a position to advise your Lordships of its conclusions. Neither am I in a position to advise your Lordships on the state of consultation with Scotland and Wales, but I shall write to the noble Lord and give him particulars.

Airport Baggage Halls: Evacuation Arrangements
2.56 p.m.
Lord Geddes Lord Geddes asked Her Majesty's Government:
What procedures or arrangements exist at Heathrow and other United Kingdom airports to enable passengers who have been evacuated from a baggage hall during a security alert to return there to retrieve their baggage.
The Earl of Courtown: My Lords, arrangements for the evacuation of passengers from baggage halls and their re-entry at UK airports are a matter for the airport concerned. They are responsible for drawing up contingency plans in consultation with interested parties and taking account of all relevant requirements, including those in respect of aviation security.
Lord Geddes: My Lords, I am most grateful to my noble friend for that reply. Is he aware that I pose the

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Question from personal experience on 22nd May at Terminal 1, Heathrow, at approximately a quarter-to ten in the evening? There was an evacuation which included myself. We were sent to what I think is called the land side for perfectly reasonable reasons. We were then told that we could go back into the baggage hall to retrieve our baggage. Some 500 people, including myself, then spent 45 minutes trying to get back into the baggage hall through what I can only describe as rather poor facilities for necessary security checks. There were passport controls, baggage check controls and ticket controls. Will my noble friend draw this situation to the attention of those whose responsibility it is to deal with such matters and seek to have the facilities somewhat improved?
The Earl of Courtown: My Lords, the Government are satisfied that the airport has properly discharged its responsibilities for planning for evacuation. The noble Lord let me know the content of his inquiry. I am asking the managing director of Heathrow Airport to write to the noble Lord about the evacuation on the night in question.
Lord Dean of Beswick: My Lords, is the Minister not aware that it would be an act of great stupidity to take out of the hands of the security people involved in any incident the right to keep anyone outside the periphery of activity? Is he further aware that but for the magnificent performance of the Greater Manchester Police, the Greater Manchester Fire Force and other related services there could have been a holocaust in the centre of Manchester? Only the action of those services prevented loss of life. I believe that it would be dangerous to start wavering and to allow people back on a personal basis. If we take the matter out of the hands of the security forces, we are asking for a mountain of trouble.
The Earl of Courtown: My Lords, the noble Lord is quite right to congratulate the emergency services on their work throughout the United Kingdom. Of course security is of the utmost importance throughout all airports in the United Kingdom.
Lord Bruce of Donington: My Lords, is the noble Earl really telling the House that the Government disclaim all responsibility for matters of the kind raised by his noble friend Lord Geddes? Is it entirely a matter for the private interests involved, including the airports and aircraft companies? Surely the Government must have some responsibility as regards safety and possible retrieval and loss. It cannot be sufficient to leave it entirely to other authorities.
The Earl of Courtown: My Lords, the noble Lord does not have the true facts of the case. Since the disaster in Lockerbie in 1988 the Government have done a huge amount to improve transport security in the United Kingdom and internationally. Her Majesty's Government have taken a leading role in agreeing with other countries a range of measures to improve security—the review of the National Aviation Security Programme,
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the cargo security regime and the Accounting and Authorising of Hold Baggage for Carriage (Triple A). A great many measures are involved
Lord Brabazon of Tara: My Lords, does my noble friend agree that of course it is the responsibility of government to lay down standards for security and ensure that they are enforced; but it must be for the management of the airport companies themselves to be in charge of the day-to-day operations?
The Earl of Courtown: My Lords, I entirely agree with my noble friend. Transec, a division of the Department of Transport, also holds a watching brief.
Lord Mackie of Benshie: My Lords, the Minister's noble friend makes a good point. If airports are incompetent about letting people back to collect their baggage, they are probably incompetent about clearing people from the area.
The Earl of Courtown: My Lords, I think the situation at Heathrow in which my noble friend was involved shows how efficiently the security services at airports work.
Lord Clinton-Davis: My Lords, does the Minister accept that there is surely no sustainable suggestion that the airport authorities at any airport in the United Kingdom are incompetent in dealing with emergencies of the serious kind that unfortunately have arisen from time to time? There may be a difficulty about getting back into the baggage hall, but that seems to me to be less significant overall.
Will the Minister accept that we on this side of the House wish to echo what has been said about the magnificent work of the emergency services in Manchester the other day? Undoubtedly it reflects the work of the emergency services in so many unacceptable situations that have arisen through the activities of the IRA. I am sure that the whole House will wish to condemn those activities in no uncertain way.
The Earl of Courtown: My Lords, I agree with the noble Lord. However, we must remember that security is impossible to guarantee 100 per cent. Her Majesty's Government, with the support of noble Lords opposite, are determined to ensure that ours remains among the best in the world.

Life Sentences: Home Secretary's Responsibilities
3.1 p.m.
The Earl of Longford The Earl of Longford asked Her Majesty's Government:
Whether they agree with the conclusion of the House of Commons Home Affairs Select Committee that the Home Secretary should no longer have the responsibility for setting the tariff for life sentence prisoners and taking decisions on their release.
The Minister of State, Home Office (Baroness Blatch): My Lords, we welcome the committee's

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conclusion that the mandatory life sentence should be retained for the offence of murder. My right honourable friend the Home Secretary made clear in his evidence to the committee that the Government did not agree that the Home Secretary's role should be removed. However, we are carefully considering the report and will respond to it in due course.
The Earl of Longford: My Lords, I am not clear from that Answer whether the noble Baroness gave a yes or a no to my Question. I do not think anybody in the House will be aware as to whether she said yes or no. She is holding her breath. Are we to understand that the Government are still considering the possibility that the Home Secretary might be withdrawn altogether from the process, which is most inappropriate, of deciding the life sentence of somebody on electoral considerations? Are we to understand that that role is to be withdrawn from him? The Minister may be aware that there is a procedure readily available for discretionary life prisoners. Is she ready to apply that to mandatory life prisoners?
Baroness Blatch: My Lords, I was not avoiding the noble Earl's Question. What I said was that he will have to be patient, as we have not yet responded to the recommendations of the Home Affairs Select Committee. The Home Secretary gave a robust defence of the present position; but he has agreed to consider the report carefully and will respond to it in due course.
Lord Renton: My Lords, is my noble friend aware that in England and Wales the Home Secretary has the important constitutional responsibility of advising the Crown on the exercise of the prerogative of mercy? Will she confirm that it would be most unfortunate if that prerogative were interfered with in any way?
Baroness Blatch: My Lords, I have to agree with my noble friend on that point.
Lord Ackner: My Lords, does the Minister recall—I am sure she does—that in a recent Criminal Justice Bill, this House, by a sizeable majority, passed an amendment that there should be a right of appeal given in a murder case against a minimum sentence recommended by the judge? Does she recall that that amendment was nullified in another place? Will the Minister assure the House that since the committee whose report we are discussing advised very firmly that there should be such a right of appeal, provision will be made for such a situation in the next available criminal justice Bill?
Baroness Blatch: My Lords, I cannot give the noble and learned Lord that assurance. Both Houses rightly discussed the matter and each reached a different conclusion on that particular issue. The elected Chamber took a different view from that taken
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by this Chamber. As I said, the Home Secretary will consider the report and will respond to it in due course.
Lord Jenkins of Putney: My Lords, will the Minister tell the House who in Scotland exercises the powers exercised in this respect in England and Wales by the Home Secretary?
Baroness Blatch: My Lords, my understanding is that it is the Secretary of State for Scotland.
Lord Avebury: My Lords, in how many cases has the Secretary of State settled a tariff that exceeds that recommended to him by the trial judge and the Lord Chief Justice? In how many of those cases has his decision been challenged by way of judicial review?
Baroness Blatch: My Lords, my understanding is that he has differed in 15 cases. In some five he settled at a figure lower than the recommendation from the trial judge; in the rest the tariff was increased. The vast majority of recommendations from both the trial judge and the Lord Chief Justice are accepted by my right honourable friend. At the end of the day, my right honourable friend has responsibility for considering the wider public interest and the safety of the community. That is not a consideration for the trial judge.
Lord Campbell of Alloway: My Lords, as we read today, the victim's views are now to be heard at every stage of the criminal process, including sentencing. Could further consideration be given as to whether there ought not to be a judicial determination in open court as to release or recall on licence? I do not of course include any reference to the prerogative of mercy. I refer to judicial determination on the available evidence, as distinct from an executive decision, which raises difficulties with the European Convention on Human Rights.
Baroness Blatch: My Lords, in anticipation of my right honourable friend considering the recommendations of the report from the Home Affairs Select Committee, we have to date taken the view that the procedures in place are the right ones, and we have defended them. So far as the European Court of Human Rights is concerned, we have already indicated that although we are disappointed, for example, about the decisions in the cases of Hussein and Singh we intend to comply with the ECHR ruling.
As to whether procedures for release and parole should be judicially decided, the current procedures for adult life sentence prisoners are the result of careful consideration by our own courts of appropriate procedures of the European Convention on Human Rights. In the case of mandatory lifers, the final decision on whether a prisoner should be released remains with the Home Secretary. To date, that has never been found unlawful.

Tribunals of Inquiry (Evidence) Act 1921
3.8 p.m.
Lord Lucas: My Lords, I beg to move the Motion standing in my name in the Order Paper.
Moved to resolve, That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance, that is to say, the abuse of children in care in the former county council areas of Gwynedd and Clwyd.—(Lord Lucas.)
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that we in North Wales in particular welcome this decision with a good deal of relief? Is he further aware that we also welcome the appointment of Sir Ronald Waterhouse as chairman of the inquiry?
Lord Allen of Abbeydale: My Lords, the Royal Commission presided over by Lord Salmon made recommendations about the procedure to be followed by tribunals of inquiry. Is the Minister aware that the tribunal of inquiry into the Crown Agents, on which I had the rather dubious privilege of serving, suggested some modification of those recommendations? Will the Minister assure the House that those suggestions will be brought to the notice of the chairman of the tribunal?
Lord Lucas: My Lords, I could not possibly answer the latter question without notice, but I will certainly do so in writing. I am delighted to have the support of the Benches opposite in an inquiry which it is important to get right for the sake of the children of Wales, and which is not a party-political matter.
On Question, Motion agreed to.

Housing Bill
3.10 p.m.
Lord Lucas: My Lords, on behalf of my noble friend Lord Ferrers I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Lucas.)
On Question, Motion agreed to.
House again in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Lord Dubs Lord Dubs moved Amendment No. 254C:
After Clause 88, insert the following new clause—

Housing Bill

  COMMON PARTS: RIGHT TO SELF-MANAGEMENT
  (".—(1) After section 34 of the Landlord and Tenant Act 1987 there is inserted—
  "Common parts: right to self-management.
  34A.—(1) The qualifying tenants of premises other than premises in respect of which the valuable reversion condition set out in Schedule 1 A is satisfied may at any time serve notice on the landlord requiring him to grant to a management company to be established in accordance with subsection (3) a management lease of all the
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  common parts of the premises which the landlord is obliged to maintain and for which the tenants contribute a service charge under their existing leases of parts of the premises.
  (2) The landlord shall within 3 months of service of such notice enter into the lease, which shall contain—

  (a) provisions for the demise of the common parts;

  (b) details of the term of the lease which shall be commensurate (except for a nominal period) with the longest of the existing occupational leases;

  (c) provisions for the payment of a peppercorn rent;

  (d) provisions entitling the landlord to enforce obligations and to forfeit such lease in the event of non-observance; and

  (e) obligations on the management company to observe the landlord's covenants in occupational leases.

  (3) Any management company established in accordance with this section shall be in the form of a company limited by guarantee with a Memorandum and Articles in accordance with Table C of the Companies (Tables A-F) Regulations 1985.
  (4) Any application to forfeit such management lease shall be made on notice by the landlord to the County Court.
  (5) Membership of the management company shall consist of all of the qualifying tenants and the landlord.
  (6) In respect of all blocks of flats exceeding 4 flats the management company shall appoint a firm of managing agents on such terms as may be agreed to manage the premises in accordance with the principles of good estate management.
  (7) No contract for the employment of managing agents shall extend for a period of more than 2 years and any contracts in existence at the time of service of notice under subsection (1) shall be deemed to come to an end within 9 months from the date of service of such notice irrespective of the contents of any contract and such notice and such termination shall not give rise to a claim for damages on the part of the managing agents.
  (8) Any managing agents appointed in accordance with this section shall be required as a term of their contract to observe any management code approved under section 77 of the Leasehold Reform, Housing and Urban Development Act 1993.
  (9) Any disputes arising under this section shall be referred for determination to the Leasehold Valuation Tribunal (save in respect of matters referred to in subsection (4)) which shall have full powers to determine all disputes arising under this section.
  (10) Where a landlord fails to comply with the provisions of this section, any rent or service charge otherwise due from the tenant to the landlord shall as from the date of expiration of any notice served by the qualifying tenants be treated for all purposes as not being due from the tenant to the landlord.
  (11) The qualifying tenants, by calling for a management lease, shall—

  (a) confirm the right of the management company to perform and charge for services included in their occupational leases, and

  (b) grant to the management company whatever rights as may be necessary to enforce such rights including the right to set up and maintain reserve funds.

  (12) Any such management lease shall not affect the tenants' rights to acquire the freehold under Part 1 of this Act.".
  (2) After Schedule 1 to the Landlord and Tenant Act 1987 there is inserted—

  SCHEDULE 1A VALUABLE REVERSION CONDITION
  .—(1) The following provisions shall have effect for the purpose of determining whether the landlord's interest in the premises satisfies the valuable reversion condition set out in this Schedule and referred to in section 34A ("the valuable reversion condition").
  (2) In the event that the valuable reversion test is satisfied, the premises shall be premises to which section 34A does not apply.
  (3) The valuable reversion condition is satisfied if the present value, as assessed in accordance with this Schedule, of the landlord's interest or interests (taken together) in the premises is equal to or greater than one fifth of the aggregate present values, as assessed in accordance with this Schedule, of each of the qualifying tenant's leaseholds.
  (4) For the purposes of this Schedule the present value of the landlord's interests in the premises shall be assessed as the sum of the present values of the landlord's interest in the reversion of each leasehold comprised in the premises together with the sum of the landlord's other interests if any) in the premises, the present values of which shall he assessed in accordance with paragraph 6 of this Schedule.
  (5) The present value of the landlord's interest in the reversion of each leasehold comprised in the premises shall be assessed as follows—

  (a) the value of each such reversionary interest shall be assessed as the sum of R+I# where—

  (i) R = the present value of the right to re-entry on the expiry of the term of years of the lease; and

  (ii) I# = the present value of the right to receive for the term of years of the lease the rent reserved by the lease;

  (b) R shall he assessed in accordance with the formula (100-x)/100∗f where—

  (i) x = the percentage figure for the unexpired term of years of the lease taken from the table at Schedule 8 to the Taxation of Capital Gains Act 1992 or such other curved line amortisation table for wasting assets as may be prescribed by the Secretary of State, and

  (ii) f = the open market value of the leasehold at the relevant date valued on the assumption that the leasehold has an unexpired term of 999 years and that all other terms, including the rent reserved, were unchanged;

  (c) I# shall be assessed by applying such arithmetic formula for the calculation of the present value of a known future stream of income as may be prescribed by the Secretary of State and if no formula is prescribed, 1# shall be assessed by applying any recognised formula.

  In applying the relevant formula, the 30 year Treasury Bond yield at the relevant date, or such other long-term interest rate as may be prescribed by the Secretary of State, shall be adopted as the relevant internal rate of return.
  (6) All of the landlord's other interests (if any) in the premises shall be assessed at their ordinary open market value.
  (7) The present value of each qualifying tenant's leasehold interests shall be assessed in accordance with the formula (x)/100∗f where—

  (a) x #x003D; the percentage figure for the unexpired term of years of the lease at the relevant date taken from the table at Schedule 8 to the Taxation of Capital Gains Act 1992 or such other curved line amortisation table for wasting assets as may be prescribed by the Secretary of State, and

  (b) f #x003D; the open market value of the qualifying tenant's leasehold at the relevant date valued on the assumption that the leasehold has an unexpired term of 999 years and that all other terms, including the rent reserved, were unchanged.

  (8) For the purpose of assessing the aggregate value of the qualifying tenants' interests in the premises, any leasehold that is the subject of possession proceedings, but in respect of which no unconditional court order for possession has been made, shall be included in the calculation.".").
  The noble Lord said: When a long leaseholder is faced with a bad freeholder or bad landlord, the leaseholder theoretically has two ways out of the dilemma. One way is to find some means so that the
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  leaseholder, with other leaseholders, can manage the common parts of the property; alternatively, the leaseholder and other leaseholders can secure enfranchisement of the block of flats in which they live. This amendment concerns the right to manage. The amendments in the group which follows relate to enfranchisement or seek to find better ways of achieving enfranchisement.
  With regard to the right to manage, the aim is to give the right to manage in such a way that leaseholders may choose who will manage the property on their behalf. That, therefore, will subject to market forces the property manager so selected. He will have to pass tests in order to demonstrate that he can deal with the management more effectively than others.
  At present, a freehold landlord can provide such services as he sees fit. Normally, he has a monopoly in the supply of maintenance, decorations, building works, insurance and other services. He can earn a profit in the form of a management fee for his work. In that situation, there is bound to be potential for abuse in that one party has a right to spend another's money.
  There would be safeguards under the scheme proposed by the amendment. If the leaseholders fail to organise the management properly, the freeholder can apply to the court to regain control of management. Under the scheme, the management obligations will be discharged by a professional managing agent, typically a member of the appropriate professional body.
  In contrast, the Government's proposals, as contained in the Bill, seek temporarily to replace a bad manager with a professional agent chosen by the leasehold valuation tribunal. But that managing agent would still be the agent of the freeholder, who could therefore still exert an influence over the overall management of the property. The LVT would be under the pressure of many applications. Indeed, at present it already takes several months for a leaseholder to obtain an enfranchisement hearing in the LVT, such is the pressure of work on that tribunal. Further, there would be the need to test the reasonableness of the proposition, which may be hard to prove. A difficulty may arise with what happens to the leasehold valuation tribunal order if the freehold interest were to be sold to another freeholder. In the meantime, the properties would be blighted and a leaseholder would find it very difficult to sell a property under that type of management.
  The Government have made clear over the years their wish and intention to give council tenants the right to manage their own property. Indeed, that was confirmed two years ago in the 1993 Act. It seems to me wrong in principle that the Government, who are willing to give council tenants the right to manage their properties, so far have denied a similar right to long leaseholders.
  The history of the scheme set out in the Bill is as follows. The right to manage was originally put into the Bill by the Standing Committee in the other place. It was removed by the Government at Report stage in the other place. That was when the Government, I think for the first time, invented the idea of giving the leasehold valuation tribunal the power to appoint a temporary manager.
  I am sure that other Members of the Committee will have received letters from leaseholders about issues contained in various parts of the Bill. Perhaps I may quote from just one letter from a leaseholder in W11 He speaks of the chance to improve the Bill and writes:
  "We cannot let this opportunity drop. I urge you to rigorously oppose the matter"—
  that is the present scheme—
  "in the Lords and pursue amendments which will give tenants, lessees, the right to manage. I am not at all persuaded that the European Court of Human Rights would overturn such legislation".
  The reference to the European Court of Human Rights is, I understand, because the Government used that as an excuse for not maintaining the change introduced by the Standing Committee in another place. The Government felt that there would be an appeal to the European Court of Human Rights. I do not understand that argument. I am not even sure that the Government still wish to sustain it. But that was the argument that was used. Without the right to manage, many leaseholders will be left with only one option, if they can exercise it—namely, to enfranchise—in order to escape from landlords who treat them badly.
  Perhaps I may make three final points. First, leaseholders typically in a block of flats probably own nearly 100 per cent—perhaps 98 per cent.—of the equity of the building. Theirs is the significant financial stake, not that of the freeholder who may have bought the freehold for a fairly small sum in relation to the interests of the leaseholders.
  Secondly, as I said earlier, it is the freeholder under the Government's scheme who is spending the leaseholders' money. Thirdly, it is the leaseholder's home which is at risk in these matters. It is not the freeholder who takes the risk. After all, he simply manages the block as a business proposition and may be doing it badly. I do not say that most freeholders do it badly.
  I argue that the amendment will protect quite a large number of leaseholders from the minority of freeholders who do not treat the leaseholders properly. It is a matter of a business proposition on the one hand for the freeholder, and on the other hand the very home of the leaseholder. In that rather unequal equation I believe that it is right that the leaseholders should have more say, if they wish it, in the management of the common parts of the properties in which they live. I beg to move.
  3.15 p.m.
  Baroness Gardner of Parkes: I have very mixed views on the amendment. I feel that it is desirable for tenants and leaseholders to have a significant say in how the money is spent in a block of flats. But I speak from my own experience when chairman of housing for an area on the Greater London Council. In those days, when we attempted to give tenants the responsibility to manage their flats, many did not want it. There were always just one or two people in a particular block who were keen to take on the responsibility and took an active part.
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  The suggestion in the amendment is that managing agents should be appointed to fulfil the management function. But someone still has to instruct and give directions to the managing agent. So I am not so sure about that part of the provision.
  The noble Lord covered very clearly the situation of a freeholder who manages the properties. But frequently the freeholder has a head lessee. The head lessee is not the freeholder but is the person who appoints the managing agents to run the properties. So there is an additional layer of management in the middle. The noble Lord did not mention that situation, and I wonder what would happen.
  I also wondered what the situation would be in terms of how much tenants and leaseholders would have to pay to compensate the head lessee for losing his business. That would be the case if they had the right to take over his management.
  I shall be grateful if those questions could receive answers.
  Viscount Montgomery of Alamein: My noble friend Lady Gardner is quite right. There is the problem of the head lessee, which is very important. Coming back to the main thrust of the amendment, I agree entirely with what the noble Lord is trying to do. I do not know whether the wording of his amendment is the right way to do it. It would be interesting to hear a few comments from my noble friend on the Front Bench.
  The fact is that the whole of the leasehold enfranchisement which was attempted in the 1993 Act has not worked. I was much involved with that legislation and at the time declared a number of interests and received a good deal of stick, mostly from my colleagues on this side of the Chamber, for my efforts in that Bill. No doubt I shall do so again today, but that is one of the hazards of this sort of activity.
  The leasehold enfranchisement Bill was emasculated by the activities of a number of senior landlords, and of course it has not really worked. I wonder how many enfranchisements have taken place. It would be very interesting to see whether the Government have any figures on this matter. I accept that I have not given my noble friend notice of this question so, if he does not have the information to hand, I should be quite happy if he writes to me subsequently. I believe that what the noble Lord, Lord Dubs, is trying to do is going in the right direction. Whether we get there in the end remains to be seen, but I do hope so.
  Baroness Hamwee: First, I apologise to the noble Viscount and to the Committee for having missed the first few sentences of the noble Viscount's speech. Nevertheless, I have no reservations in supporting what I suspect he will have said, and from these Benches we will do so. I should like to respond in particular to two points which have just been made and which go to the heart of the issue.
  During the passage of the 1993 Act there were a number of discussions about tenants wanting the opportunity to manage their own affairs, and for many tenants it was that rather than ownership which was at the heart of the issue. The noble Viscount mentioned

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  that he had received some "stick" for his position at that time. It seems to me that one of the problems with which we are dealing here—and we should not have to deal with it—is that somehow the landlord's position has become identified at one end of a very polarised spectrum and the tenant's position is at another end. I do not believe that we should be seeing the positions of either in that politicised fashion.
  To take up a comment made by the noble Baroness, Lady Gardner, in relation to the position of an intermediate head leaseholder and that leaseholder's business, is that not also one of the things that has led to such problems, that the leaseholder sees it as part of his business to make money on the term of "exercising management functions"? That is bound to disadvantage the tenant and, while I accept that in the case of a leaseholder who has bought an interest and therefore expects to be able to profit from it—one cannot disregard that there is an investment there—nevertheless, the sooner we can get away from that head leaseholder benefiting at the expense of the tenant as part of running a business, which is a business which has been interposed between freeholder and tenant, the better.
  Lord Lucas: I listened with great interest to what the noble Lord, Lord Dubs, had to say. I suspect that there are one or two things in his speech which I will need to think about and I will write to him later. But it is clear in general from what he and other noble Lords have said that what lies between us here is a political difference and one of principle. None the less, I hope to be able to persuade him to withdraw this amendment because we do not feel that there is any way in which this alternative road that he is proposing can be traversed satisfactorily in the time that we have available to us. I will come on to the detailed problems that we have with these proposals towards the end of what I have to say but, as my noble friend Lady Gardner of Parkes indicated, there are a number of difficulties with the detail.
  I will write also to my noble friend Lord Montgomery of Alamein, as I do not have the figures he requested with me. I promise to be polite to him and not to say anything rude either now or in the letter.
  The leasehold system is based on a clear set of responsibilities. The landlord normally has responsibility for the repair and maintenance of the overall structure and the common parts and for insuring the building as a whole. Individual leaseholders look after the interior of their flats, and meet through service charges the landlord's costs in discharging his responsibilities. The amendment of the noble Lord cuts right through that structure, by allowing the tenants—or presumably a group of tenants acting together—to elect to take over the management of the property. That right would apply whether or not the landlord was doing a good job or not.
  We have already given leaseholders the right to buy out the landlord's interest in the property if they wish, under the enfranchisement legislation. Through that they gain complete control over the property.
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  Under the "right to manage" proposed by the noble Lord, Lord Dubs, the leaseholders take on half the function of being a landlord. The landlord receives no compensation whatever for that. The price the landlord pays for property reflects the income available from management. If management is the landlord's job, then management has a value to him.
  As anyone who has lived in a block of flats which is well managed will know, having a good landlord who performs his function well is a worthwhile thing. It saves the tenants a great deal of trouble and argument which they would otherwise have in organising the management themselves and is a function well worth paying for if it is done well. It is a valuable business for the landlord, yet the proposal of the noble Lord, Lord Dubs, contains no provision for any element of compensation.
  As the noble Lord, Lord Dubs, said, this raises the question of whether this is contrary to the European Convention on Human Rights. The convention allows deprivation of a property right only where this can be justified in the public interest, which must be doubtful in this case, to say the least, and where fair compensation is paid. The noble Lord, Lord Dubs, proposes to pay no compensation whatsoever. I cannot see how he can think that his scheme would be certain or even perhaps likely to survive under scrutiny under that convention.
  This right to manage, to our mind, would therefore be quite unfair to the many sensible landlords who undertake their responsibilities in a conscientious manner. It offends the basic premise of the leasehold system, which is that a lease is a private contract freely entered into. It is a voluntary agreement between landlord and tenant which gives rights and obligations to each party with regard to the other.
  Of course, it is quite a different issue where the landlord is failing to behave in a reasonable manner, and it is clearly right in these circumstances for Parliament to intervene. It is because a minority of landlords are behaving in this way that we are discussing this Bill.
  This Bill includes the strengthened right for leaseholders to seek the appointment of an independent manager in cases where they can demonstrate that the freeholder has not been carrying out his responsibilities in a proper manner. Under existing legislation, leaseholders have to go to court to ask for the appointment of a manager. Clauses 81 and 82 provide an easier and more effective way for tenants to gain access to independent management in these circumstances.
  The jurisdiction for these cases is being transferred from the court to a leasehold valuation tribunal. That, in combination with the codes of practice to be issued by my right honourable friend, will provide a much easier and more sure method for leaseholders to achieve justice. It will be a much more accessible system, too.
  There is a further linked provision in the Bill in Clause 84 which will mean that once a manager has been appointed by the tribunal in cases where the landlord has misbehaved himself and once that manager has been in place for two years, the tenants have a

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  sufficient ground to apply to a court to acquire the freehold interest. This offers an attractive route for the tenants to purchase the freehold at a fair and open market value.
  Turning now to the particular proposals put forward by the noble Lord, Lord Dubs, I would like to draw to your Lordships' attention some of the difficulties as we see them. The new Schedule 1A attempts to define which groups of leaseholders would qualify for the right to manage and, as the noble Lord has explained, it would apply only where the landlord's interest was no more than 20 per cent. of the aggregate value of the leases. But we are not clear what is the case for setting the limit at 20 per cent. For example, the effect of this 20 per cent. rule would be to exclude properties where the unexpired term of the lease was 20 years or less. It would also exclude mixed-use blocks where the amount of retail floor space exceeded 5 per cent., which hardly seems consistent with other amendments to be moved by the noble Lord, Lord Dubs, in relation to the commercial element of a block and collective enfranchisement.
  Although the amendment which has been tabled is already complex, I do not think we will find that it resolves all the difficult issues in order to ensure that this right could work effectively. For example, the clause contains no definition of "qualifying tenant", or indeed of "common parts". Nor does it define what proportion of the qualifying tenants need to agree to activate the procedure. Much more needs to be done to flesh out what is only in reality a skeleton proposal.
  Any proposal would have to tackle the difficult issue of what is "management". Managing a building can involve many different functions. Obviously, it involves maintenance and repair, the sort of things for which service charges are paid. But it can also involve managing any flats let on short term tenancies, including choosing tenants and collecting the rent. It can involve developing parts of the land and insuring the structure of the building. To which of those does the "right to manage" apply? No doubt the noble Lord will say that all those issues can be solved. But his current proposal does not deal with them adequately, so he is rather asking the Committee to accept on trust that this intricate web of rights and responsibilities can be unpicked, and unpicked in a way that is both practical and fair to all parties.
  I know that the noble Lord has a more detailed proposal up his sleeve—he was kind enough to show me a copy. Indeed, that would be a useful starting point. But there are many difficult questions to be addressed. There is a great deal of detail to be gone into. There is a requirement for extensive consultation if we wish to go down that route and it would quite clearly not be possible to incorporate such a proposal in this Bill without extensive Henry VIII provisions. Under those circumstances I hope the noble Lord will realise that even should we favour his proposals—which we do not—it would not be appropriate to proceed with them in this Bill.
  3.30 p.m.
  Lord Williams of Elvel: As the Committee is aware I promised to take trapist vows on this part of the Bill because I am a leaseholder, but I wish to correct certain matters of fact. I am not speaking in my own interest but on matters of fact.
  The facts are that a freeholder sells a long lease under the terms of the definition of the 1993 Act. The freeholder sells the lease on the basis that the leaseholder will be responsible for paying rent, which may be low—that will be a matter which the Committee will discuss in due course—but also he will pay service charges. It is the service charge problem that has given rise to my noble friend's amendment and to the amendment in another place.
  It is not simply a matter of saying that the leaseholder will pay all service charges whatever they may be. It is not even a matter, as the noble Lord said, of a return to the freeholder. The freeholder sold a lease for a capital value and that is his return, plus the ground rent. Unless I am much mistaken, the freeholder does not expect to get anything out of the service charge. It is the manager who obtains the return from the service charge.
  Normally, freeholders appoint a manager. A number of estate agents of distinguished credentials run blocks of flats with long leases. The problem is that at the moment most leaseholders—I am trying to put this in the most objective manner that I can—do not know whether or not they are obtaining proper value for money from the service charges they pay to the agent. That is the problem that my noble friend is trying to address. It is nothing to do with the landlord or the head leaseholder; it is whether the leaseholder who has a flat, as I do, on a long lease, who pays a small ground rent, who could enfranchise— but as the noble Viscount, Lord Montgomery, said, I have no intention of enfranchising under the present arrangements, or at all—is receiving value for money.
  I speak for myself at this point. With regard to service charges—I am not complaining about my flat or the service charges I pay—leaseholders need to do what is called "market testing". I thought the Government were in favour of market testing. The estate agent in charge of the property may have decided that after five years or so the whole property should be refurbished on the outside. That is the landlord's responsibility. They may have commissioned painter X or decorator Y. But we do not know under what circumstances they have been commissioned; we do not know that they were commissioned under competitive procedures; we do not know what the estate agent management take is and we do not know whether there could be any better management of the properties in which we live.
  The intention is not to break through anything that the noble Lord described. We recognise, having signed and bought a long-term lease, the obligations. It is a question of market testing as to whether anybody—there are plenty of people in the business—could do it better than the present manager of the property. That is all my noble friend is saying.
  Viscount Caldecote: The noble Lord, Lord Williams, is perhaps confusing the issue. He said that it was

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  nothing to do with the situation of the head lessor. It is very much to do with the head lessor. If a tenant has a long lease from the freeholder he has certain obligations to keep the building properly painted, the structure maintained, and so forth. If he does not carry out those requirements then he may be sued by the freeholder.
  The problem arises when the freeholder sells a long lease to a head lessor and the head lessor then has to pass on the requirements for maintaining the buildings to the sub-tenants. The head lessor appoints a managing agent to carry out the work on his behalf. The problem arises because some head lessors act in a most improper way, as do their agents, and the sub-tenants have no comeback to deal with the situation when they are being done down by the head lessor. I declared an interest in this matter the last time we discussed it and I speak from the experiences I mentioned then.
  Lord Williams of Elvel: I am grateful to the noble Viscount for allowing me to intervene. I am trying to stick to the facts rather than pleading any interest. Whether or not the instruction of a manager is from the freeholder or the head lessor is, to my mind, irrelevant. Somebody has got to instruct a managing agent to manage the property, whether it is the freeholder or the head lessor. My problem is that I do not believe the Government are right in the facts of the matter; that is to say, the Government are not right in saying that there should not be some form of market testing whether it is from the freeholder or head lessor down to the person who actually holds the long lease of the property. I hope that I have made my factual contribution clear.
  Viscount Caldecote: I am not sure whether I understand the noble Lord when he says that he is dealing with the facts and perhaps implying that I am not. I am trying to do just that.
  The fact is that the head lessor can and does appoint managing agents and the tenants of the head lessor have to accept the service charges and other charges that the managing agents impose on behalf of the head lessor. If that is done properly, there is no problem. But how does the sub-tenant deal with a head lessor who is not acting properly and whose agents are not acting properly and where the charges are excessive?
  One way of getting round that problem is simple but may be expensive; that is, for the tenants to buy out the head lessor, which is a satisfactory solution. This Bill gives greater power to the sub-tenants to buy out the head lessor when the head lessor changes. He will not get out of his responsibilities so easily now in giving the sub-tenants the first right of refusal to buy him out as he could before this Bill.
  That is therefore a great improvement; but the problem still arises in a case where the head lessor does not sell on his interest. The sub-tenant still has to put up with the difficulties and disadvantages of overcharging by the managing agents. As I say, the solution is to buy out the head lessor. In my own experience we have found that to be extremely satisfactory. A great deal of money is saved by the sub-tenants, as they were, who have taken over the head lease and manage the flats on their own behalf and employ what agents and surveyors
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  they wish. The whole thing is much more open and a great deal of money is saved. I hope that the Government will look again at this problem of protecting sub-tenants from head lessors who do not act properly at a time when they are not proposing to sell and when they are now much better protected.
  Lord Monkswell: As something of an outsider in this kind of debate, it seems to me that the amendment my noble friend Lord Dubs is putting forward is trying to separate the service charges and management from the ground rent and the capital sums and returns on capital. The noble Viscount, Lord Caldecote, suggested that one way of resolving the problem is to buy out the head lessor. That obscures the problem. It is rather like the Government's argument, "You can enfranchise yourself".
  We should look at the two charges separately. There is the ground rent which is like a return on capital for the landlord. The other is the service charge which is for maintenance, repair and management of the building, which is an on-going function. It is not to do with a return on capital. One of the problems that we are faced with in the market place is that people operate as though the service charge was some sort of return on capital and do not use the money to maintain and manage the building. My noble friend's amendment effectively encapsulates that by saying, "The tenant should have the right to effectively manage the service charge and maintenance of the building". It should he taken away from whoever was previously responsible. The sub-tenants are paying the money and they are living in their own homes; therefore, they should have the right to ensure that the money is properly spent in the management and maintenance of the building and that it is done properly. I am just a simple guy, but that is the way I see it and that is why I support my noble friend's amendment.
  Lord Weatherill: I had not intended to participate, but listening to this debate I am very sympathetic towards what the noble Lord, Lord Dubs, said. I have recently encountered a problem where one of my former constituents lives in a block of flats in which some of the tenants are protected and others are not. The problem appears to be that those who have bought long leases pay substantial service charges to the landlord and in this particular instance no work is ever carried out. It seems that the landlord is using the money which he gets by way of service charge to do up the flats when the protected tenants die or leave for other reasons, and sell them on. As regards the former constituent, there appears to be no redress whatsoever. The amendment of the noble Lord, Lord Dubs, may not he absolutely correct in its wording, but I hope that the Government will agree to take it away for reconsideration and then bring forward an amendment which will cover this particular difficulty.
  3.45 p.m.
  Baroness Hamwee: Perhaps I may take up one point made by the Minister given that this is the first debate on this subject. He said that agreements between landlords and tenants are contracts freely entered into.

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  I do not dispute the importance of contract nor the importance of providing means for its enforcement; but it is worth recalling that in this area the contract is perhaps a little different from, say, a contract to purchase goods where there is a freer choice.
  In the housing market one is affected by a number of issues such as the location, price and so forth. It may well be that all that is available within one's price range and the place where one needs to move is a flat which is the subject of a lease and one purchases the, benefit of that lease. One may not even be in the position of making the contract afresh. These days I guess that there are rather more existing leases than there are new leases being created. A purchaser buys an existing lease and does not have the opportunity to alter its terms. So in talking about a contract I do not believe that we can regard this contract as being quite like others.
  Lord Lucas: I believe that Members of the Committee on all sides agree with the definition of the problem and are determined that it should be dealt with. Quite clearly, these abuses should not be allowed and that is what this part of the Bill is about. We have chosen a route which preserves the rights of landlords. Through Clause 79 onwards we are setting up a structure which allows tenants to deal with landlords who are misbehaving without expropriating the landlord's property and rights. The noble Lord, Lord Dubs, proposes to deal with the matter by jumping on landlords without compensation.
  Lord Williams of Elvel: No!
  Lord Lucas: I believe that that is the basic difference between us.
  Lord Williams of Elvel: I must correct the noble Lord. Again, let us stick to facts. There is a contract between a freeholder and a long leaseholder. That contract has one thing in it which is open-ended: the ground rent is closed. The capital value has been sold, whether it is an original lease or a lease which has been bought from somebody else. The one point which is open-ended is on the service charge, and that is a problem. It is not a question of shifting the balance between the landlord and tenant. My noble friend is trying to make sure that the leaseholders have the possibility of alternative arrangements should they find that they are paying excessive charges. What is an excessive charge can only be determined by, as I say, market testing. I should have thought that the Government were in favour of that.
  Lord Lucas: That is exactly what we are setting out to do within Clause 79(2A). I believe that the words are very clear. There are provisions in earlier legislation. Section 42 of the Landlord and Tenant Act 1987 states that service charges must be held in trust. The Leasehold Reform, Housing and Urban Development Act 1993 states that tenants can call for a management audit. Section 20 of the Landlord and Tenant Act 1985 states that the landlord is required to obtain alternative
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  quotations for any work undertaken. So there are provisions within existing legislation. In this Bill we are providing that,
  "A tenant by whom, or a landlord to whom, a service charge is alleged to he payable may apply to a leasehold valuation tribunal for a determination—

  "(a) whether costs incurred for services, repairs, maintenance, insurance or management were reasonably incurred,

  "(b) whether services or works for which costs were incurred are of a reasonable standard, or

  "(c) whether an amount payable before costs are incurred is reasonable".

  That deals with the kind of abuses which the noble Lord, Lord Williams, has outlined and will provide tenants with the sort of power that they need to make sure that the service charge they are paying is proper. But at the heart of it is our belief that the provision of the management service to tenants is a business which is owned by the landlord and ought not to be taken away from him lightly or without compensation.
  Baroness Gardner of Parkes: I must declare an interest in that I have a small flat for my retirement when I can no longer manage stairs, but I am not living in it at the moment. The ground rent is £50 a year and the service charge is £5,000 a year for a one-bedroom flat. Service charges can be very high. Even more irritating is that part of the electrical work that is being done this year was done last year. The people who are doing the work this year say that the work done last year was unsatisfactory. Tenants find it very disconcerting to have to pay twice.
  I like my noble friend's Clause 79. I believe that it gives people the right to go to a leasehold valuation tribunal. To go to court can be time consuming and expensive and it cannot be done by an amateur. Can my noble friend tell me whether, under Clause 79, an individual acting on his own behalf, and at comparatively low cost, can go to a leasehold valuation tribunal to query these matters, or will that be an expensive process?
  Lord Lucas: How expensive the action is depends upon the complexity of the case. We believe that the basic charge will be about £500. In relation to a £5,000 service charge for each individual that does not seem excessive. Any individual tenant can apply to the leasehold valuation tribunal or a number can get together as a body and challenge the matter. The cost is the same. The cost may be £500 for something simple or £2,000 a day for a more complicated case.
  Lord Williams of Elvel: Leaseholders respond to their freeholders. Generally, except in certain circumstances, leaseholders are not individuals who are aggravated by difficulties. Some are and some are not. In referring any matter to a leasehold valuation tribunal the leaseholder, whether individually or collectively, confronts the landlord. If as a leaseholder one confronts the landlord one is liable to find that the service charge next year is not £5,000 but £6,000. That is a major problem in many of the big estates in London and outside London. This problem does not apply simply to London. I have certain knowledge of this matter. To go

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  to a leasehold valuation tribunal (a) incurs costs and (b) requires confrontation with the landlord. On the whole, leaseholders who have brought a contract do not want that kind of confrontation. It makes good sense to say that perhaps a service charge of £5,000 should be put out for competitive tendering. There are plenty of people in London and elsewhere who manage properties.
  Earl Bathurst: I declare an interest as a leaseholder who hopes to be a freeholder. If leaseholders decide to take their case before a tribunal not only do they confront the landlord—which is a perfectly reasonable thing to do—but for perhaps four or five days they will confront a legal team of top QCs with whom they will have to do battle—and I mean "battle". That is a difficult, time-consuming and nerve-wracking business for an ordinary tenant. I hope that the Minister will give serious thought to accepting something on the lines of this amendment.
  Lord Lucas: I believe that my noble friend describes the current situation where these matters must be worked out in the courts. We propose and believe that the leasehold valuation tribunals will be much simpler, quicker and cheaper. As regards that procedure, to the extent that I am allowed to do so from the Dispatch Box I would back my noble friend Lady Gardner of Parkes against a landlord any day of the week.
  I deal with a number of other matters raised by the noble Lord, Lord Williams of Elvel. First, the landlord's right to develop the property further is a valuable right which the amendment of the noble Lord, Lord Dubs, may well extinguish. Secondly, the leasehold valuation tribunal fee may not be the same irrespective of the number of tenants. I am sorry that I gave a wrong answer in that respect. It is certainly cheaper than several cases, but it may be more than one individual case. We have not finalised the details.
  Lord Monkswell: Do the Government seriously suggest that it is quite legitimate for a service charge to be used to redevelop property? Surely, the person who develops a property should put his own money into it by way of capital investment rather than use the service charges. That is the implication of what the Minister has said.
  Lord Lucas: No. I said that the service charges must be held in trust and could not be used for other purposes. But the landlord has the right to develop the property further, and that right may be interfered with or taken away by the amendment of the noble Lord, Lord Dubs. The amendment would take away from the landlord the right to manage the roof, which might have to be removed in order to build on extra storeys, and give it to existing tenants.
  Lord Dubs: This debate has been extremely interesting. The noble Baroness, Lady Gardner of Parkes, referred to having a £5,000 service charge. The Minister said that he would back the noble Baroness against any freeholder. That is true. However, not all
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  leaseholders are as articulate, fluent or persuasive as the noble Baroness, Lady Gardner. We must have a system which works for the generality of leaseholders.
  The Minister said that I wanted to expropriate some functions of the freeholder. That is the last thing that I want to do. But where there is a contract between the freeholder and a leaseholder whereby the former provides certain services—which is the basis on which the original lease is acquired—we should not lock the leaseholder into that contract in perpetuity, because the freeholder may, for his part, fail to meet the terms of that contract. It seems to me that when leaseholders pay for services they ought to get something back. When that fails because the provider of services is not doing so adequately, or it is being done at too high a charge, it is reasonable that the leaseholder should have other options. It is called the market economy. It gives the consumer a choice.
  It is my contention that the scheme in the Bill is not adequate. It is bureaucratic and costly. To go to the leasehold valuation tribunal can be costly, particularly if the freeholder assembles expensive counsel for his part. It is costly and is a difficult burden for leaseholders. I believe it is possible to have a scheme that works more easily and effectively. I still believe that the balance ought to lie with leaseholders, because in almost all instances they account for 95, 98 or 99 per cent. of the equity. That is where people have made an investment in their own homes.
  The Minister has referred to the right of leaseholders to enfranchise as an alternative to my scheme about management. He omits to say that the majority of leaseholders are not able to secure enfranchisement. I understand that about 65 per cent. of leaseholders cannot do that. We will discuss that matter in more detail in the next group of amendments. To offer enfranchisement as a way out when dealing with a bad landlord is not the answer, unless the Government accept the other amendments. If they do that, it may change the terms of this particular debate.
  As regards intermediate landlords—head lessees—under my scheme the right to manage will be transferred, and the leaseholder will be able to secure the right to manage whether it is the freeholder or the head lessee who has appointed the managing agents. The point is the same in both instances.
  The Minister said that he did not believe it was appropriate to accept on trust some of the points within this particular amendment. I point out that the Government's system relies on a Royal Institution of Chartered Surveyors code of conduct which itself has not yet seen the light of day, so the Minister also asks the Committee to take matters on trust. As my noble friend Lord Williams of Elvel pointed out, there are three elements in the contract between leaseholder and freeholder: the purchase price or capital sum; the rent; and the payment for service charges. That is what we are talking about. We are talking about a particular service for which the leaseholder has agreed to pay in return for certain things happening. When they do not happen we need remedies. It is my contention that the

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  remedies proposed in the Bill through the complexities of the leasehold valuation tribunal are simply not adequate and will not work.
  The Minister gave the game away at the beginning when he said it was not a matter of the details, it was a matter of politics. Those were his words, not mine. He said "political principle" and the political principle seems to be that we do not want to weaken the position of landlords. I am sorry he takes that view because I thought the Bill was about the rights of leaseholders and giving leaseholders a fair chance in this particularly difficult market.
  I shall refer finally to a point the Minister made. He said I did have another amendment. I accept that given the complexity of the legislation and the procedures, my amendment may be—I think it is usually Government parlance—technically not fully effective, or technically slightly defective. Those are the normal words. Yes, I accept that. That is why I sent the Minister a longer and more detailed amendment which came to some 24 pages, in the hope that I could persuade him to show sympathy for that one and then he would not argue that there were technical flaws with this one. I am not sure where his comment leaves us. I did not want to have another rain forest bite the dust by having a 24-page amendment put down when it is a point of principle we are talking about. I very much regret that the Minister sees this as a political issue and not as one about the rights of leaseholders. I wonder whether I can tempt him to say a little more.
  Lord Lucas: No.
  Lord Dubs: In which case I should like to return to this on Report. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  4 p.m.
  On Question, whether Clause 98 shall stand part of the Bill?
  Lord Dubs: I beg leave to speak to this and also to the other amendments on the Marshalled List. It may be for the convenience of the Committee that we take all these amendments together, because they deal with closely related issues.
  We are talking about the low-rent test, and, related to that, the argument about whether the period should be 50 years or 21 years. The purpose of my amendment is to exclude agricultural or rural tenancies from the provisions of the clause. I have therefore used the same words as are contained in the appropriate paragraph in Schedule 8.
  My understanding is that the position is quite complicated. As regards a low-rent test there are in fact three separate tests depending on when the lease was first signed. For leases before April 1963 the calculation of the low-rent test is that the ground rent has to be less than two-thirds of the letting value estimated for that period. For the period April 1963 to April 1990, the
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  formula for the low-rent test is that the ground rent should be less than two-thirds of the rateable value; previously it was the letting value. Thirdly, for post-1990 properties the ground rent has to be under £1,000 in London and under £250 elsewhere.
  Those are arbitrary figures. There is a lot of scope for landlords to evade the figures by setting the rents in such a way that they can avoid the possibility of enfranchisement. Indeed, landlords have done that.
  Also, in the case of leases going back before 1963 it is very difficult to define what should have been the letting value at the time; and there are many hard luck stories of leaseholders who have failed, and are failing, to secure enfranchisement simply because they are caught by these particular provisions.
  In answer to the question, "Why is there a need for a low rent test at all?" the Government argued in 1993 that the absence of a low-rent test might undermine the rented market by allowing those paying a rack rent to enfranchise. There is no evidence that I or anyone else has been able to find of this as a likelihood, or any evidence that it has been happening.
  The original 21-year limit was a perfectly adequate safeguard because it clearly differentiated leasehold properties from rented properties. Anybody who had under 21 years of a lease would therefore not be able to enfranchise. That is the present position. For reasons which are not totally clear the Government have increased this time period to 50 years. It was virtually admitted by the Secretary of State in the other place that it is an arbitrary figure. It is far too long. No evidence has been produced to suggest there was anything wrong with the 21-year period. Indeed the Lord Chancellor's Department, when it consulted on commonhold in 1990, took the view that there was no justification for a low-rent test in relation to commonholds. The argument applies equally to this amendment as it does to commonholds.
  There are other difficulties with the low-rent test. It is inequitable between individual leaseholders. There may be leaseholders in the same block, of whom one would be allowed to enfranchise and one would not because of the way the formula works. The last domestic rate revaluation was in 1973. Rents have risen since then and the longer the period since 1973 when a long lease was granted, the less likely it is that the rent would have been fixed at less than two-thirds of a 1973 rateable value. In other words, the way in which the formula works is capricious; it is arbitrary, and it is very unfair.
  When the Bill was debated in the other place there was considerable discussion about how this place would react to the contents of the Bill. I wonder whether I could read from a letter sent by a Conservative Member of Parliament to one of his constituents. This is a letter dated 15th May. I quote:
  "There is very considerable resistance to leasehold reform in Parliament, principally in the House of Lords but also to an extent in the Commons.
  "The Leasehold Enfranchisement Bill was badly mauled by the Lords, resulting in a considerable weakening in the Government's original intention.
  "It is very important that the leasehold reform aspects of the Housing Bill should not be weakened in the same way.

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  "In fact, it became quite clear that the Lords would probably have struck out all of the leasehold reform aspects of this Bill had the reform been too radical.
  "Those of us who are in favour of radical reform, therefore, had to ensure that as much reform as possible was included in the Bill that was consistent with it being accepted in the Lords."
  The final paragraph states:
  "Although there is still a risk that the Lords may water down the leasehold clauses, I am now reasonably confident that they will grudgingly let them through."
  I am puzzled by that letter. I understand that there was some concern in the other place, prompted by the Government, that the Committee might be more resistant to these measures and to any improvements in them than even was the case in the other place. It is puzzling but I quote it just for the record.
  There is another difficulty about the low-rent test and the period involved. Between 1963 and 1990 a surprisingly large number of leaseholders had a nil rateable value. This is because of extensive building works which took place at the time they acquired their leaseholds, especially in the late 1970s and the 1980s when nil-rated houses were being converted into flats which were often sold off the drawing board. So we have the anomalous position that because of that accident of history leaseholders would have no right to be enfranchised.
  So, the low-rent test is essentially arbitrary and unfair. It affects not just people living in SW1 or in Kensington but people living in many parts of the country. Indeed, people in Kensington and SW1 may themselves be lacking in affluence. The case is that there is no need for a low-rent test at all. My proposition is that the low-rent test should not apply except in the case of agricultural or rural tenancies, and that the 21-year period is a sufficient qualification. The various amendments together would achieve that end.
  Lord Strabolgi: I support everything that my noble friend Lord Dubs has said about the low-rent test. Thousands of genuine long leaseholders throughout the country will be disqualified from any right to enfranchisement by that test. That is because the low-rent level is so low—on average it is probably no more than 5 per cent. of the full letting value—that landlords granting long leases have for some considerable time been able to fix ground rents just above the limit, without significantly affecting the premium paid for the lease.
  The low-rent test is therefore unnecessary and inequitable. The desired division between owned and rented property is preserved adequately by the restriction of enfranchisement to long leases. As the Committee will be aware, the low-rent restriction was removed entirely by Standing Committee in another place. It would have meant relief from impossible situations for very many leaseholders. When the Bill returned to another place on Report, the Government reversed that amendment which had been passed by Members of all parties in Standing Committe and imposed, for reasons of their own, their own amendment giving exemption from the low-rent test only to those with leases of over 50 years when granted and to those not living on country estates.
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  That is surely discriminatory legislation of a highly divisive nature and favours one long leaseholder over another in an unacceptable way. The test of a long lease has always, but always, been whether it was for over 21 years when granted. Anyone buying a lease of 21 years or more would always have expected that any legislation applying to long leasehold tenure would apply to him. What the Government have set up in that hastily thought through amendment is an entirely new and unjustifiable barrier of 50 years, which bears no relevance to the established criteria of lease lengths or even to the low-rent argument.
  I remember the departmental housing booklets over the years. They are booklets that the department brings out. It does it very well. They are for the information of the public and those who are not specialists. Those departmental housing booklets, giving advice to tenants and leaseholders, issued by the Government, have always defined a long lease as 21 years. They made it clear that leases below that figure did not qualify for enfranchisement.
  Now, at a stroke, the Government propose to alter that figure to over 50 years. Why that volte face? There seems to be no reason for it. The Government remind me of Humpty-Dumpty, who said:
  "When I use a word, it means just what I choose it to mean—neither more nor less".
  So, 21 now means 50—neither more nor less. It is a real looking-glass world indeed. I support the amendments.
  Lord Hamilton of Dalzell: I have one question that I should like to ask the noble Lord, Lord Dubs. I am advised that despite his intention not to remove the exemption from rural properties, his amendments would in fact do that. I wonder whether he will accept that his amendments are flawed in that respect.
  The noble Lord, Lord Strabolgi, and others have wondered why the time period has increased to 51 years. I have never understood why it should be 21. Did it have something to do with the fact that it used to be the age of majority for adults before that was changed by Harold Wilson?
  I used to speak in these debates as a trustee of Smiths Charity. It of course no longer has properties, so I no longer do that. Smiths started selling 60-year leases in response to demand from the tenants to be able to roll up their rents in a single payment in order to take advantage of the mortgage relief which the Government had offered them; 60 years is the point on the graph that reflects the way a leasehold diminishes. It was considerably to the advantage of tenants to do that.
  I asked what the statistics were. One could in 1960 have bought a 60-year lease of a good Smith flat for £10,000. When we were discussing leasehold reform in 1993, the freehold of that flat was valued at about £500,000 to £550,000. The remaining 30 years of the lease was worth £350,000, but the rack rent on the property had by that time increased to what would have been £35,000 a year. Therefore there is no logic in the 21-year period.
  When late in the debate on leasehold reform we began to discuss the low-rent test, the Government excluded any debate on the 1976 Act. Therefore we could not get

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  into the question of whether it should be 21 years or 60 years. It is high time that we debated that matter. There is every logic in the time being much longer than 21 years.
  4.15 p.m.
  Lord Boardman: I must first make it clear that I have no personal interest in this. I am not a leaseholder. I own my own home and I am a short-term tenant in my flat. I say that because when I spoke on previous occasions there was some suggestion that I had some interest in the matter, but I have not.
  I oppose the amendments for one simple reason: they amount to government interfering in a contract freely made between tenants, lessees of premises, and the freeholder. I was amazed to hear the noble Baroness, Lady Hamwee, in the previous debate saying that we should not worry too much about contracts relating to property because of the short supply. She suggested—I am sure that when she reads Hansard she will be surprised to see what she said—that there are two types of contract: one which is normal and the other relating to property which, because of the shortages and one thing and another, can be ignored or one need not be bound by it. If I have misquoted the noble Baroness, I apologise. She will be interested to see what she said on the subject.
  When a leaseholder enters a contract to take a lease—never mind for the purposes of this argument whether it is for 21 years or 50 years—the terms are agreed. The ground rent, the service charge basis, the term and anything else are agreed. Those are the terms of the contract which is entered into. It is suggested that Parliament should come into that and say, "We think you might have had a hard-luck story to tell. We believe that we should interfere and put it right". That cannot be right. It cannot be our duty to interfere in contracts freely and honourably made.
  If someone was badly advised when he entered into a contract, that person has another remedy. He had better go for his adviser. Let me give an example of a highly honourable man who in 1970 took a flat with a 50-year lease at a rent of £200 a year. At that time and today he had no power or right to enfranchise. There was no such right in 1970 when he took the flat. There is no such right today. Because he is just outside the over-50-years limit in the Bill which would entitle him to enfranchise, and because his rent is just too high to qualify as a low rent, he is outside the exemption. He feels—I understand this and have great sympathy for him—that he has had a raw deal. He is a highly honourable man.
  That man believes that Parliament should come into the picture and say, "All right, you have had bad luck. Your landlord told you at the time you took the place that sometime later if you wanted to buy the freehold you could do so". Now we are saying that we are not prepared to do that. That is bad luck, but it is not the responsibility of this place or of Parliament as a whole to say, "We will remake that contract for you". That is what the amendments tabled by the noble Lord, Lord Dubs, seek to do. They seek to remake a valid
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  contract that was honourably and properly made but which happens not to be as favourable as if it were amended as the amendments seek.
  I cannot support the amendments. I do not believe that it is our role to interfere with such contracts and to remake them in order to make them more favourable because we did not get it right first time. I oppose the amendments.
  Lord Strabolgi: But these contracts were not always entered into in the way in which the noble Lord, Lord Boardman, describes. Very often they were contracts which the tenants were forced to enter into because speculators took over blocks of flats and threatened them with expulsion—they were people with ordinary rentals—unless they entered into long leases. That is why they had to scrape together to get the money, by borrowing or raising mortgages and so on, in order to maintain themselves in their homes. I do not believe that one could describe them as contracts freely entered into, as the noble Lord, Lord Boardman, said. He used to say so in 1988, and I used to say the same sort of thing too. It rather took me back when he spoke just now. I am glad that he did, but I believe that historically this is a special case.
  Also, the Government believe in leasehold enfranchisement. They say so on almost every occasion. The Prime Minister has said so many times. They say so in theory and maintain it in theory, but when it comes to it, they do their best to undermine it.
  Viscount Caldecote: This is a very complex issue. I am slightly confused because the noble Lord, Lord Dubs, said that he was speaking to his proposition that Clause 98 should not stand part of the Bill and also to his other amendments, to some of which I have my name. Surely, since the whole purpose of Clause 98 is to give effect to Schedule 8, if Clause 98 does not stand part of the Bill then Schedule 8 falls to the ground and all the other amendments will not be called. I believe that that is the situation.
  However, I believe that it is in order to speak to Schedule 8 on the Motion that Clause 98 does not stand part of the Bill. As the noble Lord, Lord Dubs, said, Schedule 8 deals with the low rent qualification which applies to long leases of less than 50 years. I appreciate that the logic behind the concept of a low rent qualification is not to give to what may be described as temporary tenants on relatively high rack rents the same rights as tenants who are long leaseholders who regard the property as their permanent home.
  Long leases are now defined by Section 3(1) of the Landlord and Tenant Act 1987 as those exceeding 21 years. The schedule now proposes to increase that to 50 years. There seems to me to be no justification whatever for removing the rights of many long leaseholders through a low rent requirement nor for discriminating between long leases of 50 years and 21 years which has always been the custom in the past and as is now proposed under paragraph 1 of Schedule 8.
  But now I diverge from the noble Lord, Lord Dubs, who says that he wants to keep the exclusion of people who live in rural places. It has been pointed out that he

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  does not actually achieve that by removing Clause 98 and with it Schedule 8. But surely there is no justification in fairness or logic for excluding wholly from the right of enfranchisement people living in rural areas. I understand the argument that has been used to justify that exclusion; that it is to protect the freeholders of certain types of houses on country estates. That is a perfectly understandable point of view which others can put much more clearly than I can. But in general, it seems to me to be an unacceptable point.
  In my view, it is quite wrong to use that logic to exclude everyone who lives in a village house, on rural estates, from the right of enfranchisement. Surely the right solution to the problem is to withdraw Clause 98 and with it Schedule 8 and to insert a specific exclusion to deal with the houses which justify being kept separate on rural estates, and leave with the right of enfranchisement all the other village houses which many people have occupied all their lives and perhaps also in the lives of their parents. I have heard mention of dower houses and so on as being an example of those which should be excluded and they should be dealt with by a special provision.
  I hope that the Government will look again at this matter. Even if this amendment is not put to a vote, I hope that the Government will agree to look again at this whole question in relation to low rent disqualification, the 21 to 50 years and the rural disqualification. It is something of a muddle at present which needs to be looked at afresh.
  Perhaps I may comment briefly on what my noble friend Lord Boardman said. I entirely take his point that contracts freely made should not be upset by legislation. But I believe that to take that principle in this case is going rather too far. After all, before any of the recent Acts were passed, if you were a long leaseholder and your leasehold came to an end after, for example, 100 years, you had no rights at all. That was the condition on which you took on the original long lease.
  Parliament felt that that arrangement was so unjust and unfair that it should be altered, as it has been altered by a number of Acts which have been passed. Therefore, this proposal is merely an extension of that principle; namely, to ensure that long leaseholders, who have been occupying their property as their home for many years, are subject to fairer conditions. I support the proposition of the noble Lord, Lord Dubs, that Clause 98 should not stand part of the Bill, but I ask the Government to look very carefully at the whole of this problem. They should try to tidy this area and not use a blunderbuss, particularly in relation to rural areas, which causes great injustice.
  Lord Carnock: First, I must declare an interest. I am a leaseholder in the process of extending my lease but I have no financial interest in the subject of this debate.
  I had in mind to refer to two anomalies in the existing law, both of which have been referred to by the noble Lord, Lord Dubs. I shall say nothing about the first but I should like to enlarge upon the second. That concerns property which underwent major works of reconstruction after the war and at a time when it became uninhabitable so that its rateable value was
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  reduced to nil. Such a house does not meet the low rent test. But if you compare that with a property which was newly reconstructed, you will find that there is no rateable value at all when the house is under the process of construction and becomes first rated after the building is complete. Such a house would comply with the low rent test.
  I ask the Minister whether, if these amendments are not accepted, the Government would he prepared to amend the 1993 Act so as to avoid the anomaly that a property with a negative rateable value could qualify under the test.
  4.30 p.m.
  Baroness Gardner of Parkes: Having earlier declared my interest in a flat, I should indicate that that is non-enfranchisable and so does not come in any way into any further discussion on this Bill. The home I live in is already freehold. In my time on the estates committee of one of the major London hospitals we were faced with this problem of how to re-let the houses that were becoming vacant. At that time—I am going back 15 years—we were well aware that 20 years was not considered a long lease and that it was a safe period for a hospital to let their property on a rack rent. There has been an awareness of the 21-year term for a long time. I do not think there is anything new in that.
  A genuine matter of concern is the situation as regards properties on a rack rent. I feel that the 50 years might be significant if it were going to exclude properties on a rack rent, or market rent or full rent for today. This has been put to me in two different ways. The Leasehold Enfranchisement Association has said such leases do not exist, so I went to the British Property Federation and asked them to produce chapter and verse on it. The federation told me that they have produced chapter and verse to the Secretary of State, to the department, asking for proof that such leases did exist; and they do exist. There do not seem to be a great many of them, but the evidence had certainly been produced. Therefore, I will ask my noble friend the Minister to confirm that to me. If that is the case and such rack rent properties exist, then they should he treated differently from other properties.
  I would support the points made by my noble friend Lord Carnock about properties that were not on the rateable list. Indeed, everyone I have spoken to, including the British Property Federation, acknowledges that that is an anomaly and that it was unfortunate if your house was undergoing major repairs. Everyone wants to see that corrected so that people who are in that position are not disadvantaged through it.
  A very interesting point was made by the noble Lord, Lord Dubs, about the difficulty of tracing the rents that would have been applied to leases before 1963. I am unclear as to why there is such a difficulty because I thought this was a country full of documentation on everything going back hundreds of years. I would have thought it would have been easy to produce something. After all, 1963 was not that long ago.
  There are people who want to be able to buy a property at a lower value if they are buying a lease, and currently these people buy a short lease. There is a

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  problem that exists there, that if we reached the point where property owners were only prepared to sell really short leases, say, 20-year leases, in order to secure the return of their property at a later stage, would we then face a situation where people would not be able to get mortgages? In my time as a director of a building society I know that with any term less than 50 years it was not very easy to get a mortgage because the building society wanted 25 years remaining after you had paid off the 25-year mortgage, in order to give it a degree of security.
  That is something we should look at carefully. We should take care not to kill off a market in shorter leased, affordable property for people, but also make it financeable for people, because, unless they can afford either to rent or to buy, it is not much good creating a market for short leases, which landlords have opted for, in order to protect their property interests.
  None of these things is as simple and straightforward as we would like to think and whatever we decide in this law we will be affecting so many other decisions made by people. If we do develop a really short leasehold market and a longer leasehold market and enfranchisable and non-enfranchisable markets, we will definitely see differentials in values in the property market, and those people who have a lease that is enfranchisable will find their property worth relatively more than those who have one that is not enfranchisable.
  On the rural position, I have had a considerable number of letters on both sides of that argument. The people from Adlestrop in Gloucestershire, who I understand have written to many Members of this Chamber, are concerned that some of the village are able to enfranchise and others are not, but I have had just as many letters from other people saying that on no account do they want the rural exemption lifted and they would like to see it more restrictive. This is a very complex matter and the point made by my noble friend Lord Caldecote is an important one; namely, that if the Government would really consider reviewing this whole issue I would not oppose the present clause standing part. I would rather see that than nothing, but I really hope that there are many aspects of this matter that should be looked at again.
  Baroness Hamwee: I do not want to repeat any points that have been so thoroughly aired. Perhaps I may confine myself to saying that this should in no way be taken as a lack of strength in what I am saying. I wish to associate myself very much with the support for ending the discrimination with which we have found ourselves, and which was the thrust of the argument of the noble Viscount, Lord Caldecote. It is important that we take this opportunity to eradicate those discrepancies as far as we possibly can. In the best of all possible worlds it might be better to start again and have something that reads clearly and easily. I suspect that opportunity will not be before us.
  Lord Coleraine: We are debating the question that the clause stand part and I have tabled an amendment, Amendment No. 254E, which is designed to probe my noble friend as to the meaning and purpose of the rural
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  exclusion. If the question is put that the clause stand part and the noble Lord, Lord Dubs, is successful, then, of course, my amendment will not be debated. To some extent the amendment has already been pre-empted by my noble friend Lord Caldecott who has drawn clear attention to the problems of the rural exclusion.
  It seems to me that this is possibly the moment at which I should explain that my amendment is intended to be a probing amendment because I see some force in what I believe to be the desires of the Country Landowners' Association, which I believe is behind it. Yet, on the other hand, I suspect that it goes too far in some directions and not far enough in others. What I am trying to find out from my noble friend on the Front Bench is why there should be this rural exemption to the provisions of the Bill which sweep away the no-rent test in respect of leases over 50 years, and exactly what the exclusion is trying to achieve and how, if at all, it does so.
  I want to tease this information out of the Front Bench if I can, because in the debate in another place on Third Reading on 30th April the Secretary of State was not able to explain the rural exemption. The nearest he came was to comment (Official Report, Commons, 30/4/96 cols. 927–928) that some leases of under 50 years are found in rural areas where they are granted as part of a management strategy as regards looking after a farming estate. It remained for Mr. Nick Raynsford to bring up the matter in relation to leases over 50 years in length. Apparently advised by the Country Landowners' Association, he produced (at col. 939) the information that there are some 200 or 300 such leases in the whole country, where, as part of agricultural arrangements, properties are let for over 50 years without a premium. I would ask whether my noble friend agrees with this figure and, if so, why have the Government so singly failed to identify even one rack-rented lease granted for more than 21 years over the years in which we have been discussing this matter of the low rent test? Can my noble friend explain how the areas of rural exemption are to be worked out? Would the areas be the same as the rural areas referred to in Clause 17 of the Bill?
  During the passage of the 1993 legislation exception was taken by those concerned with both interests—landlords and lessees—to the power given in the Bill to the Secretary of State to allow to be changed by order the percentage area of the building used for non-residential purposes which would exclude the right to collect enfranchisement. That provision would have varied, according to the will of the department, the valuable property rights of landlords and lessees and, on that occasion, the Government gave way to the argument and that right to regulate matters by order was taken out of the Bill.
  What the Government are effectively doing by the arrangements that they have in place for the rural exclusion is achieving exactly the same undesirable result. There is also the case that the rural exclusion relates to houses in rural areas adjacent to other land in the ownership of the freeholder. That seems to me to be a definition which may have some pragmatic background, but one which is completely lacking in any principle because there is no particular reason why, if you happen

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  to be the lessee of a house and your freeholder landlord happens to own the land next door and not occupy it for residential purposes, you should not have the right to enfranchise. As I understand it, the provision would also leave open the possibility that a freeholder who found himself with an isolated house on the wrong side of the road could go and buy some land adjoining the house in question and thus collect the right to enfranchise. Again, that seems to me to be wrong in principle.
  My final question is to ask why the Bill provides no exemption for future leases granted in rural areas for more than 50 years? If there is a case for the exemption, it seems to me that it should operate in the future. It may well be that the answer is to be found in other parts of the Bill, but I have not as yet discovered it.
  So far as concerns the substantive matter regarding Clause 98 stand part—namely, the low-rent test—I believe I am right in remembering that it fell to me to move the amendment to abolish the low-rent test in 1993. I should like to declare my support for the amendments tabled in the name of the noble Lord, Lord Dubs, in so far as they would achieve that aim. I do not wish to make many points on the issue, but, having read the report of the Third Reading debate in another place, it seems to me that a great deal of misunderstanding still exists in the highest places as to what the low-rent test is meant to achieve.
  In that debate, my right honourable friend the Secretary of State said:
  "The policy has been to give enfranchisement rights to leaseholders who might be regarded as owner-occupiers. That policy lies at the heart of the discussions: how does one distinguish between those who are leaseholders, as one understands that term, and those who may be leaseholders in the sense that they hold a lease but who have been paying a proper market rent as tenants would?"
  I believe that to be a very fair way of setting out the question. Then, a few sentences later, my right honourable friend said:
  "Two tests establish whether the leaseholder is an owner-occupier. First, there is the length of the lease, which should generally he more than 21 years. Secondly, the tenant must pay only a nominal ground rent rather than a market rent".
  In the same debate, my right honourable friend also said:
  "An amendment was carried in Committee, to remove the low rent test. That decision was based not on the idea that renting tenants should be given enfranchisement rights, but on the fact that a low-rent test has caused difficulties in practice".—[Official Report, Commons, 30/4/96; cols. 921 to 923.]
  It is correct to say that the low-rent test has caused difficulties in practice, but that is not a reason why those who oppose it do so; they do so because it is conceptually flawed and because the low-rent test does not begin to meet the requirements set out previously by the Secretary of State regarding the justifications that he gives for having a low-rent test.
  Perhaps I may give Members of the Committee an example of a case where the low-rent test has caused difficulties in practice. It was one that was canvassed at great length during the debate in another place and it has been brought to my attention by Mrs. Joan South of the Leasehold Enfranchisement Association. It is a situation where one has to prove that before 1963 the rent was less than a certain percentage of the letting value. It has been
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  made perfectly clear many times that that has been almost impossible to achieve. Indeed, I do not need to refer Members of the Committee to the evidence given by Simon Marr-Johnson who is a very well-known and well-respected valuer with great experience in such matters. He made it quite clear that there are very few cases where you can actually show what the position was as long ago as, say, 1948. That is certainly a case where difficulties have occurred in practice.
  I should like to draw the attention of the Committee to two other ways, which have already been mentioned, where the whole low rent test is conceptually flawed. First, a lease granted for a premium in the 1980s, after the inflation which had taken place since the rateable revaluation of 1973, was certainly never going to satisfy the low-rent requirement. Yet, almost invariably the valuable property in the flat or house passed to the lessee without any doubt at all.
  Secondly, I should mention the position since 1990, where, in London, a property will fail to pass the low-rent test where the lease was granted after 1990 if the rent is greater than £1,000 a year. No one in their right mind would suggest that a lease at a premium of £1,000 a year in central London was one in which the property passed indisputably to the lessee. That clearly rebuts any suggestion that the low-rent test achieves the desired objective of differentiating between leases which are genuine rack rent leases and those where the property passes to the lessee. For those reasons—and, indeed, for others—I support the amendments tabled by the noble Lord, Lord Dubs.
  4.45 p.m.
  Lord Hamilton of Dalzell: Perhaps I may enlighten my noble friends Lord Caldecote and Lord Coleraine on the point of view of country landowners in requiring rural areas to be exempted from this enfranchisement. One has to realise that landowners who, basically, own agricultural property only own houses by default. They have acquired such property because of the vast diminution of the number of people required to work on farms. As such, they regard such properties as part of their estates.
  A country cottage is now worth an enormous amount of money. My noble friend Lord Caldecote talked about how one could exempt dower houses or houses in the village. But how does one define village and dower houses? Our children are now perfectly prepared to go and live in a cottage previously lived in by a country workman.
  We have made all sorts of curious arrangements as landowners. I can give Members of the Committee one instance regarding a house which was enfranchised as a result of the 1976 legislation. The agent of the property who worked for a firm in London asked to be able to live in the country on the property. That was thought to be a good idea. He was given a house which was in a state of extremely bad repair and he restored it on a 50-year lease. The agent spent his entire life making arrangements regarding agricultural properties on tenant relief where the costs of the improvements are written off over a number of years. But, of course, the

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  enfranchisement allowed him to enfranchise so that he bought, for an absolute fraction of its worth, a cottage which was made over to him in perfectly good faith under certain arrangements to enable him to use it for his own convenience and pleasure.
  The whole business of enfranchisement in the countryside has been riddled with such arrangements which have been overturned by laws and which have disrupted the rules of contract, as my noble Lord, Lord Boardman, said. Many landowners have become extremely angry about the situation—and quite rightly so. We are considering all sorts of requirements. For example, we have people we wish to live in houses from time to time and properties have been let over periods so they would be occupied until the families needed them. However, many such arrangements have been overturned. We are enormously grateful that the Government have produced a rural exemption. Anything which tended to upset it I would resist and vote against with all my heart.
  Viscount Caldecote: I wish to respond to my noble friend. I understand that there are great difficulties here—I said that when I spoke earlier—but is my noble friend really saying that a family who have lived in a house for perhaps two or three generations should not, when the lease comes to an end, have the same sort of enfranchisement rights as someone in a London flat in the same sort of situation? Surely that is totally inequitable. I entirely take his point about the difficulties and the unfairnesses in the other direction; all I am asking is that the Government should look at this with the Country Landowners' Association, and with other people who are interested in this matter from the other side, to see whether some reasonable solution can be found to what is an extremely difficult problem.
  Lord Hamilton of Dalzell: Is not my noble friend arguing my case? If he is talking about three or four generations living in the same house, that will involve a 75 to 100 year lease, and not one of 21 years.
  5 p.m.
  Lord Lucas: The noble Baroness, Lady Hamwee, said that these amendments were about ending discrimination—of course they are not. What we are arguing about is how the discrimination should be made. We have to discriminate between properties which may be enfranchised and properties which may not. What the noble Lord, Lord Dubs, proposes is that there should be a cut off at 21 years. Any term of fewer than 21 years is not enfranchisable; any term of more than 21 years is enfranchisable. What we are proposing is that there should be one cut off at 21 years—anything below that should not be enfranchisable—and another cut off at 50 years, or thereabouts—in that case any property with a lease longer than that should always be enfranchisable—with a grey area in the middle where a property could be one thing or the other, to be determined by the low rent test.
  The noble Lord, Lord Dubs, and my noble friend Lord Coleraine spent a good deal of time going into the details of the low rent test. But that is not what the
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  amendments of the noble Lord, Lord Dubs, address; they do not address how the low rent test operates, they just sweep it away. They sweep away the possibility of letting properties for a term of between 21 and 50 years at a rack rent, not subject to enfranchisement. When we look at the way in which we feel the property market should develop, we think that that is unreasonable. We think that it should be possible to let properties for a term, say, of 30 or 40 years and to have those as rack rent properties. That may well be a deal which suits both sides perfectly. People may want that length of lease and be happy to do it on rack rent terms. I do not see why we should restrict the property market to the essentially artificial cut off of 21 years, and make it impossible for anyone ever to be granted a lease which is longer than that without the danger of enfranchisement.
  The noble Lord, Lord Strabolgi, said that the figure of 50 years was without foundation. In all my relatively short years as an accountant 50 years has been a figure of great significance as regards leases. Fifty years is the point at which a lease begins to depreciate. Beyond that, for longer terms, a leasehold is essentially freehold and can be treated in the same way for accounting purposes. Below that it is a depreciating asset. That is why the figure of 50 was chosen. It may not be perfect but it is a good baseline to take in terms of ordinary business practice and common sense as regards the point beyond which it is not sensible to look at the thing as being a rented property. Those are the two options which are offered to the Committee. What we have—with the patch in the middle—to my mind represents the real world rather more than the cut off at 21 years.
  If the amendments of the noble Lord, Lord Dubs, were accepted, there would obviously be some properties which had been rented at proper rack rents for over 21 years which would suddenly find themselves enfranchisable. As my noble friend Lady Gardner said, we have been provided with a list of half a dozen of these properties. I do not suppose there is a great register of these, but certainly the British Property Federation knows of half a dozen. In the list the length of lease varies from between 50¼ years and 30 years. The basic question is, what sort of structure do we want to provide for the future development of the property market? To our mind, restricting rack rent arrangements to 21 years, making it impossible to give anyone a longer security of tenure than that without risking enfranchisement, would not be good for the future of the property market.
  We have wandered on to the question of Amendment No. 254E in the name of my noble friend Lord Coleraine. With the leave of the Committee I think it right to address that now because certainly if the Question that the clause stand part was disagreed to, my noble friend's amendment could not be put. He and others have asked a number of questions to which, if I may, I shall answer in writing in order to give a proper, full and correct answer. However, I shall provide an explanation of the basis for this exclusion.
  Schedule 8, in providing for the exclusion of certain houses in rural areas, looks to those which form part of larger estates. Even if these are let on leases of more than 50 years they will not—under the Bill—be able to enfranchise unless the low rent test is satisfied. The

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  reason for excluding rural areas is that some landowners, for good estate management reasons, have let property on relatively long leases at market rents. In these cases the landlord fully intends to use the property in future, but because the house may be surplus for a generation or more he may have offered tenants long-term security. In some cases the landlord would have left the property empty or demolished it rather than allow it to be sold from the estate, and so would not have let it with long-term security had there been any question of enfranchisement rights arising.
  The exemption applies only to houses (not flats) in designated rural areas where the land is owned with other land which is not used for residential purposes; for example, if it is on a farm or other estate. We aim to designate the same areas as will be designated under Clause 17 for the rural exemption from the right to acquire. The case for this exemption was accepted, I believe, by the Opposition spokesman in another place, and the amendments to Schedule 8 moved by the noble Lord, Lord Dubs, do not seek to remove it. A question has been raised as to whether they are technically effective in failing to remove it. I do not have an opinion to offer on that.
  Various of my noble friends referred to Adlestrop village. I believe that a number of noble Lords have been written to on behalf of that village. I am afraid to say that the villagers have neglected to write to me. However, I am aware that it appears to be a settlement of a number of leasehold houses, let for over 50 years, some on low rents and others on rents above that limit. Because, so I understand, it is a settlement of fewer than 3,000 people and the landlord owns agricultural land, it would appear to be covered by the exemption.
  I do not believe that it would be right to remove the rural exemption merely to bring the leaseholders of Adlestrop within the scope of enfranchisement. However we frame the rural exemption, there will always be some people who look to have a good case caught on the wrong side of the line. I recognise that we are moving the line, figuratively speaking, closer to Adlestrop, but the leaseholders there who will still be unable to enfranchise will not be worse off than at present, even though there will be others who will be better off. Nothing in this Bill removes the right to enfranchise from anyone; it merely gives additional enfranchisement rights, perhaps not to everyone who wants them, but that is what it does.
  Various noble Lords have raised specific points. My noble friend Lord Cannock asked about leases which have a nil rental value. That sort of question is one which we are quite happy to look at. There may be problems around the edges of our proposed scheme. It may be possible, for instance, to solve this problem by reducing the figure from 50 years to some slightly lower figure, perhaps rather than tackling the problem in the ways he proposed. I certainly look forward to amendments at Report stage which discuss the way in which the low rent test operates, which is really what the noble Lord, Lord Dubs, and my noble friend Lord Coleraine addressed themselves to, but which
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  these amendments do not. We are not caught on any point of principle. We are happy to look at ways in which matters might be improved.
  There is nothing further that I need say on the amendments but I can see that I shall be asked questions.
  Lord Strabolgi: Before the noble Lord sits down, perhaps I may raise this point. I have listened with great interest to his definition of the grey area between 21 and 50 years. But do the Government believe in leasehold enfranchisement or do they not? The issue was in their manifesto at the last election, as was commonhold, on which they are supposed to be working. It never seems to come to fruition. The matter is complicated but the Government are working on it. The Government make public their belief in leasehold enfranchisement. Yet at the same time they do their best to undermine it. Between 21 and 50 years there will be little leasehold enfranchisement because the landlord will hope to get round it by an increase in the low-rent test. Therefore, that belief means very little. The period is increased to 50 years. I note what the noble Lord says. However, the Government are undermining their own policy.
  Lord Lucas: It is a matter of how one regards leases of less than 50 years. They are not normal leases to the extent that one buys a leasehold as though it were a freehold. Such leases are difficult to mortgage. They are normally sold only to cash buyers and those who can raise bank finance. They are generally found on some of the London estates and in some rural areas where they are granted as part of the management strategy for looking after a farming estate.
  Some leases may be granted at low rent in which they will be considered as leaseholds with the leaseholder having the greater part of the equity. Some may be essentially long term contracts at a rack rent, in which case the equity remains with the freeholder.
  I understand that the noble Lord, Lord Strabolgi, does not consider that the low-rent test is perfect. These amendments are not aimed at that. The purpose of the low-rent test is to discriminate between those two types within the 21 to 50 year period. I am arguing that it is right to have the 21 to 50 year period: that that is the right structure for the future of the property market. The noble Lord may argue that we should discriminate within that in a different way. Yes, we believe in leasehold enfranchisement; and, yes, we think that the principle is right. But we do not believe that there should be one single cut-off at 21 years.
  Lord Dubs: I have listened with interest to the many contributions made in the debate. Perhaps I may make a few comments.
  First, the noble Lord, Lord Boardman, referred to interference with contracts. Yes, my amendment seeks to interfere with contracts: it seeks to change the legislative basis on which those contracts were originally entered into. But I suggest that all legislation on leaseholds over recent years has interfered with contracts. A great deal of the legislation in the Bill interferes with contracts. Therefore, the concept that legislation, in the sense in which the noble Lord defines it, interferes with contracts is not a new departure; and, yes, that is what my amendments will achieve.

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  The noble Baroness, Lady Gardner, was surprised, given the amount of paper that we have, that there was difficulty in establishing rent values prior to 1963. Perhaps I may quote from a letter from an eminent fellow of the Royal Institution of Chartered Surveyors. As regards the working of the present system, he states:
  "I have no hesitation in saying that section 4(l) of the Leasehold Reform Act 1967 is extremely difficult to interpret in any particular case. It affects only leases starting before April 1963, so the valuer is put to proof as to the letting value of a property more than 33 years ago. Frequently I find that the County Court has serious problems in understanding the valuation aspects of a case, and more often than not, the matter goes to appeal".
  He then gives examples of cases that went to court. Later he states:
  "From time to time I am instructed to advise on doubtful cases under section 4(1); only too frequently I am obliged to include words in my report such as 'I am certain that the rent at the start of the lease was indeed low within the meaning of the Act, but I am far from certain that I would be able to prove it in court'".
  Finally he states:
  "The section works in a capricious manner, and in my opinion it often does prevent proper claims under the Act from getting through the qualifying process".
  That is one expert. It seems to me that he speaks with some authority.
  As regards the key points of difference between ourselves and the Minister, I have had a number of letters from individuals concerned with the low-rent test and the 50 year period. I shall not take up time by quoting them, but they all say clearly that there are many unfairnesses and anomalies. I am not convinced that the Minister's reasoning underlying the low-rent test is persuasive. He states that the British Property Federation provided him with six examples of rack rents on the basis of which he believes that there is a case for the low-rent test. I find that hard to accept given the evidence put forward as to the sheer difficulty of making the low-rent test work, the unfairness between one leaseholder and another, and the many anomalies. To support legislation based on six examples is not a good way forward when we have so many instances of how badly the system works.
  The Minister said that as an accountant he regarded 50 years as a key figure. My understanding is that in the property market 21 years has normally been the accepted term. If someone has a lease of, say, 40 years that is a long term commitment to living in that flat. It is not a short term commitment saying, "I'm renting this for a couple of years between living in London and elsewhere". A 40-year lease, or one of that order, is a long commitment to a specific property. It seems anomalous that a Government committed to enfranchisement of leaseholders should then say that in many instances those who have the bad luck not to have been in the property for 50 years will simply not qualify. The last legislation failed to achieve its intent given the low number of instances of anyone managing to enfranchise. The present legislation will make it even more difficult.
  I understand the technical point as to whether I have achieved in the amendments the rural areas exemption that I sought. I concede that technically the system
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  would not work. But it would be fairly easy for me to amend Clause 98 in such a way that Schedule 8, as amended, still stands part of the Bill and, therefore, would have the desired effect.
  The Minister gave us a small crumb of comfort by saying that he would look at some of the details. Perhaps he will give us a larger crumb of comfort by considering the comments made from all sides of the Committee and taking them into account at Report stage. That would enable us to proceed on an amicable basis.
  Lord Lucas: I always pay great attention to what is said in this Chamber and this occasion will be no exception. I have not heard sufficient today to give me clear guidance as to the way forward that the noble Lord wishes us to take if we accept our proposal that there should be a grey area, and we are talking about how the low-rent tests should work. He may wish to make his own proposals on that matter on Report.
  However, it is clear that we believe in the enfranchisement of leasehold but not the enfranchisement of people who are merely paying a rack rent. It is necessary to distinguish between the two in some way.
  Lord Dubs: I do not wish to take up the time of the Committee. We have been debating these amendments for some time. The Minister will know the arguments as to what constitutes a rack rent, and why I do not accept the principle underlying his argument.
  I wish to reflect on what has been said and read carefully the comments made so clearly in support of some of these amendments. I reserve the right to bring these issues back before the House on Report. I withdraw my opposition to the Question.
  Clause 98 agreed to.
  [Amendments Nos. 254D to 254K not moved.]
  Schedule 8 agreed to.
  Clause 99 [Collective enfranchisement: multiple freeholders]:
  Lord Dubs Lord Dubs moved Amendment No. 255:
  Page 64, line 33, after ("enfranchisement)") insert—

  ("(a) in subsection (1)(b), for "10" substitute "25", and

  (b) ").

  The noble Lord said: I hope after the length of time spent on previous amendments we can dispose of one or two subsequent amendments in less time.
  The proposition is simple. At the moment for enfranchisement to be possible in a block of flats not more than 10 per cent. of the total floor space may be taken up by non-residential activities—usually shops on the ground floor of a block. The purpose of the amendment is to increase that to 25 per cent., thereby allowing more flats to be enfranchised.
  The difficulty is that flats above shops, as one sees all too often when travelling in parts of our cities, through not being able to be enfranchised, frequently fall into a dilapidated state. The figure of 10 per cent. is pretty arbitrary. I fully accept that 25 per cent. is also an arbitrary figure; but it is a better arbitrary figure than

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  10 per cent. It would achieve the aim of allowing more people to be enfranchised. I cannot see any disadvantage in doing that. In the past, people who bought a flat above shops may not have been aware of the disadvantages that would follow in regard to the 10 per cent. formula. Twenty-five per cent. is a better arbitrary figure. I beg to move.
  Lord Strabolgi: I support my noble friend's remarks. I shall speak very briefly. There is surely an added reason for supporting this measure. When the late Mr. Nicholas Ridley was Secretary of State for the Environment, he very much altered the rules in relation to changing domestic property into commercial property. A great deal of domestic property that had hitherto been reserved for that purpose and not changed to commercial use was allowed to be changed. Therefore there was a sort of infiltration of commercial property into what had been domestic. That is an added reason why the percentage should be increased in line with this new form of thinking.
  5.15 p.m.
  Lord Lucas: As the noble Lord, Lord Dubs, said, quite simply a balance has to be struck between the need to encourage commercial development and the rights of leaseholders`. It is our view that the 10 per cent. rule strikes the balance in the correct place. My right honourable friend the Secretary of State for the Environment spoke eloquently at Report stage in another place about the Government's strenuous efforts to protect and enhance the position of town centres. That is where most of the flats over shops will be found and why we do not want to do anything to harm the commercial element in these developments. We do not want to place any impediments in the way of further such developments.
  It has been made clear to us that many institutional investors, on whom we depend for the continued health of our commercial property market, would have severe doubts about investing in developments where there is a risk of being enfranchised. That is not unreasonable. If you run a commercial development and you particularly want to keep the property in good repair, looking good and generally a credit to the neighbourhood so that shop people are keen to have shops underneath and people are keen to shop there, you want to be in control of what happens in the whole property. To try to manage a shop property where you do not have control over what happens above it could turn out to be a complete nightmare. The property would certainly be worth a great deal less money than if you had control over the whole block. So merely from a practical point of view we want to encourage people, when they are putting shops in town centres, to build residential property above them. We feel that that is healthy for town centres and results in healthy communities. Merely from that practical point of view we do not want to include anything in the Bill that would discourage that from happening.
  I appreciate that this will be a disappointment to some leaseholders who will be denied enfranchisement, although it is important to realise that if there is a significant element of commercial development in a block, the cost of enfranchisement will be greatly increased and many leaseholders would not be able to
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  afford the price. With the 25 per cent. figure that the noble Lord, Lord Dubs, uses one would expect the cost of enfranchisement to be at least doubled by the commercial property—the property would represent at least half the purchase price. We think that the potential group of enfranchisers who are effectively denied by the 10 per cent. limit is much smaller than first appears.
  I also stress that we are not leaving these leaseholders entirely unprotected against the possibility of encountering unscrupulous landlords and bad management. They will still in most cases be able to seek lease extensions under the 1993 Act, and the rights and safeguards against unreasonable service charges, including the additional provisions contained in the Bill, will apply to them as to all long leaseholders. This includes the protection against forfeiture proceedings and access to the leasehold valuation tribunal to seek a determination about the reasonableness of service charges and the appointment of a manager. If the freeholder decides to sell the block, the requisite figure for the residential floor space becomes 50 per cent. In those circumstances many leaseholders will have the right to buy their property.
  Lord Dubs: I see that the Minister is not to be persuaded. I want to reflect on what he has said. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 99 agreed to.
  Schedule 9 agreed to.
  Clauses 100 to 105 agreed to.
  Lord Lucas Lord Lucas moved Amendment No. 255ZA:
  After Clause 105, insert the following new clause—

  POWER FOR LEASEHOLD VALUATION TRIBUNAL TO DETERMINE AMOUNT OF COSTS PAYABLE UNDER LEASEHOLD REFORM ACT 1967
  (". In section 21(1) of the Leasehold Reform Act 1967 (mailers to be determined by leasehold valuation tribunal), after paragraph (b) there shall be inserted—
  "(ba) the amount of any costs payable under section 9(4) or 14(2);".").
  The noble Lord said: This amendment makes a small change to the powers currently available to leasehold valuation tribunals when they are resolving disputes over cases concerning the enfranchisement of houses under the Leasehold Reform Act 1967.
  The amendment would provide that leasehold valuation tribunals may additionally determine the amount of any landlord's costs liable under the Act to be paid by the tenant. At the moment any dispute over these would have to be settled by separate court proceedings. This change would bring the 1967 Act into line with the Leasehold Reform, Housing and Urban Development Act 1993 which gives the leasehold valuation tribunals jurisdiction to determine costs incurred in the enfranchisement and lease extension process in relation to leasehold flats. I beg to move.
  On Question, amendment agreed to.
  Lord Lucas Lord Lucas moved Amendment No. 255A:
  After Clause 105, insert the following new clause—

  PRIORITY OF INTERESTS ON GRANT OF NEW LEASE
  (". After section 58 of the Leasehold Reform, Housing and Urban Development Act 1993 there shall be inserted—
  "Priority of interests on grant of new lease.
  58A.—(1) Where a lease granted under section 56 takes effect subject to two or more interests to which the existing lease was subject immediately before its surrender, the interests shall have the same priority in relation to one another on the grant of the new lease as they had immediately before the surrender of the existing lease.
  (2) Subsection (1) is subject to agreement to the contrary.
  (3) Where a person who is entitled on the grant of a lease under section 56 to rights of occupation in relation to the flat comprised in that lease was entitled immediately before the surrender of the existing lease to rights of occupation in relation to the flat comprised in that lease, the rights to which he is entitled on the grant of the new lease shall be treated as a continuation of the rights to which he was entitled immediately before the surrender of the existing lease.
  (4) In this section—
  "the existing lease", in relation to a lease granted under section 56, means the lease surrendered on the grant of the new lease, and
  "rights of occupation" has the same meaning as in the Matrimonial Homes Act 1983."").
  The noble Lord said: This amendment deals with the treatment of third party interests binding a lease when a leaseholder is granted a new lease under the provisions of Chapter II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993.
  Section 58 of the 1993 Act already provides that if a lease is subject to a mortgage, then that mortgage shall take effect against the new extended lease in the same way as it applied to the old lease. Some uncertainty has arisen about the position where there is more than one third party interest to a lease.
  New subsection 58A(1) of the 1993 Act inserted by this clause clarifies that when a new lease is granted under Part I of the 1993 Act, the interests which applied to the old lease shall apply to the new lease in the same priority as they applied to the old. New Section 58A(2) provides that this rule is subject to agreement to the contrary.
  New Section 58A(3) provides that a spouse's rights of occupation under the Matrimonial Homes Act 1983 existing on the grant of the new lease is to be treated as a continuation of the rights to which he was entitled immediately before surrender of the old lease. That reverses the result that would otherwise follow under the Matrimonial Homes Act; namely, that the rights would be treated as created on the grant of the new lease. I beg to move.
  On Question, amendment agreed to.
  Lord Lucas Lord Lucas moved Amendment No. 255B:
  After Clause 105, insert the following new clause—

  ESTATE MANAGEMENT SCHEMES IN CONNECTION WITH ENFRANCHISEMENT BY VIRTUE OF SECTION 98
  (".—(1) Chapter IV of Part I of the 1993 Act, except section 75(1), (estate management schemes in connection with enfranchisement by virtue of that Act) shall also have effect subject to the modifications mentioned in subsections (2) to (4) below.
  (2) In section 69(1) (definition of estate management schemes), for paragraphs (a) and (b) there shall be substituted—

  "(a) acquiring the landlord's interest in their house and premises ("the house") under Part I of the Leasehold Reform Act 1967 by virtue of the provisions of section IAA of that Act (as inserted by paragraph I of Schedule 8 to the Housing Act 1996), or

  (b) acquiring the landlord's interest in any premises ("the premises") in accordance with Chapter I of this Part of this Act by virtue of the amendments of that Chapter made by paragraph 3 of Schedule 8 to the Housing Act 1996,".

  (3) In section 70 (time limit for applications for approval), for "two years beginning with the date of the coming into force of this section" there shall be substituted "two years beginning with the coming into force of section (Estate management schemes in connection with enfranchisement by virtue of section 98) of the Housing Act 1996".
  (4) In section 74 (effect of application for approval on claim to acquire freehold), in subsection (1)—

  (a) in paragraph (b), in sub-paragraph (i), the words from "being" to the end shall be omitted, and

  (b) after that paragraph there shall be inserted "and

  (c) in the case of an application for the approval of a scheme as an estate management scheme, the scheme would extend to the house or premises if acquired in pursuance of the notice."

  (5) Section 94(6) to (8) of the 1993 Act (estate management schemes relating to Crown land) shall also have effect with the substitution for any reference to a provision of Chapter IV of Part I of that Act of a reference to that provision as it has effect by virtue of subsection (1) above.
  (6) In section 33 of the National Heritage Act 1983 (general functions of the Historic Buildings and Monuments Commission for England), after subsection (2B) there shall be inserted—
  "(2C) In subsection (2B), references to provisions of the Leasehold Reform, Housing and Urban Development Act 1993 include references to those provisions as they have effect by virtue of section (Estate management schemes in connection with enfranchisement by virtue of section 98)(1) of the Housing Act 1996."
  (7) In section 72 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (general duty as respects conservation area in exercise of planning functions), at the end there shall be inserted—
  "(3) In subsection (2), references to provisions of the Leasehold Reform, Housing and Urban Development Act 1993 include references to those provisions as they have effect by virtue of section (Estate management schemes in connection with enfranchisement by virtue of section 98)(1) of the Housing Act 1996."
  (8) In this section, "the 1993 Act" means the Leasehold Reform. Housing and Urban Development Act 1993.").
  The noble Lord said: Previously when Parliament has given lessees the right to enfranchise, Parliament has also made provision for the former landlord to be able to apply to have some continuing degree of control over property in the area. Landlords, or a group representing tenants, may apply for approval of an estate management scheme. A leasehold valuation tribunal may approve a scheme if the tribunal is satisfied that a scheme is necessary to maintain adequate standards of appearance and amenity or to regulate development. Landlords had two years from the commencement of the legislation to apply for such schemes. So the opportunity to apply under the 1993 Act expired on 31st October last year.
  Clause 98 enfranchises a new class of leaseholders. The new clause (Amendment No. 225B) provides a further two-year opportunity for any landlord to apply for an estate management scheme on the basis that the property will become enfranchisable after this legislation. The same procedures and criteria will apply to the approval of schemes as in the 1993 legislation. Landlords will be able to mount a case for a scheme only on the basis of property which becomes enfranchisable as a result of the current legislation, although if a new scheme is granted it can apply to all property within its area. I beg to move.
  On Question, amendment agreed to.
  [Amendment No. 255C had been withdrawn from the Marshalled List.]
  Lord Dubs Lord Dubs moved Amendment No. 255CA:
  After Clause 105, insert the following new clause—

  REVIEW OF EXTENSION OF COLLECTIVE ENFRANCHISEMENT
  (".—(1) The Secretary of State shall keep under review the effect of this Part together with the Leasehold Reform. Housing and Urban Development Act 1993 on the extension of the right to collective enfranchisement.
  (2) In conducting the review, the Secretary of State shall—

  (a) consider new or better ways of exercising the right of collective enfranchisement; and

  (b) consult such bodies as he considers representative of the interests of leaseholders.

  (3) The Secretary of State shall, within a period of two years after the date on which this Act is passed, make a report of the review carried out by him under subsection (1), and shall lay before each House of Parliament a copy of the report made by him.").
  The noble Lord said: This amendment stands in my name and that of the noble Lord, Lord Meston. There is a great deal of concern about how well the 1993 Act has been working as regards enfranchisement. Concern has also been expressed this afternoon as to how well the changes proposed in this Bill will work.
  The purpose of the amendment is to ensure that within a two-year period after the Act is passed, the Secretary of State will carry out a review and will report on the way in which the measures—that is, the 1993 Act and the Bill—are working as regards leasehold matters. I share the anxiety of those who say that the last Act could not have worked well because of the small number of instances of enfranchisement that are known and that leaseholders are finding it too difficult to put into practice the provisions which the 1993 Act should have given them. I contend that they will also find it difficult to deal with the changes proposed in this measure. Let me repeat the figure that I quoted earlier. It is my understanding that 65 per cent. of leaseholders will not be able to become enfranchised because of the measures in this Bill together with the measures in the 1993 Act.
  The purpose of the amendment is to put that proposition to the test—unfortunately, only after the event—so that the Secretary of State will publish the results of a full review to see how well the measures are working. I believe that it is a sensible course. We shall then have some objective—I hope—information which will enable us to judge whether further changes are
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  needed or whether the fears expressed today by several Members of the Committee in relation to the Bill are borne out in the event. I beg to move.
  Lord Strabolgi: I support the amendment. The noble Viscount, Lord Montgomery of Alamein—I am sorry to see that he is no longer in his place—said rightly that the Act was not working very well. Indeed, as my noble friend Lord Dubs pointed out, there have been very few cases of leasehold enfranchisement. I understand there have been only a few dozen. Therefore, it is crucial that the Government now have a commitment to a thoroughgoing review.
  If the Government's stated intention is still to make long leaseholders the full owners of their homes, they must now commit themselves to examining how the restrictions of the 1993 Act are serving to frustrate that aim—there will be further frustrations as a result of the present Bill—and how landlords are using loopholes to deprive leaseholders of their right to buy. It is clear that leasehold as a form of tenure has not come to an end. A commitment must be given to examining how the process of enfranchisement can be made simpler, cheaper and fairer, and so allow more leaseholders to become the full owners of their homes.
  What the Government continually say they want to do, although they do the opposite in legislation, is to bring the leasehold system of this country to an end, so that we can enter into the kind of tenure that is held on the Continent and in other countries, such as Australia. It is much more successful than the old-fashioned, 19th century system which still persists in this country. The Government believe in bringing it to an end. Therefore, it is time that there was a full examination of the legislation that has been brought in during their term of office to see whether we can make further improvements and ensure that the aim to which they subscribe can be fully realised.
  Lord Lucas: I agree entirely with the noble Lord, Lord Dubs, that it is our responsibility to keep the effects of our legislation under constant review. That is especially so with such an important and complex piece of legislation as the 1993 Act.
  That is exactly what the Government have been doing. Let me explain briefly two ways in which we are seeking to achieve it. First, at the outset we established the Leasehold Enfranchisement Advisory Service. We have already discussed the value of that body in debating a previous amendment with a view to strengthening its activities. Not only has it provided an excellent advice service to leaseholders and freeholders in relation to the enfranchisement procedures, but it also has a non-political role in advising the Government about the effectiveness of those procedures. It can do that because of its contact with an enormous number of leaseholders interested in enfranchisement. It received 4,000 inquiries in 1994 and nearly 5,000 in 1995.
  It was largely at the prompting of LEAS that the Government took action in this Bill to deal with the avoidance device of the creation of flying freeholds. I can assure the noble Lord that we shall continue to rely on its very helpful and sound advice. We shall also

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  consult groups representing leaseholders and freeholders, as we have done in the course of the preparatory work for this Bill and during its passage through Parliament.
  Secondly, we have commissioned a substantial research project which is being undertaken by staff from Sheffield Hallam University into the experiences of a sample of leaseholders drawn from inquirers to the Leasehold Enfranchisement Advisory Service who have shown an interest in enfranchisement. That study is understandably quite a lengthy process, but I expect that a full report will be made to the department in the spring of 1997.
  In moving his amendment, the noble Lord, Lord Dubs, suggested that the 1993 Act had proved ineffective and over-complicated and that that was why so few leaseholders had made use of the new powers. He quoted a figure of 65 per cent. who cannot enfranchise. I do not recognise that figure and do not know the basis of it. Perhaps the noble Lord will write and enlighten me. The 1993 Act was brought forward on the basis of principle—hence all the qualifying conditions. It is not something that we intend to change just to get the numbers up.
  I have to admit that the Government are faced with two difficulties in trying to refute the claim that the 1993 Act has proved ineffective. First, if leaseholders do proceed to enfranchisement, then, although they may be using the provisions of the 1993 Act, they may have come to a private agreement with their landlord. The Government have no automatic knowledge of how many such agreements there have been.
  Secondly, it may be that in many cases the exact procedures of the legislation are not closely followed. The two parties form a degree of mutual trust and come to a purely private arrangement. That does not mean that the legislation has proved unsuccessful because it is quite likely that in many cases, without the knowledge of the legislative powers as a reserve, no such private deal would have been reached.
  Those qualifications apart, the evidence that we have available suggests that there is far more activity going on than many of the critics of the Act would lead one to believe. I do not wish to prejudge the results of our research project, but the preliminary results of one part of the research, which was a survey of inquirers to LEAS, indicate that of those wishing to enfranchise, 18 per cent. had completed the process. That represented 67 cases of completed enfranchisement. Further evidence has been made available from LEAS itself, which has sought information from its own list of professional advisers, principally those solicitors and valuers working in this area. This has produced evidence of 164 completed cases of enfranchisement involving nearly 1000 flats and 154 cases of lease extension. This is, of course, only a very partial survey but it does indicate considerable activity.
  There have also been 39 cases under the 1993 Act provisions where there have been disputes resolved by the leasehold valuation tribunals. Although this is not a large number in itself, the resolution of some difficult
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  issues, such as the share of marriage value between landlord and leaseholders, has established some important ground rules which will add a degree of certainty for prospective enfranchisers.
  I accept that the numbers we have for successful enfranchisement is not large in relation to the 1 million or so leaseholders that exist, but the Government have never claimed that progress would be rapid. For example, there are still cases of enfranchisement being completed under the original 1967 Leasehold Reform Act provisions, so it is still early days. However, we do think that the evidence we have available suggests that there is a great deal of interest about enfranchisement among leaseholders and that the level of activity is markedly accelerating.
  The provisions in this Bill will enable more leaseholders to acquire their freeholds in a number of ways and we will, of course, keep the legislative framework under close review. I do not rule out further research work being commissioned.
  I do not, however, think that it would serve any useful purpose to place a requirement on the statute book requiring such a review to take place. With the assurances I have given to the noble Lord, Lord Dubs, I hope he will feel able to withdraw his amendment.
  Lord Dubs: I thank the Minister for his reply, which is reasonably helpful. I agree with him that it would not make sense to have such a requirement permanently on the statute book. I have achieved what the amendment sought, which is a positive response from the Minister. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 255CB not moved.]
  5.30 p.m.
  Clause 106 [Payment of housing benefit to third parties]:
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 255CBA:
  Page 70. line 29, at end insert—
  (" "( ) Regulations relating to housing benefit under subsection (1)(h) above—

  (a) shall require a request for information or evidence by the determining authority to be made in such a manner and within such a period as may be prescribed, not being more than seven days from the date on which the new claim is received at the appropriate Department of Social Security office, or the designated office, whichever is the earlier, and

  (b) where it appears to the determining authority that further information or evidence is required, shall require that request to be not more than ten days from the date on which the claim is received.").

  The noble Baroness said: With this amendment we move onto the next part of the Bill dealing with housing benefit. I do not know which noble Lord on the Government Front Bench is handling it but if, as I believe, it is, the noble Lord, Lord Mackay of Ardbrecknish, may I congratulate him on behalf of these

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  Benches on his appointment as a Privy Counsellor which is well merited. We are delighted to be able to express this here on the first occasion on the Bench.
  Noble Lords: Hear, Hear!
  Baroness Hollis of Heigham: As this is the opening amendment on this part of the Bill perhaps I may make a few general remarks before going into what is a fairly modest amendment. We are all very worried about the future administration of housing benefit. The system is breaking down. We have very high rates of error, very high rates of fraud and a too low take-up figure with too long delays in paying out housing benefit.
  Let me look at the first of these—fraud. I will come back to this in a later amendment. Somewhere between £1 billion and £2 billion of the £10 billion paid out in housing benefit may be fraudulent, mostly paid to fraudulent landlords who invent fictitious tenants. Until recently, local authorities had to pay back any money that they recovered, which was effectively a tax on crime-busting, so they did not do so. Wisely, however, the Government have changed their policy on this and given local authorities encouragement to pursue fraud. But it requires time, it requires staff and it requires detailed information—validating the income, perhaps, of the self-employed or checking the landlord's property and the identity of tenants in a floating ethnic minority community. There is a problem of fraud and all the evidence suggests that parties on all sides of this Chamber have under-estimated the amount of fraud that is occurring in housing benefit.
  Secondly, the Government have also, in my view very foolishly, introduced changes in housing benefit which allow landlords to repossess property after eight weeks rather than after 13 weeks in arrears. The more careful the local authority is to check on fraud—and that takes time—the longer it takes to pay out a housing benefit claim, the more impatient landlords get, and the more keen they are to evict.
  To that has been added a third pressure. Housing benefit is now paid four weeks in arrears, which I can tell the Committee is really popular with landlords. It is the requirement now that when a local authority has collected all the information it needs the clock starts ticking and the local authority has to pay the housing benefit within 14 days of receiving that information. Even so, only 70 per cent. of authorities achieve the target figure of meeting 80 per cent. of the claims within 14 days. It can take weeks—eight, 10 or 12 weeks—to collect information, especially if a claimant is self-employed or the employer is reluctant to co-operate or where there is a particularly difficult situation involving hours of work that fluctuate because of part time or casual labour. In the meanwhile, the landlord gets impatient and seeks possession. If the local authority does make a payment on account and it turns out not to be justified, which I suspect may be the ministerial answer, it is very hard to recover and the local authority may well be criticised by the district auditor.
  The Government have boxed in the local authority and the tenant. We need to have the claims thoroughly checked to avoid fraud but, in so doing, it takes longer
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  to pay out whereupon the landlord is more likely to evict. That process is made worse by the fact that housing benefit is now being paid in arrears. All that makes the tenant increasingly vulnerable.
  What we are trying to do with this amendment—it is a very modest amendment but I felt it was right to try to state the nature of our concerns—is to reduce the time that the local authority has in order to seek additional information before the clock starts ticking. This amendment would say to the local authority, "You have seven days to request the information you need to check on this claim and beyond that you have a further 10 days for any additional information." Thereafter the clock starts ticking. We bring a sense of urgency into the system and we hope that as a result we will be both scrupulous in the handling of public money vis-à-vis the landlord, but also I hope we will protect the tenant from coming under pressure from the landlord for eviction. I beg to move.
  Earl Russell: I must apologise to the noble Baroness for my discourtesy in missing the first minute of her speech. I have agreed with what I have heard and I am happy to support this amendment for the time being.
  Baroness Hollis of Heigham: And trust me on the rest!
  Earl Russell: I certainly trust the amendment, which is what I am here to support. One extra reason for supporting this amendment is that I hope the Minister might feel that it will save us from some occasionally fruitless and vigorous exchanges across the Chamber, the last of which happened while we were engaged on the housing benefit regulations only a few weeks ago.
  Before I go any further, I take this opportunity to congratulate the Minister most warmly on his elevation to the Privy Council, which is a very just honour in which I take a great deal of pleasure.
  The trouble is that the Minister is always expressing with confidence figures about housing benefit delay which appear to those of us with experience of the subject on the ground to be absolutely incredible—particularly incredible if our experience happens to come, as mine does, from the London Borough of Brent. The reason why we have this trouble with information is that we are measuring different things. The 14 days within which the landlord of the housing benefit authority is supposed to determine the housing benefit runs from the day it receives the last bit of information. When information does not come in, it is extremely easy and sometimes correct to blame the tenant, but it is not always correct to do so. Local authorities, especially if they are cash-strapped, overcome by a flow of business or generally crippled by the weight of what they have to do—as sometimes happens, particularly in inner city authorities—simply may not get round to sending out requests for additional information.
  I believe I am right in saying that the London Borough of Lambeth discovered three sacks of housing benefit mail which had been left unopened for three months. In such a case this amendment would apply, because it would mean that the clock would start ticking

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  and the local authority would have to get its finger out and do something about it. It would therefore relieve a great deal of hardship among tenants whose claims are frequently delayed through no fault of their own; it would relieve the pressure on homelessness (whatever we think of Part VII of the Bill, we all agree that that pressure should be relieved); and it would relieve public funds since homelessness tends to be expensive. It would also save a great deal of often useless acrimony in debate when we are not discussing figures on the same basis.
  For all those reasons I am delighted to support the amendment; I am glad it was tabled and I thank the noble Baroness for moving it.
  The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): I thank the noble Baroness and the noble Earl for their kind words on what the noble Earl described as his pleasure at seeing me elevated to the Privy Council—a pleasure I share. I thank them for their kind words and the Chamber for its assent in those congratulations.
  Amendment No. 255CBA would require local authorities to request the information or evidence required in connection with a claim for housing benefit within seven days of that claim being made and, if they need further information, that must be requested within 10 days of the claim being received. The noble Baroness indicated 10 days thereafter. In fact, though that may be what she meant it is not what the amendment says. The amendment allows only a further three days.
  The purpose of the amendment, as the noble Baroness and the noble Earl explained, is to speed up the claims process in order to get benefit to claimants more quickly. But it may well have the opposite effect.
  Under this provision, authorities would have just two opportunities to obtain all the information needed to determine and maintain a claim. Once the seven days had elapsed, a local authority would only be able to seek further information within the next three days, giving the claimant no realistic time to reply to the first inquiry. If they failed to request any item of information within the statutory time limits, no matter how important, they would either have to do without or press ahead with a request for which there would be no statutory backing. In the event of the latter, the claimant would arguably be within his or her rights to refuse to co-operate. Faced with that dilemma, an authority could only determine the claim on the basis of the available evidence, which might result in benefit being overpaid, underpaid, or in the claim being rejected.
  And the difficulties would not end there. Once the time limits had passed a local authority would not be able to seek any further information in connection with any subsequent review of a claimant's circumstances. Instead, the authority would have to rely entirely on the claimant reporting every relevant change correctly. The consequences of such a course and the opportunities it presents for fraudulent claims are unthinkable. I am sure that that is not the outcome the noble Baroness desires; indeed, she expressed quite contrary terms. But that may be one of the conclusions if the amendment is accepted.
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  There are already measures in place to help speed up the claims process, including demanding targets that staff must meet in connection with the determination of claims.
  In 1994–95 local authorities determined 83 per cent. of claims within the 14-day target. Of course there must be a target of receiving all the required information; it cannot be expressed any other way and local authorities are steadily improving their performance.
  The noble Earl suggested that some local authorities may not get round to sending out for the additional information and referred to three sacks of mail waiting for three months. I am sure the noble Earl would accept that that must have been due to different circumstances and would not be a deliberate policy of the local authority or its housing benefit staff. I am sure they try to get on with the job as quickly as they can and that the benefit claim is dealt with as speedily as possible. If it is not dealt with speedily and the tenant is not able to pay his rent for some weeks or months, then the person may land in the local authority's lap as a homeless person. It is not therefore in the authority's interest to stall those decisions, for whatever reason, and it is not in their interests to be inefficient.
  We know that most claims are dealt with promptly and I am sure that there is not a deliberate intention on the part of the authority staff to delay claims. One must therefore be careful when one lays down procedures in law because they may hinder rather than improve efficient customer service.
  I hope that with that exploration of the issue of the speedy determination of claims, the noble Baroness will be able to withdraw the amendment which makes the timetable extremely tight and could act in a contrary manner to the way in which we all wish to see local authorities act.
  5.45 p.m.
  Earl Russell: I am grateful to the Minister for that careful and thoughtful reply. But I wonder whether he puts a little too much weight on the argument that it is not in the local authority's interest to delay. It is not in anybody's interest to drive too fast for safety on the road; but it does happen from time to time. It is necessary that the law should restrain it, as it properly does.
  I admit that the example of three unopened sacks was unusual. It came from the London Borough of Lambeth which for a long time has been unusual. I make no party point; it was simply an exceptional authority. But these things happen. I take the point the Minister made that there are a considerable number of targets on the local authority. Perhaps he could clarify one specific point.
  Is there a specific target on the local authority for sending out requests for information within a certain time? If not, perhaps the Minister could give an undertaking that in future there will be such a target. That may go some way to meet the point of the amendment. It is a serious point. If the Minister does not want to meet it that way, perhaps when we come back to the Bill at Report stage, he can meet the point in a different way under Clause 94 which shortens the

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  period for eviction for non-payment of rent from 13 to eight weeks. It would help considerably if that period were to run not from the beginning of the request from the tenant for housing benefit, but from the completion of the requests for information.
  There are a great many delays in housing benefit which run well beyond the 13 weeks. Therefore, if nothing is done, people will be evicted through no fault of their own. Though the Minister made a lot of fair points, I hope that he made them with a view to finding a better way of meeting a genuine difficulty.
  Lord Mackay of Ardbrecknish: Perhaps I can try to respond. On the last day on which we discussed these matters I tried to outline the average timetable of a potential eviction. The eight weeks may start the trigger but it takes a few more weeks before anything happens in relation to eviction. Of course, through that time, if the rent is paid, the clock ceases to tick and the process stops. The time therefore is a little more than eight weeks.
  We are not quite up against the eight weeks' barrier. A tenant having trouble getting his housing benefit agreed would have a little more time than that. But timetables work both ways. I would be reluctant to suggest an alternative to the seven and 10 days contained in the amendment, which is what the noble Earl is inviting me to do. The fact that 83 per cent. of claims are determined and paid within 14 days is important and we would like local authorities to improve on and continue to live up to that situation.
  The noble Baroness drew attention to the fact—although, I believe, not meaning it to help my argument—that if a local authority was unable to determine a claim within 14 days it is required to make a payment on account. That can be done, although on that matter the noble Baroness put in the qualification that she believes that we should remember. The irony of it is that when asked for a piece of information the tenant has four weeks in which to supply it. The timetable is quite lax, if I may use that word, on the part of the tenant, although on the part of the authorities, 14 days after the claim is certainly quite tight.
  I always contemplate what has been said in these debates. I suspect that it would be rather difficult for the authorities to run on seven and 10 days. That could have consequences in some cases which are the opposite of those which the noble Earl is looking for. It may be unhelpful rather than helpful to the tenant. I hope that with my explanation we can leave the matter and all think about what we have said.
  Earl Russell: Before the noble Lord sits down, perhaps I may ask him one further point of clarification. He quoted the figure of 83 per cent. of claims being determined within 14 days. Can he clarify—within 14 days of what event?
  Lord Mackay of Ardbrecknish: I thought I had said that. It is within 14 days of receiving all the required information—in other words, the claim being available in a way in which it can be dealt with.
  Baroness Hollis of Heigham: I hope the Minister will agree that there is a real problem here. At the very
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  same time that the Government are empowering the landlord to evict the tenant earlier, usually for rent arrears, they are not willing to ensure that the money with which the tenant pays the rent is getting to the tenant or the landlord speedily enough. There is a real problem here, and the result is that if we do not do something about the supply side of the money as opposed to increasing the demand powers of the landlord, we shall see more evictions and more pressure on the local authority of homelessness, which is not the tenant's fault.
  There is a problem here and the Minister must help us address it. We are not particularly fixed on the wording of this amendment; there may be other ways of going about it, including the Minister making it much more clear in what circumstances payment on account may take place. Perhaps I may give one example. A CAB in Norfolk reported on a single parent who moved into a housing association property in July and claimed benefit. By September no payment had been made and she received notice to quit, with all the worry that comes with it. In October she was threatened with court action for arrears of £683. This is a good, social-renting association. Benefit was finally paid after 11 weeks. The housing benefit department claimed that it had been waiting for information from the Benefits Agency, but there was still a month's delay even after the CAB had intervened.
  It is not necessary that this should be the particular fault of any one person. It may be a problem of getting information for part-time employees and from, say, the Benefits Agency as regards family credit and from the claimant himself. There may be some slackness in the local authority system. But by putting those factors together one is increasing the landlord's powers to evict without at the same time ensuring that the money to stop that eviction will be paid on time. As I say, there is a problem here and we hope that the Minister will help us address it. At this stage I beg leave to withdraw the amendment, but I may seek to come back to it at Report stage.
  Amendment, by leave, withdrawn.
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 255CBB:
  Page 70, line 29, at end insert—
  (" "( ) As it has effect in relation to housing benefit subsection (1)(k) shall apply so that where a claimant is entitled to income support and—

  (a) has included in the calculation of his applicable amount the pensioner, the enhanced pensioner or the higher pensioner premium, or

  (b) although not in receipt thereof has included in the calculation of his applicable amount the pensioner, the enhanced pensioner or the higher pensioner premium,

  the award of housing benefit shall be made for the equivalent period of that entitlement.").
  The noble Baroness said: This is an amendment to bring the payment of housing benefit to pensioners in line with the payment to them of other social security benefits. At the moment current housing benefit claimants have to renew their claim every 12 months otherwise they are struck off the list and the housing

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  benefit fails to be paid. That is obviously sensible for someone of working age whose circumstances may change significantly. They may be in and out of work or the family size may alter. It is right that there should be an automatic check and reapplication, not merely relying on the tenant to notify the authority of changes in circumstances, which might just slip the mind.
  As we know, the situation is not the same for pensioners. Their income fluctuates very little indeed, if at all. They are not in and out of work and family circumstances remain constant unless there is some major change such as the death of a husband or wife. The Government have accepted this provision in the field of income support. Pensioners are not required to sign on: they get special SPI forms. That means that income support is paid indefinitely unless the pensioner notifies the department of a change of circumstances.
  We are seeking to do the same thing with housing benefit. There will be several advantages. It will simplify unnecessary investigation and administration. It will leave the local authority free to handle the paperwork of those whose circumstances fluctuate and who need annual renewal. It will also avoid the situation where an elderly person perhaps becomes confused and fails to return the forms on time and as a result, to their surprise and bewilderment, find themselves cut off from housing benefit altogether. As a former councillor I have had to handle quite a number of such instances in which claims have had to be renewed and back-dated because a pensioner was confused by what was happening.
  Housing benefit is complicated to administer, but there is one group for whom it is relatively simple; namely, the pensioner. If it was paid indefinitely, subject to the pensioner reporting any significant changes, it will free the local authority for the more difficult and cumbersome work. It will free the pensioner from unnecessary worry and simplify proceedings. I believe it is a very useful little amendment. I beg to move.
  Lord Mackay of Ardbrecknish: As the noble Baroness has explained, this amendment would enable regulations to be made requiring local authorities, who have responsibility for administering housing benefit, to make an award for an indefinite period for those claimants and their partners who are in receipt of, or have included in the calculation of their applicable amounts, the pensioner, the enhanced pensioner or higher pensioner premium. That would mean that that group of people would not have to reapply for housing benefit at regular intervals.
  Perhaps I may put this amendment into context and, in doing so, explain why I am not content with it and would not suggest to the Committee that it take it on board. Housing benefit is awarded for a fixed period called "a benefit period". The length of that period is at the discretion of the local authority, but it is up to a maximum of 60 weeks. After that time the local authority must invite a repeat claim. Generally, the period is 52 weeks for the majority of claims. There is a simple reason for that. It accommodates things like annual rent increases and therefore the benefit is
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  reviewed. It is likely to pick up any annual rent increase which has been made since the last time the level of benefit was decided.
  In that way there is a formal statutory mechanism for ensuring that the benefit paid accurately reflects the applicants' circumstances, and not just their income, which the noble Baroness was concentrating on, but the rent being charged. The requirement to make a fresh claim for housing benefit applies to all claimants and not just to pensioners. It ensures that local authorities are administering the scheme correctly by paying the correct amount of benefit and thereby prevents either over-payment or under-payment building up.
  In the past we have consulted local authorities and asked them to provide evidence for improving the administrative efficiency of the schemes through adopting easements similar to that which this amendment suggests. The evidence that they provided was inconclusive. There was evidence of over-payment. Some local authorities prefer to set even shorter benefit periods than the maximum 60 weeks.
  In addition, we remain unconvinced that any administrative easement following a move to continuous awards would justify the costs involved in identifying the cases affected. Such a move may result in over-payment for which there would be subsidy implications for the local authority. Claimants may suffer because less frequent reviews of their entitlement may result in under-payment for which they would not be fully reimbursed as there is a 52-week limitation on paying arrears. So if it took a little time to pick up something that was indefinite, one could only go back for up to 52 weeks before any arrears were due.
  There are some problems here and over-payment is in the same position. People may be asked to repay money which they have long ago spent. While I understand the argument of the noble Baroness, I think that distress may be caused in the way that she suggested and the other way round because of an indefinite review, allowing a good deal of time to pass and therefore missing some change which over time has built up.
  There is no need for the renewal claim forms to be onerous. While the practice varies from one local authority to another, a local authority may at its discretion use a shorter claim form for repeat claims in order to avoid the need for claimants to repeat the same detail. I hope that local authorities that do not use this procedure will consider making use of it in order to help them and people such as pensioners who have no change of circumstance and for whom the shorter claim form may be perfectly suitable. I hope that with that explanation and some sympathy and understanding of the points that have been raised, the noble Baroness will feel able to withdraw her amendment on the basis that distress may be caused in one direction but, with indefinite payments, in certain circumstances distress may be caused in the other

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  direction if changes have not been picked up within 52 weeks, or the outside limit of 60 weeks, of the change occurring.
  6 p.m.
  Baroness Hollis of Heigham: I thank the Minister for his reply and sympathy. He referred to indefinite circumstances on the pension side. That applies equally to income support where the Government continue to pay unlimited benefit. I take the Minister's point about rent changes. I just wonder whether the Minister may be prepared to consider at a later stage an amendment which would allow the local authority discretion to go beyond the 60-week period. I envisage that discretion being exercised in the area of local authority tenancies covering the bulk of pensioners where the rent is entirely covered by the benefit and computers simply talk to each other. Therefore, there is no need to send out forms. One can simply make an in-house adjustment of the housing benefit claim to reflect increased rent, because all of that falls within the local authority purview. I accept that this would not cover the situation of a private tenant where the landlord's rent is a much more individual matter. Would the Minister be willing to consider extending local authority discretion so that the position of the two-thirds or so of pensioners whose housing benefit is paid because they live in council houses or flats, where none of the obstacles that he fears need arise, can be reviewed?
  Lord Mackay of Ardbrecknish: I shall have to study this matter. However, standing here and thinking about it, it appears to me that, even if it is one computer talking to another computer, a review of housing benefit is taking place. It may not require a form to be sent out and sent back, but nonetheless it is a review within the 60-week period to which I referred. If it is the wish of the noble Baroness that I look at that aspect, I see the point that she makes. If it is being done automatically by the local authorities and sending out a form has no consequence, I shall certainly have a look at that in particular. But as far as concerns the generality certainly in the private sector, I must stand where I stood earlier.
  Baroness Hollis of Heigham: I believe that we have made a little progress. With the leave of the Committee, I should like to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 255CBC to 255CBE not moved.]
  Clause 106 agreed to.
  Earl Russell Earl Russell moved Amendment No. 255CBF:
  After Clause 106, insert the following new clause
  (". In section 63 of the Social Security Administration Act 1992 (adjudication of housing and council tax benefit) in subsection (3) for "reviews" substitute "appeals to social security appeal tribunals".").
  The noble Earl said: This amendment provides for housing benefit appeals to social security tribunals rather than minor scale reviews. With reference to the first of the housing benefit amendments we heard how contentious some of the issues arising out of housing benefit could be and how vital they could be to some of the people
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  involved in them. In those circumstances, it seems that a full-scale appeal procedure may be rather useful. I hope that the Minister will consider it. I beg to move.
  Lord Mackay of Ardbrecknish: This amendment would transfer the responsibility for carrying out housing benefit reviews from an internal review by the local authority, with a right to a further review before a housing benefit review board, to an appeal to a social security appeal tribunal, though with no provision for any further appeal. The current housing benefit appeal system has two tiers: the first is an internal review by the local authority that made the original decision on housing benefit entitlement. The second is a statutorily independent review board which comprises local authority councillors.
  In 1988 the Government commissioned a report by the Social Policy Research Unit based at York University to look at ways in which the review system could be improved. It published its report in 1991. One of its major criticisms was that review boards lacked true independence because of the way in which they were constituted, but it also found very little evidence that boards were being influenced by financial or political considerations. Since publication of the report much has been done to improve the review system. My officials have issued good practice guides on each of the two stages of the review system for use by local authorities and review boards. Regulations were also tightened up to ensure that authorities dealt with a request for a review within 14 days of its receipt or as soon as practically possible thereafter. We have good reason to believe that this has led to an improvement in standards. Appeals dealt with by this means are brought to fruition a good deal quicker than appeals before social security tribunals.
  I am advised that councillors treat this responsibility very seriously. I have no reason to believe otherwise; indeed, the noble Earl made no suggestion to the contrary. If the present system works reasonably efficiently and effectively and the councillors who form these appeal committees take their work seriously and there is no evidence of any extraneous considerations creeping into their deliberations—and it is, dare I say, a relatively cheap system to run compared with the social security appeal tribunal system—perhaps we should stay with the system that we have. Currently, we are looking at the whole question of decision-making and appeals in the benefits system. In any case we will be looking at the question of housing benefit and all other benefits. I am not persuaded that we should move in the direction suggested by the noble Earl. I do not believe that the authorities would themselves welcome such a major structural change to housing benefit when there are so many other changes taking place.
  Having started off the afternoon with such good spirits, I shall not begin to tease people about not being prepared to trust councillors. There appears to be evidence, and I am so advised, that councillors take this seriously, and the training courses that are run are attended in a serious way by those councillors who fulfil the obligation. In the absence of solid proof that the system is not working

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  properly, I am inclined to suggest to your Lordships that we stay with the system that we already have. I ask the noble Earl to withdraw his amendment.
  Earl Russell: I thank the Minister for a thoughtful and full reply. I did not suggest any impropriety in the way that the present system was run. I have no special reason to distrust councillors, but I believe that it is proper to distrust all power and to distrust it rather more if one happens to hold it oneself than one would under any other circumstances. I make no apology for a degree of mistrust because I believe that it is only proper. I think that anyone whom one respects will expect it. There is some force in the point that justice should not only be done but should be seen to be done, and the show of independence is worth while in terms of acceptance of decision.
  But when the Minister mentioned the cost of the system he also set me thinking about what the effect of the changed programme will be over the next three years: that is, the Committee may remember, a programme for a 25 per cent. cut in the DSS running costs. Whether when that comes in everything will be working quite as well as in some places it is at present is quite another question. So we should bear that in mind as we watch the way the evidence develops over the next year. But I am certainly not going to make an issue of it tonight, so I shall accept the Minister's suggestion that I withdraw my amendment if the House will give me leave to do so.
  Amendment, by leave, withdrawn.
  Clause 107 agreed to.
  Schedule 10 [Administration of housing benefit, 8c]:
  Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 255CC:
  Page 160, line 35, at end insert—
  ("( ) For subsection (5) (agreements with other authorities for carrying out of functions) substitute
  "(5) Authorities may—

  (a) agree that one shall discharge functions relating to housing benefit on another's behalf, or

  (b) discharge any such functions jointly or arrange for their discharge by a joint committee.

  (5A) Nothing in this section shall be read as excluding the general provisions of the Local Government Act 1972 or the Local Government (Scotland) Act 1973 from applying in relation to the housing benefit functions of a local authority.".").
  The noble Lord said: With this I shall speak to Amendments Nos. 255CD and 255CE. These amendments to Schedule 10 to the Bill will make further changes to the powers in the Social Security Administration Act 1992 under which local authorities administer housing benefit and council tax benefit and the Secretary of State for Social Security pays subsidies to them in respect of their expenditure on those benefits. The proposed amendments would make good a limitation on certain of the powers in Part VII of the 1992 Act under which the Secretary of State makes his subsidy payments. They would also remove a doubt which has arisen about the powers in Part VII for local authorities to discharge another's function and how these interact with general local government legislation in England and Wales and in Scotland for such joint workings.
  Section 134 of the 1992 Act (as regards housing benefit) and Section 139, which is its equivalent for council tax benefit, empower local authorities to arrange to discharge responsibilities relating to benefits on one another's behalf. Lawyers have questioned whether these specific provisions unintentionally ousted the general provisions for such working contained in the relevant local government legislation. We had all assumed that the two sets of provisions would work together.
  Amendments Nos. 2555CC and 255CD will remove any element of doubt that in making such arrangements relating to benefits the authorities concerned are still empowered or bound by the relevant general provisions for joint working. They will also allow those housing authorities that are not local authorities to discharge their functions with others by a joint committee if they so wish.
  The problem addressed by Amendment No. 255CE concerns payments by the Secretary of State for Social Security in respect of subsidies for administration or benefit expenditure arising from such joint action. Those powers require him to make such payments to "each authority"; that is, he must in all circumstances make a separate payment to each authority. In other words, the authorities can act together but the Secretary of State must pay his subsidies to each of them separately. That is inefficient, it is out of line with what Parliament intended for the operation of the authorities' functions in those areas and it gives rise to a multiplicity of payments, authorisations, audit trails and the like.
  The problem has been highlighted for us by a joint proposal to my right honourable friend the Secretary of State from the London boroughs wishing to work together in a pilot scheme for London organised fraud teams to tackle organised landlord fraud in housing benefit. My right honourable friend has agreed to the proposals from the Association of London Government. He has made funding of up to £1 million available to get the pilot scheme going. The boroughs wish to develop the scheme with one of their number as the lead authority. That authority would take responsibility for the payment from my right honourable friend and account for it. But as matters stand he cannot meet that particular, sensible aspect of the boroughs' proposals.
  There are three lessons in that example, assuming that the pilot is successful and there is a desire to continue the scheme. First, it concerns a matter raised by agreement by the local authorities concerned. Secondly,it is aimed at dealing actively with a major and unacceptable threat to the system. Thirdly, my right honourable friend is unable to respond to it in an efficient and accountable way, the way he would wish to do.
  Amendment No. 255CE would open the way for my right honourable friend to match his payment arrangements with the voluntary operational arrangements Parliament has empowered the authorities to enter into.
  I recommend these amendments to the Committee. They are, as I said, wholly within the spirit of the 1992 Act and very much in response to what I believe everyone will welcome as a sensible initiative between my right honourable friend and the London boroughs. I beg to move.
  On Question, amendment agreed to.
  6.15 p.m.
  Earl Russell Earl Russell moved Amendment No. 255CCA:
  Page 160, line 43, leave out from beginning to end of line 2 on page 161.
  The noble Earl said: The amendment draws attention to a passage in the Bill on which I would like to hear the Minister's comments before I take my arguments very much further. This is the passage in Schedule 10 which appears to be introducing a cap on the total amount of subsidy in housing benefit that can be paid to any one local authority. In Schedule 10, paragraph 1(7) we see:
  "The Secretary of State—

  (a) shall by order specify the permitted total of housing benefit payable by any authority in any year, and

  (b) may by order specify one or more subsidiary limits on the amount of housing benefit payable by any authority in any year in respect of any matter or matters specified in the order".

  So, if I have understood this correctly—and I am not sure I have—there is an attempt to put a total limit on the amount of housing benefit to be spent in any one borough.
  There has been some discussion of such a proposal knocking about since 1994. I have in the past had correspondence with the Secretary of State about it. I thought, if I understood him correctly, that he was of the opinion that such a proposal was impracticable because housing benefit is an entitlement. It is essential to people's ability to work that it should be because one cannot work without being housed. But if there is a way of combining a strict cash limit in the form of a cap with an entitlement, then I have not seen it. If the Minister tells me that I have misunderstood this passage I shall be delighted. I look forward to hearing his reply. I beg to move.
  Lord Mackay of Ardbrecknish: I will simply do as invited by the noble Earl and explain the background to this paragraph in the schedule. Local authorities have powers to make discretionary payments in certain circumstances; for example, in cases of exceptional need where a claimant is temporarily without funds or of exceptional hardship where the maximum housing costs allowable under the housing benefit scheme do not meet the claimant's contractual rent. As discretionary spending does not receive full central government funding, the permitted total protects local authority general funds by placing a limit on that spending.
  Currently, under the provisions in the administration Act, the permitted total for any year has to be calculated by reference to benefit expenditure in that year. Consequently, authorities can only estimate at the beginning of the year, and as an ongoing process throughout the year, the extent to which they can make payments. The purpose of the express powers which the noble Earl's amendment would remove would be to allow the permitted total for a particular discretion following consultation with local authority associations to be fixed in advance of the financial year. Consequently, local authorities could manage their budgets more efficiently and the risk of inadvertently
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  making illegal payments would be removed. The amendment would remove this amelioration, and I must say to the noble Earl that our change has been welcomed by the local authorities.
  The noble Earl asked whether there was a total limit: no, there is not a limit. It is only a discretionary expenditure. As I said, the provisions in the schedule are beneficial to local authorities. I understand they are welcomed by them. With that explanation, I hope that the noble Earl will feel able to withdraw the amendment.
  Baroness Hollis of Heigham: The advice I have had is that we welcome the new form of the schedule. It gives local authorities additional financial protection. So, as the Minister said, I hope the noble Earl will not press his amendment.
  Earl Russell: I am grateful to the Minister for that reply. I must apologise for taking the time of the Committee. That is in part the result of the crossword method of legislation adopted in social security legislation and in part the result of the fact that we are, and remain, an amateur Chamber. When one is reading a Bill, often late at night and at home, one does not always have all one's works of reference to hand. That is the explanation of a misunderstanding for which I must offer apologies. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 255CCB:
  Page 161, line 2, at end insert—
  ("( ) In section 135 of the Social Security Administration Act 1992 (housing benefit finance), after subsection (5) insert—
  "(5A) The additional sum mentioned in subsection (5) shall include specific provision in respect of the costs of measures to prevent fraudulent claims for housing benefit.".").
  The noble Baroness said: Like the noble Earl, I find trying to piece together the movements between housing benefit and DSS legislation at times extremely perplexing. This is a more straightforward amendment. It is obviously a probing amendment at this stage. There is a serious argument here about housing benefit fraud and how central government may best help local authorities to pursue it, recover it and stop it.
  We believe that at the moment the Government's way of supporting the local authorities' tackling of fraud is in some dimensions perverse rather than helpful. I wonder whether the Minister may come to agree as we go on.
  I believe that we all accept that social security administration is, as I say, bedevilled by the three interlocked problems of unacceptably high rates of departmental error in paying out benefit, unacceptably low take-up rates of people claiming benefit in fields like family credit and a worrying and unacceptable amount of fraud in areas such as housing benefit. I do not believe that there is any division between us on that matter.
  Fraud, as I am sure the Minister will agree, is unacceptable wherever it occurs. Money claimed fraudulently is at the expense of other claimants or taxpayers. Most DSS fraud—not housing benefit

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  fraud—occurs where typically the claimant misrepresents his position: he claims unemployment benefit or income support when in fact he or she is in part-time work, or when the claimant, more deliberately, has acquired several fictitious identifies by accessing missing national insurance numbers and claiming benefit for all of them.
  Housing benefit fraud, however, is more complicated even than that because it involves three parties, not two: the landlord and the tenant as well as the local authority. Some housing benefit fraud is like most DSS fraud: a tenant, so to speak, falls into it. His circumstances change, he obtains some part-time work, but he does not report the changed circumstances and therefore obtains more housing benefit than he should. It is reprehensible, but in cost terms relatively minor.
  The tenant is often fairly poor and the facts are fairly easy to cross-check. It is small-scale, fairly petty stuff. I repeat, I do not defend it, but a six-month rule which applies to family credit, introduced into the housing benefit system, would, I suspect, wipe out almost all tenant housing benefit fraud. I do not know, but it would be worth looking at.
  The difficult area—this is where fraud most occurs—is landlord fraud, because for everyone's benefit the Government permit housing benefit cheques to be paid directly to the landlord rather than to the tenant, where the tenant requests it and agrees to it. Many landlords make it a condition of the tenancy that they receive the housing benefit cheque direct. A landlord may request it, perfectly reasonably, because the tenant has an unreliable record of passing on that housing benefit.
  However, equally, direct payment is a charter for cheating. The local authority can refuse to pay the landlord the housing benefit cheque only if it believes that it is in the tenant's best interests to do so. Otherwise the local authority has little discretion. For example, local authorities have little right to refuse to make such direct payments even where they may have doubts about the landlord's probity.
  Some 65 per cent. of private sector housing benefit payments are made directly to the landlord. It is within that 65 per cent. that we suspect most fraud occurs, because around that fact many rich landlords have built themselves a web of organised crime. I use those words deliberately. I repeat, most housing benefit fraud is landlord fraud. They are crimes of greed. It is widespread, organised and costly and it flourishes. The Government estimate that it costs £1 billion of the £10 billion housing benefit bill. The Select Committee of the other place estimates that it may well exceed £2 billion of the £10 billion bill—a very serious sum indeed.
  As I said, I do not defend the tenant who fails to declare some casual earnings, but by far the more serious problem is the fraudulent landlord milking the system of perhaps £100,000 a year by lying and cheating. We know that such landlords claim for tenants who do not exist. They claim for tenants who speak so little English that they cannot contradict the landlords'
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  claims. They claim for tenants who have moved to other properties owned by the landlord. Such fraud must be stopped.
  Let me give a couple of examples. Hackney checked 1,800 claims. It found fraud in 21 per cent. of them. What is more, it found that up to two-thirds of the managing agents were misrepresenting the claims and pulling in a fraudulent income of about £5,000 a week. Haringey in 1994–95 spent £200,000 on employing nine fraud visitors. It saved over £4 million, most of which of course went back to the DSS.
  Until recently, local authorities were under pressure to speed up their payment of housing benefit to avoid the tenant being evicted by the landlord if benefit was not received promptly while at the same time they were penalised because they had to repay to the department if they found that they had made an over-payment; in other words, that they had uncovered error or fraud. Because of the pressure on speed and the penalty for detecting fraud, it is not surprising that until recently local authorities gave priority to increasing take-up and speed and were relatively less aware and did relatively less about the scale of organised landlord fraud.
  Since 1993, the Government have wisely given local authorities an incentive to detect fraud. Each year local authorities are set a target of fraud that they are expected to identify. For savings above that figure, local authorities may keep 25 per cent. and the department recovers 75 per cent. Local authorities are, however, penalised if they fall below half their target figure which is set at some £270 million-odd this year.
  That is fine, and an improvement on the situation as it was, but the problem is that it encourages one to invest effort in tracking down fraud once payments have been made in order to keep one's 25 per cent. The system offers no incentive to invest resources to ensure that fraudulent payments are not made in the first place. Indeed, one is still penalised if one prevents fraud occurring, because then one is less likely to reach the target of fraud detected.
  The amendment seeks to address those perversities. It assumes that it is better and more desirable to have an efficient anti-fraud culture and prevent fraud in the first place than to tolerate less efficient payment of housing benefit and to detect fraud afterwards. The amendment stresses prevention rather detection. At the moment, the Government give a modest subsidy to detection. They actually penalise prevention by cutting the housing benefit administration subsidy. As a result, not surprisingly, local authorities will spend less time on preventing fraud and more time on detecting it in order to receive their reward. That is perverse.
  What is even more perverse is that those authorities which have in place efficient strategies for the prevention of fraud, and therefore which have low figures for detected fraud because there is little fraud to detect, will, under the Government's new regime, be penalised for not uncovering enough fraud.
  Chiltern District Council reported on that to the Select Committee. It had invested so much money in preventing fraud that it was not reaching its target for detection and therefore was being penalised for producing an efficient prevention strategy. That is folly.
  As I say, this amendment seeks to tackle some of those perversities. It requires the Secretary of State to make specific provision for measures to prevent fraud which would be paid to local authorities, especially in larger cities, so that they may build up specialist investigative teams; for example, to make home visits before a housing benefit application is granted; checking out whether the tenants for whom the landlord is claiming reflect the number of rooms in the property and so on.
  The Government have produced £8 million of challenge funding for fraud protection and detection. That is utterly inadequate because £5 million of that has been found by slicing off money from the housing benefit administration subsidy. New money is not being put into challenge funding. What is needed is a strong and improved administrative subsidy to prevent fraud occurring in the first place.
  I suggest that this amendment must be sensible. It will not stop all landlord fraud. Local authorities will still need other measures: for example, the ability to prosecute more readily; they should, along with decent data protection, have access to the Benefits Agency's computers and the register of national insurance numbers so that it can be checked to see whether false claims are made. Local authorities need to be able to stop the redirection of giros to false addresses and ensure that their instructions not to redirect are followed. Local authorities still need to co-operate with the Benefits Agency to overcome the hurdles of the finders/keepers rule which encourages each body to hug information to itself and not to work together to check fraud.
  If the Government really had the political will to tackle landlord fraud and to work properly in partnership with local authorities, I believe that we could see a saving not of £270 million but of £500 million or more per year. This amendment is just a beginning. But it would encourage local authorities to seek to prevent fraud—at the moment, they are penalised for it—as opposed to merely rewarding them if they detect it after fraud has occurred.
  If the Government reject this amendment, we can only conclude that they are soft when it comes to housing benefit fraud committed by landlords, who do so out of greed, while they are harsh on income support fraud which is committed by smaller people who are often doing it out of need, ignorance, illiteracy or error. I beg to move.
  6.30 p.m.
  Earl Russell: The objective of this amendment is clearly sensible. Prevention is obviously better than cure. If this amendment contributes to prevention, then it may be useful.
  I am not quite certain that if the Minister were to reject the amendment, he would do so for any improper motive. There may be all sorts of technical reasons why
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  it might not be useful, to which I should listen with interest and care. But I cannot pronounce on that until I hear his reply.
  I also recall the noble Lord, Lord Boyd-Carpenter, who I regret is not at present in his place, asking the noble Viscount, Lord Astor, who was then where the Minister is now, how he could know the amount of undetected fraud. The noble Viscount said that, of course, it could only be an estimate. For the time being, all estimates must remain provisional. The disagreement between the Government and the Select Committee on the amount of benefit fraud involved is conjectural and must remain so until we have solid evidence on that.
  It is clear that we are all in favour of preventing fraud whenever we can do so. I hope that it is clear also that we are all agreed that because fraud is a crime, it must be proved beyond reasonable doubt. There is always a risk, especially when you find something which may fill a hole in Treasury projections, when a very tight financial argument is in progress, that there should be controls and suspicion.
  I take the point about incentives, but incentives can be overdone. I have recently read the Government's reply to the Select Committee on this subject. In paragraph 71 of that reply, the Government expressed considerable doubt about the Select Committee's proposal that there should be incentives to prosecute fraud because they thought that that might tend towards a perversion of justice. On that, I feel some sympathy with the Government and, indeed, I may tell them that there is legal authority for their position in a ruling of the judges in the year 1604 which is, I understand, still good legal authority. I agree with the thinking behind it.
  The noble Baroness said a good deal about the situation in Hackney. I am not certain what is the situation in Hackney, and I believe that we would be wise not to be too certain on that point.
  The proposal for a team to visit and check whether a tenant in fact exists is sensible. The suggestion that that cannot be financed unless money is made available to finance it is sensible. But I hope that we shall avoid leaping to conclusions that there is a certain amount of fraud or that we should reward prosecution for fraud in a way which might diminish respect for justice. We have more than one objective here and I hope that we shall remember all the objectives.
  Lord Mackay of Ardbrecknish: As the noble Baroness explained, this amendment would require the Secretary of State to identify a specific sum of money for local authorities' fraud prevention measures. The purpose is to encourage local authorities to do more to combat fraud. I am sure that we all support that and indeed, at the risk of embarrassing her, the noble Baroness may find that all three Members of the Committee who have taken part in this short debate are absolutely four-square on the prevention of fraud in the whole social security system and in the housing benefit system in particular, which we are discussing today. Indeed, there appears to be a considerable amount of that fraud and I shall return to that point later in my speech.

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  But we do not believe that the amendment is the best way in which to proceed and to achieve further gains in the fight against fraud. As the noble Baroness knows, I never try to make anything of defective amendments but the amendment is defective. However, my case does not rest on that.
  Local authorities have a statutory duty to protect public funds, including housing benefit. But we think that this amendment would tie the Secretary of State's hands in meeting authorities' efforts to combat fraud. The provision of a specific sum to meet the cost of measures to prevent fraud is contrary to our general approach, which is to pay subsidy according to the results achieve. The amendment would pay for anti-fraud work but we prefer to pay for the results of that work. Therefore, the amendment calls into question the method by which the benefit subsidy mechanism works which, as I say, rewards authorities by allowing them to share in the weekly benefit saving which they achieve.
  The noble Baroness made some play on the point that we may be spending more on detecting fraud rather than on preventing it. I understand that point, but I hope that I shall be able to explain to her that her fears on that score are groundless. She postulated an authority which had taken such effective anti-fraud measures that in fact no fraud was attempted in that area. I do not think there is any evidence that any local authority is yet in that happy position.
  Baroness Hollis of Heigham: I quoted the specific authority, Chiltern District Council, which gave evidence to the Select Committee which showed that it would struggle to meet half the target figure, at which point it would fall into areas of penalty, even though auditors had showered praise on the council, and the like, for its ability to stop fraud. It was being penalised for what it believed to have been a very effective strategy to prevent fraud rather than to detect it. Had the council not invested in preventing fraud, but instead let it occur and then detected it, it would perversely have been rewarded.
  Lord Mackay of Ardbrecknish: I thought that that was what the noble Baroness was saying. I preface my remarks by saying I suppose one can either stop the fraud happening by detecting it when the claim comes in and before the claim is paid or one can detect it once the claim is in payment. The position is that both count as a form of reward to the local authority. If the claim has gone into the local authority and in the course of processing it is discovered to be fraudulent, even before it has come into payment, then the saving is, so to speak, chalked up and the local authority receives part of the benefit of the saving in reward, and of course we do, as central government, by not having to pay all that money out in benefit.
  The noble Baroness is not quite right when she says that there is no reward to a local authority which runs the system and detects and stops the fraud before any money is paid out. As I understand it, that is allowed
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  for in the situation in this country. Indeed, in the last financial year almost 90 per cent. of authorities earned additional subsidy for their anti-fraud efforts.
  We accept that there is a role for special measures in the anti-productivity of local authorities. That is why the Secretary of State has focused his recent strategy on rewarding local authorities for their anti-fraud efforts. The recent government amendments to pay subsidy to one authority on behalf of a group of authorities provide the flexibility that we are trying to achieve. Indeed, the Committee accepted those amendments without any debate because we are all agreed on the objective, and the amendment passed earlier this afternoon builds on the measures that we have already introduced.
  In 1993 my right honourable friend the Secretary of State introduced a financial incentive scheme for the detection of fraud. Savings have increased from £92 million in 1993–94 to £171 million in 1994–95. Figures for 1995–96 are expected to exceed £200 million. The scheme for 1996–97 has been stiffened still further, with greater rewards for high performing authorities and tougher penalties for those who are failing in their duty to protect public funds—a kind of carrot and stick approach.
  The noble Earl asked what I always think is a pertinent question: how much fraud is there—how many people are smuggling things into the country, as I was asked the other day—and how many people are claiming benefits? The truth is that people are not putting up their hands and indicating that they are doing any of these things; otherwise they would be fairly easy to measure. The Government have taken their figures from a fairly detailed benefit review of fraud and the correctness of major social security benefits which we undertook between September and December 1994.
  We had over 200 specially trained investigators and they took a random sample of customers: 3,000 unemployed, of which 1,000 were on income support only; 1,000 on income support and unemployment benefit; 1,000 on unemployment benefit only; 1,000 lone parents; 1,000 pensioners; 1,000 disabled, and others. The investigator undertook a full investigation of the clerical records and computer records that we hold. He carried out an unnotified visit to the customer's home, so if the house was not there or the tenant was not there it was as sure as night follows day that one kind of fraud was detected without any doubt. He verified the customer's identity and probed all the details held to verify income, savings and so on. It is from that very detailed investigation that we have arrived at the rough figure—and it can only be a rough figure—of £1 billion in housing benefit fraud.
  The Select Committee in another place, on the basis of one person's evidence from one London borough and then a piece of extrapolation, thought it might be up to £2 billion. I have explained from where we got our £1 billion. It was not conjured up out of the air; we undertook a fairly detailed study in order to come to these conclusions. Whether it is £1 billion, as I suspect it is, or £2 billion, as the Select Committee suggested it is, one sure thing is that it is all wrong. As the noble

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  Baroness said, it is either money that the taxpayer could be saved or money we could spend on the benefit system elsewhere.
  We have undertaken several new fraud initiatives. Perhaps I could briefly spell them out to the Committee in suggesting that they are the best way to go and not the way suggested in the amendment by the noble Baroness: £1 million has been made available to fund and train specialised teams to crack down on organised housing benefit fraud across London. The fact of the matter is that this is a crime which is a good deal easier to commit in the anonymity of a big city—especially a city like London, which is extremely large—than it is in the country, in small towns and villages.
  A housing benefit data matching service is to be set up next month to detect fraud and inconsistencies in claims. That is an important step forward. The noble Baroness mentioned that £8 million has been set aside via a challenge fund for innovative anti-fraud work. A study is taking place into the costs and benefits of a unified housing benefit computer system. The Department of Social Security and local authorities are working together to draw up a verification framework to prevent fraud getting into the system in the first place. Lastly, a rolling campaign of increased anti-fraud activities, headlined Spotlight on Benefit Fraud, has been operating at various locations across the country throughout the spring and summer.
  That Spotlight on Benefit Fraud is undoubtedly bringing in considerable dividends, not just on housing benefit but across the whole benefit area as people report suspicious circumstances, circumstances in which they think someone is making fraudulent claims. They range all the way from, as the noble Baroness said, people forgetting that their circumstances have changed, or owning up to the fact that their circumstances have changed, to pretty major frauds such as the one the Committee may have read about in the papers yesterday and today of the lady who was using—it seems doubly indecent to be doing this—the birth certificates of dead children in order to perpetrate a major fraud on British taxpayers.
  We are taking this matter very seriously indeed. A great deal of anti-fraud work is under way across the whole field and particularly with regard to housing benefit, but I do not believe that the amendment produced by the noble Baroness today would secure an increase in fraud activity. The methods we are using and the investigations we are undertaking are the right way to go about it. With that explanation of what we are doing, and total endorsement of the point made by the noble Baroness that we are out to crack down on people who think they can perpetrate this kind of fraud, I hope that she will be able to withdraw her amendment.
  6.45 p.m.
  Baroness Hollis of Heigham: I thank the Minister for that reply. As he made clear, it is certainly not a party issue and we welcome the Government's initiatives. Like him, I think the local authorities would be the first to admit that they too are not able precisely to estimate the scale of fraud.
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  I would like to correct something the Minister said. He gave the impression that the figure of £2 billion that I was quoting, drawn from the report of the Social Security Select Committee, was based on one officer from one London borough. On the contrary, he was the head of a team operating across and speaking for all the London boroughs. Therefore, far from this being a single, one-off, eccentric figure which could not be multiplied or extrapolated from, it represented all London boroughs. The more we explore the matter, the more evidence comes to light from similar large cities—and the Minister was right to focus on that aspect—which suggests similar levels of deception. I believe that the Minister would be advised to take the figure of, perhaps, £2 billion reasonably seriously. All the evidence coming in suggests that the figure of £1 billion may be far too low.
  My second point concerns the technicalities of financing. As part of their initiatives, the Government listed challenge funding of £8 million. That is silly. The Government have top sliced £5 million off the existing administration subsidy of local authorities and put it into a pot with only £3 million of new money to hid for. Therefore, it means that the general level of everyone's administrative subsidy has been depressed and a few lucky authorities which bid for it will get a little more. That is batty; it should actually be the other way around. This is not an area in which it makes sense to top slice off the general administrative subsidy for the, perhaps, less efficient authorities, and thereby discourage them from doing more work, while giving more money to the few that are in a position to bid and compete for it, which will tend to be the better organised authorities.
  If we are to have challenge funding, it must he new money. It would be far more sensible to combine that with a strengthened administrative grant, separately identified as the Audit Commission recommended. I hope that the Government will look more thoroughly at the matter. Nonetheless, the general point remains: what the Government are currently doing—and I am not criticising this aspect—is to reward to a modest degree those local authorities which detect fraud in the process of paying out, or after payment has been made. I do not criticise that; indeed, I believe that to be both sensible and welcome.
  However, in addition there must be a more positive incentive for local authorities to create an anti-fraud culture in the first place to prevent it occurring. All the evidence suggests that local authorities which have created that culture so that landlords never make fraudulent claims (because they know they are likely to be prosecuted and the like) may now struggle to reach their targets of detecting fraud because they have prevented it and, therefore, may find themselves penalised.
  Nothing the Minister said in his response has answered that basic perversity—namely, that if an authority is successful enough at preventing fraud it is then penalised for not detecting it. I can assure the Minister that I am correct in that respect. I see that the Minister shakes his head. In that case, perhaps the noble Lord would like to write to me and explain to me exactly where I have misunderstood the system. Certainly my

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  advice from the local authority associations which are at the sharp end of the spectrum believe that to be the case. Therefore, I hope that the Minister takes what we are saying very seriously. We all want to see fraud eradicated, but, while the Minister has done part of that by encouraging and rewarding local authorities for detecting fraud, he is not doing enough to prevent fraud occurring. Moreover, he will be actively penalising those authorities which fail to reach half their target figure. I see that the Minister wishes to respond.
  Lord Mackay of Ardbrecknish: Of course I shall look into the matter and, if I believe there is anything to be said, I shall certainly write to the noble Baroness. However, our experience is that authorities which undertake the most thorough checks and verification on claims are often those which achieve the best savings from their anti-fraud work.
  Baroness Hollis of Heigham: There is no disagreement between the Minister and myself on that point. It is clear that those authorities which have been rewarded for detecting fraud are those which have detected fraud most successfully. Indeed, that is true by definition; it is a truism. However, I am concerned about the other end of the equation; namely, where authorities have been successful at preventing fraud occurring in the first place and where, therefore, there is no fraud to detect. In such cases, authorities may be penalised for not reaching their targets.
  Having said that, I believe that we have made our point. I hope that the Minister will look into the matter because all of us are extremely worried about it; indeed, that applies both to local authorities and to taxpayers. The Government really must review their method of supporting local authorities in seeking to prevent as well as to detect fraud. At present the Government are sending out perverse and contradictory signals, which cannot be in anyone's interest. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 255CD:
  Page 161, line 10, at end insert—
  ("( ) For subsections (4) and (5) (agreements with other authorities for carrying out of functions) substitute—
  "(4) Nothing in this section shall be read as excluding the general provisions of the Local Government Act 1972 or the Local Government (Scotland) Act 1973 from applying in relation to the council tax benefit functions of a local authority.".").
  On Question, amendment agreed to.
  Earl Russell Earl Russell moved Amendment No. 255CDA:
  Page 162, leave out lines 28 to 31.
  The noble Earl said: In moving the above amendment I shall, with the leave of the Committee, speak also to Amendment No. 255CDB. The amendments refer to two related points about drafting but, nevertheless, they are important. I shall read some of the words in the legislation that I propose to delete so that Members of
  230
  the Committee will be able to understand what is worrying me. New Section 140C(1) to the Social Security Administration Act 1992 says:
  "Subsidy shall be paid by the Secretary of State in such instalments, at such times, in such manner and subject to such conditions as to claims, records, certificates, audit or otherwise as may be provided by order of the Secretary of State".
  If those words do not say that the Secretary of State may do whatever he likes, then I do not know what they mean.
  So far I have made a perfectly conventional point, but what has begun to interest me is the effects on the relationship as regards the legislature, the executive and the judiciary of drafting legislation in that manner. I say that because a Secretary of State to whom those words are applied is, I believe, effectively entirely freed from statutory restraint in relation to the power there described. In fact, he is put back in the position that the executive was in before Parliament first evolved of not being controlled by parliamentary statute because it was used to freedom from control.
  However, nature does abhor a vacuum. People do attempt to control power, so the natural result of leaving power thus unfettered by statute is that the only way it can be controlled is through judicial review. In speaking in a debate on 5th June my noble friend Lord Rodgers of Quarry Bank offered statistics for applications for judicial review. He said that in 1976 there were 500 applications, but that there were 3,000 in 1993.
  I have many times heard the blame for that rise in applications being placed on the judiciary, and I have many times heard it being placed on the executive. The question I want to raise is: if we draft legislation which leaves Secretaries of State that free from statutory restraint, ought we not to desist from blaming either the judiciary or the executive? Indeed, should we not really be blaming ourselves? I beg to move.
  Lord Mackay of Ardbrecknish: When I looked at the content of the noble Earl's amendments I suspected that the argument we have just heard would indeed be the one put forward. Perhaps I may tell the noble Earl that I am not entirely sure that the Secretary of State is given such unfettered powers by virtue of the two new subsections. In fact, they are fairly well defined: they refer to the subsidy, the instalments and the times that he should pay them in, and so on. They also refer to the,
  "claims, records, certificates [and] audit",
  that he might require in order to satisfy himself that public money is being properly spent.
  I am well aware that the noble Earl is always suspicious—I nearly said rightly suspicious—of the executive asking Parliament to give itself lots of power. If the noble Earl is worried about these two minor pieces of legislation I invite him to look at a clause passed in the other place only yesterday which is winging its way to this Chamber and which, I believe, gives a Henry VIII power to at least one of my clan of considerable breadth and scope. However, that is another matter.
  Perhaps I may tell the noble Earl what those two subsections are about. I hope he will then be persuaded that it is not unreasonable—and, indeed, that it is in the

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  interests of good government, both from our point of view and that of local authorities—that we should have such powers.
  Local authorities are currently required to submit estimates before and during the course of the year on the basis of which payments on account of subsidy are made pending the receipt of a final audited claim after the end of the financial year. The provision at Schedule 10 for subsidy to be paid by instalment is intended to put the payments on account of subsidy on a statutory basis so that they are local authorities' by right rather than an exercise of discretion. If such payments were not made, an unacceptable burden would be placed on local authorities' budgets and cash flows.
  Apart from denying authorities the right to receive subsidy in advance of incurring benefit expenditure, the amendment would also remove the power to require authorities to submit a claim for subsidy, to have it audited, to keep records and otherwise satisfy the Secretary of State as to the propriety of their claim for subsidy and the awards of benefit on which it is based. I suggest that the latter is obviously unacceptable as there would be no check on the accuracy of the claim or the propriety of the expenditure incurred. In the interests of both local authorities and the public purse I hope that the noble Earl can see the merits of new Section 140C(1).
  Turning to new Section 140C(2), there are often cases where local authorities submit inaccurate or incomplete claims for subsidy which are qualified by auditors. After inquiry as to the reason for the inaccuracy, or after these claims have been qualified by the auditors, it may transpire that it is not possible for the matter to be properly quantified. Generally there is no real doubt that the local authority has incurred proper expenditure, even if its precise extent is open to question. The accepted, although infrequent, practice in these cases is for the Secretary of State to employ his powers of estimation in order to resolve the matter. The amendment, by removing the power to estimate subsidy, would leave no alternative but to withhold or claw back any subsidy for expenditure which cannot be properly quantified by auditors, or where a claim is incomplete.
  I believe that it is in the interests of local authorities and local council taxpayers who would ultimately fund and subsidise benefit expenditure that the Secretary of State should retain powers to estimate subsidy. Therefore I do not believe that the Secretary of State is being given fairly unfettered power here, entirely free of any restraint. New Section 140C only fills out duties which are set out in new Sections 140A and 140B. I believe that is the way we have to proceed in order that we can set up a reasonable administrative system for paying these subsidies in a sensible way without—dare I say?—cluttering primary legislation, and without the problem of having to come back for primary powers when we need to make changes of a fairly minor nature for administrative reasons. I hope with those remarks and assurances the noble Earl will feel able to withdraw his amendment.
  7 p.m.
  Earl Russell: I am grateful to the Minister for that reply. He has perhaps inevitably taken the amendment in a somewhat literal manner. He has taken it as an attack on the existence of a power of any sort, whereas in fact my concern was rather with the drafting. I put it down in this form to probe the drafting because I had no intention of putting it to a Division. The Minister must by now have read the report of his noble friend Lord Renton on the preparation of legislation. I am fully in accord with the general arguments of that report. One could perhaps have said that subsidy should be paid in a reasonable manner and subject to audit, which would have been a general statement of principles by which the power was governed, and which would then be subject to interpretation by the courts. The courts would have had something to bite on. But in this drafting I really do not see what the courts can bite on, especially with the addition of the words "or otherwise".
  In all the Minister said, I heard no justification at all for including the words "or otherwise". It is this full and fussy drafting which at the same time does not actually create any restriction which may be judicially investigated, which is giving me considerable cause for concern. Even if we were going to have a power, it could have been drafted a great deal better than it is here. This type of drafting invites judicial review. However, I shall not solve that problem at this time of night. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 255CDB not moved.]
  Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 255CE:
  Page 163, line 28, at end insert—
  ("Financing of joint arrangements.
  140DA.—(1) Where two or more authorities make arrangements for the discharge of any of their functions relating to housing benefit or council tax benefit—

  (a) by one authority on behalf of itself and one or more other authorities, or

  (b) by a joint committee,

  the Secretary of State may make such payments as he thinks fit to the authority or committee in respect of their expenses in carrying out those functions.
  (2) The provisions of sections 140B and 140C (subsidy: calculation and supplementary provisions) apply in relation to a payment under this section as in relation to a payment of subsidy.
  (3) The Secretary of State may (without prejudice to the generality of his powers in relation to the amount of subsidy) take into account the fact that an amount has been paid under this section in respect of expenses which would otherwise have been met in whole or in part by the participating authorities.").
  The noble Lord said: I have already spoken to this amendment. I beg to move.
  On Question, amendment agreed to.
  Schedule 10, as amended, agreed to.
  Clause 108 [Functions of rent officers in connection with housing benefit and rent allowance subsidy]:
  Earl Russell Earl Russell moved Amendment No. 255CF:
  Page 71, line 2, leave out ("specified in the order in connection with") and insert ("required for the purpose of determining").
  The noble Earl said: This is another drafting point. This is another case where the Secretary of State seems to me to have been given extremely wide powers which cannot really be judicially controlled. Clause 108(1) states:
  "The Secretary of State may by order require rent officers to carry out such functions as may be specified in the order".
  I wonder whether one could tighten that by including a purpose requirement, and state instead,
  "required for the purpose of determining housing benefit and rent allowance subsidy".
  That, again, would fit the principles of drafting which would allow a statement of general principle which could be made the subject of some judicial control.
  Similar points apply to the second amendment in this group which concerns our old friend, transitional provision. The noble and learned Lord, Lord Simon of Glaisdale, will doubtless remember the first regulations under the Child Support Act where major provisions were changed under the transitional provision and held to be transitional simply because the Minister had changed his mind. For some time afterwards the noble and learned Lord queried the word "transitional" every time it appeared in a Bill.
  All I really want to know here is exactly what the Secretary of State can do under these transitional powers, and why he needs to have such transitional powers as appear to him "to be desirable" rather than such transitional powers as are necessary for a particular purpose. Because, after all, as Dr Faustus knew, we can all desire powers for all sorts of purposes, but it is not always good for us to have them. I beg to move.
  Baroness Hamwee: I support my noble friend on this amendment having teased him on a previous amendment when I said that it could have been even worse and could have referred to matters "otherwise howsoever". At least the draftsmen did not go quite that far. I hope the Minister will explain the relationship between subsections (1) and (2) of this clause. Subsection (1) gives powers which appear to be a matter of discretion. Without prejudice to those, subsection (2) suggests some of the provisions that may be contained in the order. Will the Minister also explain—and I hope confirm to the Committee—that the Secretary of State must act reasonably in specifying matters in an order under this clause?
  Lord Mackay of Ardbrecknish: The final question of the noble Baroness is easy to answer in that my right honourable friend always acts reasonably. In the case of the provisions we are discussing he has to act in regard to housing benefit and rent allowance subsidy. Clause 108 replaces Section 121 of the Housing Act 1988 which enables the Secretary of State to make an order requiring rent officers to carry out certain functions in connection with housing benefit and rent allowance subsidy. Since 1989 rent officers have reviewed all deregulated private sector rent allowance cases to check that the amount of rent being covered by housing benefit is reasonable. Clause 108 would provide a new statutory basis for this work.
  234
  From 2nd January 1996 a prospective tenant has been able to apply, with the landlord's consent, through the local authority, for a pre-tenancy determination. This enables the prospective tenant and the landlord to find out the likely level of rent which will be eligible for housing benefit purposes before the tenancy is agreed.
  Clause 108 extends this existing power to allow the Secretary of State to make an order to allow a prospective landlord to establish, in advance of offering the tenancy, the level of rent which housing benefit is likely to meet if a housing benefit claim is made in respect of that tenancy. It will make it possible for landlords to obtain a pre-tenancy determination for housing benefit purposes without involving a prospective tenant.
  The effect of the noble Earl's amendment on the face of it would be to limit the functions that a rent officer could undertake under Clause 108 to those which were required only for the purposes of determining housing benefit. This seems directly to contradict subsection (2) of the clause which allows a prospective landlord to apply for a pre-tenancy determination. The result would appear to be that rent officers would be prevented from carrying out pre-tenancy determinations for landlords and probably also for tenants since these would relate to prospective tenancies which, although likely to result in benefit claims, may not always do so.
  The fact that tenants have been able to apply for pre-tenancy determinations has been widely welcomed. It enables the tenant and his landlord to know how much of the proposed rent is likely to be met by housing benefit before the tenant commits himself to the tenancy. Clause 108 seeks to allow landlords to discover this information without having to have a prospective tenant lined up. I believe that these provisions are a positive step forward. From the noble Earl's remarks, I did not detect objections to the policy in principle. I detected a feeling, as usual, that he was unwilling to see the Secretary of State granted the powers via secondary legislation.
  Amendment No. 255CG would prevent the Secretary of State from making any transitional, incidental or supplementary provisions to an order made under the powers conferred by Clause 108. The transitional provisions in any benefit change are sometimes the most difficult and can cause the greatest problems for the administration. By and large, we are all agreed that as regards making benefit changes it is important to have some transitional protection for those people whose benefit may be changed, sometimes adversely. We believe that in general it is fair to make transitional protection. Therefore provisions such as those in this clause are not unusual in social security legislation.
  I realise immediately that that will not be considered a defence by the noble Earl, but I thought that I would slip it in as quickly as I possibly could, while accepting that it may not allay his suspicions. However, there may be cases where the rules are changing and there is need to make special provisions which arise at the point of change when such change has to be made. If we do not have these provisions, unforeseen hardship or inequity could result. The fact that the hardship or inequity is

  235
  unforeseen makes it important that transitional provisions should be given to my right honourable friend the Secretary of State—indeed, to any Secretary of State. I do not believe that it would be right to prevent such flexibility. It is a common enough feature of such order-making powers. I hope that the noble Earl is not about to tell me of recent instances when the power has been abused. Therefore, I hope that I am on fairly firm ground in saying that there is nothing unusual and nothing underhand about this subsection. It seeks to ensure that such changes are made in as fair a way as possible.
  While I realise that the noble Earl may be reluctant to accept my assurances on these matters—his suspicion of this kind of legislation is well known—I hope that he will feel able to withdraw the amendment.
  7.15 p.m.
  Earl Russell: I thank the Minister for that reply and my noble friend Lady Hamwee for a crucial contribution.
  I am glad that the noble Lord, Lord Irvine of Lairg, is now in the Chamber. The amendment arose from thoughts following a debate which he initiated in this House on 5th June. The noble Lord will remember that we discussed the growth of judicial review. Since he was not present at the beginning of these exchanges, perhaps I may explain that I was concerned with the reasons that judicial review has increased. I suggest that one reason is the style in which legislation is drafted. Where one has a power which says that the Secretary of State may carry out such functions as may be specified, or that he may have such transitional powers as may appear to him to be desirable, it is difficult to control his powers by the use of statute. As my noble friend Lady Hamwee crucially pointed out, the only way that one can control him is to require him to be reasonable. Instead of sending him to Coventry, one sends him to Wednesbury. It is the only penalty we have available. I seek to suggest that this style of drafting is a substantial reason for the growth of judicial review.
  The Minister was quite right. I have no objection to the policy intention. In fact, I believe that I was the first person to ask in this House for pre-tenancy determinations. I am grateful to have achieved them. However, I wonder whether yet again I can ask the Minister to consider the principles of drafting set out in the Renton Report: the statement of the general principle whose interpretation may then be tested by the court. We might then return to having our cases on statutes instead of searching for the town of Wednesbury. However, in the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 255CG not moved.]
  Clause 108 agreed to.
  Earl Russell Earl Russell moved Amendment No. 255CH:
  After Clause 108, insert the following new clause—

  HOUSING BENEFIT: DETERMINATIONS
  (". In section 5 of the Social Security Administration Act 1992 (regulations about claims for and payments of benefit), after subsection (1)(r) insert—
  236
  "(s) for enabling requests for reasons for a determination affecting a claimant for housing benefit, and for a review of such a determination, to be made by an agent for the claimant." ").
  The noble Earl said: The Committee will be relieved to hear that this amendment has nothing whatsoever to do with drafting. It is concerned with the use of agents to ask for determinations for housing benefit or to request a review on behalf of the claimant. There are many reasons why claimants may not be able to do that themselves. They may be extremely old or infirm; they may be ill; or they may have language difficulties. In all those situations, it may be easier for the claimant and the administrators, and, indeed, cheaper, quicker and more comfortable for all concerned, if the use of an agent is allowed. That may also apply for people with learning disabilities or with difficulties in communication.
  I believe that it is a practical proposal. I hope that the Minister will consider it. I beg to move.
  Lord Mackay of Ardbrecknish: Procedures are already in place to facilitate the arrangements which are the focus of this amendment. We in the Department of Social Security are not aware that these arrangements create difficulties for those who use them. Therefore I hope that the noble Earl can see that the amendment would mean an unnecessary addition to the statute book.
  The appointment of an agent to deal with a specific issue arising out of a person's claim for benefit is a long-standing feature of the social security system. Typically, an agent may be appointed to collect the claimant's benefit payments if, for example, he or she is unable to get to the post office themselves. Where the issue in question is the basis on which a determination has been made or the scope for a review of that determination, the relevant information may be provided to a third party if the claimant consents. Where the request is made under the aegis of a reputable organisation such as a citizens advice bureau or a trade union, consent on the part of the claimant is assumed. In housing benefit, requests for a statement of reasons or review by an agent or representative simply have to be countersigned by the claimant. So there is no great bureaucratic structure surrounding the treatment of a representative whose aim is the resolution of a particular area of concern to the claimant. The aim is, of course, to sort out any problem to the satisfaction of the claimant while minimising the administrative burden on all concerned.
  Where a person is unable to act on his or her own behalf through mental incapacity or some other cause, as in the case raised by the noble Earl, the Secretary of State has power under Section 5 of the Social Security Administration Act 1992 to deal with the problem. Regulations made under that power provide for a person to be appointed to act for the claimant. In such circumstances, the appointee stands in the shoes of the claimant in all respects. I hope that helps to address one of the issues raised by the noble Earl.
  I am not sure whether the noble Earl has any specific problems. If he does, we should be interested in hearing them. However, we do not believe that there are any problems with this procedure of people acting as agents

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  for others who for any reason cannot act on their own account. If there are any, we shall be happy to hear of them, examine them and try to refine the arrangements if necessary.
  What worries me a little is that the one group that might benefit from the amendment, were it to stand, would be landlords seeking to take advantage of their tenants through the housing benefit scheme—in other words, setting themselves up as agents. I know that that is not in any way what the noble Earl intended, but it could be one of the consequences of an amendment like this. We already have the procedures in place in this area to deal with the kind of examples where somebody requires help from a third party. Given that assurance and explanation I hope the noble Earl can withdraw his amendment.
  Earl Russell: I am grateful to the Minister for that very helpful reply. I take great pleasure in the fact that it is helpful. In recognition, nevertheless, that the subject continues to need thought, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 255CJ:
  After Clause 108, insert the following new clause—

  ADMINISTRATION OF HOUSING BENEFIT NOT TO BE A DEFINED ACTIVITY
  (". The determination of claims for, and payment of, housing benefit and council tax benefit shall not be defined activities for the purposes of Part I of the Local Government Act 1988 (Competition).").
  The noble Baroness said: This amendment relates to the interlocking of housing benefit with some changes introduced by the Department of the Environment on compulsory competitive tendering.
  A few weeks ago the DoE Minister issued a consultation paper which, if adopted, will dramatically affect local authority work that goes out to CCT. Financial services, which in most local authorities include housing benefit and council tax benefit administration, will have to expose 65 per cent. of their work to CCT. That is truly very foolish. Housing benefit in particular is under strain. We have already debated half a dozen amendments today relating to that.
  First, the Government rightly want—and tenants rightly need—to have housing benefit paid more speedily than in the past. Otherwise, as already made clear, tenants will risk eviction by impatient landlords who have not received the rent. It is essential to prevent that and to avoid adding to the problems of homelessness. So local authorities must speed up the delivery of benefit.
  Yet at the same time, as we discussed in relation to an amendment some 10 minutes ago, the Government rightly want and encourage local authorities to prevent and detect housing benefit fraud, often of a fairly sophisticated sort. Therefore, local authorities should not cut corners, but should take enough time to be fastidious.
  Thirdly, at the same time, the Government are continually changing the regulations under which housing benefit is allowed. There were regulation changes in January; there will be further changes in October. This is a system in which we need to speed up payments, while simultaneously decreasing fraud, while at the same time coping with government changes to regulation. This is the system that the Government propose to put out to compulsory competitive tendering. The prospects are horrific.
  My first objection is a management one. Housing benefit is a stressed system. Rightly, there are conflicting objectives. Yet to these strains will be added another one; namely, exposing the work to CCT. That means not only asking hard-pressed staff to draw up the specifications of their work for CCT, but expecting those same staff to go through the trauma of bidding for their own jobs while continuing to run a department. Precious energy and effort will be diverted away from the job in hand. If they themselves win, they will be likely to have done so by cutting their own staffing costs and thus reducing their ability to pay benefit on time and without error or fraud. If, however, they lose and the administration of housing benefit is handed over to an outside company, because housing benefit is so complex we are likely to see errors, delays and fraud mount while the staff of the new company start from scratch and learn the system.
  Look at the difficulty that the DSS is currently experiencing in moving over from IS to JSA. It has had to slip six months because the systems could not deliver. Look at the problems the DSS had when part of its most routine work in handling order books was privatised. People went without money for weeks. Has the Department of the Environment talked to the DSS about the implications of imposing CCT'? I cannot imagine a worse time at which to throw all local authorities' housing benefit administration up into the air by imposing CCT. I find it quite unbelievable.
  Where local authorities wish to use private companies, that is fine. The staff will have geared up to that and will have worked out a partnership which may now be of several years' standing. But I predict that where an outside company wins against the local authority's own in-house bid—in other words, where privatisation is imposed on housing benefit administration—there will be chaos. Systems will break down; giros will be lost, delayed, underpaid, over-paid. Every time the housing benefit regulations change—and at the moment they are changing every six months or more frequently—the entire contract has to be renegotiated with the local authority at considerable cost and effort. Who will be held accountable when landlords start evicting tenants because the housing benefit cheques have not arrived and the rent goes unpaid? Will it be the councillors who have had CCT forced upon them, or senior housing and treasury management staff who have had CCT imposed? It is appalling.
  I accept that housing benefit adjudication will not be put out to tender. But in practice that is not a distinction that can hold, especially when dealing with fraud. So our first objection is that there will be management and administrative chaos.
  Our second objection is that housing benefit and council tax benefit administration is extremely sensitive, just like income support or disability payments. To administer correct benefit staff will need to handle sensitive and confidential information about a couple's marital situation, when for example a pregnant woman may expect the birth of a child; their finances; their employment; their relationship with their children; their domestic life; their debts; their relationship with the landlord; and any arrears they may have. It is some of the most confidential and sensitive information that local authorities ever handle. Local authority staff are well trained to handle such information sensitively and professionally and to regard confidentiality as of the utmost importance.
  What confidence can we have that a company that wins a bid merely because it has submitted the cheapest, lowest tender will apply the same professional standards in handling such sensitive questions? We know what happens. We have had experience of what happens when local authorities do as the Government require and accept the lowest tender. They pay the staff least; therefore the staff turn over rapidly; therefore little is invested in training. We know that customer complaints then mount and systems collapse. Those are the facts.
  My third objection is that, as late as November 1995 (six months ago), the DoE confirmed by circular to local authorities:
  "given the sensitivity [of the administration of revenue services and benefits] Ministers have undertaken that authorities will not he compelled to market test any of this work, and the competition requirement has been set at a level to take this into account".
  Only six months later, without publishing any supportive evidence, the Government have gone back on their word. Following consultation, local authorities may be forced to expose this most sensitive work to CCT. Why is that? As the entirely impartial and professional Institute of Revenues, Rating and Valuation says, the only explanation can be that the DoE is responding:
  "to private briefs from a group of disappointed contractors".
  That is interesting. I wonder what the Tory Government hope to get in return. I beg to move.
  7.30 p.m.
  Lord Mackay of Ardbrecknish: The noble Baroness rather ingeniously added that argument to this part of the Bill, although it has little or nothing to do with the four clauses and schedules that we are discussing now. Nonetheless, she seized the opportunity to run one of the Labour Party's favourite hobby horses—its objection to any competitive tendering within the services of local authorities. In this case, it is the financial services of local authorities. But, frankly, the position is the same regardless of the service of the local authority. Whether it be in the collection of dustbins or any other service, the noble Baroness's party believes very firmly that the private sector has no part to play and cannot teach local government anything in regard to efficiency or effectiveness.
  Baroness Hollis of Heigham: Did I hear the noble Lord correctly? Is he suggesting that collecting rubbish
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  in dustbins is the same as administering housing benefit claims? Does he believe that there is any comparison between the two?
  Lord Mackay of Ardbrecknish: I did not make that suggestion at all. I simply pointed out that it was an objection to the whole contracting-out policy and that encompassed services such as the collection of dustbins, which is done very efficiently indeed in many local authority areas by the private sector. We are discussing now what I might call a sub-set of that policy, which affects the financial services of local authorities.
  The noble Baroness advanced arguments of which my ministerial colleagues in the Department of the Environment are very well aware. They understand and have examined them. They have concluded that there is no special case for benefit work not to be taken into account when local authorities calculate whether they have fulfilled their competition requirements.
  We believe that there are substantial savings to he made in the administration of benefit work. With that in mind, as the noble Baroness knows, we have recently proposed increasing the competitive requirements for financial services work (into which this activity falls) from 35 per cent. to 65 per cent. We believe, however, that there are some elements of benefit work—mainly determinations—where the functions cannot be transferred to another party and we have no intention of forcing local authorities to do so.
  It is very unlikely that an authority could not meet its competition requirements without exposing work to competition where it has no power to do so. In other words, there is enough headroom, so to speak, in the 35 per cent. which remains to accommodate work such as the determination work. But if that were to occur, we should certainly be prepared to examine the case and provide an exemption if the case were shown to be justified.
  I suspect that the noble Baroness was referring to a little more than determination in the adjudication officer definition and that she was thinking about the day-to-day administrative processes used to assess and pay claims on housing benefit or council tax benefit—the collection of information and subsequent payment of the benefit. Her amendment, if accepted, would simply mean that all aspects of benefit administration carried out by local authorities would be outside the scope for the exposure to competitive tendering. That is certainly not the Government's intention.
  The point about competitive tendering in this and every other field is to deliver a more efficient service in the most cost-effective manner. There are clear specifications laid down in all those contracts for the delivery of the service—for the outcomes achieved—so that whoever does the work, whether it is in-house or a private contractor, he is paid not just for processing the claims but paid on the basis of the outcomes. The outcomes are well described as "paying the right money to the right person at the right time". I should have thought that those were specifications that we should demand from everybody, whether it is an in-house person or a private contractor.

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  There are local authorities which already use private companies for part of the housing benefit work. The experience of those who have already contracted out is not one which I recognise from the noble Baroness's description. CCT is about getting the best services for the local charge payer at the best price. The policy is about ensuring that the service is delivered well to the customers who need it and costs as little as possible to the taxpayers and the council tax payers who have to pay for it. I am afraid that the noble Baroness's amendment is designed to remove the need for local authorities to expose large amounts of their financial services to competition, thereby ensuring that we do not gain the competitive and financial advantages that we believe come from competitive tendering.
  I hope that, with those remarks, the noble Baroness, having aired her point of view very clearly, will feel able to withdraw her amendment.
  Baroness Hollis of Heigham: Before I comment more fully and decide what to do about the amendment, perhaps the Minister will tell me how I should understand the quotation that I gave. Why, six months ago, in November 1995, did the DoE say in a circular:
  "Given the sensitivity [of all this area] Ministers have undertaken that authorities will not be compelled to market test any of this work"?
  Would the Minister like to explain to me what that sentence means?
  Lord Mackay of Ardbrecknish: I do not have the circular to hand and so I am not sure of the context from which the noble Baroness took the quotation. But I have made it clear, and my ministerial colleagues at the Department of the Environment as well as my right honourable friend at the Department of Social Security have made clear, that the determination—the adjudication work—is work that cannot be transferred to another party. As I made perfectly clear, we have no intention of forcing local authorities to contract out that part of the housing benefit work. The other parts of the housing benefit work are perfectly capable of being contracted out, as has already happened in certain local authorities.
  Baroness Hollis of Heigham: The quotation was in reference to the administration of revenue benefits and services, not to determination. Clearly, the Government's word lasts for six months. Six months ago local authorities were assured that the 35 per cent. rule would remain in place and that housing benefit administration would be protected from CCT. Six months later, we have a volte face. I give way to the Minister.
  Lord Mackay of Ardbrecknish: It is not a volte face at all. It is simply ensuring that the policy is succeeding in those areas in which it has been started and therefore it is sensible to expand the area over which the benefits can be sought. I should have thought that it was
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  perfectly sensible to start slowly and simply expand further in order to gain maximum benefit for the council tax payer and best service for the customer.
  Baroness Hollis of Heigham: If the ties on parliamentary language did not preclude me, I would use the word "rubbish" to that, but it does, so I will not, except when talking about the dustbins that the Minister is so fond of quoting. The point is that throughout all CCT work, ever since Government first initiated this, going back now some 10 years—and many of us on these Benches have been involved in those debates over those 10 years—Government have always allowed local authorities, given that commitment, to ring fence that work which is particularly sensitive in handling confidential information. That position which applies to housing benefit was reconfirmed by the Government in November.
  The Minister talks airily about increments and learning from experience; it is simply not true. It has never applied to this area of work. He is pulling arguments out of the air in the hope that because it has been done in dustbins we are now ready to apply it to housing benefit and confidential material. That is not the case. This work has always been regarded and recognised as sensitive and therefore not appropriate to go out to CCT, where it would perhaps go to a company who has gained the work simply because they have put in the lowest bid. The lowest bid to the specification has to be the one that is accepted. We had debates on that subject when we introduced that Bill many years ago. The cheapest bid is the one which pays its staff the least; it pays its staff least because it trains them least and, as a result, there is the fastest staff turnover and the lowest level of staff reliability. If the Minister knew, as would the Department of Environment Minister, about the workings of CCT he would recognise that what I am saying is a faithful and accurate description of what has happened to wide swathes of white collar CCT work.
  The Minister made a couple of other points. He said that the Government were protecting the determination of housing benefit claims. It was only the administration that was going out, as though somehow in local government work one can make a clean distinction between the two. One cannot do so. The collecting of information is a crucial part of the determination of the final result. Only then will one know what additional information one will want in order to make a determination. The determination will be done by one set of officers, apparently, in-house to the local authority; the collection of information, which is essential to that determination, will presumably be done by a private company outside. How service standards can be specified under this, I really do not understand. It is an absurd distinction which cannot, in practice, be held or delivered. I promise the Minister that; it will not work.
  Secondly, the Government emphasise efficiency and say that the whole benefit of CCT has been in relation to efficiency, but the whole problem of housing benefit is the risk of fraud and error that occurs. The very management problems that will occur in the switch from

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  the existing system to one going out to CCT will encourage inefficiency rather than reduce it. There will be very high lead-in costs indeed.
  Where such CCT work is voluntary, I was very careful to say in my opening remarks that that is fine. It is for the local authority to decide and develop partnership schemes. However, I repeat that housing benefit, as we know, is a stressed system. Fraud is increasing. Errors are high. Take-up is inadequate. This is a system where, at the same time that the Government are continually changing the structure within which it works, the Government are throwing it out to CCT, having reversed something like a decade's commitment to protect sensitive work away from commercial considerations. The Government have sought to reverse 10 years' policy in the last six months and, as the IRRV, an independent professional body of rating officers said, the only explanation they can come up with, and I quote, is that:
  "the [Government] is responding `to private briefs from a group of disappointed contractors'".
  I just wonder whether the approach of a general election and the necessary finance for that has anything at all to do with this decision. None the less, with the permission of the Committee, I withdraw this amendment.
  Amendment, by leave, withdrawn.
  Clause 109 agreed to.
  Schedule 11 agreed to.
  Clauses 110 to 112 agreed to.
  Lord Lucas: I beg to move that the House be now resumed. In moving this Motion I suggest that the Committee stage on this Bill be resumed not before 8.45 p.m.
  Moved, accordingly, and, on Question, Motion agreed to.
  House resumed.

Right of Establishment for Lawyers
7.45 p.m.
Lord Slynn of Hadley Lord Slynn of Hadley rose to ask Her Majesty's Government, in the light of the 14th Report, Session 1994–95, of the European Communities Committee on the Right of Establishment for Lawyers (HL Paper 82) and the judgment of the European Court of Justice dated 30th November 1995 in Case C-55/94 Gebhard v. Milan Bar Association, whether it is likely that the proposal for a Directive on the Right of Establishment for Lawyers will now be modified so that it can be adopted in a form acceptable to Her Majesty's Government and the legal professions in the United Kingdom.
The noble and learned Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. The subject-matter of the Question is one of considerable concern to the legal professions of England, Wales, Scotland and Northern Ireland. It is scarcely of less concern to those who are or may become their clients.
The Treaty of Rome clearly envisaged that restrictions on the provision of legal services, as with other services, and on the right of establishment would go. This was the parallel of rights which were given to workers to move freely around the member states. For some professions this should not have been too difficult to achieve. For doctors and architects, for example, I imagine that appendicitis is not very different in Athens from that in Copenhagen.
For lawyers it has not proved to be at all easy, as was to be expected. Different systems of law, different procedures, different methods of qualifying exist in the various member states. It is especially difficult because, despite an increasing familiarity with community and international law, lawyers are trained and admitted to practise in a single jurisdiction. Steps have been taken. In 1977 the Council of Ministers adopted a directive which laid down the conditions under which lawyers could carry out occasional and temporary services in other states, using what is called their home state title. If a solicitor went to Paris to practise he still called himself a solicitor. He could advise on law on that basis. That directive has been useful and was a good move, although it has not been used as much as might have been expected.
After that directive there were two outstanding tasks. One was to make it easier for lawyers from one state to qualify in another member state. That meant adopting a system by which qualifications were recognised mutually between the member states. It took 17 years for agreement to be reached on a directive relating to architects, which I suggested might perhaps have been one of the simpler professions, and it took a little less time for several other professions. It was not at all surprising, therefore, that the noble Lord, Lord Cockfield, as the commissioner responsible, began to despair of achieving by the agreement of the member states a directive for each profession. The Commission adopted a general directive, leaving it to the professions to come up with an agreed scheme. I pay tribute to the initiative of the noble Lord, Lord Cockfield, in ensuring that this step was taken.
The general scheme was that after a three-year course which would be recognised people would be able to practise their professions in the light of their experience, but there would be an aptitude test. In order to move in the same profession into a different state it was necessary to take a test.
The second problem was of a different nature. What ought the rules to be by which a lawyer from one state can go and practise his own law, or community law, or international law, or even what is called the host state law in another state? For another and different 17 years the Council of European Bars of the member states worked on a draft directive and they produced this in 1992. Many, perhaps most, lawyers thought that the scheme advised by the Council of European Bars was a very good scheme, but the Commission had other ideas, which were made available to the European Parliament in 1995.
When the Select Committee looked at this matter most witnesses agreed that the directive was necessary in order to make it easier for lawyers to practise, not

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just on an occasional or temporary basis, but on a more continuing and permanent basis in a state other than that in which they qualified. It was recognised to be particularly necessary in order to provide for cross-border legal services becoming more prevalent and necessary. It would seem to be necessary also because it was found that in seven member states only locally qualified lawyers could practise. Lawyers from other states therefore, if they wished to practise there, had to become members of the local Bar or the local lawyers' association and become integrated.
A proposal for a directive was therefore put forward by the Commission. I do not need to go into detail on that. I mention just two or three relevant points. It proposed that lawyers should be entitled to practise in another member state under their home title for a period of five years, so long as they registered with the appropriate professional authority in the host member state to which they went. They used their home title—a solicitor in Paris would call himself a solicitor—and would be subject, under the proposal, to the professional control of both his home Bar and the host Bar in the state to which he went.
The second matter I want to mention is that it was proposed that if a lawyer from one state practised for three years in another state—the host state—he would not be required to take a professional aptitude test, unless he had never practised in law other than the law of the host state, when he would be required to take a test limited to procedural law and rules of professional conduct.
The Select Committee took the view that it is important to improve the free movement of lawyers throughout the Community while protecting and providing adequate safeguards for clients. The proposed draft directive is good in that it complements the existing two directives I mentioned—the 1977 directive and what I may call the "Cockfield directive". It would make it easier for a lawyer to become established on a continuing and relatively permanent basis in another state. By providing that a lawyer will be subject to the deontological rules of both professional bodies in the home and the host state, it provides a system of disciplinary control.
Two matters remained controversial. The first was that a lawyer could only practise in another state for five years and then, under the proposal, he would need to leave the host state or qualify as a local host state lawyer. The Select Committee, Sub-Committee E, felt that that was unjustified. It seemed absurd on the face of it that someone who had practised—say an English solicitor in Paris or Bonn—for five years, should have to leave at the end of that period when he had built up a practice with clients who wanted him. It seemed to us that there was no justification for that restriction and as a matter of principle we did not feel that practice under the home state title—solicitor in Paris—should be considered merely as a stage towards the full integration of the individual lawyer into the host state profession.
It seemed to us that it was a desirable end in itself that a solicitor or barrister should be able to go into Paris or Bonn, or wherever in the Community, and practise
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using his English or Scottish title. Indeed, the fact that he continued to practise as a solicitor or barrister was the sole indication to his client that he may not have the same detailed knowledge of the host state law as someone qualified in that state. So we come out very firmly against that.
The second matter in issue was how far the host state should be allowed to test the lawyer's knowledge of the host state law and practise before he could become a member of the local Bar. That is a more difficult question. It seemed to us, as it seemed to the legal professions in the United Kingdom, that a balance has to be established between ensuring that the client is adequately protected in that his lawyer has the requisite knowledge and qualifications on the one hand and, on the other, avoiding sitting tests which really constitute a discriminatory barrier against nationals of other states.
In the result we concluded that the Commission's proposal was wrong and that some testing would be justified but that, in deciding whether a lawyer from a foreign state should be admitted to the local Bar, full credit should be given for individual experience and qualifications; there should be some flexibility. I do not believe that we in this country would want to make it too difficult for a good, experienced lawyer from another member state to be integrated into our profession here any more than we would want barriers to be erected against our lawyers integrating abroad.
The Commission's present proposal is that a lawyer may be admitted without a test if he has practised for an unbroken period of three years, subject to his taking a test if he has not practised in the host state law. Recently the European Parliament, in a careful and well-thought-out report—with Madame Fontaine as the rapporteur—put forward more detailed proposals which would leave out of account any aptitude test, but which would require that effective and regular activity be taken into account before someone was admitted into the legal profession of the host state.
Those are the two matters which remain for negotiation and on which both the Select Committee and the legal professions of the United Kingdom are in agreement. The five-year proposal is a bad one and we feel that, with some flexibility, it is right that there should be aptitude tests. But they must not be discriminatory. This is an important question and I hope that the Minister will be able to give some information as to how far the aims of the Select Committee and of the United Kingdom professionals—solicitors, barristers and advocates—are likely to be achieved.
7.58 p.m.
Lord Irvine of Lairg: My Lords, your Lordships will be grateful to the noble and learned Lord, Lord Slynn of Hadley, both for bringing this matter before your Lordships' House and for his lucidity in explaining an issue which may seem esoteric to many of your Lordships. Putting it in my own way, I would like to compare the present position with the position that would obtain under the proposed new directive.
If I, as an English Queen's Counsel, wish to practise in either English or Italian law in Florence, then I can do so on one of two bases: first, as a temporary service

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provider under Article 59; or, secondly, as a fully fledged member of the Florence Bar. For the second, I would have to pass an aptitude test in Italian law. But if I opt for the first route, then I may provide English law services on a temporary or intermittent basis. If, however, I want to stay in Florence permanently as a practising lawyer, my only option under the present regime is to pass an aptitude test in Italian law and so become a fully fledged member of the Florence Bar.
Now, under the Commission's proposed Directive on Freedom of Establishment for lawyers, in its current form, I could practise as an English lawyer in Florence for a limited period of five years. But after that five years, I would have to become a fully fledged member of the Florence Bar, or go home and abandon the good will that I have built up. The fact that I will be as well qualified to go on doing what I have been doing for the past five years, but that I am to be disabled from doing so, strongly suggests to me an arbitrary restrictive practice. After the decision of the European Court in Gebhard, which is mentioned in the noble and learned Lord's Question, I believe that this five-year restriction might be held contrary to Article 52 of the treaty as an unjustifiable obstacle to trade. Since in my example I have practised English law in Florence for the past five years, consistently, no doubt, with the public interest in Italy, why, rationally, should I not be free to continue to do so? That is the first point.
Next, I turn to what the new directive proposes in relation to aptitude tests. The present position, as I understand it, is that if I want to become a fully fledged member of the Florence Bar, Italy can require me either to pass an aptitude test, which will examine my knowledge of the law of Italy, or to serve a certain number of years as a lawyer in Italy before I can become a fully fledged member of the Bar. In fact, all member states, apart from Denmark, as I understand it, have opted to require an aptitude test. True, there have been some complaints that some countries, although not the United Kingdom, make their tests so difficult to pass that foreign lawyers are effectively excluded. True, there are these complaints, but the remedy for that lies in Article 52. If aptitude tests are operated in such a way as to amount to an unjustifiable barrier on free movement, then they are in any event unlawful under Article 52.
So, if there is this problem, that is the appropriate remedy. The remedy is not to introduce a blanket rule excluding aptitude testing and as a result to penalise those states which operate aptitude tests reasonably because others may not operate them reasonably. What the new directive proposes is that the obligation to pass an aptitude test in a foreign system of law, as a condition of becoming a fully fledged member of a foreign Bar, should be dispensed with where the individual has practised for three years in a practice involving the application of the law of the host state. For my own part, I firmly agree with the Select Committee of your Lordships' House, which, at paragraph 62 of its report, expressed the opinion:
"To relax these principles so as to confer the host country professional title on lawyers unqualified and untested in the law of the host country would in our view be unacceptable".
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The Commission's current proposal would dispense with the need for an aptitude test where, if I may continue with my example, I pursued for an unbroken period of three years, which is the Commission's version in the new directive, or regularly for three years, which is the better European Parliament version, a practice which involves the law of the host member state, Italy. Where the three-year requirement is not met, the draft envisages that I may still ask the Italian authorities to take into consideration such experience of Italian law as I may have.
This new regime would result in entry to the legal professions of the countries in the European Union without any formal examination in the relevant legal system or without any objective testing of aptitude to practise in that system.
Initially, the CCBE was opposed to this change. Its original draft allowed for national authorities to insist upon an aptitude test, provided that they took into account and gave full credit for any relevant experience of domestic law. That is the present position with the United Kingdom aptitude test. My understanding—and I look forward to hearing whether this may be confirmed by the noble and learned Lord the Lord Advocate—is that the UK delegation for the CCBE is proposing to vote in favour of the European Parliament report, which substantially retains the Commission's proposal. I have to say that I am disappointed by that.
I believe that the Select Committee of your Lordships' House was correct. I do not think that an obligation to pass an aptitude test in a foreign system of law, as a condition of becoming a fully fledged member of a foreign Bar, should be dispensed with simply because of some practice over a three-year period involving some application of the law of the host state. In my view, that would let into legal practice those who had not, by objective standards, demonstrated their capacity to practise as professional lawyers in a foreign system of law—a plain and obvious danger not only to the standing of the profession, but also to the protection of consumers of legal services. So my position is that the aptitude tests should be retained as an available option for member states in the interests of the maintenance of high professional standards in the law. I certainly look forward to hearing the views of the noble and learned Lord the Lord Advocate on this important subject.
8.6 p.m.
Lord Lester of Herne Hill: My Lords, as the noble Lord, Lord Irvine of Lairg, has just said, we are grateful to the noble and learned Lord, Lord Slynn of Hadley, both for initiating this debate and for his very skilful chairing of Sub-Committee E of the Select Committee on the European Communities whose report we are now considering. I had the privilege of serving as a member of that sub-committee and contributing to its report. We noted there that the right of establishment is among the fundamental freedoms accorded by the European Community treaty to nationals of member states and that there is a powerful case for a directive on the right of lawyers to establish themselves in member states other than their home state.

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For the single market to function effectively, obviously it is very important that qualified members of Europe's legal professions should be able to practise in every member state in the interests of their clients, subject to adequate and effective safeguards for professional standards and for the public.
To achieve that, as the noble and learned Lord, Lord Slynn, has indicated, has involved a very protracted exercise of complex consultation. At the invitation of the Commission, the Council of the Bars and Law Societies of the European Community (CCBE) laboured for 17 years to produce a draft directive on the right of establishment for lawyers. In addition to the pioneering role of the noble Lord, Lord Cockfield, I should like to pay a particular tribute to the dedicated and patient work done by Mr. John Toulmin QC, in his capacity as the former president of the CCBE. Mr. Toulmin reminded the sub-committee that as companies, employees and individuals become increasingly mobile within the Union, they need more cross-border legal advice on matters involving both Community and national law. How, he rightly asked, could a prohibition on obtaining such advice in the country of the potential migrant lawyer, rather than in the home state, be objectively justified either under the provisions relating to the establishment or under those relating to competition. The answer is that such a restrictive practice in favour of vested local or national professional interests cannot be objectively justified.
Since we published our report a year ago, the Court of Justice has decided the Gebhard case. The facts of that case exemplify the reason why European law is needed in the interests of the citizens of Europe, whether as members of the legal profession or as clients and users of legal services. Since neither the noble and learned Lord, Lord Slynn, nor the noble Lord, Lord Irvine of Lairg, has mentioned those facts, I do so briefly because they are quite informative. Mr. Gebhard, a German national and a qualified member of the German legal profession, had lived for many years in Italy, practising law in Milan, with no criticism of any kind being made of his activities in the set of chambers with which he was associated. When he opened his own chambers in 1989 together with Italian colleagues a number of Italian practitioners, including his former associates, now his competitors, complained to the Milan Bar Council of his use of the title Avvocato on the letterhead of the chamber's notepaper and of his having appeared using that title before the local Italian courts. He was forbidden by the Milan Bar Council from using the title Avvocato and was suspended from practice for six months.
It was not the function of the Court of Justice to decide whether Mr. Gebhard had been properly disciplined in favour of his Italian competitors, though I am bound to say that the facts illustrate how easy it is for, say, British lawyers to be discriminated against when practising in other member states, and vice versa, unless there are adequate safeguards against abuse and against the perpetuation of unjustifiable professional restrictive practices purporting to be in the wider public interest.
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Happily, however, the European Court rejected the argument that Mr. Gebhard could not be regarded as being established in Italy unless he belonged to the Italian professional body. The Court made clear that, although the host state might restrict the practice of certain activities or the use of their professional title, those restrictions must be necessary and must be applied in a non-discriminatory and proportionate way.
It is those safeguards which protect the people of this country against unscrupulous and unqualified overseas lawyers, whether from Europe or elsewhere, who seek to practise here, and protect British lawyers like myself or the noble Lord, Lord Irvine, if we wish to practise abroad. We would be protected from unjustifiable barriers in seeking to practise law in other member states.
There were two problems about the draft directive which particularly concerned Sub-Committee E. The first related to the rigid and arbitrary five-year limit on practice under home title. We strongly disagreed with the view of the European Commission that a five-year limit of that kind was justified. We preferred the CCBE draft directive which made provision for an indefinite right for a lawyer to practise under his home title in another member state. We suggested that Article 2 of the proposals should be amended so as to make similar provision.
I agree with the noble Lord, Lord Irvine of Lairg, that it is strongly arguable that a rigid five-year limit of that kind is arbitrary and violates European Community rules. I very much hope that the Commission will be persuaded to adopt this view. The fact that the Legal Affairs and Citizens Rights Committee of the European Parliament has put forward an amended proposal on these lines will, I hope, carry weight in the corridors of power in Brussels.
The other, more difficult question concerned aptitude tests. We pointed out that clients in the host country must be able to have confidence that a lawyer qualified under the legal system of that state had the necessary knowledge. The relevant professional body of the host state must be able to ascertain that this is so, if necessary by adopting tests, so long as such tests do not create unjustified discriminatory barriers. We did not consider, on the basis of the evidence about aptitude tests which we received, that artificial or discriminatory barriers were being created by the application of the principles of the Diplomas Directive. We observed that if they were they would be likely to be struck down by the European Court. To relax those principles so as to confer the host country professional title on lawyers unqualified and untested in the law of the host country would be wholly unacceptable.
Most of the witnesses maintained that the CCBE draft directive had achieved a balance appropriate to the Diplomas Directive. We made it clear that we favoured a solution whereby testing was retained but with a positive obligation on the authorities in each country to give full credit to individual experience.
The Legal Affairs Committee of the European Parliament has proposed that, where a lawyer has not practised the local law, his or her competence may be

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assessed by reference to professional experience and knowledge gained in the host state, with an interview where necessary, rather than by a formal aptitude test. This suggestion is broadly in line with stronger amendments suggested by the CCBE—which I prefer—applying to all migrant lawyers, whether they have practised the local law or not. They would allow the host state to require attendance at specified courses in the host state's legal system.
I fully accept the force of the comments of the noble Lord, Lord Irvine. I am as anxious as he to preserve professional standards, but it is strongly arguable that the CCBE amendment—which is stronger than that of the European Parliament—would represent a sensible compromise. It would create a presumption that a person who is professionally qualified as a lawyer and has practised under his or her own state title for a number of years would have gained sufficient experience in the law of the host state to gain exemption from the aptitude test. Something rather similar applied traditionally in this country if one wished to change status from barrister to solicitor. In order to be exempt from certain tests one had to show seniority in the profession, and that seemed to work fairly well.
Most importantly, the CCBE amendment would also protect consumers and the administration of justice, provided it worked properly, by enabling the competent authorities in the host state to satisfy themselves on a flexible case-by-case basis of the migrant lawyer's competence. Provided they did that, that would seem to be perfectly satisfactory as a formal aptitude test. It would meet the legitimate concerns of some other member states about aptitude tests without permitting the test to be used as a device for discriminating against migrant lawyers. I hope that the Commission will agree to a sensible compromise which has built-in safeguards against abuse. If not, I would be strongly opposed to a blanket prohibition on aptitude tests for the reasons so clearly and powerfully expressed by the noble Lord, Lord Irvine of Lairg.
Our report expressed belief that a directive on the establishment of lawyers could open up new opportunities for enterprising lawyers, give clients access to greater choice of services and enhance the process of enrichment and cross-fertilisation among the legal systems within the European Union. Safeguards requiring knowledge of or experience in host country law are surely necessary to protect the consumer. It is no less essential that a directive does not permit the erection of unnecessary barriers. What is required is modification of the Commission's proposal on the two points of principle where it departs from the CCBE draft directive. I look forward keenly to the speech of the noble and learned Lord—the first that I will have heard from him in his capacity as Lord Advocate—and any indication as to the likely approach to be taken on this subject.
8.19 p.m.
The Lord Advocate (Lord Mackay of Drumadoon): My Lords, the Question that we are considering this evening arises out of a campaign that has been pursued by lawyers throughout Europe for the
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best part of two decades. I welcome this opportunity to inform your Lordships, the wider public and the profession in the United Kingdom, of the Government's assessment of the Question posed this evening by the noble and learned Lord, Lord Slynn of Hadley.
As the noble and learned Lord said, the directives of 1977 and 1988 made some progress in achieving the objective of lawyers being able to establish themselves in different parts of the Community, but that progress has unfortunately been more leisurely than many would have wished and, despite the best efforts of government and individual lawyers, the matter has progressed at a pace which has caused a measure of frustration and, I suspect, a measure of irritation on occasions.
It is right, therefore, that your Lordships should appreciate, as was recognised by the report to which I shall turn in a moment, the valuable role played by the Council of the Bars and Law Societies of the European Community in trying to drive matters forward. It was in 1992 by a majority, I understand, of 10 to two that the CCBE agreed a draft directive which provided a framework for the establishment of lawyers in member states other than those states in which the individual lawyers had obtained their qualifications.
By coincidence that draft was published during the period of the United Kingdom presidency of the European Community. My noble and learned friend the Lord Chancellor commended it to the Commission at that time and again sought to give some impetus to the Commission in the work that required to be done. The Government and the professions, working closely together, kept up the pressure thereafter and at the end of 1994 the Commission published its proposals which form the basis of our discussion this evening.
Unfortunately, the proposal, as drafted and put forward by the Commission, was not one which either the Government or the professions in this country could accept without qualification. That was the position which was reflected in a number of other member states throughout the Community. For that reason, negotiations with officials of the Council required to commence but, most unfortunately, after a few months these became deadlocked. It was only when the Legal Affairs Committee of the European Parliament took a hand, at least as far as the European organs are concerned, that some progress was made.
By a remarkable coincidence, this very evening the European Parliament, at a plenary session in Strasbourg, will consider its Legal Affairs Committee's opinion on the draft directive. As we speak, the debate is going on and, as I hope to indicate later, the Government are optimistic that some progress will be made.
There can be little doubt that in considering the matter the Legal Affairs Committee was assisted, as your Lordships will be assisted, by the very detailed scrutiny of this matter which was carried out by your Lordships' Select Committee on European Communities. Its deliberations were, of course, chaired by the noble and learned Lord, Lord Slynn. I personally, and on behalf of the Government, wish to pay unqualified tribute to all members of the committee for the very fair and thorough manner in which they examined the issues. A

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reading of the report makes clear that not only did they bring their own personal expertise and experience to bear on the issues, they spent considerable time hearing evidence from organisations within this country, from the Lord Chancellor's own department, the professions, and various bodies within other European countries.
The report is a most impressive document. The conclusions are clear and carefully argued and reached. The Government are very grateful to the committee and accept the views which the report sets out.
At the same time it would also be right to acknowledge the work carried out by members of the United Kingdom delegation to the CCBE who have worked over the last few years at their regular meetings and, more informally, in lobbying interests in Europe in trying to drive the matter forward. I know that the UK delegation, the previous chairman who was mentioned by the noble Lord, Lord Lester, and the current chairman, Matthew Clarke, have dedicated a lot of time and effort in bringing the matter forward and, in particular, briefing and lobbying members of the European Parliament at the present time. At the risk of tempting fate, the signs are favourable that some fruits of their long campaign will become clear once the discussions in Strasbourg have been concluded this evening.
All noble Lords who have spoken have dealt in detail with the draft directive and the objections to it. For that reason it is unnecessary for me to deal in detail with the nature of these objections other than to make clear that in both matters the Government share the concerns that have been expressed in this House. The first objection is that the directive gives lawyers the right to practise under the home state titles in another member state but that would be limited to a period of five years. After that, as the noble Lord, Lord Irvine of Lairg, indicated, the lawyer would be faced with a stark choice of packing up and going home or alternatively becoming a fully qualified and enrolled member of the local Bar. That is a very stark problem which, there seems little doubt, is unacceptable on all sides.
The next objection is the question of the "fast track" entry to the legal profession of the host state by showing some three years' "effective and continuous" practise in the host state. Those who could show that their practice included host state law, including Community law, would be entitled to be admitted without any aptitude test at all. If the three years' practice did not include host state law, the aptitude test would have to be limited to procedure and professional ethics. The Commission sought to justify this approach on the ground that practise under home state title was a step in the way to integration as a member of the host state profession but, as noble Lords have pointed out, that is viewing a practice in another jurisdiction using one's home state title, whether it be advocate, solicitor or barrister, in an unacceptable manner.
As I indicated, the Government are quite clear that both these matters are objectionable and every effort is being made to address them in discussions with the active support of the CCCB.
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By another stroke of good fortune the case of Gebhard v. Milan Bar Council came along. As the noble Lord, Lord Lester of Herne Hill reminded us, the court rejected the Bar Council's argument that a lawyer cannot be regarded for the purposes of the treaty as being established unless he belongs to, or acts in association with, a member of the professional body of the host state. The court also held that although national measures which restrict certain activities to those possessing a particular qualification or membership of a professional body were permissable, restraints on the exercise of a fundamental freedom guaranteed by the treaty—and of course the right of establishment is one such fundamental freedom—must comply with four conditions familiar to those with a knowledge of Community law. First of all they must be applied in a non-discriminatory manner. Secondly, they must be justified by imperative requirements in the general interest. Thirdly, they must be suitable for securing their objective and, fourthly, and importantly, they must be proportionate; that is, that they should not go beyond what is necessary in order to attain their objective.
In those circumstances it appears to the Government that what is proposed in the draft objective, in so far as it imposes a time limit, cannot be valid because it appears to impose an arbitrary and blanket restriction on the exercise of the right of establishment by lawyers under the home state title. I am heartened by the contributions of all the noble Lords who have spoken this evening in that they would appear to accept that view.
The Legal Affairs Committee of the European Parliament has proposed amending the directive so as to provide for a right of establishment under home title without limit of time. If, as can confidently be expected, that amendment is adopted by the European Parliament this evening, it is reasonable to hope that the Commission will revise the text accordingly. That would be a major advance towards achieving not just the Government's policy towards the directive but the wishes of the legal professions throughout the UK.
I turn now to the other major area of controversy which is undoubtedly more difficult. It is the provisions concerning admission to the host state professions. It remains the Government's aim to ensure that these provisions are such that legal professional standards are maintained and that consumers are not misled as to the nature of the qualifications possessed by the lawyers who are practising and available to provide legal services. The Commission's proposals, which provided that joining the host state profession after five years was compulsory if the lawyer were to continue to be allowed to practise in the state concerned, and that in certain circumstances the lawyer could join the profession without his competence being tested at all, were not acceptable either to the Government or to the legal professions of this country.
While I understand the view expressed by the noble Lord, Lord Irvine of Lairg, about abandoning aptitude tests, there may be some room for compromise in dealing with the second major area of controversy. There may be adequate methods of assessing competence falling short of an examination or aptitude

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test. The competent professional authority of the host state could assess an applicant's competence, taking into account professional experience and knowledge gained in the host state. One possibility could be attendance at courses of the nature that has been mentioned. In appropriate cases that might require the lawyer to prove his competence at an interview, to produce proof of attendance at courses, as I have said, or to practise for a period under the supervision of a host state lawyer. In seeking a compromise, it is important to bear in mind the existence of the CCBE code of conduct which applies to lawyers engaged in cross-border practice throughout the EU.
That code provides, among other things, that a lawyer should not handle a matter which he ought to know that he is not competent to handle. The code has been adopted by the majority of Bars and Law Societies throughout the Community and is part of the practice rules for solicitors both north and south of the Border.
Such an approach appealed to, and was adopted by, CCBE in a meeting it held in Dresden last autumn. The approach it adopted there was consistent with the Government's policy which is to seek a compromise in this difficult area. It may be for the CCBE to speak for itself as to why it adopted that attitude, which involved abandoning a commitment to the aptitude test, but clearly it felt that some compromise was necessary, and as all the Bars and Law Societies throughout the Community are represented, no doubt by eminent leaders of their respective professions, the House can have some faith that the compromise was reached for good, sound reasons after many years of reflection and discussion.
Unfortunately, the compromise proposed by the CCBE has not yet found favour with the Legal Affairs Committee of the European Parliament. Under its proposals, lawyers who have practised under their home titles in another member state for three years would be entitled to membership of the host state profession if their practice had included host state law. If the practice did not include host state law, the competent authority would be able to require the applicant to attend an interview. In an important change, however, put forward by the Legal Affairs Committee, the competent authority of the host state would be able to refuse to allow the applicant to benefit from those provisions, particularly if it considered that that would constitute a threat to public order, or because of disciplinary proceedings, complaints or incidents of any kind.
The Government's view is that the drafting of that amendment put forward by the Legal Affairs Committee is somewhat unclear and leaves something to be desired. It is an amendment which will have to be considered carefully, and when the matter goes back to the Commission further discussions will be necessary. As always in this matter the Government intend to consult closely the legal professions whose support throughout the years has been welcomed warmly.
It follows, therefore, that provided decisions are taken in Strasbourg this evening in the manner anticipated, some substantial progress is being made. To answer the question posed by the noble and learned Lord, it is
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hoped that if the European Parliament adopts the amendments which are being put to it by the Legal Affairs Committee, and if thereafter the Commission revises the draft directive, taking account not just of those amendments but of further representations being made to it by this and other governments, there is reason to believe that at long last a common solution will be found.
Indeed, I can go further and say that there is a serious hope with, it is believed, a measure of justification, that a common position may be found during the Irish presidency during the latter part of the year. In conclusion, I thank the noble and learned Lord, Lord Slynn of Hadley, for raising this issue, and I thank other noble Lords for the support they have given to the Government. I shall look forward to reading tomorrow's newspaper to see what was decided as Strasbourg this evening.
Baroness Trumpington: My Lords, I beg to move that the House do now adjourn during pleasure until 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.37 to 8.45 p.m.]

Housing Bill
House again in Committee
Clause 113 [Proceedings for possession]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 255D:
Page 73, line 36, at end insert ("and subject to subsection (2) below, sections 83, 84 and 85 of the Housing Act 1985 shall apply to such proceedings as if the word "introductory" were substituted for the word "secure" ").
The noble Baroness said: In moving this amendment, I shall speak also to Amendments Nos. 255E and 258. I thought for a moment that I might achieve acceptance of these amendments extremely quickly but perhaps I have too much of a sense of fair play.
Although the amendments may appear to be quite long and rather complicated, their purpose is relatively straightforward; it is, that tenants shall not lose their tenancies without recourse to the courts except in cases of neighbour nuisance.
In its current form, the scheme of introductory tenancies gives local authorities extremely wide powers to terminate the tenancy and to evict the tenant during the first year of the introductory period. There are no restrictions on the local authority's discretion and the involvement of the court is purely procedural. For example, it would be open to a local authority to terminate a tenancy for minor breaches of the tenancy agreement: failure to maintain a garden, small amounts of rent arrears and other matters which might not even constitute breaches of the tenancy agreement at all. The tenant has no recourse to the courts other than by an application for judicial review. That is a matter which has been touched on more than once in our discussions today. I am sure that the Government do not wish to

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encourage even greater use of that remedy, if one can even call it a remedy as it is merely a review of procedure rather than a review of the outcome.
I suggest that the scheme of introductory tenancies is wider than the consultation process proposed. The Government's paper consulting on anti-social behaviour expressed concern about the major drain on resources and time caused by tackling neighbour-nuisance cases and was concerned to identify the minority whose lifestyle and behaviour is incompatible with the quiet enjoyment of neighbours.
The scheme which is now proposed is far broader than is necessary to address those concerns. Under the new scheme, in, for example, a rent arrears case, there would be no inquiry by the court as to whether the alleged arrears exist or why they had arisen. It is the experience of housing practitioners that often it is only when a matter comes before a court that the tenant's situation becomes clear. There may be a breakdown in the relationship with the housing officer. There may be language difficulties giving rise to a misunderstanding. A relatively high proportion of those in local authority accommodation are vulnerable for one reason or another and may face special difficulties. Dealing with local authority bureaucracy is a challenge to them.
The amendment seeks to provide that in the first year of the tenancy, the local authority may seek a possession order on the same basis as for a secure tenancy. I have referred to cases of neighbour nuisance which perhaps stand on a different footing from other reasons for eviction, in that the interests of other people are very directly at stake. I accept, at any rate for the purposes of this amendment, that it is important for the local authority to be able to act swiftly against tenants as soon as they start to cause problems for other people. With this amendment and in those limited circumstances, I am therefore suggesting that it is perhaps easier to justify bypassing the court procedure, although from the way in which I put the matter the Committee will understand that I am not even wholly enthusiastic about that one exception. I beg to move.
Baroness Hollis of Heigham: I accept that anti-social behaviour on council estates can be a major problem and is probably a growing nuisance. But I am not sure that introductory tenancies are the right way forward. From my experience of 25 or 26 years as a ward councillor, in only a few cases that I recall did anti-social behaviour manifest itself within the first year of a tenancy. I found, from my own experience, that it tended to be associated with established families where there was a marital breakdown, where there was shouting, screaming and fighting and disturbed children, or possibly where you had a lone parent and as the children grew into their teens they became out of control or started inviting in other youngsters from outside the estate. In all such cases anti-social behaviour was from well-established tenants and had nothing to do with first-year tenants.
Secondly, those who exhibit anti-social or inappropriate behaviour in the first year tended, from my experience, to be people with some form of mental
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illness or mental health problem. That does not mean that one should not protect adjacent residents against someone whose home, for example, has become a fire risk because he insists on keeping every newspaper, which he has piled high, or against someone who perhaps has learning difficulties is keeping open house for every child on the estate and children from outside the estate. The right approach is to assess the tenant and bring in support, and a move may very well be necessary to a more sheltered environment.
Similarly, it worries me that one could appear to license streets ganging up on an ethnic minority family living in a white street, especially if tenants have recently exercised their right to buy and are trying to go in for up-grading the estate, which they wrongly believe means getting certain other families out of the estate in order to keep up the property values.
I do not think that introductory tenancies address the problem of anti-social behaviour; nor are they particularly relevant, either one way or the other. The right way forward is in the amendments which we will be discussing later today that will grant local authorities mandatory possession where the courts agree that there has been serious anti-social behaviour. From my experience, this is much more likely to occur in an established tenancy than in the first year of a tenancy.
Some local authorities want this power and others do not. I would reluctantly acquiesce to a voluntary scheme, which of course this one is. We need stronger safeguards than currently exist against abuse. The next series of amendments may deal with some of the safeguards against abuse that we need to see in place. But before any scheme is adopted there must be consultation with tenants.
I do not believe that introductory tenancies are a relevant solution to the problem of anti-social behaviour. It seems to me that they could license inappropriate behaviour by the local authority or, more possibly, result in pressure being exerted on the local authority from other tenants. We need convincing that not only are introductory tenancies relevant, but that there are proper and adequate safeguards to ensure that there is no victimisation.
Lord Lucas: I share many of the concerns expressed by the noble Baroness, Lady Hollis. I hope I shall be able to convince her, in not too long a speech, that we have taken the right measures to introduce the appropriate safeguards.
The purpose of introductory tenancies is to get trouble-making tenants out quickly. To that extent the amendments, particularly Amendment No. 255D proposed by the noble Baroness, Lady Hamwee, would effectively drive a coach and horses through the new regime by putting introductory tenancies on exactly the same footing as secure tenancies when it comes to eviction. Only a minority of cases will ever come to court because the vast majority of new tenants will, like most secure tenants, keep the peace and their tenancies too will become secure after a year. But where eviction is thought necessary—and such action should never be undertaken lightly by an authority—it is important that it takes place quickly and with the minimum of fuss.

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Introductory tenancies are designed to send a clear message to those who engage in persistent anti-social behaviour that such behaviour will not be tolerated and that tenants will lose their homes as a result.
We know that Manchester City Council, with 13,000 new tenants a year, and Gateshead, in particular, are looking forward to bringing in these provisions as soon as they are able to. They clearly think that their problems will be addressed by these provisions. As the noble Baroness, Lady Hollis, said, this is a discretionary and voluntary scheme. For those, like her own council, which are lucky enough not to suffer from these problems, it would not be necessary; and it would be an expensive scheme to introduce if it was not needed.
Towns like Manchester and Gateshead would not introduce this scheme; indeed, there would be little point in introducing it if they were saddled with the same eviction procedures as they have to go through now with their secure tenants. Those are authorities that have put anti-social behaviour at the top of their housing agenda and want to embrace introductory tenancies. We must not shackle their ability to get rid of the hooligan element which has contributed to the spiral of despair in some estates.
A secure tenancy is a lifetime tenancy and introductory tenants can only earn that right by behaving themselves during the trial period. That is the message authorities like Manchester wish to hammer home to some of their tenants.
It may give comfort to the noble Baroness, Lady Hamwee, to know that those authorities which bring in an introductory tenancy regime must have in place fair and rigorous procedures. The Department of the Environment will be issuing guidance to local authorities and housing action trusts on the matter.
Landlords—that is, local authorities and housing action trusts—are already aware that tenants can challenge their decision to evict by applying for judicial review in the High Court, and so they cannot evict a tenant on a whim or for a reason totally unconnected with the occupation of the dwelling. Before making a decision to evict they should undertake investigations to ensure that the action they propose to take is reasonable. For example, they would want to be sure that the complainants are reliable people. They would also assess the seriousness of the complaint to ensure that the annoyance is such that it would annoy a reasonable neighbour and not just one who is unreasonably sensitive.
Vulnerable tenants are an issue with which landlords are fully familiar and particular attention to their needs is essential to ensure that no injustice occurs. We will return to the matter on a later amendment. To achieve that aim the landlord should liaise with the welfare services. I believe that all of these are matters with which landlords are already familiar and our guidance on the subject will be crystal clear.
Turning briefly to Amendments Nos. 255E and 258, we feel those would be too prescriptive and would tie the hands of local authorities unnecessarily. The Government want local authorities to have a free hand in deciding what sort of behaviour could lead to an
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introductory tenancy being brought to an end. There might be frequent breaches of a tenancy agreement or rent arrears. It must be right that authorities can act to get rid of a tenant in such circumstances. But neither of these would fall within the scope of Ground 2. In fact, they are covered by Ground 1 of the 1985 Act. I hope that what I have said will be enough to persuade the noble Baroness to withdraw her amendment.
9 p.m.
Earl Russell: I believe that the noble Lord, Lord Lucas, was not in the Chamber before dinner. I listened with great interest to his opposition to the attempt to bring in prescriptive powers on the grounds that they were not necessary because the power of judicial review existed. However, the noble Lord will not know that I was arguing before dinner that the absence of statutory restraint tended to multiply the number of judicial reviews. If the noble Lord were setting out to illustrate my argument, he could not have done it better.
Lord Lucas: The noble Earl is quite correct. I believe that I was in the Chamber for most of the time before dinner, but of course I missed that particular argument. If I had heard it, I should have been able to repeat it. I also take the opportunity to apologise to the noble Baroness for not having been present right at the beginning of the introduction to her amendment. I was rather taken aback by England's third goal and, as a consequence, was not watching the clock.
Baroness Hamwee: The reason for me being a little late this afternoon was due to the number of Dutchmen circulating in central London; I knew that they were Dutch because they were wearing inflatable clogs on their heads.
My noble friend is quite right about judicial review. I do not believe that the Minister's answer stands up. Certainly, it cannot be a remedy to be recommended. The noble Lord said that my amendment would "drive a coach and horses" through the provisions regarding introductory tenancies, but of course that was part of the idea. I entirely share the feeling expressed by the noble Baroness that the message which will be sent out to introductory tenants is not that they have to earn the right and show that they can behave well, but that they should not behave badly for the first year.
While I accept that we are discussing an elective procedure, I have considerable reservations about the whole proposal. However, points have arisen as a part of this group of amendments to which we shall return later this evening. Therefore, I think it best to review—non judicially, in my case—the totality of the debate and possibly return to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 255E not moved.]
Lord Swinfen Lord Swinfen moved Amendment No. 256:
Page 73, line 38, at end insert ("or it is unreasonable to make such an order").
The noble Lord said: In moving the above amendment, I shall, with the leave of the Committee, speak also to Amendment No. 257. During the 12-month period of the introductory tenancy, a landlord will be able to evict a tenant at any time. The landlord will have to obtain a possession order from a court but, as I understand the Bill, there will be no defence to the possession proceedings and the landlord will not have to prove to the court that tenancy conditions have been broken. There is nothing in the Bill to indicate on what grounds a landlord would issue such proceedings, but debate around the Bill has indicated that the introductory tenancy is intended as a method to enable the speedy eviction of anti-social tenants.
The concern about the introductory tenancy regime is that it gives considerable power to landlords to make decisions as to which tenants are behaving anti-socially and gives the tenant no defence against proceedings which may be unreasonable. There are particular concerns among representatives of disability organisation that people with unusual behaviour due to mental illness or disability may find themselves summarily evicted by a landlord who is under pressure from other residents, or who is unwilling or unable to try to resolve any problems in a more constructive manner.
I turn specifically to Amendment No. 256. As I have already said, in order to evict an introductory tenant, a landlord will have to obtain a court order. Under the proposed legislation there will be no grounds on which the court can refuse to give a possession order to enable a landlord to evict an introductory tenant. The amendment seeks to ensure that, if the court does not feel it to be reasonable to make such an order, it will not have to do so. It would thus ensure that in cases in which eviction was not in the eyes of the court the most appropriate way to deal with a problem a tenant could not be evicted. As the proposals are currently set out, there is no incentive for a landlord to first try to solve problems more constructively because he will have the total power to evict an introductory tenant in all circumstances.
The concept of "reasonableness" in courts issuing court orders for possession is already well established. There are at present a number of grounds for possession of assured and secured tenancies where the court must be satisfied that it is reasonable to make an order. These include possession due to a breach of the conditions of the tenancy and for rent arrears in certain circumstances. The courts are, therefore, experienced in making decisions as to whether it is reasonable to grant possession orders.
Amendment No. 257 goes one step further than the previous amendment. It states that the court must order a possession order only where it is reasonable and, in addition, lays down criteria which the court must take into account in determining reasonableness. The amendment would help ensure that local authorities which establish introductory tenancies have fair procedures for taking action against such tenants. While the Government have indicated that it is their intention that that should be the case, in the Bill as constituted
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there is no legislative safeguard for a tenant whose landlord does not act reasonably or follow the Bill's procedures.
It is important, for example, that in the interests of natural justice an introductory tenant who is threatened with eviction should be given ample warning of the fact that such action is to be taken and given the opportunity to correct his behaviour. It would also seem appropriate that, in the case of tenants with disabilities or mental illness which may be leading to perceived anti-social behaviour, the landlord should take that into account and make every effort to liaise with the social services department or any other body involved in providing care and support to the individual. The amendment would also ensure that any action taken against the tenant was not discriminatory on the grounds of a person's race, sex, sexual orientation or disability. I beg to move.
Baroness Darcy (de Knayth): I should like to express my support for the amendments to which I have attached my name and which have been so clearly explained by the noble Lord, Lord Swinfen. The introductory tenancy scheme is new; it gives much power to landlords and provides very little comeback to tenants. As the noble Lord said, disability organisations are genuinely concerned that people with mental illness or disabilities may find themselves evicted peremptorily for supposed anti-social behaviour, either because their landlord is unsympathetic or because of a lack of understanding on his part; or, indeed, because of pressure from other tenants, as mentioned by the noble Baroness, Lady Hollis of Heigham.
Amendment No. 256, whereby the court does not have to grant a possession order if it feels that that is unreasonable, and Amendment No. 257, which describes the yardstick by which to judge reasonableness, would ensure that the landlord considers carefully before taking action against a tenant. I hope the Minister will feel that these modest amendments have value. I look forward to hearing his reply.
Baroness Hollis of Heigham: I have much sympathy with the purpose of these amendments—they are consistent with what we were discussing earlier on the previous amendment—particularly as I do not like the concept of introductory tenancies. However, I hope that the noble Lord, Lord Swinfen, will not disagree with the point I am about to make. In a sense the provision is slightly the wrong way round because noise from a tenant suffering from schizophrenia, for example, is no more tolerable to the nextdoor neighbour than if the noise is being made by a teenager who will not turn the hi-fi down and who is not under the control of his parents and who has no such mental illness. The right response is not necessarily to say that the landlord should not be granted possession, either under an introductory tenancy or under any other tenancy, but that the requirement should be on the landlord to produce more satisfactory alternative accommodation; that is, accommodation with appropriate support structures and the like.
In other words, where this sort of situation blows up—if I may use that phrase—it is usually because there has been an inappropriate placing of a vulnerable tenant

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on an estate or in a property where there are no support services. The right answer is not necessarily for that tenant to remain there, or for the courts to decide whether that tenant should remain there. However, an obligation should be placed on the local authority as regards seeking possession of a property where the tenant has mental or physical health problems. There should be a duty—not merely a permission—on the local authority to provide more suitable alternative accommodation. That would seem to me a more helpful way forward because it then makes it appropriate for the other tenants to have quiet enjoyment of their property. It also ensures that the tenant who may have mental or physical health problems continues to enjoy proper and decent, but now supported, accommodation.
Earl Russell: I wish to support these amendments. Legislating is a little like firing a shotgun. One is aiming to hit something. It may be a perfectly legitimate purpose to want to get rid of anti-social tenants. It may be a perfectly legitimate purpose to want to get rid of pigeons. However, in both cases some of the pellets are likely to go to places where they are not intended. We create powers; quite rightly we do not thereafter have a continuing control over how those powers are exercised. They may be exercised in all sorts of ways. As we in this Chamber cannot sit down and decide whether each several tenant is anti-social—and if we did, we would never do anything else—the restraint of reasonableness, as proposed by the amendment of the noble Lord, Lord Swinfen, is very much the right one.
I take the point that the noble Baroness, Lady Hollis of Heigham, made; namely, that noise made by a schizophrenic is just as annoying to the neighbour as noise made by a careless teenager. But the fact that it is just as annoying may be compatible with it being rather more tolerable. In most decent roads—certainly including my own—people feel that there is a balance to be struck between the reason a disturbance is made and the amount of nuisance it creates. To take an example from my memory, I remember when my nextdoor neighbour at school decided to learn to play the tuba. I decided that I had to make a great effort to tolerate that when he was playing it himself, but when his friends came to exercise their lungs upon the instrument I did not feel the need to extend the same tolerance. This is where it may be relevant that the tenant may have some form of mental handicap. He may be schizophrenic, for example. The pacing late at night can be trying but because we know this sort of thing can happen to any of us we stretch a point and tolerate it. That is an important part of common humanity which I would not want these introductory tenancies to destroy.
It is also a vital point, one that has been made before in this Chamber many times—I repeat it only quite cursorily—that where one is dealing with tenancies for people with physical disabilities, there may be a question of purpose building which would be entirely wasted if one thought that the person might be chucked out after a year, and where one may have to have a process of learning to live and let live which may take a little longer. The reference to grounds for writs is of course also well taken.
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A power which is as uncontrolled as the power created by Part V of the Bill could be dangerous in future in the hands of someone with prejudice. The reference to the power is important, but the test of reasonableness which is implied in Amendment No. 256 is right.
Therefore, again, we need to have restraints on the exercise of power. One cannot have absolute power without restraint. It will come in under judicial review if we do not put it in the statute. However, I believe that it is tidier, more limited, more specific and more predictable if the provision is put in statute.
9.15 p.m.
Lord Lucas: As with the previous group of amendments, we do not wish to fetter the way in which the power works in practice, to reduce it to the level of existing powers. We want it to be quick and easy in operation.
It is, of course, of vital importance that tenants who are in some way vulnerable, have adequate safeguards under the new system. I am thinking here particularly of the disabled—those individuals receiving community care, and those who do not speak English as a first language.
Councils will already be aware of the needs of those of their secure tenants who are vulnerable and that they will also need to act fairly and reasonably with regard to every aspect of the introductory tenancy regime. The Department of the Environment guidance, which will be sent to all local authorities, will reinforce this message and will contain advice on the special arrangements that need to be made to protect vulnerable introductory tenants. The initial information given to prospective tenants should be easy to understand so that tenants are aware of their duties under the tenancy. Where a tenant has special needs (for instance, people with learning disabilities), the authority should choose communication methods carefully to get across what is required of them and what support services are available. Carers and helpers should also be involved.
Liaison with social services will be essential. Authorities should make arrangements for automatic notification to social services at an early stage once any problems arise. Liaison should be on a formalised basis with each party (the housing department, social services, NHS and the tenant) aware of their role.
Vulnerable introductory tenants should be visited regularly either by the staff of the housing department, or by a care agency involved. Regular visits will enable any problems to be highlighted quickly.
I cannot emphasise too strongly how important it is for authorities to ensure that vulnerable people are fully protected. It will he essential that local authorities are fully alive to the needs of those tenants and to their relationship to the community as a whole.
The points made by the noble Baroness, Lady Hollis of Heigham, about support and placement are particularly relevant. However, I think in particular of the point just made by the noble Earl, Lord Russell. He spoke of the importance of our living as a community with people who suffer from disabilities which

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neighbours may find a little upsetting. We must make sure that councils are vigilant in ensuring that neighbours are not able to make a case for eviction against a vulnerable tenant whose behaviour they find upsetting. Such situations will require sympathetic but firm handling by the local authority. Eviction of the vulnerable tenant in those circumstances is not an acceptable result.
Clearly, as drafted the amendments suffer from the same deficiencies as those from the first group and we would not be able to accept them. With the assurances that I have given to the noble Lord, Lord Swinfen, of the attitude that we take to the problem, which will be communicated to landlords through our guidance, and which we would expect to be echoed through the application of judicial review should that prove necessary—given the general practice of local authorities and housing action trusts in this matter we would not think it to be necessary in all but the very occasional case—I hope that he will feel able to withdraw the amendment.
Baroness Hollis of Heigham: The Minister answered one of two questions that I would have asked. He confirmed that, as currently drafted were the Government not to accept the amendments, the Bill provides that the decision of the local authority to evict on the basis of an introductory tenancy was subject to judicial review. That was good.
May I put another question. If someone with mental or physical health problems made himself or herself the object of an eviction order, would he or she be regarded as having made himself or herself intentionally homeless? Where someone was vulnerable and in priority need, some of our concerns would be overcome if there were a continuing duty on the local authority to continue to have a duty to rehouse under the Act. In other words, I refer to the case of the schizophrenic where the noise level was intolerable. In a 1950s or 1960s flat, the sound levels between the second and third floors can be intolerable for the people underneath, perhaps with children trying to sleep. Possession is sought. In that situation would that person be regarded as having made himself or herself intentionally homeless; or could we hope that the local authority would continue to have a duty under the Bill to provide perhaps more appropriate accommodation?
Lord Lucas: I find myself in total sympathy with the noble Baroness but unable to be sure of giving her an accurate answer. If she will allow me, I will write to her.
Baroness Hamwee: It is something that we need to know very quickly. If it is not possible to have the answer later in the debate tonight, perhaps we may have it in time for us to take it into account when we debate these matters later in the Committee stage.
On another point, it is suggested that it is inappropriate to place too much reliance on judicial review. As I understand it, judicial review is a review of the process, not of the reasons for a decision being made. Without amendments, or without a local authority
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having adopted publicly known guidelines of the sort we have debated, the process can be quite unrelated to what we agree are all appropriate reasons.
Earl Russell: I listened with very great interest to the Minister's reply. I am in entire sympathy with the ideas he wants to put into guidance. I have no argument with his intentions. However, he is leading local authorities into temptation. Housing stock is scarce in many local authority areas. Many people want it. So the temptation to get rid of a tenant may, on occasion, be acute for a great variety of reasons. The Minister is creating a temptation and then telling people not to succumb to it. He is telling them not to eat the apple. I think that is beyond his powers.
Baroness Fisher of Rednal: I came in late to the debate, but I believe the problem arises from a health authority being able to re-house people that it wants out of the hospitals but without the back-up to go with that. In other words, the local authority is carrying the can for another area of government. The authorities have no back-up. People suffering from all kinds of mental problems should not be penalised for that. The local authority should be able to say to the hospital authorities: "Will you please come in with your workers to see whether, through resettlement, we can keep them in housing, instead of putting them through this gamut which might mean eviction?". Better co-ordination is preferable to a strict requirement that they be got rid of, which is detrimental to them and to all the people they have disturbed.
Lord Swinfen: Before my noble friend responds to the points made, can he tell me what is the cost of judicial review? He mentioned it on a number of occasions in relation to different amendments. Would the introductory tenant be likely to receive legal aid to obtain a judicial review? What would be the cost of introducing reasonableness into the Bill as against the cost to tenants and local authorities of having to apply for judicial review?
Lord Lucas: To deal with the latter point first, the cost would be that the system of introductory tenancies would thereby become ineffective. The key remedy that the provision gives to landlords is the ability to get rid of a tenant quickly without having to go through lengthy court procedures.
As to the cost of judicial review, I shall chance saying that this is a matter for which legal aid could clearly be obtained. If not, it is not likely to be a very effective defence available to local authority tenants. The High Court, on judicial review, has the power to quash a decision if there are procedural errors in the decision-making process. It can also do so if the decision is one which no reasonable council would make. That is the level of test at which we are looking.
I do not believe that the noble Baroness, Lady Fisher, missed anything by coming late to the debate. Perhaps she was watching England's fourth goal. Clearly, we all share the same concerns. I have listened and will read with great care what has been said this evening. We want to achieve the same result, which is to make sure

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that the considerable new power that we are giving to local authorities, fettered only by the right of judicial review, is not one which, in practice, will be abused as this evening people feared that it might be abused. It is a concern that we all share. We believe that we have taken the necessary steps but we are not so arrogant as to say that we are sure about it until we have listened very carefully to what other noble Lords have to say.
Baroness Hollis of Heigham: I am sorry to delay the noble Lord, Lord Swinfen, again. It would help enormously if the Minister were able to come back, perhaps at Report stage, with an amendment to the Bill in relation to certain defined categories of vulnerable people—particularly those with mental health problems, learning difficulties and the like—to the effect that if the local authority, whether under an introductory tenancy or a secure tenancy, seeks possession of that property by virtue of alleged anti-social behaviour, nonetheless the person in question should not be judged to have made himself intentionally homeless and therefore the local authority should continue to have a duty to house. That would meet some of our worries. Otherwise, we leave local authorities very vulnerable to unpleasant pressures.
Baroness Hamwee: Let me prolong the discussion for just one short moment. I understand that for secure tenants, the practice of the courts in the case of intolerable nuisance by people who are mentally ill is to make an order for possession on condition that an offer of suitable alternative accommodation is made. I wonder whether the Minister could give an assurance—possibly not at this moment—that there is nothing in the Bill that would restrict the court in imposing a similar condition in the situation that we have been discussing.
Baroness Gardner of Parkes: Like the noble Baroness, Lady Fisher, I too came late to the debate. I am not sure about the last statement with regard to suitable alternative accommodation. Some cases are extremely difficult. From my own housing experience, I recall a tenant who constantly set fire to the wastepaper bin and therefore the flat. It was terrifying for everyone who lived within reach of that flat. What suitable alternative accommodation is available for such a person? Such problems can be extremely difficult.
Let me respond to the point made by the noble Baroness, Lady Fisher. I am chairman of a hospital trust where there are a great many psychiatric and mental health cases. We provide care in the community—continuing care. Now there is a new register, which is also a continuing register. One of the difficulties is that accommodation suitable for people suffering from mental illness is limited, particularly if one wants to put them not into secure housing or individual housing but into a place within a building where they are supported by other people. The minute that the building is filled and there is nowhere to move people on to the next stage, the whole system becomes gummed up. So it is not a very easy situation.
Lord Lucas: I can reply briefly to the noble Baronesses, Lady Hamwee and Lady Hollis. Perhaps
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they will permit me to look at the problems on the questions that they raised with a view to returning to them at Report stage or earlier.
Lord Swinfen: I thank everyone who has taken part in this short debate. Possibly I agree with the noble Baroness, Lady Hollis, that this situation has been put the wrong way round and that suitable accommodation should be given in the first place. I have a series of amendments that we will be dealing with at a later stage of the Bill, and I hope that when we come to them, even if the noble Baroness does not support the actual amendments because she does not like the wording, she will support the idea behind them.
Guidance is all very well, but I feel that the court should be able to use the test of reasonableness in the Bill on this occasion with introductory tenancies. I quite agree that judicial review is possible. It sometimes takes time to get to court and it costs a great deal of money. It would be much better if reasonableness were there in the first place, and the court could deal with the matter at a much lower cost then than having to go on to judicial review, which is going to come out of the tax and ratepayers' as well as the tenants', pockets.
I am not very happy with the response of my noble friend Lord Lucas on that point. I will, however, read the debate with care. At this stage of the evening I beg leave to withdraw the amendment, but I may well come back to it at a later stage.
Amendment, by leave, withdrawn.
[Amendment No. 257 not moved.]
Clause 113 agreed to.
Clause 114 [Notice of proceedings for possession.]
[Amendment No. 258 not moved.]
Clause 114 agreed to.
9.30 p.m.
Clause 115 [Right to request review of decision to seek possession.]
Lord Swinfen Lord Swinfen moved Amendment No. 260:
Page 74, line 18, leave out ("a") and insert ("an independent").
The noble Lord said: I beg to move Amendment No. 260 and to speak at the same time to Amendment No. 261. I see that Amendment No. 261A in the name of the noble Lord, Earl Russell, is also grouped with these amendments; no doubt he will wish to speak to that amendment in due course.
The only safeguard given to an introductory tenant who is faced with possession proceedings is that he is entitled to a review of his case. The Bill proposes, however, that such a review shall be carried out by the landlord. Clearly, a review carried out by the landlord who has instigated the possession proceedings is unlikely to be impartial and is certainly unlikely to be seen as such by the tenant.
This amendment suggests that an introductory tenant faced with possession proceedings should be entitled to an independent review by someone other than his landlord. An independent review panel could be made up of lay people from the local community, in a similar

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way to the use of lay people who sit as justices of the peace, school governors or on social security tribunals. It would be possible to ensure that there was one representative from the local authority if this seems suitable. It would also seem appropriate to have tenant representation on such a body.
Given the very strong powers which introductory tenancies will give to local authorities—in essence, the right to evict any tenant with whom they are dissatisfied—it seems vital to me that there is at least some independent safeguard of the tenant's rights. The landlord is unlikely to be seen as giving an impartial review of the case. This may lead to introductory tenants choosing to challenge evictions via the judicial review process, causing expense to local authorities, individuals and, potentially, to the legal aid system, clogging up the court system. Some of this might well be avoided if the tenant felt that his appeal had been considered by a truly independent review panel as I propose in this amendment. I beg to move.
Earl Russell: I support the amendment. In speaking to my amendment, I would not like necessarily to suggest that it is in any way better than that of the noble Lord, Lord Swinfen. I do not intend to push my amendment to a Division, first, because it was drafted at home late on a Sunday night and, secondly, because I have some doubts about attempting to import the common law concept of natural justice into statute.
The point to which I wish to draw attention is the same as that made by the noble Lord, Lord Swinfen; that is, the need for an independent panel for review. It is in effect a judicial panel and somebody is being given something which is certainly in effect a punishment. Judging by much of what has been said about the purpose of the introductory tenancy, it may even be construed to be an intentional punishment.
It is a fundamental breach of the principles of natural justice for anyone to be judge and party in their own cause. The noble Lord, Lord Irvine of Lairg, recently gave a lecture on the judiciary, which attracted a good deal of attention and was the subject of a debate in this Chamber. In that lecture he referred, with some disapproval, to what is commonly taken to be the last case in English history when a judge attempted to strike down the provisions of an Act of Parliament in the reign of King James I. That was done on precisely this ground of natural justice, but in that case it made the Royal College of Physicians judge and party in its own cause.
The clause before us is the absolute carbon copy of the clause which was struck down by the judge in the reign of King James I. Drafting statutes in that way tends to lead Her Majesty's judges into temptation. Not only does the Bill make local authority judge and party in its own cause, it also purports, in Clause 115(2), to free the landlord from all the normal procedural safeguards which are also associated with natural justice. It says,
"the landlord shall carry out the review in such manner as it considers appropriate".
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That is the same style of drafting to which I have been referring all evening. It says in effect that the landlord may do whatever it likes. But one cannot do that at common law, even if one is permitted to do it by statute. So again it is something which invites the intervention of the courts.
As my noble friend Lady Hamwee pointed out, judicial review can only be concerned with the procedure of a decision. It is a great mistake to legislate in a way which substitutes a judicial review of the procedure for a judicial examination of the merits. That is why we would be so much better advised, as the noble Lord, Lord Swinfen, suggested, to have something which lays down guiding principles which local authorities shall observe rather than purporting to give them an absolute power to do what they like, which is something which, under common law, the courts will not leave to them, in spite of the statute. Therefore it will not achieve the effect it intends. It will bring the legislature and the judiciary into conflict and it will not work.
The noble Lord, Lord Swinfen, has gone most of the way to showing how it should be put right and I hope that the Government will listen to him.
Baroness Darcy (de Knayth): I too support the amendment which will ensure that the review is independent and not carried out by the landlord. That seems to me to be essential if we are to protect the rights of tenants. It is essential that it should be unbiased, and visibly so.
I waited to hear the noble Earl explain his admirably worded amendment. I wondered whether it was the sort of thing one put into statute. However, I agree totally with what he said. I hope that the Minister will agree with the amendments and provide the necessary counterbalance to the strong powers the introductory tenancies give to the landlord. Originally I had intended to say that I hoped that he would accept the amendments or bring forward something of his own at Report. I am not sure that that is not Cloud-cuckoo-land, having heard his reply to the previous batch of amendments. However, I am ever optimistic and hope that he will at least give an encouraging reply.
Baroness Gardner of Parkes: I oppose these amendments. As I read this section of the Bill, I understand that it applies only to local housing authorities or a housing action trust. Therefore we are not talking of private landlords; we are talking about social housing. The setting up of an independent process would be a costly affair and may not work very well.
At the present time local authorities have methods of review for all sorts of things and they call upon serving councillors to sit on those committees. They try to detach themselves completely from any view and deal with the cases in an impartial way. That is very correct. In theory the suggestion of my noble friend Lord Swinfen sounds delightful that one might have people who are on local school boards or those who are helping in some other way in society such as local justices of the peace. That is all very well in theory, but in practice it would take a great deal to set up. It is

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extremely difficult now to get enough people to serve on school management committees and as JPs who are unpaid in this country. These people are already giving a tremendous amount of their time for nothing in order to help the community. It will be very difficult to get them to take on this added responsibility. It could so slow the process down or snarl it up that the whole purpose of the introductory tenancy could be lost. That is a point that we are overlooking.
One of the real arguments in favour of an introductory tenancy is that people will be more likely to get a tenancy of that type much earlier than they might otherwise because it is of an introductory nature and subject to review. I consider that the allocation of points, for example, might enable one to give an introductory tenancy at an earlier stage than a secure tenancy. If one is going to introduce tremendous disincentives and great bureaucracy and make it almost impossible for the local authority to operate the scheme in terms of cost and logistics, I do not believe that it will be wise to do so. For that reason I oppose the amendment.
Lord Swinfen: Before my noble friend sits down, perhaps I may say that I do not want to make everything costly. I appreciate the point that she made. I also appreciate that local authorities have set up reviews already, but do they set them up when they are either the plaintiff or the defendant in a case?
Baroness Gardner of Parkes: I am unable to answer that specifically. I believe that they do, but someone currently involved in local government might be able to give a more accurate answer.
Baroness Hamwee: I intended to raise a question on that very point. As regards school admissions there are appeals procedures. The local education authority will set up the procedure providing, according to my experience in my own authority, a panel to deal with the appeal. My question to the Minister is this: Is there any other situation where the statute calls for a review, using the term "review"? I share with other Members of the Committee a concern that this matter should be dealt with in a proper, quasi-judicial manner.
Earl Russell: I listened with care to the noble Baroness, Lady Gardner of Parkes. I take her point about the difficulty of getting people to go through this process. I cannot help feeling that that argument does not help the Bill. Unless we can get people to do the review work, who are independent of local authorities, the whole procedure of the introductory tenancy cannot work at all. That is a conclusion which the Government may wish to resist. The noble Baroness used at one point the phrase, "slow down or snarl up". In my experience it is much more often speed that snarls you up rather than slowness.
Lord Lucas: The noble Earl is quite correct in that we are here dealing with another part of the Bill where the backstop is judicial review. We have in place procedures which are intended to be quick and where those operating them are bound by statute to be reasonable. If they act in a way which is not reasonable the backstop to that is judicial review. We believe that
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in adopting that structure we have a combination of a quick process which in the vast majority, if not in all cases, is likely to be fair and effective with the power of the court to review that available as a backstop.
I begin by setting out the reasons why we prefer the system that we propose rather than that proposed in these amendments. Clause 115 gives an introductory tenant the right to request a review of the landlord's decision to seek possession. Amendment No. 260 would require this review to be independent. Amendment No. 261 is consequential. We cannot see the advantage of an independent review over an internal review by the landlord. The local authority or housing action trust will have been involved in the case from the beginning and will have access to all the information on which the decision was based. Moreover, an independent review would take longer because of lack of familiarity.
Let us consider the system as set out in the Bill. The tenant receives a notice to quit and has 14 days to exercise his right to ask the landlord to review his case. The landlord must complete the review and notify the tenant of the result by the earliest date on which proceedings against him could begin, which would be at least 28 days after serving the notice. There are good reasons for a prompt timetable. We fear that the inevitable consequence of an independent review would be to drag the whole affair out interminably. Introductory tenancies are intended to help landlords to deal promptly and effectively with tenants who prove to be troublemakers and make other tenants' lives a misery. Hence, quick but fair procedures are required. Landlords will want to have in place fair and rigorous procedures that enjoy the support of tenants. Guidance from the Department of the Environment will not dictate how a landlord should conduct such a review, but will point out the need for impartiality—for instance, officers involved with the eviction should not be involved in the review. We can see no advantage in an outside body reviewing the local authority's actions. The obvious alternative to the local authority itself conducting the review is for the courts to do so. I have already addressed that matter. We believe that it would slow down the process to the point where it had no advantage over the existing system.
Amendment No. 261A in the name of the noble Earl, Lord Russell, does not, as the noble Earl points out, belong in statute. That safeguard is there ultimately in judicial review. We rely on the availability of the courts through that process to ensure that, should there be an abuse of this system, it is properly corrected.
9.45 p.m.
Earl Russell: The Minister's last remark about reliance on judicial review is extremely interesting. It will not have escaped the Minister's attention that recently Ministers of the Crown in other departments have complained bitterly about the growth of judicial review; indeed, in one or two instances they have complained about the existence of the power itself. I cannot help feeling that that sits a little oddly with the Minister's frank admission that he is creating a power that leads people to exercise the power of judicial review. I was also a little taken aback by the Minister

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saying that he could not see the point of an independent review. He is flying in the face of one of the basic principles of English law for at least the past five centuries—that a person shall not be judge and party in his own cause.
Before we return to this matter at another stage, I ask the Minister to look at the debates on the Child Support Act 1991 when a procedure was introduced to allow another officer in the agency to conduct a review of a decision taken by the first officer. In particular, I ask him to look at the speeches made on that proposal by the noble and learned Lord, Lord Simon of Glaisdale. If he refers to those speeches he will appreciate the shock that some of the things he has said tonight may create in those who read them in the Inns of Court. This is a very unwise series of remarks, and I hope that the Government will think better of it.
Lord Lucas: I shall look at that precedent and others that I can find. With reference to the question posed by the noble Baroness, Lady Hamwee, I am sure that there are quite extensive review procedures in social security, although I am not familiar with them. Certainly, I am familiar with the schools procedures, some of which are not totally independent and involve appeals to a panel of governors who happen not to be the governors who took the first decision. There are precedents and parallels, perhaps, in previous practice, but given what has been said I shall certainly look carefully at those and, in particular, at the ones drawn to my attention by the noble Earl, Lord Russell.
Turning briefly back to the subject of judicial review and the comment by the noble Earl that reliance on judicial review is odd—not at all! Judicial review will be very much a backstop. We expect local authorities to act fairly in all matters concerned in introductory tenancies. Recourse to judicial review, we are confident, will be very unusual.
Lord Swinfen: At the beginning of his speech my noble friend said that the landlords have to act reasonably as laid out in the Bill, yet on my last group of amendments he resisted strongly my wish to put into the Bill that they should not act unreasonably. Where in the Bill do they have a duty to act reasonably?
Lord Lucas: It is not in the Bill; it is a basic duty.
Lord Swinfen: I am not very satisfied with my noble friend's response. The feeling I get from what other Members of the Committee have said is that a number of them are not satisfied either. We should not be relying solely on judicial review. There should be some form of independent review. In the long run it will be cheaper, appear to be a great deal fairer and, I suspect, more effective.
I also suspect that if we go down the route that we appear to be travelling at the moment according to the Bill, it will not be over-long before some tenant who is removed from his tenancy is funded by someone to take the matter to the European Court of Justice. I would
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suspect that the local authority, the housing authority, would lose in that court because there would not be effective justice given or certainly not seen to be given.
It is late and therefore I will not divide the Committee on this matter tonight, but I reserve my right to come back at a later stage. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Baroness Hamwee Baroness Hamwee moved Amendment No. 260A:
Page 74, line 18, leave out ("a") and insert ("an independent").
The noble Baroness said: I beg leave to move Amendment No. 260A and speak to Amendments Nos. 262 and 262A, which are still concerned with the matter of review. The Minister said in that last exchange that the Government were relying on the remedy of judicial review but were certain that it would not often be required. There seems to be an inconsistency in that approach. However, as the noble Lord, Lord Swinfen, said, no doubt we will come back to this matter.
My first amendment proposes the addition of a sub-section requiring that a date before which the tenant is to be notified of the outcome of the review will be specified. Clause 115 assumes that the local authority has specified in the notice of proceedings a date before which the tenant will be notified of the outcome of the review, but none of the clauses actually requires the landlord to specify a date. If it did not specify a date it would be quite hard to apply Clause 115(4) in particular. I wonder whether the Minister can explain how that is to operate without the requirement that I am proposing.
Amendment No. 262 adds a requirement for written notice. My concern that notice should be written is greatly strengthened by the exchanges that we have had over the past hour or so. Whatever mechanism there is to be for review, unless reasons are given in writing it will be very hard to pursue the matter. I hope that the Government, if not agreeing to put this small amendment on the face of the Bill, can at least give some assurance as to the guidance that they will provide.
Finally, Amendment No. 262A proposes that a period of not less than 14 days be inserted into Clause 115(4) as the date to be specified which:
"shall be earlier than the date specified in the notice of proceedings as the date after which proceedings for the possession of the dwelling-house may be begun".
In other words, a decent period of notice shall be given.
Perhaps I may, in a slightly unorthodox fashion, ask that my noble friend Lord Redesdale make an important announcement to the Committee when I have moved the amendment. I beg to move.
Lord Redesdale: I support my noble friend Lady Hamwee, and I must ask the Minister whether he is aware that England has beaten Holland four to one?
Lord Lucas: Among many other things, no, I was not aware of that. Unusually for this evening, I am delighted to find out.
Clause 115(4) already requires the review to have been carried out and the tenant notified of the outcome before the date specified in the notice of proceedings as

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the one after which proceedings can begin. There is no question, therefore, of a tenant being evicted before a review of his or her case has been carried out, or before the tenant has been informed of the result of that review. For that reason Amendment No. 260A is unnecessary.
Amendment No. 262A would require the tenant to be notified of the outcome of the review at least 14 days before the date after which possession proceedings may be begun. That too is unnecessary. The Bill already requires the local authority to complete the review and notify the tenant before proceedings may be begun. The requirement to have at least two weeks' grace between the outcome of the review and the beginning of possession proceedings will merely drag out the procedure, which would be of no benefit to either the local authority or the tenant. If the review reverses the decision to evict, all well and good for the tenant, but if it does not, the need for a prompt eviction remains. If we were to accept Amendment No. 262A, other tenants affected by the anti-social behaviour would have to ensure an unwarranted additional two weeks of aggravation.
Under Amendment No. 262 the noble Baroness wants the tenant to be told of the outcome of the review in writing. I believe that is too prescriptive. It will be sensible for local authorities to write and I believe in the vast majority of cases they will do so. That is normal good practice for local authorities dealing with eviction cases. However, if they choose some other method of communicating that is rightly a matter for them.
I have no illustrations to offer of how else they might convey the decision to evict. Perhaps a couple of heavies turning up and dumping the tenant over the balcony might suffice. However, they may do it, the legislation already requires them to notify the tenant, and that is the key point. With those words, I hope that the noble Baroness will be able to withdraw the amendment.
Earl Russell: The Minister suggests that allowing two weeks for the people to find somewhere else to live might drag out the proceedings. Might it not be preferable to drag out the proceedings rather than to drag out the tenants?
Lord Swinfen: I feel that the notice to tenants should be given in some way that they have a record of it. I agree that it is not always appropriate to do it in writing. It may be necessary to use an alphabet sign language for people who have profound hearing problems or a tape for those who have visual problems. There should be some record that they can have in front of them if they need it.
10.00 p.m.
Baroness Hollis of Heigham: I support that. I cannot believe that a local authority would not give notice in writing. It may be that the Government will cover this
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matter through a code of practice or guidance. However, if there is any doubt, it should be written onto the face of the Bill.
Lord Lucas: I shall certainly consider what has been said.
Baroness Hamwee: On the basis that it will be considered, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 261 to 262A not moved.]
Clause 115 agreed to.
Clause 116 agreed to.
Clause 117 [Persons qualified to succeed tenant]:
Earl Russell Earl Russell moved Amendment Nos. 262AA:
Page 75, line 20, leave out ("resided") and insert ("been normally resident").
The noble Earl said: I hope that we can dispose of this briefly. In moving this amendment I should like to speak also to Amendment No. 262AB, which basically covers the same point.
This concerns the conditions for a successor tenant. The Bill states that a person is qualified to succeed the tenant if:
"he is another member of the tenant's family and has resided with the tenant throughout the period of twelve months".
It occurred to me that that may tend to rule out a child of the previous tenant who was, at the relevant time, a student. That is why I seek to insert the words "normally resident" and to substitute the word "during" for the words "throughout". It may be that my concerns are unnecessary and, if so, I should be happy to be told that. I beg to move.
Lord Lucas: I had not addressed myself to the particular concern raised by the noble Earl, Lord Russell. As a matter of general principle, if a particular place is a person's main residence, he is resident there despite the fact that he may be on holiday or away for short periods of time. Obviously that will depend on the exact circumstances.
However, as I said, I had not addressed myself to the question of whether a student away at university would or should qualify for those purposes. I hope that the noble Earl will allow me to write to him on that matter.
Earl Russell: That is precisely the reply for which I had hoped. I am aware of the point which the Minister made about main residence. In view of the way in which my children have been treated in relation to the electoral register, I am aware that people are in great confusion as to whether they normally reside with us or at their universities. That confusion has become much greater over the past five years.
I am merely concerned to suggest that succeeding one's parents in a tenancy is not improper. Therefore, I shall await with great interest the Minister's answer. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 262AB not moved.]
Clause 117 agreed to.
Clause 118 [Cases where the tenant is a successor]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 262B:
Page 75, line 33, leave out subsection (2) and insert—
("(2) A tenant to whom the tenancy was assigned in pursuance of a family order is a successor only if the tenant who assigned him the tenancy was a successor.").
The noble Baroness said: In moving this amendment, I shall speak also to Amendments Nos. 263, 263ZA, 263ZAA, 263ZAB, 263ZAH, 263ZA 270C and 270D, and, for good measure, although it is not in the grouping, Amendment No. 276A.
The explanation is probably shorter than reading the list of amendments. They are designed to cover transfers of tenancies in all forms of matrimonial and family proceedings where the effect of the transfer is to assign the tenancy from one spouse or former spouse to another, or from a parent for the benefit of a child under the Children Act 1989, or from an estate.
These are drafting amendments intended to provide a comprehensive definition of "family order", although my noble friend suggests that once the Family Law Bill completes its passage there may need to be yet another revision of the matter. I beg to move.
Lord Lucas: These amendments seek to extend references to cover assignments made under other pieces of matrimonial and family legislation which Amendment No. 270C defines under the heading of "family order". I do not propose to dwell on the detail of these amendments now. Amendments with a similar intention but restricted to the Children Act 1989 were debated in another place. An undertaking was given to introduce amendments to this effect at a later stage. As we pointed out then, and as the amendment demonstrates, there are several complex pieces of legislation involved. We wish to ensure that each of these and the consequential effect on both this Bill and existing housing Acts is correctly reflected in any amendment which we bring forward. We will be tabling amendments on Report and in doing so we will reflect on the amendments. I hope that is sufficient reassurance for the noble Baroness to be able to withdraw her amendment.
Baroness Hamwee: Of course, I am perfectly happy to return to the matter at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 263 not moved.]
Clause 118 agreed to.
Clause 119 [Succession to introductory tenancy.]
[Amendment No. 263ZA not moved.]
Clause 119 agreed to.
Clause 120 [Assignment in general prohibited.]
[Amendment No. 263ZAA not moved.]
Clause 120 agreed to.
Clause 121 [Right to carry out repairs.]
On Question, Whether Clause 121 shall stand part of the Bill?
Earl Russell: I assure the Committee that my concern with this clause is only probing. I have no objection whatever to the carrying out of repairs. In fact, I am strongly in favour of it. My concern is with the effect of the one year introductory time limit on the carrying out of repairs. It is my experience—and it may be that of some others among Members of the Committee—that builders are occasionally dilatory. If we require people to conduct repairs, perhaps in the last three months of their tenancy, they will be conducting repairs which will be completed in time for the arrival of a new tenant. We may find people showing a little reluctance to repair a property at great expense in ways in which only their successor will benefit. There will be a good many technical problems in pro-rating the cost and, indeed, on occasion in dividing the responsibility which may exercise people quite considerably.
I put down the opposition to the clause in order to find out whether these problems have been foreseen. If they have been foreseen, I wonder whether there is any solution prepared for them, or whether the Government will suggest that it will all be all right on the night. Alternatively, I wonder whether they are going to take the line that this is all the responsibility of the local authorities and that somehow they are bound to solve it. I should like to think that there were some constructive ideas available on how this should be done.
What was once described by the former leader of another place as the process of osmosis, by which information reaches a Minister in this House, is occasionally rather slow in operation so one does have to exercise one's soul in patience. I wait with great interest to know what the Minister is going to say about this. I beg to move.
Lord Lucas: I hope I can give some rapid comfort to the noble Earl. On the first point—the effect of the one year period—we expect the vast majority of introductory tenants to go on to secure tenancies. Secondly, what we are dealing with in the right to repair, as at present envisaged, is concerned with things like blocked sinks, unsafe power or light fittings and toilets that do not flush—items that have to be repaired very quickly. The time-scale given for some of those is of the order of 24 hours and really quite short even in relation to an introductory tenancy.
Earl Russell: That is a reassuring reply but if the noble Lord has found that items that have to be repaired quickly are always repaired very quickly he has been luckier than I have, and I congratulate him. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 121 agreed to.
Clauses 122 and 126 agreed to.
Schedule 12 agreed to.
Clause 127 [Index of defined expressions: introductory tenancies]:
[Amendment No. 263ZAB not moved.]
Clause 127 agreed to.
Clause 128 [Extension of ground of nuisance or annoyance to neighbours, &c.]:
Earl Russell Earl Russell moved Amendment No. 263ZABA:
Page 79, line 13, leave out (or illegal").
The noble Earl said: I cannot help thinking of this amendment as zabaglione. It is only a probing amendment, as, indeed, is Amendment No. 263ZAGB which is grouped with it and to which I should also like to speak.
The amendments cover the phrase in paragraph (i) of the clause which refers to,
"using the dwelling-house or allowing it to be used for immoral or illegal purposes".
I am sure that the Committee will take it for granted that I have no wish to encourage illegal purposes. However, I should like to know quite how widely the clause extends. Obviously, if the dwelling is used to organise a drug pushing racket, that will not do; similarly, if it is used by a den of thieves, that will not do. However, let us suppose that we are talking about the property of a journalist who happens to be unsuccessful in a libel case. I should have thought that such a situation would have been outside our intention as Parliament. However, I would welcome the Minister's reassurance that that sort of situation would not be covered under the clause as drafted. In the sure hope that I will receive that reassurance, I beg to move.
Lord Lucas: Clearly I share the noble Earl's opinion as regards the meaning of the word "illegal". However, rather than chancing my arm by offering a reassurance now at this stage, perhaps I may do so by letter. I do not expect that our answer will be otherwise—nor, indeed, that we would wish it to be otherwise—than the noble Earl supposes.
While I am on my feet, I should like to record the fact that I have been told by my Bill team that another place uses a different method of numbering amendments in Committee which is altogether easier to understand. I must say I find that very hard to believe.
Earl Russell: I share the Minister's scepticism and I welcome his answer, which is everything that I hoped to hear. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.15 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 263ZAC:
Page 79, line 15, at end insert—
(" When considering whether conduct is likely to cause a nuisance or annoyance under this Ground the court shall take into account evidence provided by the local authority that witnesses are or may he intimidated and possession may be granted notwithstanding that there is no direct evidence that any person has actually caused a nuisance or annoyance and that the only evidence available is from police officers or employees or agents of the authority.".").
The noble Baroness said: In moving the above amendment I shall, with the leave of the Committee given the time of night, group with it Amendments Nos. 263ZAD, 263ZAE, 263ZAF, the substantive Amendment No. 263ZAG, and No. 263ZAGA. I must say that it is somewhat difficult trying to recite those numbers. I should also like to notify the Committee of something which may be of interest. The amendment almost at the bottom of the groupings list, Amendment No. 263ZAGDA, has failed to get its number printed on the Marshalled List. However, I can assure your Lordships that it will actually be moved, even though it has become temporarily invisible.
The amendments raise the issue of grounds for possession not for those on introductory tenancies but for those on secure tenancies. Some of those arguments have already been rehearsed on introductory tenancies, but perhaps I may try a little bit of scene-setting before turning briefly to the original amendments.
One of the most troubling problems on local authority estates is anti-social behaviour which may be caused by problem neighbours when tenants act against other tenants, perhaps because teenage sons are out of control or perhaps even because daughters may be on the game, with customers lingering outside the dwelling. It can also be caused by thugs and hooligans coming into the estate from outside to peddle drugs, to pick a fight, to break a window or, indeed, to harass a particular family, especially if it belongs to an ethnic minority group or has a disabled member. The perpetrators of such problems may be under 18 and, therefore, the law can do little to control them, even though they may be the worst offenders. They make life intolerable for those living on such estates. We should not tolerate it.
At present, I believe that we would all accept—and certainly the Government do—that a local authority is poorly equipped by law to deal with such problems. As regards its own tenants, a local authority finds it difficult to regain possession of a property. Neighbours and witnesses are intimidated and threatened and are reluctant to give evidence. It takes a long time to bring a case to court—a minimum of 34 weeks, as far as we can tell, and it can be as long as two years—during which time the tenants have to endure continued nuisance and continued intimidation. When such a case finally does come to court, the courts do not always grant possession. In any case the local authority has power only as landlord over its own tenants. It has no powers to regulate the behaviour of thugs or hooligans coming in from outside the estate looking for trouble, and of course it cannot use an injunction on anyone under 18, and they are often in my experience the worst offenders.
We shall move a series of amendments which we hope the Government will seriously consider. I believe that the concerns are shared by noble Lords around the Chamber. I hope, if these amendments cannot be accepted, similar amendments will be supported by the Government, or perhaps even introduced by them at Report stage. The major amendment in this group seeks to give a local authority mandatory rights of possession in defined circumstances against the most severely

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anti-social tenants. There is an amendment to give victims and witnesses protection from threats and intimidation. Without such amendments, the more serious the violence, the less likely it is that it will come to court because of the fear felt by witnesses.
There is also an amendment to bring young people under the age of 18 within the law. They are often the main culprits. There are also some amendments to clarify Section 222 of the 1972 Local Government Act to make it clear that it can be used by the local authority to exclude non-residents from sections of its council estates; in other words, so that a local authority has a public order as well as a landlord power. Finally, there are amendments which provide for information to be shared with the police and to ensure that information does not fall foul of the Data Protection Act.
We believe that this package of amendments will transform the ability of local authorities to check criminal and serious anti-social behaviour on council estates. After all, council tenants, like everyone else in the country, are entitled to quiet enjoyment of their homes. Those of us who are fortunate enough to live in semi-detached or detached houses, or houses which were built long enough ago to have thick walls and enjoy reasonable sound proofing, or who have generous gardens, are not always aware of the nightmare that can arise when one shares a thin party wall with someone else.
The first amendments I wish to address seek to give the local authority mandatory grounds for possession against tenants guilty of serious anti-social behaviour. Since 1985 council tenants have enjoyed security of tenure. To get possession a local authority has to prove to the courts that one of 16 possible grounds for possession applies. The grounds range from anti-social behaviour of the tenant to regaining a house that is tied to a shop or a school, or perhaps because the property needs to be demolished for whatever reason. When dealing with anti-social behaviour as the ground for possession, a local authority has to show that there has been a breach of tenancy, nuisance or annoyance to neighbours or damage to property. I remember vividly having to seek possession against one tenant who burnt his floorboards to keep warm until he was restricted to a fairly narrow area of the house in which he could move around. In all possession cases local authorities must give four weeks' notice to tenants. Courts in all but a few cases have discretion to grant or refuse possession to the local authority. In all cases so far where possession is mandatory, the local authority is required to rehouse the family.
The second group of amendments to which I am speaking would do three things. First, they would allow a local authority to have a fast-track procedure for serious cases of anti-social behaviour. A serious case would involve violence, threats of violence, damage to property or drug dealing. In that situation the local authority could go to court without first serving four weeks' notice on the tenant. Why is that necessary? Let me give one example. One local authority served a notice in July, 1993, following complaints of harassment including fire bombing. Between October 1993 and
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October 1994 the defence failed to serve a certificate of readiness to proceed to trial despite several requests that it do so. The local authority had to request the court to proceed to trial and the case was eventually heard in February, 1995, 18 months after the fire bombing incident. In all that period the tenants who were the victims were living in real fear of what might next happen to them. Therefore the amendment would grant a fast track.
Secondly, the granting of possession would be mandatory if, but only if, the judge were satisfied that the new grounds for possession exist—that is, serious anti-social behaviour including violence, threats of violence or drug dealing. If the local authority cannot establish that such serious anti-social behaviour exists, the judge would not grant possession. But if the local authority has established it to the judge's satisfaction, then the judge must grant possession.
Again, why? Let me give another example. During 1994 one local authority received a litany of complaints against the 17 year-old son of a tenant, including excessive noise, chopping up the neighbours' fences, throwing bricks and scaffolding at windows, threatening neighbours with an air rifle which he occasionally fired off, directly threatening a disabled witness, and damaging the disabled witness's car to the extent of £2,000 worth of damage. In August 1995 an injunction gained no improvement in behaviour. At the possession hearing in December 1995, by which time he was over 18, the court would grant only a suspended possession order.
In another case the local authority detailed 110 cases of nuisance involving drunkenness, violence and excessive noise. When the case came to court the judge intervened after only one witness had been heard, even though many witnesses had summoned up the courage to bring evidence, and gave a suspended possession order. When that was breached, possession was finally secured in April, 1995, 15 months later. Through all that time the witnesses, including disabled witnesses, were harassed and threatened.
The second part of the amendment would establish that where serious anti-social behaviour had been established to the judge's satisfaction, mandatory possession would be granted. Thirdly, in these circumstances, the local authority would not be required to rehouse.
Such a group of amendments to some degree fetters judicial discretion. But the experience of local authorities represented by associations across the country suggests that when local authorities take possession proceedings in very serious circumstances—possession proceedings are relatively rare given the difficulties of obtaining evidence, of persuading witnesses to take the stand and of securing charges against those under 18—it is a matter of utter chance whether or not they gain possession, especially when the case depends on the willingness of neighbours who have been intimidated and threatened.
If neighbours know that following their evidence, and establishing that such violence has occurred—we are talking about virtually criminal violence—the local

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authority will be granted possession, they are more likely to give evidence. At present—I exaggerate not at all—the most serious offenders are never brought to court because neighbours are frightened to give evidence. Other noble Lords who have been councillors will know that time and again they have been given information but the people giving that information have begged to be kept anonymous because their house, windows, car or children would not be safe if their name were mentioned, if they were brought into the matter, or if they were asked to give evidence.
Finally, Amendment No. 263ZAC offers a protection for victims. I repeat that it is difficult for neighbours living in a nextdoor flat, or in the flat underneath or above, to give evidence against a threatening or violent neighbour knowing that it may take at least six months before the case is finally heard in court; and that even then the judge may not grant the local authority possession and they will have to continue to live with such violence and intimidation.
In some cases local authorities have tried to protect tenants by using professional witnesses, including their own rent officers, environmental health officers on grounds of noise, and the like. But some judges, I am sorry to say, have refused to accept their evidence and the cases have been dismissed.
I shall give another example. A local authority began to receive complaints of very loud music, shouting, swearing and the slamming and kicking of doors at all times of the night and day. The authority used its power under the Environmental Protection Act to seize equipment. The problems continued, but the neighbours were too frightened to give evidence. The noise was frequently witnessed by environmental health officers and the tenant was prosecuted again for contravening a noise abatement notice. However, the local authority was unable under the law to issue possession proceedings and evict the tenant in the absence of evidence from at least one resident witness. The resident witnesses were too terrified to give evidence. The professionals, such as environmental health officers, who could and would have given evidence were not permitted to do so.
Amendment No. 263ZAC allows grounds for possession to be sought where a person is guilty of serious misconduct causing, or likely to cause, a nuisance to people other than immediate neighbours. That would permit the use of evidence from other than resident neighbours.
It is clear that a judge will be able to give such evidence proper weight, knowing that it is not from a resident witness and not hearsay evidence but evidence from a professional witness. It would allow such cases to come to court and avoid neighbours, often frail, elderly and disabled, being afraid that such a case will never be pursued. The whole cluster of amendments leads to the ability of local authorities, with, I hope, the support of noble Lords on all sides of this Chamber, to
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begin to tackle effectively the problems of serious and severe anti-social behaviour within the framework of the law. I beg to move.
Lord Mottistone: I am very taken with the argument of the noble Baroness, Lady Hollis. I sympathise greatly with much of what she said. However, when she tabled her amendments they greatly alarmed the National Schizophrenia Fellowship, which advises me on these matters. When I entered the Chamber during the debate on Amendment No. 256, I was interested to hear the noble Baroness, Lady Hollis, among others, saying how important it was for severely mentally ill people not to be harmed by the measures under discussion.
Although I believe that something like the proposals in this group of amendments could usefully be included in the Bill, my fear is that severely mentally ill people need protection from them. The problem is that conduct likely to cause a nuisance or annoyance under the new Ground 17 to Schedule 2 to the Housing Act 1985 can result from severe mental illness as well as from drug taking or dealing. Court proceedings are sometimes initiated now under that type of ground against people suffering from schizophrenia who cause a nuisance when in a severe psychotic state; for example, by incessantly playing music at night. In such cases at present a court may order possession but is not required to do so.
Amendments Nos. 263ZAF and 263ZAG introduce draconian new powers which would mean that any tenant guilty of "serious anti-social behaviour" in the locality where he or she lives must be evicted. By virtue of Amendments Nos. 263ZAD and 263ZAE no notice would be required of that action.
Subsection (1B) of Amendment No. 263ZAE would turn the screw further by suggesting that if the court dismissed a claim for possession under the ground proposed in Amendments Nos. 263ZAF and 263ZAG it should consider making an order for possession under Grounds 1 to 4 of Schedule 2 to the 1985 Housing Act, and doing so without notice.
I and the NSF do not condone severe anti-social behaviour; nor do we wish to minimise the unpleasant repercussions for those at the receiving end. However, we think it important to emphasise that an illness like schizophrenia can cause someone to behave in a way which results in disturbance, damage to property and occasionally violence and that sometimes behaviour of the same or similar nature is repeated. Summary eviction of a person who is ill cannot be in his or her best interests.
The provisions of Parts II and III of Schedule 2 to the 1985 Act should apply. They empower a court to order possession if suitable alternative accommodation is available. That, of course, is what various noble Lords and the noble Baroness, Lady Hollis, were talking about earlier. But the noble Baroness has not put it in her amendments. That is where it needs to be. That accommodation might need to be provided by health or social services authorities rather than a housing authority or private landlord, as more intensive care and support could well be needed under the circumstances which I described.

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I have some examples of the kinds of people about whom we are talking but I am sure the Committee is well aware of the kinds of people who can cause such trouble. I simply say that, if the Government are minded to pursue the line that the noble Baroness, Lady Hollis, invited us to follow, they should qualify it by including protection for the severely mentally ill, which is not provided in these amendments. It is an awful pity that it is not.
Earl Russell: When one proposes to this Chamber an amendment, one needs to try to show four things. One needs to show first, that there is a problem to be solved; secondly, that the amendment will purchase on that problem; thirdly, that the amendment will not accidentally purchase on all kinds of other problems on which it is not intended to purchase; and fourthly, that the cure is not worse than the disease.
I shall stipulate that the noble Baroness has abundantly proved the first of those points. She has proved that there is a problem. She is undoubtedly right about the right to quiet enjoyment of one's own property. That is vital to preservation of the peace. She is clearly right that that is now far too often under threat. She is clearly right that attempts to put it right sometimes lead to intimidation. So, if I may, I shall stipulate that she has established the existence of a problem.
I am not so certain about the other tests that the amendment has to pass. To some extent, the amendment purchases on the problem; but the point made by the noble Lord, Lord Mottistone, is well taken: there must be somewhere else for the people to go instead. In some cases, which may involve mental illness, we may have to say, not for the first time, that the policy of closure of long-stay mental hospitals can be overdone. But there are people—the noble Baroness has already drawn attention to them—who are simply anti-social or criminally disposed. Those people will go somewhere else. We shall have to pay attention to where else they will go and whether they may cause as much trouble all over again as where they went in the first place.
As to whether the amendment will purchase on other problems as well as the ones that it is designed to meet, when I look at the drafting I have some anxiety on that score. Let me take first Amendment No. 263ZAC. I entirely accept the problem to which that amendment is directed. Line 3 of the amendment brackets together the similar propositions that:
"witnesses are or may be intimidated".
From a legal point of view those are two fundamentally different propositions. If it can be proved that the witnesses are being intimidated, that is a conspiracy to pervert the course of justice. It is also threatening behaviour. It is a crime in its own right, and I believe that the law has power to deal with it. But to say that witnesses "may be intimidated" is rather like my favourite crime story from my childhood of the people who were prosecuted for loitering with intent to press button B. There was no proof that any crime had ever
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been committed. I really could not accept a drafting which took witnesses being intimidated or "may be intimidated" as two interchangeable propositions.
In the later part of the amendment there seems to me to be a contradiction between the proposition that they can proceed if there is no direct evidence that any person has actually caused a nuisance and that the only evidence available is from police officers or employees. I am not particularly worried about who the evidence is from, but there must be evidence that a nuisance has been caused. If there is any doubt about whether an offence has been committed, then no proceedings should be taken. It is the old proposition of Perry Mason: the prosecution must first prove the corpus delicti.As this amendment stands, it does not prove the corpus delicti. That, I find, is something I really could not accept. "No notice" has been commented on. I say no more about it at present.
The noble Baroness herself touched upon the case for making orders mandatory under Amendment No. 263ZAG. I understand the point she makes, but she cannot have it both ways. Either she has to have the proceedings mandatory and then the grounds have to be made less all-inclusive because no discretion is allowed or, if she wants the ground spread wide, to cast her net wide to catch all the possible offences, then it cannot be mandatory.
Perhaps I may explain what I mean. Amendment No. 263ZAG, referring to "serious anti-social behaviour"—which is, incidentally, a term of sociology rather than of law—goes on to state in paragraph (b) that this shall include,
"any damage to property in the locality".
I should declare an interest. When my son was under 10 years of age and fancied himself both as a cricketer and as a footballer he would, under this clause, have got me evicted from four consecutive properties and his grandparents from one. Any 10 year-old breaking a window would be covered by that clause. It is the effect of the amendment, and can only be the effect of the amendment, as I understand it, to have mandatory eviction every time that a 10 year-old breaks a window.
I know that there should be more school playgrounds; I have said so quite often—but to evict a family every time a 10 year-old breaks a window! That is what the amendment says and if the noble Baroness does not mean it I hope that she will come back with a better amendment at a later stage. The amendment is unacceptable and I am not convinced that it purchases effectively on the problem.
Also, as always, we cannot assume that if we intend a power to be used for a particular purpose it will never be used for any other. I remind the noble Baroness of what I said about an earlier amendment, that legislation is like using a shotgun with pellets going lots of places where they are not intended to go. I consider the effect of this amendment if it were to be applied in an American township where the Ku-Klux-Klan is powerful. It may be said that we do not have that here. I would be reluctant to legislate on the assumption that we never will. That is the way in which bad legislation

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is passed. This is the sort of use of powers under which one gets what is proverbially and, indeed, literally, known as a witch hunt.
When I was arguing with the right honourable friend of the noble Baroness, Mr. Straw, on "A Week at Westminster" a couple of weeks ago, he argued at some length that the powers he was proposing could not possibly be arbitrary because they were not being exercised from the top down but by the community. But Mill was quite right that the people may desire to oppress a part of their number.
Power exercised by the community, as anybody who has been run out of town in the United States knows painfully well, can be just as arbitrary as any power exercised by any despot of whom we have ever heard. There is a problem. We do not have a solution. I am perfectly happy to sit down round a table and try and work out what the solution may be; but I do not believe it to be this one.
Baroness Gardner of Parkes: I have great sympathy with these amendments. I do not intend to go into the semantics of the words or the details; I want to speak to the principle behind them.
It is essential to have a rapid and sure process of regaining possession. Points have been raised in this debate that the mandatory phrasing is too demanding. That could be qualified in such a way that it is mandatory "unless". It would be wise to make it clearer to the judiciary that the onus is on the giving of the order to grant the vacant tenancy rather than the other way round. Cases have been quoted, and I know of cases, where action was not taken and a lengthy slow process followed.
My noble friend Lord Mottistone mentioned the Schizophrenia Fellowship. I have a great respect for that organisation, which does a marvellous job. There must be ways of wording the process to protect such people. It may be—I refer the Committee to my Noise Bill which is passing through your Lordships' House at the moment—that it is not a question of who is creating the noise or intolerable conditions for the neighbour; it is a question of who is suffering the noise or nuisance. That is a sound principle to be followed in this case.
Today in your Lordships' House a member of the staff asked to have a word with me, being aware that the Housing Bill was before the Committee. The family are living in a block of flats where it is impossible to get any sleep because an anti-social family also live there. I said that they could complain and gave all sorts of advice about what they could do. They said that the trouble was that they would be much too frightened to do that—exactly the point being made. They said that no one in the block would be game or foolhardy enough to front up as a witness against those people because they know the retribution would be swift and unpleasant. I greatly respect the comments made by that person and that person was saying what so many other tenants would say. We have heard the story many times and it is therefore extremely important for there to be protection from intimidation.
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I should like the Minister to comment on the position quoted by the noble Baroness, Lady Hollis, regarding the under-18s. I do not understand what remedy exists in that regard. Does Clause 128 mean that if the tenants are the parents of the under 18 year-old they are evicted because of the behaviour of the young person; or is the young person only asked to leave? What is the position? It seems very unsatisfactory if parents who in themselves are not unreasonable, but have no control over someone young who is living with them, can be evicted. I can see that problems will arise.
The noble Earl, Lord Russell, talked about people being run out of town. I recall reading in a newspaper a year or so ago about a family in a village. Everyone in the whole town was so fed up with the damage that they were causing and the robberies that they were carrying out that they were eventually moved out by the pressure of all their neighbours. That cannot be right. There should be a proper and legal process for doing that.
I do not say that I support these amendments in the way that they are worded—many faults have been pointed out—but I support the principles of a rapid and sure process of gaining possession and protection against intimidation. The objective giving of evidence which applies in the Noise Bill means that no witness would have to come to court. The evidence will be given by the officer who measures the noise. Equivalent processes must be available in the form of an environmental health inspector inspecting damage done to the property or something of that kind. It must be possible to have independent, authorised people able to give such evidence. That would be great protection for people against intimidation.
10.45 p.m.
Baroness Hamwee: When the noble Baroness considers the thrust of her amendment after tonight, I ask her to take two procedural but important points into account. The first is to allow the court to make a suspended order which will be effective if the tenant does not comply with provisions for good behaviour. We do not want to add to the problems of homelessness if other measures can assist. Secondly, there is the place of interlocutory injunctions. I am going the other way now. A court can move very quickly, if it wants to, in extreme circumstances. It is possible to order a tenant to leave pending the final hearing.
Lord Lucas: I, too, will read very carefully what the noble Baroness, Lady Hollis of Heigham, has had to say. I suspect that there are some points that she made in her opening speech which I shall fail to address. Perhaps that is because I found myself rather taken aback by the beginning of her speech, feeling that I was being outflanked on the right by the noble Baroness. After a while I realised that she was just being a great deal more authoritarian than I feel comfortable with and, as the noble Earl, Lord Russell, said, that is becoming quite a feature of new Labour in various pronouncements. It is something which shines out of Peter Mandelson's book as a key part of the party's vision of community. I do not believe that it is part of the noble Baroness's make-up to be that way. I hope

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that she will look carefully at the matter. It chimes so oddly with her great passion and the feeling that she has expressed so often on other subjects.
I turn to the subjects of these amendments. Clearly, we share the anxieties that she has expressed. But we believe that we have better solutions to them. I turn first to Amendment No. 263ZAC. Clause 128 amends Ground 2 of Schedule 2 to the Housing Act 1985. That schedule sets out the grounds for possession of dwellinghouses let under secure tenancies. The clause strengthens in several ways the existing ground for possession based on nuisance and annoyance to neighbours so that it applies to behaviour in the locality of the tenant's property. It covers behaviour by visitors to the property and the situation where the tenant, a person living with him or a visitor, has been convicted of an arrestable offence in the locality of the house or flat.
But the key part of the clause for the purposes of this amendment is that it will also make it possible for local authorities to evict a tenant for behaviour likely to cause a nuisance or annoyance, so that the victim of the behaviour may not have to give evidence. Instead, that might be provided by a professional witness or local authority officer.
We feel that Amendment No. 263ZAC is unnecessary, as Clause 128 achieves its intention to enable local authorities to seek eviction where victims do not feel safe to give evidence in court, by allowing evidence to be provided by the local authority or its agent, such as a professional witness.
On a related matter, the provisions of the Civil Evidence Act 1995 enable hearsay evidence to be admitted as evidence. The weight to be given to that evidence is for the courts to determine and will depend on the facts of each case. We do not feel at all comfortable with saying that that is something which should be automatically assumed to be reasonable. But the Act, which comes into force in the autumn, provides that in doing so one of the matters for consideration is whether it would be reasonable to call the witness. Clearly, the likelihood of intimidation of the witness would be relevant to that consideration.
I turn now to the large group of amendments to which the noble Baroness spoke. I thought that I heard her refer to Amendment No. 263ZAGDA, which is not grouped with these amendments. I now understand that she did not. That amendment is the subject of a separate note.
Clause 130 substitutes a new Section 83 of the Housing Act 1985 which deals with the notice of proceedings for possession. Most of the clause re-enacts existing legislation. The new provisions in the clause allow the landlord to start possession proceedings at an earlier stage than previously in cases related to anti-social behaviour and to dispense with the requirement to serve the notice in appropriate case.
The purpose of these amendments is to introduce a mandatory ground for possession in cases of serious anti-social behaviour. We do not believe that the loss of someone's home should be made mandatory. To do so
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would fetter the discretion of the judiciary and fail to take into account those cases, which might not be great in number, where there were mitigating circumstances. It is important to strike a balance between giving local authorities stronger powers and protecting the rights of tenants. Eviction is, after all, a serious business. We maintain that the package of measures in the Bill gets that balance right. Mandatory grounds would tip the balance against the tenant, unfairly in some cases.
The discretion that the court can exercise will relate largely to the circumstances of the household as a whole. This is important. In some cases the tenancy may not be held by the offender but his mother, for example. She may have no control over an adult son. This point was raised by my noble friend Lady Gardner. In such a case the court will wish to consider whether she should be evicted for the wrongdoing of someone else. Under the present proposal the court would have no option but to evict her. In other circumstances the wife of the offender may be the tenant and may be left with a young family to look after. There will always be case where it is essential that judicial discretion can be exercised; otherwise, the court will be forced to evict those who may have had no knowledge of the criminal activity because the offence is mandatory. I believe that my noble friend Lord Mottistone has underlined the need for the courts to be involved.
We recognise that many local authorities have difficult relations with the courts on these matters. We have published a booklet, Getting the Best out of the Courts, with a view to encouraging better contact between local authorities and the courts. We feel that perhaps there is fault on both sides in getting it right. After that paean of praise for the judicial process, I am sad to see the Judicial Benches empty this evening. It would have been a rare opportunity to see a smile on the faces of noble and learned Lords. On many occasions I have seen the opposite.
There are difficulties at a practical level with some of these amendments. Amendments Nos. 263ZAD and 263ZAE in particular give local authorities two bites at the cherry when seeking an eviction. We feel that cannot be fair. Where a local authority loses its case in court on one ground, surely it cannot be equitable for the court to be allowed to consider repossession on another ground which is so similar. Amendments Nos. 263ZAF and 263ZAG seem to us not to be even-handed. For example, any damage to property in the locality is defined as serious anti-social behaviour. Of course, mindless vandalism must be punished, but we feel that eviction for any damage goes too far.
As the noble Earl, Lord Russell, has said, a boy who plays football and breaks a window will fall foul of the clause. Under the proposal a family could be evicted because of that damage. The court could not take mitigating circumstances into account. There must be countless other examples of minor, possibly unintentional, damage that could lead to families losing their homes. That would not be fair to tenants. Our package of measures to deal with anti-social behaviour in the social rented sector is a strong one which is designed to cover all aspects of such behaviour.

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I believe that it goes as far as it should. I remain unconvinced of the need for mandatory grounds for possession.
I am aware that on occasions judges appear reluctant to grant possession orders, but I do not believe that the answer lies in cutting out the judiciary by giving mandatory grounds for possession; rather, it should be approached in other ways. One of these is the general raising of the profile of the issue, making judges aware of the deleterious effect that all anti-social behaviour can have on a community. More particularly, we are impressed by the work of the noble and learned Lord, Lord Woolf, as part of the Commission on Access to Justice, which recognises the unique nature of possession cases on the grounds of serious anti-social behaviour and the need to organise the civil justice system to deal with these matters as effectively as possible when they come before the courts. We expect to hear something from the noble and learned Lord on these subjects next month.
I hope, with the considerable comfort that I trust I have been able to give to the noble Baroness, that we are addressing the problems which she has identified in so far as we can without being unfair to tenants and that she will feel able to withdraw her amendments.
Baroness Hollis of Heigham: First, I should like to thank—I think—the noble Lords who took part in the debate. Perhaps I may try to respond to some of the individual points because the debate is central to this section of the Bill.
If I may first respond to the noble Lord, Lord Mottistone, I suspect that the gap between us is not very wide. I accept his reproof that there is not, in this amendment, a statutory duty to rehouse, and I will certainly look at it when we come back at report stage because I doubt whether we are in disagreement about this.
If somebody is, as he described in his National Schizophrenic Fellowship briefing, in a severe psychotic state, he believes that that should be a reason for not granting eviction. Again I think that that is the wrong way round. It may be a reason for seeking possession of that particular property which that tenant is inappropriately occupying because of the intolerable nuisance he is causing to his neighbours but—and I think this is where we would be on the same side—I would in no sense wish to remove from the local authority a continuing duty to be responsible for ensuring that that person has appropriate and secure accommodation perhaps in a sheltered environment.
As somebody who was responsible for building sheltered housing schemes for those with learning difficulties and those with mental health problems, I am well aware of some of the issues. So I suspect that the gap between us is not very wide. Perhaps inadequate drafting failed to pick up the point.
I have to say that we only realised the significance of the issue as a result of an earlier debate this evening, and, had that earlier debate, when we were exploring just this issue, come up on a previous day, we might have been able to amend the amendment. So I think we share a common position on this.
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If I may comment on the remarks of the noble Earl, Lord Russell, he accepts that there is a problem. He worries first that those exhibiting such severe anti-social behaviour—and we are now talking not about those who have a mental health or physical health problem but about those who are simply bloody-minded, if I may use that phrase—who have severe anti-social behaviour will go elsewhere. Yes, I think that that is true by definition. They will go somewhere else.
I say again from my own experience that, particularly where there were dependent children, we were faced with a very real dilemma. You either moved them on knowing that the threshold of tolerance in the average street was about 18 months, after which you then moved them on again, each time interrupting the children's schooling and being extremely disruptive, or you took those children into care, which was even more disruptive for the family. What the "respectable" wanted was a ghetto of such problem-families: out of sight, out of mind, out of there and not here.
If you try to avoid that and integrate such families in the hope that at least the children will not inherit the behaviour patterns of their parents, you are asking other people to accept behaviour which imposes severe strain. We know that one or two such families can very quickly send a street into a declining spiral in the course of a year or two. It may take 10, 15 or 20 years to rebuild a degree of self-respect in that street. From my own experience, we have had to move tenants on every 18 months or so as other people's tolerance breaks down. It is a very difficult problem, but that is not to say that the street on which these families first descend should be asked to bear it for the sake of everyone else. We have to respond in other ways.
The second point the noble Earl made related to the words, witnesses "may be intimidated", as opposed to "been intimidated" and he was very unhappy about that as a basis for law. Perhaps he misunderstood—I am sure not wittingly—the thrust of the amendment. The concern was not for this amendment to seek to establish whether witnesses have or have not been intimidated. The concern was to establish the right of the courts to hear—in fact the requirement that the courts should hear—professional witnesses. And such professional witnesses are going to be people like the police, housing officers employed by the authority, and environmental health officers.
I do not know why any Member of the Committee should think that those busy, overworked, understaffed services would willingly waste their time hanging around and taking cases to court in a vexatious way. EHOs normally only turn out with their machines at one o'clock or two o'clock in the morning after there have been continual complaints or continual telephone calls to the police. Only then will they start to act. The problem is not that they will act in a vexatious or frivolous way, but how long it takes to collect and bring such evidence to court. It may take many months.
The noble Lord's criticism that witnesses may be intimidated, and that we must be sure that they have been intimidated, is irrelevant. The amendment seeks to establish that professional witnesses may be used where

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there may be a problem with resident witnesses. One may want professional and resident witnesses, but if resident witnesses cannot be called because the threat of intimidation is more severe, cases will collapse. The amendment will deal with that problem.
To believe that professional officers are going around trying to catch the unwary who are guilty of the most trivial of offences is not faintly to understand local government and the pressures on its staff.
11 p.m.
Earl Russell: Perhaps I may clarify what I was saying. I was by no means questioning the sincerity of witnesses, but sincerity is not necessarily synonymous with accuracy. There must be clear proof that an offence has been committed.
Baroness Hollis of Heigham: I should have thought that with evidence from the police, professionally trained EHOs and professionally trained housing officers in pursuance of the law, it is not just a question of sincerity, it is a question of their professional integrity. I am sorry, again, that I fail to understand the noble Earl's point on this. Such people will be producing evidence in a professional way through their professional training, and if they fail to do so they will be disciplined professionally.
I cannot believe that any judge would not listen to the evidence of such people and attach to it the weight that it properly deserves. I have to say from my experience that EHOs would not take a case to court unless there were several instances testified to by their environmental noise machines and all the rest.
The third point that the noble Earl made—it was a point made also, to my surprise, by the Minister—was that the net was cast too widely, and that under the amendments the child kicking around a ball that just happened to bang against someone's fence would be grounds for mandatory eviction. When I listen to those worst possible case scenarios, I sometimes wonder in what sort of a world we are living. There is a reference to serious anti-social behaviour. If the judge did not believe that the damage to property amounted to serious anti-social behaviour, the case would not be established and he would throw it out. It is as simple as that.
I do not understand the examples of kids and so forth. The noble Earl referred to the Ku Klux Klan and witch hunts. I am sure that he did not intend any insult to thousands and thousands of elected, serving, unpaid councillors, but they might take what he said as such.
The noble Earl is right—he is ferociously right—to protect the minority from the intimidation of the majority, but I am also worried about the intimidation of the majority by the minority. Perhaps I may remind the noble Earl that John Stuart Mill was equally good on that. The alternative is to send a street into decay.
I welcome the contribution of the noble Baroness, Lady Gardner of Parkes. The answers to the questions posed by the noble Baroness, Lady Hamwee, about a suspended order, are that she may well be right. We would all prefer to see a tenant remain rather than be
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evicted, and to transform his, her or their behaviour. Perhaps we should look at this further. I am anxious to ensure that we do not have the sort of delays of two years, two and a half years from incident to eviction, in the course of which tenants live in fear and intimidation. That is what I have sought to document.
I shall have to take advice in relation to interlocutory injunctions. My knowledge of that aspect of the law is not sufficiently secure to respond to that matter. However, my knowledge of the Government's existing social security measures is sufficiently secure to challenge the Minister on his reference to authoritarian policies. That is rather rich coming from a Minister and a Government who are introducing introductory tenancies, on which these Benches have very real reservations, which will remove all rights from tenants in the first year; who have introduced the jobseeker's allowance, including benefit penalties for breaking dress codes when you turn up for interviews, and benefit penalties for not looking sufficiently hard for work which is not there to find; who have introduced tough penalties, including top-slicing of 40 per cent. for a parent with care who is not prepared to name an absent parent to the CSA when she is in fear of violence. I find that accusation of authoritarianism quite extraordinary and of mind-baffling hypocrisy.
Or is it that the Government are willing to be authoritarian when on the side of the Treasury, but are indifferent and accuse others of being authoritarian when they are seeking to protect the right to quiet enjoyment of council tenants? Those people are infinitely more vulnerable to the problems of noise, nuisance and intimidation than is, I suspect, anyone in this room. We live in our comfortable houses with gardens and, in some cases, many broad acres and will never know what it is like to have a noisy neighbour.
It is a pity that more former councillors have not spoken in the debate. I realise that that is because of the lateness of the hour. I do not know whether the noble Baronesses, Lady Hamwee and Lady Gardner of Parkes, share my experience of local government, but when I was involved with housing issues, I spent my time chasing repairs and managing transfers. During the last few years, I spent most of my time seeking to manage the problem of anti-social behaviour and neighbour disputes.
These amendments may not be quite the right way in which to deal with the problem. Local authorities need to be able to manage their estates so as to secure for their tenants the quiet enjoyment of their property to which they have every right, just as Members of the Committee have. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 128 agreed to.
Clause 129 agreed to.
Clause 130 [Proceedings for possession or termination]:
[Amendment No. 263ZAD not moved.]
Baroness Hamwee Baroness Hamwee moved Amendment No. 263ZADA:
Page 79, line 36, leave out from ("section") to end of line 38.
The noble Baroness said: This amendment seeks to delete Section 83(1)(b) from the proposed new Section 83 of the Housing Act 1985; in other words, to ensure that a landlord of a secure tenancy serves a notice specifying grounds on which the court will be asked to make a possession order.
The insertion of a general power to waive the requirement of notice in all cases, not just nuisance cases, is new in relation to secure tenants. Notices are very important. The courts insist on them in many areas of life. For example, in employment matters, it is important to give warnings and notice to ensure that an employee whose job is in jeopardy is warned of the likely outcome of his continued conduct, if that is what is at issue. A notice is a warning shot across the bows. In any event, it seems to me to be fair that before the step is taken of seeking possession with the likely result, or at least possible result, of homelessness, the tenant should be given the opportunity to remedy the complaint.
One cannot know whether the courts would restrict to narrow circumstances the waiver of written notice, but it seems to me to be clear that there are great advantages in written notice, in that there should be far less room for confusion or dispute. I am concerned both about the erosion of existing rights and also about the practical implications. I beg to move.
Lord Lucas: Clause 130 re-enacts Section 83 of the Housing Act 1985 which provides for the proceedings for possession or termination of a secure tenancy. In doing so it makes some important amendments to help to speed up those processes. It is one of those amendments that would be deleted by Amendment No. 263ZADA tabled in the name of the noble Baroness, Lady Hamwee.
One of the concerns that local authorities have brought to the attention of the Government during the discussion which we have been having about how to tackle anti-social behaviour has been the length of time that the possession procedures take. Eviction is often very much a matter of last resort after all other remedies, such as mediation or an injunction, have failed. By the time the local authority seeks a possession order the level of nuisance or annoyance to the neighbours, or even the whole estate, is clearly way beyond an acceptable level. Therefore, the possession order needs to be obtained quickly so that the neighbourhood does not continue to suffer, and so that those who have come forward as witnesses are not deterred because of the length of the procedures.
In such serious cases we considered that it would be useful for local authorities to be able to ask the court whether they could dispense with the issuing of the notice of possession proceedings. Where such a notice is issued a local authority cannot normally start the possession proceedings for at least 28 days. There could, therefore, be a considerable saving of time. Our view
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that this was a useful proposal was reinforced by the fact that a similar provision already exists for assured tenancies, the regime applied generally to housing association tenants.
Nevertheless, the discretion to dispense with the notice remains with the court which must be satisfied that it is just and equitable to do so. It seems unlikely that the courts would agree to do so unless the case before them was of a very serious nature, and some of these do involve extreme physical violence and abuse. I believe, therefore, that tenants have nothing to fear from the provision. Indeed, the great majority of tenants have something to gain if it helps rid estates quickly of the very worst offenders.
Baroness Hamwee: There seem to be some inconsistencies in comments made in response to earlier parts of this evening's debate. I am not convinced by that answer, but I think that if the court considers that the situation is serious then it is a matter, is it not, for an interlocutory order rather than for moving straight to a position where I believe that the tenant might be prejudiced? It is perhaps a little late to pursue those detailed procedural points at this time of night, but, as I say, I remain unconvinced as to whether this is the right way to proceed. However, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 263ZAE to 263ZAGA not moved.]
Clause 131 [Extension of ground of nuisance or annoyance to adjoining occupiers &c.]:
[Amendment No. 263ZAGB not moved.]
Clause 131 agreed to.
Clauses 132 to 140 agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 263ZAGC:
After Clause 140, insert the following new clause—

Housing Bill

  WITNESS PROTECTION ORDER
  (".—(1) In the circumstances set out in this section, when requested by the applicant the High Court or a county court may make a witness protection order in the form of an injunction.
  (2) The applicant is—

  (a) a local housing authority;

  (b) a housing action trust;

  (c) a registered social landlord; or

  (d) a charitable housing trust.

  (3) The application is made immediately before or during the course of proceedings for—

  (a) possession of any dwelling;

  (b) an injunction relating to the breach of any tenancy;

  (c) an injunction relating to the breach of any restrictive covenant applying to any freehold land;

  (d) an injunction relating to the breach of any agreement made with any occupier of any dwelling owned or managed by the applicant or in the vicinity of a dwelling owned or managed by the applicant;

  (e) an injunction relating to trespass or nuisance committed against the applicant's property;

  (f) an application for an injunction by the local authority using its powers under section 222 of the Local Government Act 1972.

  (4) The court is of the opinion that there is a risk—

  (a) to any person who has been, is, or may be a witness in any such proceedings;

  (b) to a member of the household or of the family of any person mentioned in paragraph (a);

  (c) to the property of any person mentioned in paragraphs (a) or (b).

  (5) The risk referred to in subsection (4) is a risk of violence, threats of violence, harassment or intimidation to any person by reason of a person's role or likely role as a witness in the proceedings, or the risk of removal of or damage to the property of any such person.
  (6) A witness protection order may contain such provisions as the court considers necessary to protect the persons or property referred to in subsection (4) and may include—

  (a) an order restricting the respondent from a specified area or several such areas either completely or at specified times;

  (b) an order requiring the respondent to remain within the curtilage of a dwelling or other premises at specified times;

  (c) an order requiring the respondent to enter a specified area or specified premises only when escorted by a specified person or with the written consent of a specified person;

  (d) an order prohibiting the respondent from approaching a specified person or persons;

  (e) an order requiring the respondent not to approach specified premises or enter within a specific area around such premises;

  (f) an order prohibiting the respondent from contacting specified persons in any way or in specified ways.

  (7) Where subsection (6) requires a person to be specified this may be done by naming that person or by a description of a class of persons.
  (8) A witness protection order shall contain a power of arrest and the provisions of sections 137 to 140 of this Act shall apply to such power of arrest.
  (9) A witness protection order may be for a fixed period or for an indefinite period and may be made or continue after the conclusion of the proceedings but where it is indefinite it shall be subject to review and at the time of making the order the court shall fix a time for a review.
  (10) A witness protection order may be varied or discharged on the application of any party to the proceedings or the witness or potential witness who is protected by the order.
  (11) For the avoidance of doubt, a witness protection order can contain provisions requiring the respondent not to request, permit, or allow other persons to carry out specified acts on his or her behalf.
  (12) For the avoidance of doubt, a witness protection order may require the respondent to vacate any premises that he or she uses as a home or for other purposes.).
  The noble Baroness said: I beg to move this amendment standing in my name and that of the noble Baroness, Lady Hollis of Heigham. I hope that the Committee will forgive me if I do not go through the detail of this amendment at this time of night. I think that what it seeks to provide is fairly clear so I will, if I may, restrict myself to the "why".
  Part of the reason behind the amendment is that it is important for direct evidence to be given. On this matter, I take a slightly different view from the noble Baroness regarding her earlier amendment. In proposing the scope for a witness protection order it is intended to assist the giving of direct evidence by a witness rather than direct evidence by, for instance, a police officer, who is not necessarily himself a witness to the event and might not have been there at the time. Indeed, he would have to make a judgment himself on having heard
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  evidence from the person directly affected; he would have been put in the position of having to make a judgment; in other words, the court would be at two removes from evidence of the matter which is complained of.
  I accept that it would be new to allow a witness protection order in housing proceedings and that it might be argued that all proceedings should allow for such an order. However, I believe that it is particularly in the context of housing proceedings—possibly only in that context—that witness intimidation of the kind described to the Committee has been identified. Therefore, I suggest that it is appropriate to consider special powers for the courts in such proceedings.
  I do not believe that I need to repeat the experiences that have already been shared with the Committee, because I am sure that it is generally accepted that there is problem. Having, I appreciate, briefly introduced a long and important amendment, I beg to move.
  11.15 p.m.
  Lord Lucas: When responding to the same proposal in another place, the Government acknowledged that it had been put forward with the best of intentions to offer protection to witnesses in cases of anti-social behaviour. It is a serious problem and the Government have been working with local authorities to find ways in which to strengthen existing laws and improve their use so that victims of such behaviour are not frightened to come forward and give evidence.
  The Government are keen to help, but we do not feel that the kind of witness protection as set out in the proposed new clause offers any more than existing provisions, except in one small area, for the following reasons. Local authorities are already able to take out an injunction to restrain the behaviour of an individual from intimidating witnesses. Where there has been violence or threatened violence, Clauses 135 to 141 of the Bill allow the courts to attach a power of arrest to such an injunction. That is a very powerful weapon because if the injunction is breached it will offer immediate protection to the victim.
  I appreciate that a witness protection order could be granted and a power of arrest attached in cases where there is a risk of removal or damage to the property of a witness, but such behaviour, reprehensible though it is, does not alone warrant the proposed new clause. Otherwise, we are clear that the proposed new clause does not offer any more effective means of protection than can be offered by existing means.
  We seek to address the problem of witness intimidation in other ways too. Clause 128 contains a revised ground for possession based on nuisance and annoyance. It will enable a landlord to evict on the basis of behaviour likely to cause nuisance or annoyance. That will enable a third party to give evidence. We have in mind here particularly the use of professional witnesses or the police. Some local authorities—for example, Sunderland—have had considerable success with that approach. The Civil Evidence Act 1995, which I understand will be coming into force shortly, will also help in that it will make it easier to adduce hearsay evidence.

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  Much of the work done on the issue of anti-social behaviour has been designed to speed up the process involved in gaining eviction. The more quickly a landlord acts, the less time there is for the perpetrator of the harassment to continue his activities and the more likely it is that witnesses will feel able to continue their involvement in the case. Clause 130, for example, makes certain provisions for shortening the timetable of the possession procedure.
  Additionally, the Government have issued advice to local authorities on how to get the best out of the court system in order to ensure quick and effective evictions. There is no simple solution to the problem of witness intimidation, and work on this issue must continue. As I said earlier, the Commission on Access to Justice of the noble and learned Lord, Lord Woolf, has acknowledged this in looking at the problem and other issues relating to anti-social behaviour on estates. His report is to be published shortly and we look forward to seeing his final recommendations and what scope he as an experienced member of the judiciary identifies for tackling this problem further. I hope that that gives some comfort to the noble Baroness.
  Baroness Hamwee: I am obviously reassured that the Government take the matter as seriously as the noble Lord appears to indicate. Despite what I said in opening this discussion, I have some sympathy with an approach which tackles the general position of witnesses rather than selecting protection in one area. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 263ZAGD:
  After Clause 140, insert the following new clause—

  YOUNG PERSONS: BREACH OF WITNESS PROTECTION ORDER
  (".—(1) This section applies to an injunction granted by a county court or by the High Court—

  (a) in possession proceedings;

  (b) in any proceedings for breach of tenancy relating to residential premises;

  (c) in proceedings brought by a registered social landlord or a public sector landlord as defined in section 80 of the Housing Act 1985 for trespass or nuisance;

  (d) in any proceedings brought by a local authority using its powers under section 222 of the Local Government Act 1972;

  which is a witness protection order granted under the provisions of this Act.
  (2) Where a young person is in contempt of court by reason of a breach of any injunction to which this section applies that court shall have the equivalent powers of sentence and punishment which would be available to any criminal court had the defendant been convicted of an offence liable to imprisonment for up to two years.").
  The noble Baroness said: This amendment concerns the problems presented by under 18 year-olds in civil law. Where an adult breaches an injunction, he or she is in contempt of court and can be imprisoned for up to two years. This amendment would give the county court or High Court powers to deal with someone under 18 as if he or she had committed an equally serious offence.
  We find that a large number of cases of abuse, violence, harassment or serious damage to property are committed by juveniles. If these were criminal proceedings, the court could act and the actions would range from fining the parents to sending the young offender to an appropriate institution. But in civil law there is no appropriate punishment; indeed, there is barely any punishment at all.
  According to Wookey v. Wookey, one cannot take out an injunction against someone under 18 because he cannot be imprisoned, nor is he likely to have an income which could lead to the payment of a fine, and imprisonment could not again come into it if he defaulted on payment. This was brought home to me when Exeter City Council obtained an injunction against someone who was either 16 or 17—a young man who had a history of making threats and committing acts of violence culminating in a threat to burn down a council house. The young man broke the injunction by further violent acts. When the city council pursued the matter, the official solicitor stepped in and said the injunction should never have been granted in the first place as the young man was under 18. The city council had to drop the case; the local authorities were entirely powerless to act. This amendment would bring the powers of civil courts into line with those of the criminal courts when dealing with juveniles. I beg to move.
  Lord Lucas: Clearly the new clause of the noble Baroness highlights an important and intractable feature of life on some local authority housing estates. There may be gangs of youngsters, some below the age of criminal responsibility, who indulge in various forms of anti-social behaviour. It is not easy to devise an apt remedy in terms of public policy. A number of government departments have an interest: the Department of the Environment, the Home Office, the Lord Chancellor's Department, the Department of Health and possibly the Department for Education and Employment. The measures in Part V of this Bill represent the first fruits of the Government's work in the field of anti-social behaviour. That work has been undertaken in close consultation with the local authority associations. But it does not end here, with this Bill. There is a great deal more work to do, co-operatively between departments and with local authorities.
  That said, we are not comfortable with the route pursued in this amendment. It would allow a county court or a High Court to impose on a young person who breaches an injunction granted by a county or High Court any penalty which would have been available if the young person had been convicted of a criminal offence which carries a sentence of imprisonment of up to two years.
  The use of custody for those under 18 years of age is something that we resort to reluctantly. That is why the law only provides that it may be used for those young offenders who commit serious offences or who persistently offend. This reflects the long held principle that young people who appear in court should be treated in a way that takes into account their level of maturity and their welfare needs. This new clause is out of line with these important principles. Under the new clause, a county court would have the power to impose a sentence

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  of detention on a 15 year-old for up to two years; for example, for a breach of an injunction which had been issued to prevent the escalation of a relatively minor breach of the tenancy agreement, such as persistently loud music.
  We feel that in any case the Youth Court will be the appropriate forum for dealing with people of this age. We certainly agree that when young people commit serious anti-social acts which amount to a criminal offence then such firm action is needed. That is why we have provided the courts with a wide range of penalties to deal with those aged 10 and over who have been convicted of a criminal offence. Courts also have powers to ensure that parents of young offenders support and care for their children to help prevent re-offending.
  For the relatively few young people who offend in a serious and persistent way a custodial sentence must remain an option. That is why we have recently widened the custodial powers available. The Youth Court is experienced in dealing with those serious sentences and we would not wish to widen that area of jurisdiction to the county court. But it is quite clear that the noble Baroness and I are aiming in the same direction with much the same ambition—to achieve an effective solution to these problems.
  I hope that the noble Baroness will understand that we cannot support the specific solution she proposes and will withdraw the amendment.
  Baroness Hollis of Heigham: I propose to withdraw the amendment. I agree with the noble Lord that it is an intractable problem. I think the truth is that none of us knows what to do about it. None of us likes, wants or seeks custody for young people under 18, especially as they may end up more damaged at the end of it. However, if custody is inappropriate, and those people cannot pay fines, what does one do? We are not talking about the child of 10 who kicks a ball, or anything at that level. We are talking about people of 15, 16 or 17 who commit arson, threaten violence and terrify elderly and frail people.
  Again, I do not know whether community service orders, or some version of a sentence within the community, is a way forward. We are clearly on the cusp between what is civil and criminal in much of this area. Obviously we shall have to return to the issue. However, currently local authorities are absolutely powerless to do anything against young people under 18. Many teenagers, largely but not invariably young men, are responsible for a major amount of serious harassment and intimidation which occurs, and they go free because custody is inappropriate. They do not have an income with which to pay a fine and, therefore, an injunction is not appropriate because if that were broken there would be contempt and a fine which they could not meet.
  We shall have to return to the issue. Whether such people could be required to do a number of hours of work
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  in the community, I do not know. We need some help on the matter. It is simply unreasonable at present for so many people to do as they do: to criticise local authorities for the management of council estates and then deny them the powers needed against those people who cause not simply a minor nuisance but serious intimidation.
  The noble Lord is right. I shall withdraw the amendment. We should revisit the issue. I am stumped as to the best way forward on such an intractable problem. It would be helpful to hear from organisations outside and beyond this Chamber as to what might be the most appropriate way of dealing with this very real problem. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  11.30 p.m.
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 263ZAGDA:
  After Clause 140, insert the following new Clause—

  RESTRAINING ORDER
  (".—(1) Section 222 of the Local Government Act 1972 shall he amended as follows
  (2) After subsection (1) there shall be inserted—
  "(1A) On the application of a local authority under this section in their own name the High Court or a county court may issue an injunction restraining any person from—

  (a) engaging in or threatening to engage in conduct likely to cause a nuisance or annoyance to a person residing in, visiting or otherwise engaged in a lawful activity in qualifying premises or in the locality of such premises, or

  (b) using or threatening to use such premises for immoral or illegal purposes,

  and may attach such ancillary provisions to ensure compliance with an injunction as the court thinks fit including provisions restraining any person from entering qualifying premises or the locality of qualifying premises.
  (1B) The following are qualifying premises for the purposes of this section

  (a) dwelling houses held under introductory, secure or assured tenancies, or

  (b) accommodation provided under Part VII of the Housing Act 1996, or Part III of the Housing Act 1985 (homelessness).")

  The noble Baroness said: This amendment seeks to amend Section 222 of the Local Government Act. Where a person living on a council estate has been verbally abused or harassed, has had threats made against them, their house attacked, rubbish thrown into their garden and so on, the only person who has suffered and can take private law action is the victim, the individual resident, not the local authority. All that the local authority can do is act as landlord and seek possession against one of its own tenants for breaching its conditions of tenancy.
  If the person responsible for the violence and harassment is not a council tenant but, let us say, an owner-occupier, possibly a right-to-buy former tenant, a visitor, a private rented sector tenant, or a housing association tenant, in all such situations the local

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  authority cannot use private law but only public law remedies, which in this field are in short supply.
  When this issue was raised in the other place in terms of debates about community safety orders, public protection orders and the like, one argument used by Ministers was that local authorities already have sufficient powers under Section 222 of the Local Government Act to deal with the situation.
  Work that we have done shows that that is simply not true. If Section 222 was sufficient, local authorities would already be using it successfully. They do not, and cannot, because it is not sufficient.
  Section 222 of the Local Government Act 1972 states that,
  "Where a local authority consider it expedient for the promotion or protection of the interests of the inhabitants of their area … they may prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name".
  Such measures have been used by local authorities to prevent, for example, Sunday trading or breaches of planning law—in other words, where commercial companies were willing to flout the law repeatedly because they were willing to pay the fine at the end of the day.
  However, when local authorities have tried to use Section 222 for serious anti-social behaviour, as the Minister in another place suggested they could, those local authorities which to my knowledge on several occasions have used it have had to withdraw or face surcharge because courts have ruled that there was not a wide enough public interest at stake.
  I quote the notorious Finnie brothers case. Coventry City Council, in March 1995, tried to use Section 222 against the Finnie brothers, aged 26 and 29, to exclude them from a small section of one Coventry housing estate. Neither of the brothers lived there. They were not tenants, but they had friends and relatives on the estate. Together, they ruled the estate. They were held responsible for burglary, intimidation, harassment, violence and fire-bombing. Law-abiding tenants left the area, and the local authority found it difficult to get new tenants to live there. School rolls actually fell—people were voting with their feet. People were terrified of giving evidence. Councillors, MPs, the police and community representatives all gave sworn evidence.
  The city council obtained a temporary injunction against the two brothers, who lived outside the estate but came in to produce that litany of offences. However, the city council's counsel, Sir Louis Blom-Cooper, advised it to withdraw the action as there was a risk of failure and therefore the court costs that would result would render it liable to surcharge. It had to follow counsel's opinion and the case fell. Some local authorities have been able to get Section 222 injunctions in cases of domestic violence; others have failed because judges have deemed that Section 222 did not cover it.
  What is to be done? One could seek a brand new clause on the basis of public protection. I am very
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  reluctant to go down that route. This area is difficult. It is a mixture of hybrid civil and criminal law. There is also an issue as to how robust the evidence would need to be on which a local authority could seek an injunction with powers of arrest, as the noble Baroness, Lady Hamwee, mentioned.
  However, there may be a simpler route. I hope with all my heart that the Minister will feel able to support it. If this amendment is not appropriately drafted perhaps he will be able to come back with his own amendment on Report. This may cut through a lot of our problems. It could be made clear on the face of the Bill and without doubt that Section 222 of the Local Government Act 1972 may be used, just as the Minister said in the other place, by a local authority as the basis for an injunction to exclude anyone, not just its own tenants, from coming into a defined area of its estates if the judge agrees that serious anti-social behaviour has occurred or is likely to occur.
  The Minister in another place said that Section 222 could bear that interpretation. I have to say that several learned counsel have disagreed with him and local authority cases have fallen as a result because the councillors feared surcharge. The right way to do what the Minister says can be done, but QCs say cannot, is to make it clear on the face of the Bill that Section 222 can do the job that the Minister wants.
  I very much hope that the Minister will feel able to support the principle of the amendment and, if this is not the appropriate amendment, will come back with a broadly similar one on Report. I beg to move.
  Earl Russell: I listened with very great interest to that speech. I am pleased to say that here the noble Baroness has successfully matched the remedy to the problem. The evidence in that Coventry case and counsel's opinion from Sir Louis Blom-Cooper I found extremely compelling.
  It is possible that the amendment says only that the law is what it is already. But, as the amendment puts it, for the avoidance of doubt I think it would be a very good thing to have in the Bill, and I am happy to support the amendment.
  Lord Lucas: The short answer to the noble Baroness's amendment is yes—yes, we agree with what she says—but the long answer is rather more complicated than that.
  First, let me issue a caveat. The local authority's power under Section 222 is very flexible. Any attempt to codify it in the way proposed in this amendment for particular uses would, we fear, reduce that flexibility. I have some counter examples to offer to the noble Baroness of cases where it has been used effectively. The London Borough of Hackney, for example, issued injunctions under Section 222 to prevent a gang of youths from outside the estate—in this case, the Kingsmead Estate—from coming on to it and causing untold serious problems by anti-social behaviour. They included attacking local authority officials and burgling and destroying council property.

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  Injunctions provided the solutions and we believe that one of the youths was subsequently jailed. I can also offer the case of Stoke City Council v. B&Q, where the court considered that it was in everyone's interest, particularly in urban areas, that a local authority should do what it could do to establish and maintain an ambience of law-abiding community and that what should be done for that purpose was for the local authority to decide.
  Having listened to the noble Baroness, it is quite clear that our positive views of what can be achieved under Section 222 are not shared by some serious members of the legal community and have not been followed by a number of local authorities which have serious problems to deal with. That is a situation that concerns us greatly. If the noble Baroness will agree to work with my officials and provide us with the evidence that she has, we shall put all the effort we can into providing a suitable remedy for whatever problem may exist, before the Bill leaves this Chamber.
  Baroness Hollis of Heigham: I am very grateful indeed not only for the support of the noble Earl, Lord Russell, but for the Minister's response. I am delighted to take up his offer and very much hope that we can strengthen the Bill in that way. With the leave of the Committee, I shall withdraw the amendment, in the expectation that we shall revisit it.
  Amendment, by leave, withdrawn.
  Baroness Hamwee Baroness Hamwee moved Amendment No. 263ZAGE:
  After Clause 140, insert the following new clause—

  DATA PROTECTION: CRIMP AND TAXATION
  (". At the end of section 28 of the Data Protection Act 1984 there shall be inserted—
  "(5) For the avoidance of doubt a local authority is acting for the purposes referred to in subsection (1) (a) and (b) when, in the exercise of any powers under Chapter III of Part V of the Housing Act 1996, they are investigating any matters which amount to or could amount to a criminal offence notwithstanding that the local authority may be considering civil rather than criminal proceedings as a result of those investigations.".")
  The noble Baroness said: This amendment stands in my name and that of the noble Baroness, Lady Hollis. The proposed new clause deals with the matter of data protection. Its purpose is to ensure that the police and local authorities can exchange information held on computer when they carry out joint investigations or strategies to tackle crime in an area, recognising the value of a multi-agency approach to dealing with crime.
  The problem, as I understand it, is that some police forces are advised that they may release information to a local authority; others are advised that they are not to do so. Some police forces argue that local authorities are involved in the prevention of crime, even when they are taking action for possession or seeking injunctions; but others have been advised that the position is not clear cut and they should not
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  release information. The effect of the proposed amendment is to make clear that a local authority is acting to prevent or detect crime or to apprehend or prosecute offenders when it is investigating matters that might amount to criminal offences, even if in fact the decision subsequently is to take civil action rather than pursue criminal proceedings or to encourage the police to prosecute. I beg to move.
  Baroness Hollis of Heigham: I would like to support this amendment whole-heartedly.
  Lord Lucas: This new clause seeks to alter the Data Protection Act provisions on disclosure of police data. Under the Data Protection Act 1984, data users have to comply with eight data protection principles, including one that says:
  "The information to be contained in personal data shall be obtained, and personal data shall be processed, fairly and lawfully".
  Processing is interpreted by the relevant enforcement body, the Data Protection Registrar, to cover disclosure of data. So, to summarise, data must be obtained, processed and disclosed fairly and lawfully.
  It is accepted practice, endorsed by the Association of Chief Police Officers and the Registrar's Office, that provided they have properly registered the purpose the police may disclose to other public bodies data originally collected for or relevant to the prevention or investigation of crime. The acceptable purposes of such disclosures include not only direct action under the criminal law but also helping local authorities deal with difficult tenants; for example, using houses for drugs or immoral purposes in breach of tenancy agreements. If, however, local authorities feel that they have encountered problems in this area, it is open to them to contact the Association of Chief Police Officers' Data Protection Working Group to discuss any proposals they may have.
  Therefore, we feel that the new clause is not necessary to provide the power for police disclosure which we believe local authorities want in this case. It already exists. Of course neither it nor the present Data Protection Act would force police to share data; that is and should remain a matter for their collective judgment.
  If the noble Baroness, Lady Hamwee, has any particular examples where the systems that I have set out in my answer are not working well, perhaps she would let us know so that we might follow them up.
  Baroness Hamwee: I thank the Minister for that response. I was not seeking by this amendment to require a police authority to share information if it did not wish to do so but merely to ensure that it had the assurance that it was entitled to do so. I will take advice as to whether what the Minister has said by way of putting the matter clearly on the record is adequate. I am not sure that it will be, given the

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  powers of the registrar. I will take up his offer, if necessary, to come back to the matter. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 141 agreed to.
  Lord Mackay of Ardbrecknish: I beg to move that the House do now resume.
  Moved accordingly, and, on Question, Motion agreed to.
  House resumed.

Allied Irish Banks Bill
Brought from the Commons, read a first time, and referred to the Examiners.

Armed Forces Bill
Reported from the Committee in the Moses Room without amendment.
House adjourned at sixteen minutes before midnight.

Official Report Of the Committee on the Armed Forces Bill
The Committee met in the Moses Room at half past three of the clock.
[The Deputy Chairman of Committees (Viscount St. Davids) in the Chair.]
The Deputy Chairman of Committees (Viscount St. Davids): Before I put the Question that the Title be postponed, it may be helpful to remind your Lordships of the procedure for today's Committee stage. Except in one important respect, our proceedings will be exactly as in a normal Committee of the Whole House. We shall go through the Bill clause by clause; noble Lords will speak standing; all Lords are free to attend and participate; and the proceedings will be recorded in Hansard. The House has agreed on the recommendation of the Procedure Committee that there shall be no Divisions in this Committee. Any issue on which agreement cannot be reached should be considered again at the Report stage when, if necessary, a Division may be called. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
I should also explain what will happen if there is a Division in the Chamber while we are sitting. This Committee will adjourn as soon as the Division bells are rung and will then resume after 10 minutes.
On Question, Title postponed.
Clause 1 agreed to.
Clause 2 [Enlistment or entry for local service]:
Lord Judd Lord Judd moved Amendment No. 1:
Page 2, line 10, at end insert ("but no regulations shall be made under paragraphs (j) and (k) above until a full report on the consultative process and pilot studies relating to the Ministry of Defence police has been laid before both Houses of Parliament.").
The noble Lord said: In moving this amendment, I want to place on record at the outset how grateful I am to all those with whom it has been possible to discuss the crucial issues at stake.
This amendment deals with the military local service engagements and the military provost guard service. Both concepts, one implementing the other, have far-reaching implications. The proposals have been described by some as the military equivalent of a new standing army.
There is to be a consultative process and also pilot studies and if these are not to be regarded as a cynical formality, it is obviously essential that the outcomes of both should be fully considered by Parliament before it is decided whether the scheme should proceed. Literally in the midst of the Second Reading we became acquainted with the consultation paper, which was kindly distributed during our deliberations. I would like
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to make the point that the consultation paper has great implications for most of those involved. Thirty working days for people with a bevy of civil servants and others assisting them may seem a reasonable time in which to complete consultations; but, for example, for the Ministry of Defence Police up and down the country to assemble the various arguments and to make sure that ordinary members have a chance to take into account what is being proposed, I want to suggest that the timescale is rather tight.
I also want to draw attention to telling little phrases in the document. For example, on page 2, there is the phrase,
"On the assumption that the pilot scheme is a success".
That wording may seem quite innocent in the drafting but to those who feel that there is a tremendous amount at stake it begins to acquire a different kind of significance. It is lending some weight to the anxiety that everything is decided and that the consultation is a formality. Anything that the noble Earl is able to say to reassure me in that context would be deeply appreciated.
I am sure we would all agree that it is not appropriate for a scheme of this significance to be introduced by the back door via a brief clause in a general Bill of this sort. Already some very cogent anxieties have been expressed by the defence police themselves. Perhaps I may ask for the indulgence of noble Lords in order to quote fairly fully from some of the letters I have received. In that way we who are deliberating at this level can take into account the real anxieties at the front line of this concern.
I quote first from Michael Jones, who is the national chairman of the Defence Police Federation:
"Ministry of Defence Police Officers come into constant contact with members of the public, sometimes hostile; but at other times, in need of assistance. Our members are fully trained and at tested police constables, possessing all the powers, privileges and responsibilities that the law confers on their colleagues in The Scottish Office's and Home Department's forces. They never function solely as 'armed guards', as the MSLE proposal implies. It is wrong to replace civilian police officers who might come into contact with ordinary members of the public as well as armed force personnel with an armed military guard. A soldier with a gun should not be regarded as a proper replacement for a police officer in this function. Bringing military armed guards into contact with civilian members of the public, be they contractors, protesters, trespassers, etc., is frankly dangerous. It could also create a gross infringement of civil liberties. In a democratic country such as ours, a force of this nature should not be brought into existence except in times of war".
That is the federation.
From the Base Ordnance Depot, Donnington, I have received a letter. I expect other noble Lords have received a similar letter. It makes the point:
"BOD Donnington is one of the stations where it is proposed to implement a trial period of the Military Provost Guard Service (MPGS) with effect from April 1997. Initially it was proposed in the Rucker Report that the MPGS would be implemented at establishments where the service personnel exceeded 50 per cent. of the establishment population. At Donnington this is not the case. The civilian population here well outweighs the service personnel by more than 85 per cent. It was proposed that the MPGS would replace the Ministry of Defence Police (MDP) on a one for one basis on armed and unarmed guarding. However, the MDP at Donnington do not carry out static armed guarding duties, although they are armed whilst on duty. Furthermore, how can this transition

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be classed as a trial period when the proposals are that MDP at Donnington are to be replaced before the end of the trial period (one month after implementation)".
Finally, a particularly interesting letter comes from Ministry of Defence Police personnel at Chetwynd barracks, Chilwell. It says:
"As you know, the MPGS scheme proposes that Ministry of Defence policemen are to be replaced on a one-for-one basis by infantry-trained, non-regular soldiers where those policemen are employed solely on armed guarding duties. This is what the scheme's protagonists within the MoD and Government have been telling Parliament, but it is far from the truth. Hardly any MDP on stations without a nuclear association are employed solely as armed guards. At the three MDP manned stations chosen to pilot the scheme. Chilwell, Donnington and Wilton, the MDP complements are and have for years been employed on primary policing duties with the added capability to provide an armed response if necessary".
The letter continues:
"On my own station, Chilwell, a complementing review scheduled for September 1996 was rushed forward to mid-April. This resulted in our being retrospectively relegated on paper only to the required status of armed guards, although our actual employment has not changed at all. This review also increased our complement, again on paper only, from our current total of 20 men to the 26 men which the MPGS would require. This represents a hidden increase in manning by the MPGS over our current true MDP numbers".
The letter concludes with the observation:
"The scheme is being promoted on the basis that it will return more MDP to policing duties. This idea is fallacious. Almost all MDP employed on armed guarding duties do so on nuclear associated stations and presumably will continue to do so. If the MPGS scheme is carried through fully, the result will be a much reduced Ministry of Defence Police with, paradoxically, a much smaller percentage of its men and women carrying out the policing duties within the MoD estate for which the force exists. The armed guarding duties would be almost untouched whilst civilian policing of MoD(A) establishments, with their large civilian workforce and married quarters estates, as well as of civilian contractors and visitors, would largely disappear. The real purpose behind the MPGS scheme is to provide MoD(A) with an extra battalion of trained infantry, albeit of limited capability, outside of normal funding, the funds required being provided by the virtual eradication of the MDP within MoD(A) establishments".
I hope the Committee will forgive me for having quoted at length but on these issues it is sometimes important to see them from the perspective of those upon whom we are relying and who are deeply affected. As one experienced MoD policemen put it to me only yesterday, "MoD police are not armed guards; they are constables trained in the use of firearms." Many of the doubts they express are shared by noble Lords in all parts of this House and certainly by honourable Members in all parts of the other place. Statements by the Minister of State for the Armed Forces have frankly so far failed to reassure or to deal with the key points.
Let me reiterate some of them. First, what really would be the financial cost of this scheme? For example, what precise estimates have been made of the redundancy costs for MoD police? What precise estimates have been made for recruitment and training costs, presumably more for raw civilians than for ex-soldiers? How many will in the end be ex-soldiers, and how many civilians? What kind of reliable surveys have been conducted on all this? What would be the consequent costs for the civil police, who will inevitably have to take on additional community and other policing
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responsibilities? What will be the net saving for the Defence budget—indeed, will there be any such saving? When will the break-even date be? And what will be the net savings to the nation as a whole, taking into account the costs of additional duties for the civil police? Or is it possible that we are on a disruptive, expensive, hare-brained ride to nothing, or worse, of the poll tax variety?
Secondly, as the letters I quoted indicated, is it not true that local soldiers guarding defence installations will not have the same responsibilities and powers as the MoD police for wider policing duties; for example, policing MoD housing estates or dealing with burglaries or car theft? What exactly will be their powers over civilians as distinct from service personnel? Is it not the case that civilians constitute the main threat to defence property? Indeed, what will happen to the public's rights? The MoD police are subject to the Police Complaints Authority— soldiers obviously will not be.
Thirdly, with their lower rates of pay and generally unfavourable conditions of service as compared with the real Army, with the absence of long-term job security, with the prospect of little but monotonous static armed guarding ahead— never a switch-on for the average soldier— with all this coupled nevertheless with being subject to service discipline, just how many people of the right calibre will really be prepared to serve and for how long will they put up with it?
Fourthly, what will characterise the interface with the real Army? In times of pressure, how local will local service prove to be? Is there not some substance in the fear that the MoD is indeed seeking a cheap source of infantry? Why otherwise are the Government not ideologically sub-contracting in their usual way to the private sector, bringing in Securicor or whoever? These are just some of the questions on which convincing evidence and answers need to be available before this far-reaching proposal is considered for a possible full go-ahead. Hence the amendment.
I am sure the Committee agrees that the MoD police have a very special role, not least because of the sensitive nature of the materials held by MoD, the requirement to carry arms and the presence on the defence estate of service married quarters containing large numbers of civilian dependants. I cannot do better than refer the Committee to the sentiments of the Minister of State himself in the other place on 9th March, when he emphasised that the MoD police do a splendid job and are a fine force that are greatly respected. We all agree with that. If we respect them, we must take their concerns about the effectiveness of the new scheme as seriously as we take our own concerns. I beg to move.
Lord Redesdale: I support the amendment and my noble friend Lord Mayhew in opposing the Question that Clause 2 stand part. We oppose clause stand part because we have doubts about the effect of the clause. The noble Lord, Lord Judd, has covered in significant detail many of the points relating to this issue and I shall therefore restrict myself to asking just a few questions that occur to us on these benches.

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On which bases will the pilot studies take place? If they turn out to be a failure or have significant defects and they bring to light the fact that this scheme may not work in the way it is set out, what will then happen to this clause? Will the Ministry of Defence police be retained or will they go forward in the manner set out anyway?
The other point that occurs to me, living close to Otterburn training area, is that the Ministry of Defence Police are usually based locally and are a significant source of local employment. To a local community one of the cost implications of a garrison town is whether, if the Ministry of Defence Police are to be removed from this duty, there will be a significant deficit in local employment. Some areas such as Otterburn rely solely on the training area for a source of employment and this could have a very detrimental effect.
My other point I should like to raise as a question. If a garrison unit is moved to a base, would that unit be liable to supply soldiers to act as armed guards if there was a shortfall? Would it then accept the liability to provide service personnel in this function? If that is the case— and it may very well not be— will the pilot study measure the effect on their morale? As is the case in the regular Army at the moment, there are significant problems of undermanning, and to add one more liability, one more duty, could have an effect on morale, especially as guard duty, as I know from my own experience in the Territorials, is in the long term extremely boring and detrimental to base morale.
The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): The noble Lords, Lord Judd and Lord Redesdale, have rehearsed a considerable list of concerns on this matter - concerns, I may say, which have been put to me directly by the Defence Police Federation. I hope that I can put the majority of them at least to rest.
Clause 2 will give the Armed Forces the flexibility to recruit personnel for military service in a specified locality rather than worldwide. The Committee may be minded to agree that in itself that is sensible— or rather, that it seems strange that we have not enjoyed that flexibility hitherto.
It has been said, rather unkindly, in another place that what is being proposed is a "travel to work" army. I can assure the Committee that the overwhelming majority of servicemen and women will continue to be required to serve wherever needed, at home or overseas, in peace or war. There are no proposals, therefore, for the general introduction of local service schemes, other than for guarding. However, the Bill does give the option to introduce such schemes if the services see a need for them before the next Armed Forces Bill in five years' time. As I have already said, it is simply a matter of prudently building in some flexibility.
I do not know whether it will offer any reassurance to the Committee if I say that I would be hard pushed to speculate on other types of task that might be suitable for local service engagements. There is no hidden list of agenda, or anything like that, waiting to be produced the moment the Bill is enacted.
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The reasons for considering the use of local service personnel could vary according to the circumstances of the case. There are some jobs that have to be done which might be unattractive to full-time regulars or inappropriate as full-time tasks for them, but which would nevertheless best be carried out by uniformed service personnel rather than by civilians or police officers. It is on this basis that we have decided to introduce the military provost guard service, using MLSE personnel.
The MPGS will be a professional, well-trained and capable guard service. Ministers would not agree to its establishment unless it was. Its success should be demonstrated by the proposed pilot scheme.
At present significant numbers of MDP officers are employed at Army establishments on armed guarding duties for which police powers are not required. It is wrong in principle, I believe, to recruit high quality individuals, give them extensive police training and then to use them wholly or mainly as armed guards.
Employing local service engagement military provost guard service soldiers to carry out these guarding duties will enable significant resource cost savings to be made without there being any reduction in security standards.
I hope that I have been able to assure the Committee that the powers under Clause 2 will be used sensibly and selectively. Local service is certainly no panacea for Armed Forces such as ours which have and will continue to have commitments and responsibilities which are both extensive and challenging. However, I believe that local service does have a place, if only a limited one and, on that basis, I commend the clause to the Committee.
The noble Lord, Lord Redesdale, asked me about the pilot scheme. Subject to the passage of the necessary legislation, the pilot scheme should start in April 1997. It would be conducted at four places—the new Defence Intelligence and Security Centre at Chicksands; Chilwell, which is the home of HQ 49 (E) Brigade and of 27 minor units; the Central Ordnance Depot at Donnington; and Headquarters Land Command at Wilton. The C-in-C Land Command would make a full report to Ministers on whether a pilot scheme had been successful in both security and financial terms. Ministers' conclusions would then be reported to the Defence Committee in another place, as well as being the subject of consultation with the staff associations and the trade unions.
The noble Lord asked me what would happen if the scheme were to fail. If the pilot scheme were to fail—and we do not expect that it will—then, quite simply, the soldiers' engagements would not be renewed unless there was other appropriate work to which they could be moved; and, quite clearly, we would have to have a rethink of the way ahead. I do not pretend to the noble Lord that that rethink has taken place. It would be odd if it had because, as I said just now, these are, in our view, sensible proposals which are also workable.
The noble Lord, Lord Judd, asked about the cost of what we are proposing. Let me say that the investment appraisal and the affordability assessment that we carried out shows that the proposals and the scheme will

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be cost effective and also affordable. He also spoke about the powers conferred upon the MPGS. It will not have constabulary powers— that is quite clear. It can, however, conduct security patrols with the agreement of the local chief constable, and many soldiers already do. We should bear in mind that armed guarding by soldiers is nothing new. It has been happening for many years; it has been happening successfully. So the apprehension that the noble Lord, Lord Judd, expressed can perhaps be tempered by the thought that this is a tried and tested system.
The noble Lord also expressed the fear that the Ministry of Defence police who are in posts requiring police powers will be replaced. I can assure him there is no question of that. Only the MDP employed on guarding duties will be replaced, according to agreed complementing criteria.
I turn briefly to the amendment to the clause. I freely confess that I am a little bewildered by the amendment. The intention is that the main MPGS scheme, involving the creation of around 600 local service guarding posts, should not go ahead until the completion of the pilot scheme which, as I said, we plan to start next year. The pilot scheme cannot get underway until we have recruited men and women on MLSE engagements, and that cannot happen until regulations are made under Section 2(1) of the Armed Forces Act 1966, which Clause 2 of the Bill amends.
The Committee may appreciate that the amendment, unwittingly or otherwise, would frustrate that. It appears to prevent the making of regulations until Parliament has received a report on pilot studies. I assume that is a reference to the pilot scheme. Yet we cannot report on the pilot scheme until we have made the regulations allowing us to conduct that scheme. The regulations themselves, as a statutory instrument, will have to be laid before Parliament, where they will be subject to the negative resolution procedure.
The amendment also refers to the consultative process, and, from what the noble Lord said, it is intended to prevent the introduction of the pilot scheme until the Defence Select Committee in another place and both Houses have considered the consultative document issued by my department on 29th May. There is no need to provide for that in legislation. As I have already said, the regulations themselves have to be laid before Parliament.
It could be also that the amendment is intended to prevent the introduction of the main scheme until the report to Parliament has been made on the pilot scheme. My honourable friend the Minister of State for the Armed Forces has already undertaken to make a report on the outcome of the pilot scheme and our proposals for phasing in the main scheme to the Defence Select Committee in another place. I gladly repeat that undertaking today. I do not believe there is any need to provide for that in legislation.
If I understand the purpose of the amendment correctly, the intention is not to stop the MPGS scheme dead in its tracks; it is to ensure that Parliament is kept properly informed about the outcome of the consultative
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process and the pilot scheme. I can reassure the Committee on that point, as I have already indicated. However, I cannot advise the Committee to look kindly on this amendment. Not only is it unnecessary for the purpose of ensuring that Parliament is kept properly informed; even more fundamentally, as I have already explained, the amendment would have the effect of stopping the pilot scheme.
Lord Judd: I am grateful to the noble Earl for the very full way in which he has responded to our observations. I put it to the noble Earl that his argument about regulations, although apparently attractive, strengthens the misgivings, inevitably, which are held by quite a number of people that the Government are very far advanced in their commitment. If they were really committed to a genuine pilot scheme, why would they not have specified far more clearly in the proposed legislation that the regulations being introduced were attached to the pilot scheme? It seems to me that what is happening is that we are being sucked in to the sort of ratchet, as so often happens in policy development, whereby the regulations for the whole scheme will be in place, because they have to be in place for the pilot scheme, and all the arguments will increasingly therefore fall towards the logic of continuing with what has been started. I hope the noble Earl will not feel I am just being unfeeling or insensitive in saying that his arguments have strengthened my misgivings.
Perhaps I may I also say that, while he has certainly dealt with some of the observations we have made, everything that he said and that was said in the Second Reading debate, and indeed everything I have read in the debates in the other place, suggest that the references to the costing of the scheme are very generalised and sweeping, whereas some of the criticisms that are being made are very specific on this score. We know that it will take more soldiers in this new arrangement to cover the work which was previously done by Ministry of Defence police as part of their wider responsibilities, and the point that the Ministry of Defence police keep making is that it is very difficult, outside nuclear installations, to find Ministry of Defence police who are largely doing this guarding work. They do the guarding work as part of much wider responsibilities.
There must be anxieties about the real costs involved in this. We could go further. We understand, for example, that the Government have not yet reached a conclusion on whether or not service housing will be available to the new soldiers, and what the costing implications of that will be. It seems to me that we are being told that the costing exercise has been carried out— there have been many more examples of this— before evidence of a really thorough financial examination of the scheme is available for all to see.
4 p.m.
Earl Howe: I am grateful to the noble Lord. It may assist the Committee if I expand on my earlier remarks. The investment appraisal we did showed that in resource terms it would be highly cost-effective to use MLSE soldiers to replace MDP officers employed only on guarding duties. The assumption was that those soldiers

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would replace MDP officers on a one-for-one basis. Given the resource cost savings which would result from the formation of MPGS, MDP voluntary early retirement or severance payments allowed for in the investment appraisal would be affordable. We do not expect those payments in practice, but we allowed for them nevertheless.
The affordability assessment shows that aggregate savings from replacing MDP with MPGS would be some £20 million, net present value, by the year 2005–2006. The combined pilot and main schemes would break even in 2001 or 2002. Further details are contained in the annex to the consultative document. The sensitivity analysis we carried out on those figures has confirmed that the conclusions are realistic, despite the inevitable uncertainties of forecasts which extend over a fairly long period. We have done our homework pretty carefully.
Lord Judd: I am grateful again to the noble Earl. I always find him extremely courteous and disarming in his endeavour and commitment to try to put the Committee's mind at rest. However, I hope he will understand that I still need a good deal more evidence that detailed homework has in fact been done. Issues such as housing; the amount of redundancy pay; the number of raw recruits who will come from civvy street and the number who will be ex-soldiers; and the different recruiting and training costs of both must all be looked at in some detail—and be seen to have been looked at in some detail—before one can be certain about costing. I imagine that we could go on arguing this point for some time, so all that I would say is that I believe there are grounds for considerable anxieties.
I must draw the noble Earl's attention again to that part of the letter which I quoted from Chilwell, in which the Ministry of Defence policeman writing on behalf of his colleagues said:
"On my own station, Chilwell, a complementing review scheduled for September 1996 was rushed forward to mid-April. This resulted in our being retrospectively relegated on paper only to the required status of armed guards; although our actual employment has not changed at all. This review also increased our complement, again on paper only, from our current total of 20 men to the 26 men, which the MPGS would require".
With examples like that being experienced by the people at the coalface, no wonder there is anxiety. I suspect that the noble Earl understands the point far better than he is able to acknowledge from the Dispatch Box.
Perhaps I may make the point again that there is a great deal of concern in this country about the protection of hard-won civil liberties and the rights of citizens. We all understand the difficulties, and I would be the first to emphasise that we live in very difficult times. Society is not as we would like it to be, or as many of us experienced it in our formative years, and it is no good sticking our heads in the sand and pretending otherwise: we live in dangerous times in many respects. We must therefore make provisions which, ideally in terms of liberal democracy, we might not otherwise want to make, but they are necessary to protect society. I am the first to endorse those whenever necessary. When we are doing it, however, it is doubly important to be seen to
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have thought through the implications. I am impressed that decent Ministry of Defence professionals (whom, as the Minister of State said in the other place, we all respect) are raising the anxiety that the public's rights may be undermined because very often the people with whom contact is first made in a tricky situation are civilians.
Ministry of Defence Police are subject to normal police requirements and are subject to the Police Complaints Authority; the soldiers will not be. There has been no reference to this by Ministers, and just because of the troubled times and the need to make changes, which ideally we might not want to make, it is extremely important that we do not skate over issues of this kind. For those reasons, I wish to indicate to the noble Earl that of course we will listen, and we always read with great interest and care what he says. We shall read and evaluate very carefully what he says, but we may want to return to this at Report stage.
Lord Redesdale: I wish to clarify one point because I know that this is going to come back at the next stage. From what the Minister said, they did not anticipate any cost implications as regards retirements in the transition from the MDP to the MPGS. Perhaps we could come back to this at a later stage, but it seems to me that that might be because the Minister is foreseeing that members of the MDP will downgrade their jobs to become members of the MPGS in the future. I had the impression that this might have been the cost implication about which he was talking.
Earl Howe: No. I was referring to our expectation that the formation of the MPGS would not require any compulsory redundancies. However, it is possible that the Government's proposal would allow a number of officers to leave the MDP voluntarily on the same terms as they would have received if they had been made compulsorily redundant. The present expectation is that all the MDP officers displaced by both the MPGS pilot scheme and the main scheme would be covered by natural wastage. However, we have judged it prudent to assume that it may be necessary to offer some voluntary early retirement or severance terms to those displaced by the pilot scheme. So it is that to which I was referring.
Lord Judd: Perhaps I may raise one other issue which we may want to examine in some detail at Report stage. It is how far this scheme commends itself equally to all three services, or how far this scheme may have won the acquiescence, I suspect the cautious acquiescence, of the Army; the Air Force and the Navy see little point in it. In the meantime, we will look very carefully at what the Minister said. I repeat that we may need to return to it, but at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Mayhew: I put down this motion because I just disliked in principle the procedural background and content of Clause 2. It is extraordinary that a scheme

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which has the most far-reaching consequences—this is quite original—should be introduced in a dozen lines in the Armed Forces Bill.
I followed as carefully as I could the helpful speech of the noble Earl and yet, at the end of it, I still had the feeling that Government are trying to rush this through without sufficient reference to Parliament. I am disappointed that he could not agree at least to the principle of amending this clause in such a way as to make quite sure that, when this pilot scheme is over, Parliament is consulted as to whether to go ahead. That has not been done. We are told that information will be given to the Defence Committee, but I believe we should go further than that. If the Government want to go ahead with this scheme, to which we have no objection whatever in principle, they should take the opportunity of assuring us of that, once the pilot scheme has been completed. From then on it is for Parliament, and not the Government, to decide whether to proceed with the scheme. I hoped that the noble Earl would be able to give us that assurance, but, as I think he would agree, he did not go that far. I felt hostile from the start to the phrasing and procedure embodied in the clause. It may be necessary to refer to it again at a later stage.
Earl Howe: I note with concern what the noble Lord, Lord Mayhew, has said. For my own part, I can see no better way of introducing a proposal such as this than in primary legislation. If we had attempted not to do that, I believe that the complaints would have been equally vociferous. It offers an opportunity for both Houses of Parliament to consider the proposals in some depth and, as the noble Lord will know, the Defence Select Committee in another place did exactly that in considerable detail.
I do not believe that the Government are rushing anything through. As I have said, there will be checks and balances. We are not going headlong into the main scheme; we want to see whether the pilot scheme will work. We will report back to the Defence Committee in another place on whether it has worked, and no doubt we shall be asked some very searching questions at that time. It is, of course, open to your Lordships at any time to put down a Motion for debate on those matters. As always, the Government will listen carefully.
I am sorry that the noble Lord feels as he does, although I am reassured that he has no objection in principle to the idea. I am grateful for that. I shall reflect on what he has said between now and Report, and if I can offer him any more comfort I shall obviously do so.
Clause 2 agreed to.
Clause 3 [Discharge certificates]:
Lord Judd Lord Judd moved Amendment No. 2:
Page 2, line 22, leave out ("authorised by them") and insert ("acting on their behalf").
The noble Lord said: We are dealing with the significant issue of discharge certificates. I am always rather intrigued about the kind of wording with which we are confronted. A discharge certificate is significant;
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it is significant for the forces and it is significant for the individual concerned. When I encounter wording that says that,
"particulars … are required to be included in the certificate by directions of the Defence Council or an officer authorised by them",
I cannot help dwelling on those words because an officer authorised by them might decide on his own initiative that this was something that he wanted to do. He would not necessarily be thinking all the time that he was doing it on behalf of the Defence Council. Therefore, while in no way challenging what this part of the Bill is about—it is a very essential part of the Bill—could we not have a type of wording that would keep clear all the time that anybody who is acting in this way is acting on behalf of the Defence Council?
I should have thought that this was an eminently sensible and reasonable amendment. I know the noble Earl is always open to helpful suggestions and I thought that on this occasion he might accept what I am proposing. I beg to move.
4.15 p.m.
Lord Mottistone: Having served in the Admiralty over 30 years ago, when I was taking various actions and making various recommendations, I was always conscious of the fact that I was doing it on behalf of their Lordships, the Lords of the Admiralty, of whom the noble Lord, Lord Mayhew, was the First Lord later—not that I was serving in the Admiralty at that time. There is no doubt in anybody's mind that any officer who is serving in a defence ministry is acting on behalf of his superiors. No doubt it also applies to other ministries although I have never served in one. The point that the noble Lord, Lord Judd, made that somebody might take action on their own account, forgetting that they were acting on behalf of the defence ministry is absolutely incredible. I hope that my noble friend the Minister will not accept the amendment.
Earl Attlee: Before speaking to the amendment, perhaps I may remind the Committee that I have an interest as a serving officer in the Territorial Army. Last year, I was involved in recruiting for an international aid organisation. Ex-Regular Army, Royal Navy and RAF personnel are a good source of recruits. The difficulty is to determine whether or not they have a good service record. Normally the discharge papers say "Conduct— Exemplary". If you are not familiar with the service paperwork you think you have a very good citizen when, in fact, his conduct in the services could have been less than perfect. I wonder whether the Minister can suggest any way of improving that so that a prospective employer can see the quality of a potential recruit. I appreciate that he cannot be given a confidential report on a soldier, but perhaps we could have some better paperwork when soldiers are discharged from the services.
Lord Vivian: I would like to support my noble friend Lord Mottistone. He is perhaps a more recent member of the regular forces, now retired, but I have a current interest as honorary colonel of a regiment, so I am perhaps a little more up to date. A commanding officer

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is responsible for signing discharge papers. When one has in mind the fact the individual being discharged may be affected by his discharge book, one treats the matter with extreme diligence. I do not believe that at any time in my career I have ever thought that I was acting on my own; I was always authorised by the Defence Council.
Viscount Slim: I would also like to say, as someone who has spent some time in the military, that I cannot recall ever having acted on my own. I find the remarks of the noble Lord, Lord Judd, quite inconsistent with the loyalty of an officer. The fact that an officer is authorised to act means that he is very carefully briefed. He is generally briefed in writing or by some more modern means today. I take what was said as a slight slur on officers of all three of Her Majesty's services. It is perhaps being a little semantic, but I take rather an exception on this occasion to what the noble Lord, Lord Judd, said. I support the last two noble Lords who have spoken.
Lord Judd: The last thing that I would want to do is to cast slurs on officers, having had the honour of holding the Queen's Commission myself. With respect, I personally would always like to take pride in the fact that I was taking action—that I was not only authorised to take action, but that people sufficiently trusted me and respected me to feel and to know that I was acting on behalf of the Defence Council. That seems to me to underwrite the significance, honour and integrity of the officer concerned. Therefore, I do not understand the misapprehension— if I may put it that way— of some noble Lords although I greatly respect their experience.
It is not just a matter of what the officer concerned may know; it is not even just a matter of what the service concerned may know or of what the Defence Council may know; it is also a matter of the perception of the general public because presumably the certificate is there to be used by people who have not been part of the military culture. I should have thought that if they knew that the certificate had been signed on behalf of the Defence Council and not just, as might well happen elsewhere in civilian life, by a line manager because he had the authorisation, that would have tremendously enhanced significance for those reading the document.
The amendment is designed to enhance and recognise the status of the officer and the significance of the document and also to reassure the public. I am very sorry but I do not think the noble Lords who have spoken could have read exactly what is being proposed. I cannot understand how they have drawn the deduction they have.
Earl Howe: I fully appreciate that the noble Lord, Lord Judd, intends to be helpful in tabling these amendments. Having said that, I am not sure that I have warmed to them particularly. The importance of discharge certificates lies in enabling men and women who have left the Armed Forces to show prospective employers and others that they have been legally discharged from the forces. The present legislation requires that the information to be included in the certificates shall be prescribed in Defence Council regulations. Clause 3 alters that by specifying the
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minimum details—the core particulars, in other words—which the services are required to include in the certificate. It also increases the flexibility to add to or change the other information included, without requiring changes in primary legislation or regulations, which may well be cumbersome to bring about. The flexibility introduced by the change could make more information available, as the noble Earl, Lord Attlee, has suggested might be desirable. It could do so if it were clear that it would help men and women leaving the services in finding suitable employment.
Discharge certificates are important in that context but what the Committee should bear in mind is that in previous legislation the Defence Council had to prescribe the contents of these certificates. All we have done is to ensure that the major items are now to be laid down in legislation, and it is only the less important matters which the clause gives flexibility to incorporate or remove; for example, what particulars are to be given about somebody's conduct or matters of that kind.
Although we consider this to be a useful change we have to keep it in perspective. It is essentially a technical change, having come about as a result of a review of the regulations about enlistment and discharge, and the main result of that review is that the proposed rationalisation of regulations in Clause 4 looks to be a useful one. When Clause 4 is brought into force all the regulations will in future be subject to parliamentary scrutiny except for this matter, where we consider that the sensible way to proceed is as provided for in the clause.
I cannot agree with the suggestion of the noble Lord, Lord Judd. We do not see any merit in making the alterations to the clause that he has proposed. As far as we can see, those alterations would simply change the wording but would not have much practical effect on the clause. Before an officer could act on behalf of the Defence Council in exercising the statutory power conferred on it, he would need in any event to be authorised by it and know that he had been authorised by it. The noble Lord's amendment would be change for change's sake.
In the light of what I have said, I wonder whether the noble Lord feels a little more relaxed about leaving the wording of the Bill as it is.
Lord Judd: I of course find the noble Earl's remarks helpful. Perhaps I may make the observation that I believe some people out there in civvy street do not always understand the intricacies of the thinking in government circles in the Ministry of Defence, or indeed, as I said earlier, in the military culture. It is unfortunate that there should be in the Bill an implication that something may on occasion be done by the Defence Council, or by somebody authorised by the Defence Council, because inevitably from time to time people are going to ask why it was not actually done by the Defence Council and what is the difference and the significance of it. I am sure it is not intended that there should be a difference and a significance but the situation I have described could arise. I am the last person to want change for change's sake. That is not a role which attracts me. But when one is considering

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legislation to clarify situations it is just as well to make sure that any possible doubts have been looked at and dealt with.
I listened to what the noble Earl said. I liked what I heard. I shall go away and consider his remarks but at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Clause 3 agreed to.
Clauses 4 and 5 agreed to.
Lord Mayhew Lord Mayhew 1 moved Amendment No. 4:
After Clause 5, insert the following new clause—(" .—(1) In each of the 1955 Acts—

(a) in subsection (3) of section 24 (misconduct in action), subsection (2) of section 25 (assisting the enemy), and subsection (3) of section 26 (obstructing operations etc), paragraph (a) and the words "(b) in any other case," shall be omitted;

(b) in subsection (1) of section 31 (mutiny) the word "death" shall be omitted and the word "imprisonment" inserted; and

(c) in section 32 (failure to suppress mutiny) sub-paragraph (i) and the words "(ii) in any other case," shall be omitted.

(2) In the 1957 Act—

(a) in subsection (3) of section 2 (misconduct in action), subsection (2) of section 3 (assisting the enemy), and subsection (3) of section 4 (obstructing operations etc), paragraph (a) and the words "(b) in any other case," shall be omitted;

(b) in subsection (1) of section 9 (offences of mutiny) the word "death" shall be omitted and the word "imprisonment" inserted; and

(c) in section 10 (failure to suppress mutiny), the word "death" shall be omitted and the word "imprisonment" inserted in its place, and the words "and in any other case, to imprisonment or any less punishment so authorised" shall be omitted.").

The noble Lord said: This subject of the death penalty in the defence forces has been discussed many times in both Houses of Parliament over many years. I do not propose to go through the familiar arguments yet again. However, as the years go by the case for retention becomes weaker and weaker. It is now 50 years since the penalty was imposed. There have been wars in the Falklands, the Gulf and Korea without, so far as I know, it being relevant at all.
The time is rapidly coming for the Government at long last to accept what I believe to be logical and inevitable. The death penalty has been abolished by most of our NATO allies; some took the step many years ago. The likelihood of the offences concerned—of mutiny, of deliberate assistance to the enemy—being committed has diminished and continues to do so. The likelihood of an execution being decided on and carried out has accordingly become less. Its value as a deterrent, if it ever was a deterrent—we have had that argument many times— becomes less and less substantial. It is a relic. It is irrelevant to our new professional army and to the age in which we live. The time has come to wind it up.
To most people the words "armed forces" and "death penalty" immediately bring to mind the terrible abuse, in many cases, of the death sentence in the First World War. That is what people think of, and it does not do the Armed Forces much good. I have just finished reading a remarkable new book about the First World War called "The Bickersteth Diaries". It consists of the letters home of two courageous and civilised officers, one of them a chaplain, who experienced four years of trench warfare. What this gallant chaplain found most stressful, amid all the tasks of comforting the wounded and the dying and picking up the remains of bodies for burial, was sharing the last night with shell-shocked young soldiers before they faced a firing squad.
Those times are long past and, of course, the death penalty is a much stricter affair today. It is more narrowly defined but it is still there, for some reason, unused for 50 years. It does not do the image of the Armed Forces any good. It does not feature in the Government's recruiting propaganda. I would be very surprised if it did.
The time is rapidly coming when we should get ourselves up to date and abolish the death penalty for the services.
4.30 p.m.
The Earl of Balfour: I am concerned that in the Navy, and even in the Merchant Navy to some extent, there could be a risk of mutiny. That is the only thing I want to talk about. Mutiny is a very serious offence. It has not taken place, I am glad to say, for a very long time. The noble Lord, Lord Mayhew, gave the example of the First World War. I feel that there a few of the officers should perhaps have been put up against a wall and shot. I feel that in the case of mutiny the death penalty is the ultimate sentence which I feel should still remain on the statute book.
Let us suppose that a mutiny takes place after the death sentence has been abolished and that the forces come in and re-take that ship. If they knew, with the sort of murder that has very often taken place with a mutiny, that these people, the mutineers, were going to get away with a life sentence of prison, I have a feeling that the officers re-capturing that ship would make certain that none of them lived to tell the tale. I would not like to see that, for this reason: for whatever crime anyone has ever committed, at least I want to make certain that that person stands a fair trial. I feel that if we do away with the death sentence totally, that might not be the case.
Lord Williams of Mostyn: I support this amendment just on the basis of principle. I would suggest that in any legal, judicial system—and of course I fully appreciate that we are speaking within a particular context—it is unwise to have a penalty which has fallen, as the noble Lord, Lord Mayhew, said, into complete disuse after 50 years. There is no death penalty for murder in this country.
A person who many of us would believe did infinitely greater harm to the security interests of this country and therefore to jeopardise the interests of those serving

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Her Majesty in one form or another was George Blake. There was no death penalty for him: the sentence was 42 years. One is also contemplating the imposition of a death sentence without the normal safeguard of a trial by jury. On those bases, not least the fundamental underpinning of which the noble Lord, Lord Mayhew, spoke, that a penalty not used becomes a penalty without value, I beg leave to support his amendment.
Lord Redesdale: I too support this amendment. I do believe that the death penalty is a relic, even for mutiny. The noble Lord, Lord Constantine of Stanmore, raised the issue of mutiny on ships, which would lead to the need for keeping the death penalty. I do not have a history book with me, however, but it is some time in the distant past since a mutiny on ship has taken place. The conditions that bring about a mutiny should be looked at. In today's very well trained and very well motivated armed forces, a mutiny will not take place for no reason whatever. Mutiny usually takes place on ships due to the very harsh conditions that are suffered, or because the soldiers themselves feel there is a form of injustice. Therefore, if that injustice has taken place, there might be mitigating circumstances.
We live in a society where the death penalty is not seen to be in any way, shape or form acceptable. Even for the most heinous of crimes the death penalty has not been implemented in the recent past. I believe that that should remain so. I do not believe that, under any circumstances in the society in which we live, we should have the death penalty. As the Army, in its conditions of service, reflects the society it serves, perhaps the death penalty should be removed. I support the amendment.
Earl Howe: With his proposed new clause, the noble Lord, Lord Mayhew, has raised a subject which engages the consciences of all of us. It is certainly not a matter which many of us can readily consider dispassionately, yet I suggest that we need to attempt to do so, even though we are contemplating the possible imposition of the most dreadful of punishments in what may well be the most dreadful of circumstances when the safety of our Armed Forces or even of the nation itself may be in peril.
As the new clause indicates, the death penalty is retained under the service discipline Acts as a non-mandatory sentence for five offences where these have been committed with an intent to assist the enemy, or the taking or not taking of action in connection with operations against an enemy. The offences involved would be likely not only to jeopardise national security, but also to put the lives of other servicemen and women at direct risk. The nearest civil criminal offence of this nature would be an act of treason for which, of course, the death penalty is still mandatory.
When men and women join the Armed Forces of this country, they subject themselves to a body of law which is designed to provide for the effectiveness of the service as a fighting force through its disciplinary system. That, of course, is what the Bill is all about. Indeed, much of the Bill is specifically concerned with bringing service law and procedures into line with civilian ones in accordance with our standing policy to do that where it is sensible and practical to do so.
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However, there are many instances where it is not possible or sensible for service law to be identical to civil law. The offences we are talking about here are a case in point: they are solely and specifically service offences. Service law has to be framed to respond to the circumstances of service life worldwide, in peace and war, and including in armed operations against an enemy. In any case, the death penalty has been retained in the civil criminal law, notably for treason, as I have just mentioned, but also for piracy with violence.
The services are firmly of the view that the death penalty should be retained for the five service offences for which it remains a sentencing option. I must stress to noble Lords the important point about all five offences: there must be an enemy. My noble friend Lord Balfour referred to the fact that mutiny at sea is one of the offences which can carry the death penalty. He is perfectly right in that, but unless there is an enemy, the death penalty cannot be passed under the service discipline Acts.
Accordingly, Ministers have given undertakings that the penalty, if passed by a court martial, would not be carried out for offences committed in peacetime. That was reiterated by my right honourable friend, the then Minister of State for the Armed Forces, Sir Archibald Hamilton, when the matter was debated during the passage of the previous Armed Forces Bill. In peacetime, we would use the system of post-trial review to ensure that any sentence of death passed by a court martial was commuted on review.
I know that we all have our views, often strongly held, about the appropriateness or otherwise of the death penalty as a sentence available to the civil courts for offences such as murder. When the retention of the death penalty was debated during the passage of the previous Armed Forces Bill, one noble Lord acknowledged that he found it an issue which was very difficult to decide, and he went on to say:
"There are reasonable arguments in favour of retaining the death penalty in military law. Noble Lords who have seen active service will know that you have problems in war to which there is no equivalent in civilian life. Extraordinary problems of discipline arise which, it can be argued, call for the threat of extraordinary punishment".
I draw those remarks to the Committee's attention not for the purpose of irritating the noble Lord, Lord Mayhew, by quoting what he said out of context, because he went on to speak in favour of the abolition of the death penalty in the services. I do so because the observations he made seem particularly apposite. This is a difficult issue. It is complicated by the fervent hope of all of us that neither the Armed Forces nor any individual should find themselves in the extreme and awful circumstances about which we are necessarily speculating.
Perhaps I may make one point in response to something the noble Lord, Lord Mayhew, said. He said that the death penalty had not been used for 50 years and that was a good enough reason in itself to consider getting rid of it. I do not think it is a persuasive argument that just because the death penalty has not been carried out for a service offence for a long time it should be abolished. That is not persuasive any more

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than an argument would hold water in relation to the penalty for treason. The Government believe that it is right to maintain the possibility of the death penalty as the ultimate sanction for the service offences to which it applies.
I believe we must take due account of the judgment of those who would have the responsibility for maintaining order should the extraordinary problems of discipline to which the noble Lord, Lord Mayhew, referred five years ago ever arise. As I have already mentioned, the services firmly believe that the death penalty should be retained. On that basis, I would urge the Committee to reject the amendment.
Lord Judd: I wish briefly to intervene to associate myself most strongly with the observations of my noble friend Lord Williams. It seems to me that the issue which we have always to keep in mind when considering this crucially important issue is that the armed services are there to defend what makes Britain a democracy worth living in. Faced with this issue in all its manifestations in our national and civilian life, Parliament has decided that the death penalty is inappropriate and indeed wrong. While of course we must respect those who carry the tremendous responsibility of leadership in the armed services on our behalf, it is unfortunate that on this issue the armed services do not reflect what has become seen as appropriate in civil life, not least in the context of civil terrorism or in the context of what might happen in a disciplined civil service— the police, the fire service or indeed in a civilian airliner or a ship at sea. In those contexts there is food for thought. I hope that the noble Earl will not rush into absolute outright rejection of the points that the noble Lord, Lord Mayhew, has so vigorously and rightly made in his intervention.
While it is of great importance that we should take seriously the responsibility and views of those we place in uniformed leadership of our armed services, it is nevertheless we who have to decide whether or not the death penalty shall apply—we in Parliament. That is not a responsibility we can pass on to others. I therefore associate myself with all that has been said by the noble Lord, Lord Mayhew, and indeed by my noble friend Lord Williams.
Earl Howe: I understand the points that the noble Lord, Lord Judd, has just made, and, as I said, these are matters which give rise to very strong feelings on both sides. I believe that at least some of the concerns that the noble Lord has expressed are reflected in the revised procedures in the Bill relating to review and appeal.
The Bill removes the current provisions which could allow executions to be carried out without review or appeal if the confirming officer under the present system judged that to be essential for the safety of the force. In future, as the Bill proposes, any death sentence would have to be approved by the Defence Council itself, which would review the case automatically, whether or not the accused had put in a petition. There is also a new right to appeal purely against the sentence, and the sentence would be stayed pending any appeal or the expiry of the time limit for making an appeal.
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The Bill contains all sorts of other safeguards. I believe that that is not only a major step forward but that it should also give comfort to those who, like the noble Lord, are fearful that a death sentence might be carried out in times of extreme stress without the individual concerned having any right of review or appeal. That is not the case under the Bill.
Lord Williams of Mostyn: Before the Minister sits down, may I deal with two specific matters? I am most grateful for the clarification that he has given. First, the noble Earl said specifically that an undertaking had been given in another place that no death sentence would be carried out in peacetime. That inevitably means that in peacetime the Army's judicial process will have aspects of complete artificiality—I do not want to use the word "charade" in such a serious context—because according to what the Minister has just told us all those taking part, even if a sentence of death were imposed, would know that there would be an automatic striking down of the sentence.
Secondly, when the noble Earl speaks of "peacetime", does he mean that in the rather technical sense—that is, if there is no formal declaration of war, no sentence of death will be carried out?
Earl Howe: To take the second point first, it is often said that as war is rarely officially declared nowadays, the dividing line between wartime and peacetime is insufficiently distinct for purposes such as this. However, I believe that most of us know the difference between war and peace, and the government of the day would obviously need to apply a practical approach to what circumstances constituted "peace" and what constituted "war". The noble Lord has made a valid point, but it is a slightly academic one in the circumstances.
The noble Lord's first point related to the undertaking given by my right honourable friend Sir Archibald Hamilton five years ago. I do not think that that undertaking gives rise to any artificiality. It is, however, the case that the post-trial review would automatically strike out a sentence of death in time of peace. I do not believe that that devalues the procedure of the court martial in any way—rather the opposite. In fact, the existence of the death sentence will underline the gravity of the offence concerned. It is a matter of the procedure that we have undertaken to adopt. Given that cases of this kind will be extremely rare in any event, I hope that the noble Lord will not consider that the point that he has made will in practice give rise to any unease.
Lord Williams of Mostyn: All procedures depend on specifics. I asked my question expecting the unambiguous answer that peacetime means the absence of the declaration of war. What is to be the position, for instance, of Her Majesty's forces who serve in Bosnia, or soldiers aboard one of Her Majesty's vessels who are in circumstances that people would not describe as "peaceful" but where there has been no declaration of war? If there is to be further consideration of the true ambit and nature of Sir Archibald Hamilton's undertaking, I am content to receive a letter from the

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Minister, if that is of assistance, but I do not believe that something as important as this can just be brushed aside on the basis that we all know what "peacetime" is.
Earl Attlee: How would the Minister describe Operation Granby in the Gulf and Operation Corporate in the Falklands? Were they peace or war?
Earl Howe: It is not only for me to decide such things. It would be for Ministers as a whole and no doubt for the Defence Council as well. I believe that the judgment of the man in the street would be that the Gulf conflict was a war, as indeed was the conflict in the Falklands.
Lord Kennet: I am sorry to prolong this debate. It seems to me that the Minister has just installed the man in the street in a judicial position involving life and death. If the existence or not of war is to be left to the judgment of the man in the street, what else may not be left to the judgment of the man in the street? Should we not abolish the penal code forthwith? I am not being flippant. The Falklands war was never declared; that is why it was called the Falklands conflict throughout. There were situations that could easily have involved mutiny, and perhaps did. I need go no further. All Members of the Committee will remember. If a soldier had disobeyed orders in such a way as to endanger his comrades in that conflict, according to what we have just been told by the Minister, he could not have suffered the death penalty.
Earl Howe: I mentioned the man in the street merely to make a point. To revert to what the noble Lord, Lord Judd, said, the Armed Forces are defending the values of our democracy and the values of ordinary people. It would be extraordinary to the ordinary man if the Defence Council were to find that a conflict such as the Gulf conflict was not a full-scale war. But we are in the realms of hypothesis and I do not accept the noble Lord's contention that ordinary language is somehow invalid.
I shall gladly write to the noble Lord, having reflected on these exchanges, because they are clearly matters of importance. I still believe that the arguments that I advanced for separating civil law from military law in this matter are not only valid but extremely compelling. I shall need quite a lot more persuading by Members of the Committee if I am to be deflected from my proposed course.
The Earl of Clanwillian: Can the Minister say whether the articles of war were read to the Armed Forces at the beginning of the Falklands incident or the Bosnia operation? If articles of war are read, presumably the Armed Forces are in a state of war.
Earl Howe: I cannot answer my noble friend on that point, but I shall certainly look into it because it is a very valid question.
Viscount Slim: I get the slight impression that some noble Lords feel that mutiny is rather like a strike. There is a grave difference between mutiny and going on strike. Mutiny puts lives at risk. It puts a strategy or a
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tactical battle at risk. It puts the lives of many people at risk and it damages a nation, or can do, with the consequence of a loss of a battle or a loss of a particular tactical site or space of a battle. Also, going across to the enemy is not just a matter of changing your political colour or your political allegiance. Giving information to an enemy is treason, whatever you feel about it.
I have great sympathy with the noble who has seen much action and understands these things. I wonder whether we could do more than say that "life" means 15 years but you are out in seven; I wonder if we could do something that is more in line with what the noble Lord said about a sentence of 42 years. I am trying to be helpful here.
Although the noble Lord, Lord Judd, is quite right that Parliament makes the laws and the rules, Parliament also sometimes makes mistakes. I believe that we should listen to the wishes and inclinations of the chiefs of the defence staff on this matter. I see a middle way in all of this, and I urge reflection. At present, I have to side with the Minister because, with great respect to the discussion that we have had so far, not enough thought has been given to the military consequences. I would therefore urge some deep reflection. I believe that there is a way out of this, a middle way, and I hope I hear it later.
Lord Mottistone: Speaking from a naval point of view, I entirely agree with what has just been said.
Lord Mayhew: I am most grateful to those who have contributed to this discussion and I am most grateful to the noble Earl for his explanation. Almost everything that has been said, especially by the noble Earl, about the safeguards against injustice and about the narrowness of the offences for which capital punishment is relevant has proved my point—that, in fact, capital punishment is non-operative in the forces. It goes without saying that it has not been used for 50 years—and everything that the noble Earl said suggested that it was infinitely unlikely ever to be used again, both because of the narrowness of the definition of the offence and because of the many, many safeguards rightly written in to prevent its abuse.
The noble Earl also mentioned the strong feelings on both sides of this debate. I examined my own and I found that my feelings are not as strong as they used to be because the question now seems academic. I do not fear that the death penalty will be imposed in my lifetime on any single serviceman or servicewoman. The tone of the debate is not like it used to be 10, 20 or 30 years ago—I can remember debates about capital punishment in this House or the other place of 40 years past—and that is because the penalty has become a relic. We have to decide whether it is a relic worth preserving. If it is a fact that the armed services wish to retain it, that is an enormously important point. I entirely agree that there are disciplinary problems facing the services, which we do not experience in civilian life. However, whether the death penalty is a deterrent to mutiny or anything else is another matter.
The noble Viscount flattered me by saying I had had great experience of action, but nothing could be further from the truth. I have had extremely limited experience

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of action, but I recall a despatch rider coming to a forward headquarters with a message at some risk and arguing against the order to return with the answer. It is when you get such a situation that you think hard about discipline and deterrents; and if I think hard about that man's mind at that time, I do not believe in his mind he had a picture of a firing squad. If he did, he might well calculate that the chance of being tried, sentenced and shot was a good bet compared with the ride back the way he had come. I do not believe that this deterrent thing is really practical.
I wish to thank the noble Earl and others who have contributed. I sense as the years go by that feelings are less strong and more practical as to what is good for the armed services and what is good for their image. I believe it is time to bring this little matter up to date. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5 p.m.
Clauses 6 to 10 agreed to.
Clause 11 [Fingerprinting of certain offenders]:
Lord Judd Lord Judd moved Amendment No. 5:
Page 6, line 23, leave out ("may") and insert ("shall").
The noble Lord said: I beg leave to move the amendment standing in my name and, if it is convenient to noble Lords, I would also like to speak to Amendment No. 6. I do not intend to move Amendments Nos. 7 and 8; indeed I am not quite sure why they are on the Marshalled List. Two days ago, when I noticed that they were on the list, I sent a message asking how that had happened, but the message has obviously not reached those with responsibility, and I take full responsibility myself for any confusion on this point.
I make my intervention here with some trepidation after the strictures of the noble Earl about change for change's sake on a previous amendment. I should like to take the opportunity of this rather delightful Committee system that we have in the Moses Room to probe the thinking behind the wording, why a particular form of words has been chosen, and why another form of words might not be better. We obviously want to get the best possible wording and on this matter we are dealing with quite a serious issue: we are dealing with fingerprinting without consent. I am intrigued to know, and hence the tabling of this amendment, why we have these words "may not". I quite understand that "may not" may be used in legal discussion at times in a particular way, but that does not mean that the word "may" has the same force as "shall". Hence, I wonder whether the noble Earl could tell us the rationale for using the word "may" here rather than the word "shall".
Similarly, "reasonable force" is a very subjective consideration. I must say in all honesty to noble Lords that the longer I have looked at the various formulae I have deployed, not least the formulae of my own wording here, I see that there are always problems of subjectivity. But we want to minimise the degree of subjectivity. I believe that it would be helpful if the
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Minister could perhaps justify the use of the wording used here, rather than wording which might have tied it all up a little more tightly.
Earl Howe: The noble Lord has helpfully outlined the purpose behind these two amendments; nevertheless, I must say that the first amendment seems a little obscure. The key word in line 23 seems to me to be the word "not", so that the powers provided for in the clause "may not" be exercised in the circumstances described. The Committee may consider that this makes the question of whether we talk about "may not" or "shall not" rather academic. That is certainly the view of our lawyers at any rate, and I do not know that there is any difference in the force of those two, but "may not" certainly is the more normal way of phrasing it.
The other amendment is concerned with the level of force that may be used to take fingerprints if the convicted person refuses to co-operate with the process. The clause provides for the service police to use reasonable force if necessary. The main effect of the amendment is to replace this with "the minimum necessary force". There is not likely to be a difference in the circumstances of fingerprinting for the record between "reasonable force" and "minimum necessary force". Military policemen operate on the following basis:
"The basic principle is that a person must not use more force to achieve his lawful objective than is or he has reasonable grounds for believing to be absolutely necessary. This applies to fingerprinting as to any other activities where the use of force may he required".
We also need to be consistent here. The clause is, in effect, extending or replicating the relevant provisions of the Police and Criminal Evidence Act 1984 to service law and the service police. The 1984 Act, known as PACE, allows the use of reasonable force if necessary to obtain fingerprints. Parts of PACE procedure are already applied to fingerprinting activity by the service police. They already have powers to take fingerprints without consent during the investigation of an offence by using reasonable force. Clause 11 extends these powers to allow fingerprinting for the record after a conviction. I would suggest to the Committee that the provisions governing the use of these powers need to be as consistent as possible, both with the civilian PACE powers and the powers already exercisable by the service police. Two separate tests might confuse the courts and lead them to look for nuances and to draw distinctions which have not been intended. This points to there being powers to use reasonable force where necessary particularly since, as I have already suggested, the distinction between "reasonable" and "minimum necessary" is likely in these circumstances to be academic.
Therefore, I hope the noble Lord and the Committee will accept my assurances that the proposed amendments, while no doubt put forward with the most generous of libertarian motives, would not really achieve anything of the kind.
Lord Judd: I am grateful to the noble Earl and I shall accept what he said. But in doing so, perhaps I may draw his attention to the fact that in what he quoted from the manual of the military police the word "must" was used which I find much more acceptable than "may" which always has the element of "perhaps" about it. However, I am not a lawyer. I am just looking at it as a layman.
I understand the spirit of what the Minister is saying. I take what he says very seriously. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (The Viscount of Oxfuird): If Amendment No. 6 is agreed to, I cannot call Amendments Nos. 7 and 8.
[Amendments Nos. 6 to 8 not moved.]
On Question, Whether Clause 11 shall stand part of the Bill?
Lord Williams of Mostyn: For this afternoon's purposes, I am a conscripted private soldier in the army of my noble friend Lord Judd. There are five amendments down—all in identical terms. Anything I say will be extremely short because the amendments are simply the basis of genuine inquiry. I ought to say, now that my noble friend has departed, that I believe the explanation given by the Minister in respect of my noble friend's last two amendments was entirely correct.
I have two questions. What is the purpose of having this power at all? Can it be sensibly used? Under Clause 11(2)(b) the power may not be used,
"after the end of the period of three months beginning with the date of the conviction".
Does that mean that if an appeal process has not been concluded within that three-month period the power lapses? Again, I do not want to take a nitpicking question which may more usefully be answered by letter but it is on this sort of occasion that one needs to test the need for the power and to see whether it is workable in practice.
There is one other relatively minor point. In Clause 11(4) "disciplinary proceedings" are subject to a definition. I shall not read it; it starts at line 35 and continues to line 40. If one goes back to page 3 of the Bill, Clause 6(3) defines "service disciplinary proceedings" in different phraseology. As the noble Earl the Minister rightly sees consistency as being important in matters of this sort, I wonder whether there is a reasonable explanation for the difference. I would be grateful if the Minister could assist by indicating what is the need for this power. There may well be good reason why, in his panoramic introduction at Second Reading, the Minister did not have the chance to deal with every such matter. This is simply a short and genuine enquiry.
Earl Howe: I am grateful to the noble Lord. I shall gladly say a few words by way of explanation of the clause. The Government believe that the change
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represented by Clause 11 is a small but important step in the direction of ensuring that, where appropriate, service police have powers corresponding to those of their civilian counterparts. At the moment the service police essentially have powers only to take fingerprints without consent in connection with the investigation of an offence, or if persons are held in arrest under the service discipline Acts; that is to say, before a trial. The powers are similar to those of the civilian police. However, it is not always necessary to take fingerprints before a trial. On the other hand, fingerprints may be needed, or may be useful later after a conviction, for recording purposes. Service police, unlike their civilian counterparts, do not have the powers to take such prints without consent. Clause 11 provides the power for them to do so.
The recording I am talking about is on a similar basis to the recording of convictions by the civilian courts. Certain offences dealt with in service proceedings are reported to the national identification service in the interests of comprehensive criminal record. The NIS will only accept records of offences where these are accompanied by a set of fingerprints. As I have sought to explain, the clause will enable us to take such fingerprints. Without the clause it would be necessary to take fingerprints pre-conviction on a fairly indiscriminate basis just in case they might be needed afterwards for the NIS record. We would regard that as wasteful, particularly as we would be obliged to destroy any such prints in the event of an acquittal. The clause will ensure that fingerprints are taken only where absolutely necessary. It puts service procedures on the same footing as civilian ones. It is a sensible measure which deserves the support of the Committee.
The noble Lord asked about the part of the clause referring to the powers lapsing after three months. Of course we would not wait for the appeal process to run its course before taking prints, and for that reason the lapsing of the power would not pose any practical problems. The wording is intended to ensure that it is a power that is properly used in connection with the offence for which the person has been convicted.
Lord Williams of Mostyn: I am most grateful. The definition matter can wait; I criticise myself for what is a nitpicking question. I am obliged to the noble Earl the Minister for his explanation. I find it entirely satisfactory that there should be a correspondence between the civil and military regimes in terms of fingerprints.
I should like to raise one matter, however. If, as the noble Earl, said, the fingerprint-taking process would not await an appeal, what happens if an appeal is successful. Are the fingerprints then destroyed?
Earl Howe: Yes.
Lord Williams of Mostyn: I am most grateful. Upon that basis—and I reiterate my genuine gratitude to the Minister for dealing with these matters so helpfully—I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Clause 11 agreed to.
Clause 12 agreed to.
On Question, Whether Clause 13 shall stand part of the Bill?
Lord Williams of Mostyn: The clause raises the same question as I raised previously, and I would like an explanation.
Earl Howe: The Rehabilitation of Offenders Act 1974 already lists the service offences and punishments which determine when rehabilitation can apply. Paradoxically, offences and punishments less serious than those listed in the Act can never be rehabilitated. For example, offenders can be rehabilitated if their punishment is detention for three months or more, but offenders who receive lesser periods of detention may not be rehabilitated.
The clause is intended to end this anomaly and also to make sure that, in doing so, we do not create a further anomaly. This would be that one or two minor convictions could have the effect of significantly extending the period of rehabilitation of someone who had already been convicted of a more serious rehabilitable offence.
To remove this clause will perpetuate the present unfairness. I cannot believe that noble Lords would wish to do that and I hope that what I have said will have put the clause into context and reassure the noble Lord on any uncertainty that he may have had.
Lord Williams of Mostyn: Which it does. I am grateful.
Clause 13 agreed to.
Clause 14 agreed to.
On Question, Whether Clause 15 shall stand part of the Bill?
Lord Williams of Mostyn: I raise the same matter in relation to this clause.
Earl Howe: Clause 15 is part of the package of reforms to post-court martial procedures. As I know the noble Lord, Lord Williams, realises, it is closely linked with certain other clauses, particularly Clause 16.
At present, court martial findings in the Army and Royal Air Force are subject to confirmation or revision by the confirming officer. Clause 15 ends this requirement so that findings will have immediate effect, as is the case in the Royal Navy already, where it works perfectly satisfactorily.
Imitation of the Royal Navy apart, there are two main reasons for abolition of the confirmation process. The first is that confirmation has generally been the responsibility of the convening officer. As the Committee will be aware, the role of the convening officer is itself being abolished as part of the wider court martial reforms included in the Bill, with the purpose of reducing the potential for the chain of command to exercise undue influence over court martial proceedings.
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Secondly, the abolition of confirmation will enable us to focus internal review of court martial findings and sentences on the authoritative single stage review proposed in Clause 16 and Schedule 5. The present arrangements requiring confirmation and allowing multi-level reviews of court martial findings are complicated and they are cumbersome as well. The new procedure should be capable of being more readily understood by everybody. I hope the Committee will endorse it.
Lord Williams of Mostyn: Again I am grateful. It seems to me that the Minister has in fact dealt with the identical question that I would have put on Clause 16. I shall not oppose the Question that Clause 15 stand part of the Bill.
Clause 15 agreed to.
Clause 16 agreed to.
Clause 17 [Appeals against sentence]:
On Question, Whether Clause 17 shall stand part of the Bill?
Lord Williams of Mostyn: I wonder if I might ask the Minister for similar assistance. As I understand it, Clause 17 is intended to give a further power; namely, the power to reconsider the sentence rather than simply to reconsider the conviction. If that is the thrust of Clause 17, as I believe it to be, then we welcome that.
Earl Howe: I am glad to have this opportunity to say a few words in explanation of Clause 17. It represents a major and positive change in extending the right of appeal for servicemen and women. As the Committee may be aware, the Courts-Martial Appeal Court consists of senior civilian judges who might be judges in the civilian Court of Appeal. At present, it can deal with appeals from servicemen and women against court martial convictions, but not against their sentences. The clause will enable the court to hear appeals against a sentence also. The reason for this important change is simply that, having conducted a review of the matter, we concluded that the present block on appeals against sentence was becoming increasingly difficult to justify because it is an unnecessary limitation on the rights of servicemen and women. It is as straightforward as that, and I commend the change unreservedly to the Committee as one deserving their support.
Lord Williams of Mostyn: I am most obliged for that explanation. I know there has been quite a body of opinion within the armed services that they were perhaps subject to unfair treatment in the way that the Minister indicated, and that their rights in respect of sentencing might not have been equivalent had they been in civilian life at the time of their charge and trial.
I would like to reiterate our gratitude for the way in which the Minister approached these matters. They are not simple and I am bound to say that a great deal of thought has been put into these reforms, which I believe to be valid and sustainable reforms. I have now reached the end of my conscription in the army of my noble

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friend Lord Judd and I simply want to apply for my honourable discharge and to thank the Minister not least for the tone and courtesy of his replies.
Lord Mayhew: Perhaps I may add on behalf of my own party that we too very much welcome these reforms. We consider them, to use the best possible adjective, to be "liberal".
Lord Williams of Mostyn: I do not wish to intrude into private grief and therefore I shall not oppose the Question.
Clause 17 agreed to.
Clauses 18 to 20 agreed to.
Clause 21 [Sex discrimination: Great Britain]:
On Question, Whether Clause 21 shall stand part of the Bill?
Lord Judd: Before I speak in this clause stand part debate, perhaps I may say how glad I am to have had the co-operation and, indeed, the support and tuition of my noble friend Lord Williams. His discharge is exemplary—and on behalf of the Defence Council.
The issues raised in Clause 21 have implications for Clauses 22 to 27 and, if I may, with the leave of the Committee, I shall try to take a strategic look at them as a whole within the context of speaking on the clause-stand-part debate on Clause 21.
For reasons which I shall explain when we come to it, I do ward to dwell on Clause 23, hence the specific amendment to that clause. By the convention of which we have been reminded this afternoon and which we are following, amendments or clause-stand-part debates are not taken to a vote in this Committee. Our discussions give us an opportunity to probe the Government's thinking and we hope where possible to win some concessions. The voting, if there is to be voting, will be at the Report stage. I am sure the noble Earl will be the first to recognise that there is a good deal of concern about the issues covered in this cluster of clauses dealing with tribunals. I therefore give notice that it is quite possible that noble Lords, including the Opposition, will want to return to these clauses when we reach Report stage with more specific amendments in the light of what the Minister has said today.
The Bill introduces a two-stage process for dealing with complaints in the realm of sex and race discrimination and for dealing with complaints in the realm of equal pay and employment rights. The principle is that, while members of the Armed Forces may present their cases to the appropriate tribunal, they may do so only if they have first made a complaint to an officer under the relevant service redress procedures and submitted that complaint to the Defence Council under those procedures and if the Defence Council has then made a determination in respect of the complaint. It is being indicated that a six-month time limit will apply for application to an industrial tribunal, and regulations are likely to specify the maximum time limit for a complaint under the internal redress procedures, which it seems will not be less than three months from the date of the incident.
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As recommended by the Select Committee in the other place, regulations are to specify the circumstances in which a complainant will be able to present his or her case to an industrial tribunal before the Defence Council has made a determination. Draft regulations have yet to become available and there is therefore at this stage considerable public interest about exactly what provisions will be made. It is anticipated that the scope to pursue a complaint under both procedures will not be wide.
The Bill proposes a diminution of rights under the Sex Discrimination Act, under which, as things stand, complaints may be made directly to an industrial tribunal. It would be helpful to hear from the noble Earl the evidence which led to this proposed change.
In 1995 the Government published a Green Paper on resolving employment rights disputes, Options for Reform. Following consultation on a range of possible reforms, the Government have rejected the proposal that all employees should be required to utilise an internal procedure before making application to an industrial tribunal.
It is only in the case of service personnel that the proposal is to apply. All other employees, including serving officers in the police and civilian employees working alongside service personnel, are to continue to be able to apply to an industrial tribunal without statutory pre-condition.
The Ministry of Defence argued to the Select Committee in the other place that,
"service and employment in the Armed Forces is different from employment anywhere else because of the demands which can he made on people … the requirement to obey orders, one cannot just walk off the job … important for the individual service person, but also important for the chain of command. Because of the particular nature of the Armed Forces, the chain of command needs to he aware of things that may he going wrong in terms of discrimination or harassment and so on in order that it can put those things right as soon as possible because those things can have a debilitating effect on unit cohesion and therefore operational effectiveness … It is particularly important to the command chain to get a feel for what is going on and what the Servicemen are thinking. Servicemen will be on duty 24 hours a day 7 days a week. Unlike other organisations, we have to have a coherence, a trust and loyalty up and down … we cannot afford to let these things fester away inside a unit, we must deal with them ourselves".
Those representations must be taken very seriously. It would be inexcusable to dismiss them out of hand but the question remains as to how all this differs from other disciplined services such as the police, the fire service, or indeed, in at least some respects for example, the air crew in a civilian airliner or a ship's company at sea.
I strongly favour the principle that there should be internal appropriate procedures for handling complaints of the kind referred to in this and related clauses of the Bill. Such procedures do help organisations to learn from mistakes, to internalise the concerns and to take their responsibilities seriously. It is also true that most employees prefer to have their cases dealt with quickly and effectively internally, so long as they have confidence that the procedures are fair, just and appropriate and that there will not be victimisation as a result of bringing a complaint.

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The Government have indicated that they intend to require industrial tribunals to take into account whether applicants had sought to resolve their dispute internally before making their tribunal application. Surely if service personnel were given direct access to industrial tribunals, like all civilians, this requirement would serve as a strong incentive for complainants to pursue the, we hope, effective service redress procedure, since if they chose to apply directly to an industrial tribunal they would have to establish and defend their case for doing so.
Delay is itself a detriment to all parties. Industrial tribunals rely on oral evidence and the quality of that evidence deteriorates with time. Delay also increases stress for both the complainant and the others involved. It can seriously affect the working situation, a disturbing possibility in the armed services, as indeed the armed services made clear to the Select Committee in the other place and was obvious from my quotation.
In advocating the importance of the internal procedure, as I certainly do, it has to be recognised that there may be a deterrent in going to a tribunal, if unsatisfied internally, because of the anticipated distress of doing it all again. It is certainly the case that the internal procedure may well not be appropriate where discrimination is believed to operate indirectly or systematically throughout an organisation or part of an organisation.
It has also been argued that an internal procedure can have certain disadvantages. As I understand it, under the internal procedure complainants are normally dealt with in writing. Only the service authorities can require an oral hearing. The complainant is not entitled to do so. She or he may therefore be unable to cross-examine any witnesses, and those adjudicating are unable to measure the credibility of witnesses. To undergo the internal procedure may place a complainant at a potentially serious disadvantage in terms of a subsequent case before the tribunal. The service procedure is investigative: to inquire into the complaint and assess the evidence in support. If the complainant is dissatisfied with the outcome and proceeds to the tribunal, his whole case will be fully known to the service and he will not have equivalent knowledge of the case against him or her.
These are just some of the issues underlying Clause 21. While we most strongly favour the availability of an internal procedure, we are convinced that this should not be mandatory at the expense of the right of direct appeal to a tribunal. We believe the Government have so far failed to establish their case for such a provision. Indeed on sexual discrimination they are moving backwards and eroding a right which is already established. That is why we are compelled at this stage to oppose the Question that the clause stand part of the Bill.
5.30 p.m.
Earl Howe: Clause 21 continues servicemen and women's existing access to industrial tribunals in sex
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discrimination cases, but introduces a requirement for them first to use the service's internal redress of complaint procedures. As a corollary of this, the clause extends the three-month time limit for making complaints to industrial tribunals to six months in recognition of the requirement to use the internal procedures first.
The noble Lord, Lord Judd, spoke in terms of a diminution of the right of individuals brought about by this clause. I strongly take issue with that. Together with the clauses that follow, this clause is concerned with putting the arrangements for access to industrial tribunals by members of the Armed Forces on a consistent footing, whatever the statutory basis for the complaint.
At present cases of sex discrimination alone can be taken directly to industrial tribunals without use of internal redress procedures first. This direct access derived from the MoD's acceptance in 1991 that the EC Equal Treatment Directive applied, for most purposes, to service personnel.
The MoD's amendment to the Sex Discrimination Act 18 months ago brought the statute law up to date by removing from the Act the exemption for service personnel.
The powers that were used to implement EC legislation by amending the Sex Discrimination Act did not extend to making ancillary domestic changes, such as are being made in this Bill, regarding the use of internal redress procedures. However, it had always been the intention to include in the Armed Forces Bill a requirement to use the internal procedures first and to extend the time limit for submission of complaints to industrial tribunals to six months. The key point is that the requirement to use the internal redress system does not diminish the right to take a case to an industrial tribunal.
The services' redress of complaint procedure is a statutory right given to service personnel by Parliament to reflect their being in the position of having to obey orders. It is much valued by the services, particularly as they may not have their own trade union. There is no statutory equivalent for civilian employees. It is particularly important in the services, where men and women work in close-knit teams and operational effectiveness is vital, that there should be a system for reporting problems immediately.
I welcomed much of what the noble Lord said about the need to have an internal redress of grievance procedure. Indeed, I agreed with many of his observations. Unlike civilians and unlike, incidentally, the police or the fire service, a great many service men and women cannot go home at the end of the day. Service personnel are often available for duty or are in barracks for seven days a week and, particularly overseas, even leisure activities take place in the workplace.
In these circumstances, there may be no escape from the source of harassment or discrimination or whatever it happens to be. It is vital in these circumstances that members of the Armed Forces should have confidence in, and should use, the internal complaints system so

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that the chain of command is made aware of any problems as soon as possible and can deal with them. In other words, the internal procedure is a safety valve, providing an opportunity for quick solutions to a problem.
Use of the internal procedures will mean that there will be a short delay before referral to the industrial tribunal, but we feel that that is justified in view of the special conditions relating to service in the Armed Forces. Moreover, it may well help to minimise the number of cases referred to industrial tribunals. In any event, complaints which servicemen and women do wish to take to industrial tribunals will still be capable of being heard by the tribunal within a reasonable time.
As the noble Lord, Lord Judd, said, loyalty in the services works both upwards and downwards. It is an important factor in the safety and morale of personnel and therefore the effectiveness of combat units. Our internal procedures for dealing with complaints are a key ingredient in this framework of loyalty that I have mentioned. I suggest that we need to proceed with considerable caution before taking any steps which might lessen the effectiveness of those procedures.
I would argue that not to have the clause in the Bill as it is currently drafted would be incautious. It might fulfil an understandable desire to have uniformity in these matters across society as a whole, but I would suggest that, in this case, the achievement of that prize must take second place to preserving an important aspect of service life.
The noble Lord, Lord Judd, referred to oral hearings. Service personnel are encouraged to discuss their complaints orally initially, before submitting a formal written complaint, and there is no reason why that procedure should not continue. He also referred to cross-examination. The complainant, of course, will have copies of all documents put to the Defence Council.
Lord Judd: This is not the appropriate time, having given notice of the concerns which exist, to take up the time of the Committee by a long debate. However, I hope that these exchanges are not taken just as kind platitudes. We mean it on this side. We enjoy dealing with the noble Earl because we find he is a rational and thinking Minister who is open to argument. In a democracy that is tremendously important.
I have taken careful note of the wording the Minister has used this afternoon. He has talked about the need to proceed with great caution. I would not dissent from that because, as I said earlier this afternoon, when we are dealing with the armed services, where so much responsibility falls upon the leaders of the armed services themselves, we have to take seriously how they perceive their task and what will help them to discharge the responsibilities which we give them. That is something which must be given immense importance in our deliberations, but that does not mean that things cannot move forward. I hope that I am not misunderstanding the noble Earl. I have the distinct impression that his mind is not closed and that there may be possibilities, although perhaps not immediately,
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of moving this argument forward even with the present Government in which I do not expect that absolutely everybody would be quite as open as the noble Earl.
Seizing on the indications that we are in a rational discussion, at this stage I shall stand down with the statement that we may well pursue this point at Report.
Clause 21 agreed to.
Clause 22 agreed to.
Clause 23 [Racial Discrimination]:
5.45 p.m.
Lord Judd Lord Judd moved Amendment No. 9:
Page 18, leave out lines 8 to 23 and insert—
(""(9) A complaint to which subsection (8) applies may be presented to an industrial tribunal under section 54(1).
(9A) Notwithstanding subsection (9) of this section, a complaint to which subsection (8) applies may be made to an officer under the service redress procedure applicable to the complainant.".").
The noble Lord said: The commitment of the Armed Forces to becoming equal opportunity employers, which the representatives of MoD explained to the Select Committee on this Bill in the other place, is clearly to be welcomed. The fact that the forces themselves and the MoD have been engaged in discussions with the Commission for Racial Equality to find ways of achieving greater equality of opportunities is very encouraging. The booklet issued by the Army itself is a model of its kind. The introduction by a fine soldier, the Adjutant General, General Sir Michael Rose, states:
"The reality of conflict requires high levels of teamwork in which individual soldiers can rely absolutely on their comrades and their leaders. There can, therefore, be no place in the Army for harassment, bullying and discrimination which will affect morale, and break down the trust and cohesion of the group.
"It is the duty of every soldier to ensure that the Army is kept free of such behaviour which would affect unit cohesion and efficiency. Army policy is clear: all soldiers must be treated equally on the basis of their ability to perform their duty.
"I look to each one of you to uphold this policy and to ensure that we retain our acknowledged reputation as a highly professional Army".
That is a splendid expression of both the purpose and its means to fulfilment. The seriousness of the commitment is further illustrated by the way in which the conclusion of the booklet guides personnel to the Commission for Racial Equality and to the Equal Opportunities Commission for further advice. All this nonetheless must realistically be seen in the context of the formal investigation by the Commission for Racial Equality of the Household Cavalry, with its threat of a formal non-discrimination notice, as well as the increasing number of media reports of abuse and harassment experienced by black members of the forces. Indeed, recent research sponsored, to its credit, by the Ministry of Defence itself, and conducted by Lieutenant-Colonel Stuart Crawford, a defence fellow, surveyed a stratified sample of 1,600 serving Army personnel. The results demonstrated that more than half of ethnic minority respondents had stated that they had been victims of racial abuse while serving in the Army.
Clause 23 of the Bill proposes an amendment to the Race Relations Act 1976 to introduce a two-stage process for complaints of racial discrimination by serving personnel. Service personnel will be able for the first time to present racial discrimination complaints to an industrial tribunal, but as we have already debated, they will be able to do so only if they have first used the service's internal procedure for redress of grievances.
The Government's proposals in the Bill as a whole demonstrate, I believe, a wish to achieve consistency. Indeed, the noble Earl has referred to that. But surely, rather than taking away rights under the Sex Discrimination Act as the Bill proposes, the right course would be to harmonise the Race Relations Act with the procedures at present in force under the Sex Discrimination Act. As I asked in the debate on Clause 21, where is the evidence that led to the removal of rights on alleged sexual discrimination?
The Select Committee on the Armed Forces Bill in the other place noted that the proportion of recruits to the Armed Forces from ethnic minorities had in fact declined between 1987–88 and 1993–94. In the determination of the Ministry of Defence and the three services, a determination which I am sure is not synthetic, is it not worth considering whether an acceptance of means of redress, which apply generally in the United Kingdom, might not enhance the reputation of the Armed Forces as fair and open and encourage people from all sections of the population to consider the forces as a career? In any case, such measures may ultimately be unavoidable if the Armed Forces are to ensure the staffing levels necessary for their effective operation.
By contrast, continuing to treat the Armed Forces as an exception to procedures in society as a whole for complaints of discrimination are likely to reinforce concerns about the existence and cultural acceptance of discrimination within the Armed Forces. I have already argued on Clause 21 that I favour strongly the availability of an internal procedure, but protecting a compulsory internal procedure could, I fear, hinder those within the forces themselves who want to defeat complacency about such discrimination, because it would limit the exposure of such discrimination to public scrutiny.
It is important to keep firmly in mind the objectives of the Race Relations Act 1976. The Act was to provide an effective remedy for individuals encountering discrimination. The accumulated evidence of how the internal redress system is operated is challenging. It has not provided the effective—and again I emphasise the word effective—remedy which had been intended 20 years ago; and of course I am speaking of the Armed Forces.
I refer to the research by Lieutenant-Colonel Crawford. His work indicates that, of the 103 service personnel who reported that they had been victims of racial discrimination, only 14 sought redress through official channels. Colonel Crawford comments:
"This shows quite simply that the Army's grievance procedure is not working".
I should like to quote a little further from his survey. On page 34 of the report, he tells us that he posed: "Question 9.'Having been a victim of racial discrimination, why did you not seek official redress?'
"The answers to this question show why the Army's grievance procedure is not working. Respondents could identify more than one reason if appropriate, and therefore absolute numbers do not match the 89 individuals who said they had taken no action. Forty individuals … said that they did not complain because they believed such a step might adversely affect their careers. Twenty seven … thought they would not be taken seriously; 23 … feared increased discrimination; while 20 … did not complain because the person to whom they would have to make representations"—
and this takes up the point the noble Earl made earlier,
"was the same person who was discriminating against them. Only 12 … said they did not know what to do about the discrimination they suffered. It is clear, therefore, that the majority of ethnic minority Servicemen who suffered racial discrimination knew that something could be done about it, but most chose to take no action because they feared the consequences. The perceived level of racial intolerance is such that keeping quiet is seen as the best way of coping."
So said Lieutenant-Colonel Crawford. He then went on to Question 12:
"What action was taken by the authorities?",
This indeed is more encouraging, although he points out that it was "Answered only by the 14 individuals who had sought redress".
"Reassuringly, 8 individuals … reported that either a formal or informal investigation had resulted from their complaints."
However, he adds,
"It is still worrying, though, to note that 4 respondents … said that no action had been taken, and one did not know if action had been taken or not."
We must remember that if, for whatever reason, a serviceman or woman does not make a complaint through the internal procedure within the time limit specified, he or she will lose the right to complain to an industrial tribunal. To the extent that service personnel continue to hold beliefs and fears as revealed in Lieutenant-Colonel Crawford's survey, to that same extent, by foregoing the internal procedure, they will lose their right to complain to an industrial tribunal.
I do not doubt the good intentions, but the proposed policy is sadly flawed. I beg the noble Earl, as the firm, sensible and compassionate man that he is, to take the point and accept our amendment which would bring the forces into line with everybody else by granting their personnel the right of direct access to the tribunal, as well as access to the internal procedure. This, we believe, will be in the interests of the effective future of the forces themselves and enable them proudly to reflect the multi-cultural society they are there to defend. I beg to move.
Earl Howe: I listened with great care to what the noble Lord, Lord Judd, said about racial equality in the armed services. Let me say at the outset that race relations are taken very seriously indeed in the Armed Forces, and it has been made quite clear throughout the services that racial abuse or discrimination of any sort will not be tolerated. Complaints of racial discrimination will be investigated and, if they are substantiated, appropriate action will be taken against those found to

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be involved. I may say that separate records of complaints involving a racial element are maintained by each service.
We very much want to increase the numbers of ethnic minority personnel serving in the Armed Forces. We want to recruit the best people irrespective of ethnic origin, and we will be working hard to provide an environment that is free from racial discrimination or harassment. In accordance with the requirements of the CRE action plan, to which the noble Lord alluded, we will be introducing a number of changes to improve ethnic monitoring of applicants and entrants to the Armed Forces. We shall be producing detailed analyses by sex, source of application, regiment or corps or trade preferred and which achieved, reasons for rejections, success rates, and so on. We are taking these matters extremely seriously, and the co-operation to which the noble Lord referred between the Ministry of Defence and the Commission for Racial Equality is testament to that.
I turn now to the amendments. Although the noble Lord did not specifically say so, I take it that he was working to the grouping on the Marshalled List. At present the Race Relations Act 1976 applies to complaints of racial discrimination in the Armed Forces but it is stipulated that these should be dealt with exclusively through the services' internal complaint procedures.
It has been the case, and it will continue to be so, that the service boards treat complaints of racial discrimination as a matter of extreme seriousness. The change proposed in Clause 23 as it stands will extend rights by allowing access to industrial tribunals in cases of racial discrimination. It is also intended to ensure, in line with government policy, parity of treatment of race and sex complaints by allowing in both areas access to industrial tribunals after prior use of internal redress machinery.
The Bill makes similar provision with regard to the prior use of the internal complaints system for all other complaints eligible for consideration by industrial tribunals. We have already debated the Question that Clause 21 stand part of the Bill. There is little I can add to the remarks I made then, since these amendments would have a similar effect in relation to cases of alleged racial discrimination that the removal of Clause 21 would have had in relation to cases of sex discrimination. Suffice it to say that we do not accept the proposition that the requirement first to use the internal redress system diminishes the right to take a case to an industrial tribunal. It certainly does not.
The noble Lord, Lord Judd, asked where the evidence was that has led to the change we are now proposing. That can be answered in two parts. First, not to have a right to refer to an industrial tribunal would seem to be a denial of natural justice in modern day terms. Secondly—and this is the point to which I referred earlier—the internal complaints machinery has special value to the services, as I have already sought to explain. We believe that that should remain in place. The value of it, of course, is that of affording the opportunity of swift solutions via the chain of command, very often to
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take the sting out of an incident and to settle it quickly once and for all. Industrial tribunals, for all their merits, will entail a wait, particularly if one imagines servicemen and women at sea who may need to wait months before a matter is resolved.
I believe that the evidence that the noble Lord calls for is a matter of common sense. I hope that the Committee will not follow him down the road of these amendments because they too readily disregard the importance and value attached to the machinery of internal grievance procedures to which I have referred.
It is true that reservations have been expressed about using the internal mechanisms because the commanding officer himself may be the subject of a complaint and that has sometimes acted as an inhibiting factor. We are proposing in Clause 20 of the Bill to amend the service discipline Acts so that complaints can be made to such officer as may be prescribed in Queen's Regulations. We will ensure that the regulations will provide for complaints against commanding officers or anyone in their chain of command to be made to a different officer. I believe that that addresses one of the concerns of the noble Lord, Lord Judd.
I say again that I hope the Committee will feel that these are sensible proposals which should remain in the Bill as drafted.
6 p.m.
Lord Judd: The noble Earl will forgive me if I just probe what he said. He has referred to the provisions soon to be made in Queen's Regulations about the ability to make a complaint to an officer other than a person's immediate superior officer. That could be reassuring but, obviously, we need to know more about that before we can give a verdict. Who will this person be? What will the regulations be precisely? We must know that because that is central to the argument.
The noble Earl will forgive me if I draw his attention to one other point. I am not wilting with sensitivity about this but he did, earlier on this afternoon, chide me about change for change's sake. There is a danger that he has fallen into his own trap on this, because he tells us that to remove the right, in terms of sexual discrimination, to go straight to an outside tribunal, is common sense, but it is common sense if there is a problem. The noble Earl has told us nothing about the problem which has made this change necessary. It has been operating until now and, therefore, there will be a danger that we will say that this is a change that is being introduced but the rationale is not there for anyone to see. There may be a rationale but it is important that the noble Earl lets us more into the secret.
I also make the point, which I have always thought applies in other walks of life as legislation and social attitudes advance on these issues, that if the Armed Forces are getting it right, if the internal appeal procedures are procedures in which service personnel have confidence, if they can see they are fair and just, why not have the ability, as elsewhere in society, to go straight to an outside tribunal? That would, in a sense, be the guarantee of the quality of the services internally, just as has been the case elsewhere.

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I must also make the point that the noble Lord has not really dealt adequately with the whole issue of the disincentives which I spelt out, which were evident in Lieutenant-Colonel Crawford's work, announced as it is by the Ministry of Defence, and the inhibitions that are still there about using internal procedures which will, therefore, become an obstacle to gaining access to the external procedures.
Further, I believe that if we want to fulfil our recruitment targets and to ensure that the armed services are culturally in tune with society as a whole and, therefore, clearly part of the society as a whole which they are defending, advance on this score is tremendously important. I hope the noble Earl will forgive me if I say that his arguments have not altogether—in fact, not by a long way—convinced me this evening and we shall probably want to return to this. But, in saying that, I do not want to chide the noble Earl. There is a genuine commitment in the Armed Forces, well evidenced by General Rose, well evidenced by the work the Ministry itself is doing, well evidenced by what I know to be the general demeanour of the noble Earl and others; there is a genuine desire in the Ministry of Defence to move forward, and I know that the Commission for Racial Equality does not feel that it is up against a brick wall. It feels it is working with people who want change effectively, and that is good.
I hope the noble Earl will accept that in the best traditions of democracy this is not a hostile debate. It is a debate in which we are seeking the best way forward for service personnel, for the armed services and for the United Kingdom.
Earl Howe: I appreciate the constructive spirit in which the noble Lord has approached these questions. I am sorry I have not been able to convince him. If there is one message that should go out to the general public, it is our wish to see increased recruitment from ethnic minority communities. The services themselves take these issues very seriously.
If we follow the noble Lord down the route of saying that a serviceman or woman should only have access to an industrial tribunal—and, incidentally, that is not a right that he or she now has in connection with racial complaints—we dilute the message we want to promulgate—that the services want to see racism, harassment, discrimination, stamped out. They want to see it stamped out at the earliest possible opportunity and they want to do it themselves.
If you imagine a situation at sea, you need powers to deal with these problems, and to be seen to deal with them, at the outset. One can imagine that there would be very difficult circumstances in which problems might be allowed to fester, merely because there was no disciplinary mechanism in place for it to be sorted out there and then by the commanding officer and, in some instances, for a molehill not to be made into a mountain.
To say that the Government are proposing change for change's sake is not fair at all. The inhibitions that the noble Lord referred to that are felt by some servicemen and women are themselves a barrier to military
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effectiveness. If one can destroy those inhibitions by having a system which is seen to work, then we will be one step further down the road of encouraging those from ethnic minority backgrounds to see the services as a fulfilling and interesting career.
Lord Judd: The noble Earl has continued to reassure me, not only by what he said but the way he said it, that we have a common objective. We want to see the armed services representing the society of which they are a part, promotion by merit irrespective of origins and armed services open to all. The other evening I was watching the massed bands Beating the Retreat and it brought back good memories to me because one of the things I cherished most when I was privileged to be Under-Secretary of State for Defence—in those days we had individual service ministers responsible for the Royal Navy—was my relationship with the Royal Marines. I loved it, and they are a body of people whom I hold in esteem second to none; and that is not to cast aspersions on any other part of the Armed Forces. It was a splendid occasion and I was as moved as ever, and I was glad to see on that occasion that there were women on parade. That would have been unthinkable some time ago, but there they were. I noticed, among all those watching, including the most senior officers in the Armed Forces—and I took great heart from this—that there was pride about this. There was no sense of shock, but it was "Isn't this good! Didn't they perform well." The way I noticed it was that there seemed to be some shorter Royal Marines, and then I realised that these were the women on parade. And that is magnificent.
What I also noticed, however, is that there were no black faces on parade. In Britain, years ago, I perhaps would not have noticed that in the same way, but in a changing Britain it somehow stood out. There is a commitment to bring that about, and, in all of this, we are not just talking about how complaints are dealt with and how harassment is dealt with, but how through the way in which these things are dealt with, we advance and accelerate the process towards effectively opening up the services.
I do ask the noble Earl to accept that, while we press these points, our objectives are the same. It is just that we feel that what we are advocating would be a better way than the way in which the Government at present appear to be committed. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 and 11 not moved.]
Clause 23 agreed to.
Clauses 24 to 29 agreed to.
Clause 30 [Greenwich Hospital]:
Lord Judd Lord Judd moved Amendment No. 12:
Page 25, line 28, at beginning insert—
("Where he is satisfied that the objectives set out in paragraphs (a) to (c) of subsection (2) are met,").
The noble Lord said: In moving the amendment I do not believe it is necessary to go over all the background yet again. However, I shall do so a little, if I may.
We know that, to the Government's shame, everybody with any sense of history or concern for the national heritage was appalled to find that last autumn the Government had allowed the Royal Naval College to be advertised in a glossy magazine by the estate agents Knight, Frank and Rutley. To some of us that seemed a grotesque example of the cheapening of society by uncurbed market ideology. Thank God that nightmare has been transformed. Noble Lords can claim great credit for that, as can the good taste and sense of public opinion, the Select Committee in another place, and certainly Mr. Nick Raynsford for his articulate and convincing interventions in another place.
The Bill now stipulates in Clause 30(2) that:
"In the exercise of his functions under the Greenwich Hospital Acts 1865 to 1996 in relation to the land to which this section applies, the Secretary of State shall have regard to—

(a) the importance of preserving for the benefit of the nation the historic buildings and monuments on the land and of maintaining the architectural integrity of the Royal Naval College site;

(b) the desirability of securing reasonable public access to the land (and in particular to the historic buildings and monuments on the land); and

(c) the desirability of preventing any use of the land appearing to him to be out of keeping with its unique character and history".

That at least is civilised, but where are the teeth? Having sounded the bugle of decency, Clause 30(3), potentially at least, beats what in effect could be a disappointing retreat. It states:
"It shall he lawful for the Secretary of State to grant a lease of any of the land to which this section applies, with its appurtenances, to any person appearing to him to be suitable for a term not exceeding 150 years".
There is no obligation to put the principles of Clause 30(2) into practice. There is a need to bond subsections (2) and (3) of Clause 30 making action under Clause 30(3) dependent upon fulfilling the principles of Clause 30(2). That is what the amendment is about. That is particularly important in view of other obligations, such as to realise the highest possible price, which could otherwise be construed as part of his responsibilities as a trustee under charity law.
I fully recognise that negotiations are now proceeding, with the very attractive proposition of an arrangement between the University of Greenwich and the National Maritime Museum, which is altogether splendid. We are legislating for the long-term future, way into the century ahead or more, and nobody can tell with certainty what the plans of the university or museum will be then. Therefore, surely it is prudent to write the means as well as the aims into the Bill. Perhaps I may say that that is what the amendment seeks to do, and before the noble Earl makes the same rather unconvincing technical point that the Minister of State made in another place, I should underline that "the importance of preserving", "the desirability of securing" and "the desirability of preventing" are to any reasonable person very clear objectives which are entirely compatible with the principle that the Secretary of State has to be satisfied that those objectives are met. I beg to move.
Lord Mottistone: I strongly support what the noble Lord, Lord Judd, has just said. The sense of what he has
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said is exactly what I believe is necessary. Whether the wording is right I do not know, but it is terribly important that Secretaries of State should meet the requirements that are set out in subsection (2) before going on to subsection (3).
In so saying, I have also been puzzled from the beginning about the 150 years. What is the significance of that? When my noble friend comes to reply, perhaps he will tell us why it is 150 years and neither longer nor shorter. That is purely inquisitive. The basic thing is that I believe that the noble Lord, Lord Judd, has it quite right. Clearly it will not be amended now, but I hope that at the next stage we shall be able to bring this in in a big way.
Lord Williams of Mostyn: I entirely endorse what the noble Lord, Lord Mottistone, has just said. I do not believe that the amendment is necessarily perfect in wording, but the objective that it seeks to attain is a noble one. This single topic is worthy of a Bill on its own; it is that important.
If one just looks at the scheme of Clause 30, the Secretary of State holds these lands and buildings "in trust for Her Majesty". I deeply regret to say that many within the Armed Forces and without have no trust in the trustee. This is far beyond the occasion of the moment. One only needs to look at the description of the buildings and then—rather surprisingly in a Bill—the fineness of the language:
"the importance of preserving for the benefit of the nation".
That sounds like 1805 to me. It refers to the "historic buildings and monuments" and "the architectural integrity" and to "reasonable public access" and to the "unique character and history". It is shameful that we need to be on our guard to this extent.
If one goes to the public buildings in Paris one sees what public glory and joy there is in them. We cannot say that about this capital city. My noble friend Lord Judd has quite rightly referred to a number of people who have interested themselves in this question, not least, I would add, Simon Jenkins, who has mounted a noteworthy campaign in the columns of the Evening Standard and The Times about precisely such sites as this. What on earth are we doing having to be on our guard against the proposed possible vandalism of a jewel of this sort?
I had the great privilege a few weeks ago of going to address an evening seminar for an advanced joint services course at these very buildings. The thought that they could be destroyed by unthinking vandalism is almost breathtaking; it is infinitely dismal. I would venture to suggest that, although the wording of course is not watertight or perfect, what we must have before the Bill leaves our House is categoric, copper-bottomed guarantees that the integrity and the historic value of these buildings and of this site will properly be regarded as a trust for the nation and not something to be treated as the plaything of the financial moment.
Lord Kennet: I have nothing to add to the arguments that have been advanced, and indeed no criticism to make of my noble friend's formula in the Bill, though if it is possible to improve it that will be good indeed.

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I want to use the occasion for a couple of minutes to mention a factor with regard to the future of the buildings at Greenwich which, as far as I know, has not yet been mentioned in either House. Greenwich was not built for kings and princes. That is an historical mistake. Its predecessor was a royal palace, but the great buildings we know now were not built for kings or princes or even for admirals. They were built for naval pensioners and ratings. I suppose that a few junior officers were allowed among them, but I do not know about that. When I look at the formulation in the Bill, the desirability of not being:
"out of keeping with its unique character and history",
I think to myself, "OK, what is it's unique history, what is the essence of it?", and it is that it was maritime. It is a maritime foundation beside two other great maritime foundations. It will be a very good idea if that could be maintained. What I like about my noble friend's form of words is that the beginning of subsection (3) would not allow the Secretary of State to enter into any lease until he was satisfied that that unique character was safe, obviously for the duration of the lease. If we can accept that that is a maritime characteristic, that would be a great safeguard for the future not only of the buildings but also for all the manifold maritime industries in this country which are at present so greatly neglected.
A word in passing about the University of Greenwich. I agree with my noble friend that this is a satisfactory solution. I am not sure if I am quoting him fairly when I say that they have promised that students will not have dinner in the Painted Hall, or anything vulgar like that. To my mind, this is exactly the wrong way round. There is no notable number of naval pensioners at the moment and those there are have no need of a special hospital for their maintenance, although, of course, the Army is still keeping Chelsea fully in use. But would not students be exactly the right sort of person to carry on enjoying the grandeur of that place in academic circumstances?
The National Maritime Museum, the other partner in the partnership which we hope will succeed there, has suggested that the Painted Hall could be let out for dinners to City livery companies because some of them, poor fellows, do not have a grand hall of their own—some do and some do not, and those that do not should be able to hire the Painted Hall at Greenwich.
Once again, let us remember that it was not built for the affluent, privileged and leisured. Although there could be no possible objection to letting it out profitably a few times a year for people to hold dinners in, I hope that the Secretary of State will write it into the lease that it should be primarily for the benefit of university people and maritime people who come there to attend conferences and courses. Possibly, as I suggested before, the World Maritime University, could hold courses in the buildings at large, and have dinner in the Painted Hall at a low cost. For the associations of former naval people who come to dine there, I suggest the cost should be £1 for ratings and £2 for officers.
The Earl of Clanwilliam: The noble Lord, Lord Kennet, described on Second Reading all the
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opportunities that could occur if the maritime centre was established at Greenwich. Of course, it is the one place in England where it should be established. The extent of the historic site does not need to be recorded at this moment.
I wonder what would happen if anybody suggested that the Chelsea Hospital should be let for 150 years. It would be a disaster. It is inconceivable that such a building should be let for 150 years. However, here we are, thinking of a far greater establishment, a far greater centre at the heart of our naval and nautical experience which we are going to flog off. It is too appalling to think of. I support the amendment.
The Earl of Balfour: I am rather concerned, first, about Amendment No. 12. It has been my experience generally that tenants are not at all good at looking after the building which they rent. I feel that the conditions written into the tenancy should be very strict. However, from the words at the beginning of subsection (3) of Clause 30 I get the impression that the tenant would be responsible for,
"the importance of preserving for the benefit of the nation",
as set out in subsection (2). I fear the worst in that respect although I accept that I may have misunderstood the clause.
I should like to make one or two other points on this clause. First, the Seamen's Hospital specialised in tropical disease, and there is still a need for that in this country. I also have the impression that Clause 30 allows the Secretary of State on behalf of the Crown to let for occupation part or whole of the Royal Naval College at Greenwich. Section 7 of the Greenwich Hospital Act 1869, which is being repealed, allows others to occupy unwanted land at the hospital. I wondered why that provision was being repealed as other parts of this Bill allow the hospital grounds, along with the College, to be let.
I have been down to the National Maritime Museum on quite a number of occasions and I must say that I find the Royal Naval College one of the most magnificent buildings I have ever seen in my life. I was there on only one occasion. It has a fascinating naval history. I hope very much that it can have a close connection with the National Maritime Museum.
Legislation often refers to "the Secretary of State", but I wonder whether some other worthy naval citizen could also be a trustee in this case, so that we have a second string to our bow to see that these buildings really are looked after.
Lord Mayhew: I should like briefly to associate myself with the amendment which I warmly support. Parliament has done well on this Bill as far as Greenwich is concerned. The amendment is a very mild one. I look forward to hearing the noble Earl, if he does not accept it, explaining how it would be proper for the Secretary of State to proceed to lease the land, even if he is not satisfied that the terms of subsection (3) have been met.

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I shall not detain the Committee. I am a past president of the Royal Naval College, and I feel as emotionally involved as some noble Lords opposite. I beg the Minister to accept the amendment.
Earl Howe: Let me say at the outset that I sympathise completely with the concerns that noble Lords have expressed about a worthy and fitting use for these magnificent buildings. The debates in your Lordships' House on the issue have brought out the level of that concern. I hope that the actions the Government have taken will have allayed some of the worries initially expressed last year. There is no real distance separating the Government from Members of the Committee concerning what we all want to see happen to the buildings.
We have taken considerable care to ensure that, as far as possible, the wider interests of heritage and access are reflected in future decisions on the Royal Naval College. It is important to remember that the Secretary of State is holding the land as trustee for the benefit of Greenwich Hospital, which is a Crown charity. I am sorry that the noble Lord, Lord Williams, felt that he had to cast aspersions on the integrity of my right honourable friend the Secretary of State as a trustee of Greenwich Hospital and indeed on his commitment to finding a fitting occupant for the Royal Naval College. That commitment is as strong as ever. Indeed, I believe that the announcement my right honourable friend made recently demonstrates how keen he is to see that we reach the right end point.
My noble friend Lord Clanwilliam expressed the view that it was a disaster that the Navy was leaving Greenwich. I agree that it is a matter of great regret that the Navy is leaving. I believe that the Royal Navy itself is extremely sad at the prospect. The fact is, however, that it is leaving, and for perfectly sound reasons. We have to find an appropriate tenant to take its place. The reason we have to repeal the section in the 1869 Act, to answer my noble friend Lord Balfour, is that the Act specifies that the buildings, which we now know as the Royal Naval College, may only be occupied by the Royal Navy or by a government department. That restricts the choice of tenant available.
Lord Kennet: That is, I think, an abbreviation of the text of the existing law: it must be occupied by the Royal Navy, a government department, or some other maritime connection or interest.
Earl Howe: The noble Lord is quite right. I am sorry. The point still stands that the Act restricts the choice of occupant. That is why my right honourable friend felt that it was right last year to see who might be out there as a potential, fitting, occupant of the college. We have found at least two fitting occupants—in fact more than two—and I have every confidence that the question of the occupation of Greenwich will be happily resolved.
The Earl of Clanwilliam: There may be two. Will the noble Earl kindly explain whether they have a strictly maritime connection?
Earl Howe: I am sure my noble friend will be aware that when my right honourable made his recent
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announcement there were two major potential tenants in the frame: one is the University of Greenwich and the other is the National Maritime Museum. There are other potential tenants for various parts of the Royal Naval College; I shall refer to that again in a moment. However, the point I was seeking to stress is that it would be unfair to Greenwich Hospital, the Crown Charity, if the Secretary of State could determine the future occupation of the Royal Naval College buildings without having regard to the charity's interests as well.
The clause as currently drafted seeks to achieve a proper balance between the private interests of Greenwich Hospital, which the Secretary of State as trustee must seek to safeguard, and the wider public interest. The noble Lord, Lord Judd, placed emphasis on the need for a firm link between subsection (2) of Clause 3 and subsection (3). He is absolutely right and there is already a clear link between those two subsections. Subsection (2) lists considerations to which my right honourable friend must have regard in exercising his statutory functions under the Greenwich Hospital Acts. It is clear from subsection (12) that this includes his power to grant the lease of the Greenwich site under subsection (3), so the trustee would be in breach of the clause if he granted a lease of the site without first having had regard to the considerations in subsection (2). The link is there. It was a fair point made by the noble Lord, but perhaps he had not made the connection between the various constituent parts of the clause.
The noble Lord, Lord Judd, felt that we perhaps ought to go rather further than we have. The possibility of making this Bill a hybrid Bill was a principal consideration which we bore in mind in drafting the key amendment to this clause, which was then agreed in another place. It was and remains our judgment that the wording of the clause goes as far as it can without raising the spectre of hybridity. The policy which appears to lie behind the noble Lord's amendment would be likely to take the clause, and hence the Bill, over the threshold of hybridity. For that reason we do not recommend that the Committee embraces these amendments, although we hope that noble Lords will see that the spirit of them is embodied already in the Bill and is one with which we can very readily identify.
My right honourable friend announced his intention to grant the head lease of the Royal Naval College to a heritage trust. That announcement was widely welcomed and my noble friend Lord Balfour may like to note that my right honourable friend was very receptive to the suggestion that a retired admiral should serve as one of the trustees of the heritage trust.
The wording of this clause reflects the importance that my right honourable friend and your Lordships attach to the heritage and to access, alongside the charitable purposes of Greenwich Hospital. The noble Lord, Lord Kennet, expressed his view that it would be appropriate if these buildings were once again available for the benefit of naval pensioners in accordance with the original purpose for which they were built. One of Greenwich Hospital's objects is the benefit of seafarers. Indeed, they will continue to benefit because rent will be paid to Greenwich Hospital which will then be used

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for the furtherance of their objects. It is welcome that the Greenwich Hospital charity announced its wish to earmark the Trafalgar quarters for sheltered accommodation for former seafarers or their wives or widows in accordance with the original objectives of the trust.
My noble friend Lord Mottistone asked what was the significance of the period of 150 years which this clause lays down. The answer to him is that we need to be able to give a lease a reasonable length of time to make it a worthwhile proposition to a lessee, but not so long as to lose control of the buildings. There is no particular significance in the number 150, althoughinterestingly—in its 300-year history the Royal Naval College was a hospital for about 150 years and then a college for a similar period. So perhaps there is a certain symmetry in this number.
On a more technical point—if the noble Lord will bear with me—although the clause as drafted requires the Secretary of State to have regard to various matters, it has not been drafted to contain any "objectives", which is the word used in the noble Lord's amendment, such that a court could say that they had or had not been met. So the amendment as it stands is technically incompatible with the current clause and would not actually work.
I hope that I have said enough to persuade the Committee that the Government's approach is right. It is as far as we can go without making the Bill a hybrid one, and I hope that the words that I have placed on the record will give reassurance to those noble Lords who are may have harboured some concerns.
Lord Williams of Mostyn: If the noble Earl reads Hansard tomorrow, he will note that I did not impeach the integrity of the Secretary of State. What I have questioned is his judgment. That is quite different. What we want in paragraphs (a), (b) and (c) in the subsection is a useful harness to circumscribe the exercise of that judgment. There is no suggestion of any attack on the Minister's personal integrity. I made none, nor did I intend any.
Earl Howe: I am grateful and I am sorry to have misconstrued the noble Lord.
Lord Judd: Before I deal with our debate, I hope that it is in order to say how much I appreciate these kinds of Committee stages in the Moses Room. They are a good development in this kind of legislation. I do not believe that that is my view alone, and I would like to thank those who have been advancing this experiment, because it is a civilised and constructive way to approach our responsibilities. I thought that this might be a good opportunity to say that.
One of the things that sometimes goes wrong in democratic discussion in general is the primadonnish way in which, inexcusably, Government or Opposition spokespeople become attached to the words that they have used, and in the end they are defending the words they have used rather than finding a way of fulfilling the objective that is established. I would be the first to
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say that if, with the help of superb parliamentary draftsmen (whom, on this side of the House, we cannot wait to get our hands on in the future), it were possible to find a proper, more effective and foolproof way of achieving the objective that my noble and learned friend has spelt out and which I myself have tried to argue, we would be the first to accommodate such changes. We do not live or die by a particular set of words; we live or die by the principle we are trying to achieve.
In that context, I would say again, as my noble and learned friend has said, that at least to the eye of the layman—and it is important that, while legislation stands up legally for the legal experts, it is also comprehensible to the layman and clearly establishes the principles about which the layman is concerned—we still have a problem in the Bill. It is not manifestly clear that, having regard to certain considerations that Members on all sides of the Committee have said are important, the Secretary of State then necessarily has to act in compliance with those principles. What we want to establish more clearly is that he has—I put it as a layman, if my noble and learned friend will forgive me—a compulsion to act in such a way. We would ask the Government to look at this a little further.
If the Government could come forward at Report stage with some wording which bridged the gap, the rejoicing would be unlimited and the Government would find themselves on a pinnacle of popularity on this issue. I therefore believe that, at a time when pinnacles of popularity may be rather hard to come by, this is a thought worth taking seriously.
I thank the Minister most warmly for the way in which he has responded not only to this debate but to all the others. While I retain the right to come back to it at Report stage, I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 30 shall stand part of the Bill?
Lord Kennet: I did not realise that my noble friend intended to withdraw his amendment at that point. The noble Earl said that my noble friend's formulation which lays an increased duty on the Secretary of State in this matter would take it over the threshold of hybridity. I may be obtuse but I did not understand that at all. This is of course a Public Bill and it could not be more public as regards the Armed Forces in changing the powers and duties of the Secretary of State. That is Public Bill material. As I understand it, a hybrid Bill is one which not only is a Public Bill but which also affects the rights or duties of an individual, whether a person or a corporation. In what respect does my noble friend's wording do that?
Earl Howe: I will be subject to correction, in which case of course if I am wrong I will write to the noble Lord. My understanding is that the rights of the individuals, to which the noble Lord rightly referred, are in this case those of Greenwich Hospital Crown Charity

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and the beneficiaries thereof. To go any further than we have in the wording of the Bill would impinge upon those rights to an unacceptable extent.
Lord Kennet: I am very grateful to the noble Earl for that explanation. Perhaps at the next stage the noble Earl will be able to give us an example of the manner in which the rights of the charity would be affected by the slight modification of the Secretary of State's publications.
Lord Judd: Without unnecessarily prolonging our proceedings, I wonder whether I may help on this point. There is an issue to be addressed here and I would be the first to address it. As I understand it—I have spent quite a lot of my life with professional responsibilities in the world of charity, on which I declare an interest—the trustees of a charity have a responsibility to maximise the income to the charity and the purpose for
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which the charity exists. That is why, in my introduction, I made the point that what we have to do is empower the Secretary of State specifically in this context to be able to do something that, under charity law, might not be acceptable. There is an issue here. I put forward the principles this evening and I would hope—the noble Earl went a long way towards this—that if the Government would really see the point and accept the point, it would be good for the Government to know that they would have a lot of support in finding some way of bridging the gap. However, there is, I believe, an issue here, which should be addressed.
Clause 30 agreed to.
Clauses 31 to 36 agreed to.
Schedules 1 to 7 agreed to.
Bill to be reported without amendment.
Committee adjourned at ten minutes before seven o'clock.

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