Sitting of 3 February 1997

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
NEW WRIT
For the county constituency of Wirral, South, in the room of George Barrington Porter, Esquire, deceased.—[Mr. Goodlad.]
Oral Answers to Questions
  NATIONAL HERITAGE

    National Lottery (Historical Items)
    Mr. Mans: To ask the Secretary of State for National Heritage if she will list those items of historical importance which have received national lottery funding in order to keep them within the United Kingdom. [12216]
    The Minister of State, Department of National Heritage (Mr. Iain Sproat): The heritage lottery fund has made 33 grants for nearly £27 million for the acquisition of items of historical importance which might otherwise have been exported overseas. I have arranged for a full list to be placed in the Libraries.
    Mr. Mans: I thank my hon. Friend for that answer. Will he explain how the new National Heritage Bill will contribute towards keeping ever greater numbers of items in this country? Will he explain also how the Bill will allow lottery funds to be used for items that at present do not come within their remit?
    Mr. Sproat: My hon. Friend is right to draw the attention of the House to the improvements that the National Heritage Bill will make. It will mean that lottery funds will be able to be used for the acquisition of individual items, as they are now, and it will mean that education, information technology access and other matters beyond preservation and maintenance will be able to be dealt with by the national heritage memorial fund.
    Mr. Skinner: That was an interesting reply. As items of historical importance could be worth a bob or two, will this lousy Government, in their dying days, give a categorical assurance that, having bought such items with the proceeds of the lottery, they will not sell them off?
    Mr. Sproat: There are two simple answers. First, it is a matter for the national heritage memorial fund, which makes decisions about how moneys will be disbursed. Secondly, there will be opportunities for clawback in the
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    contract that is agreed between the memorial fund and a commercial organisation or a private person when lottery funds are allocated.

    National Lottery (Pitches)
    Mr. Ainger: To ask the Secretary of State for National Heritage if she will take steps to provide an all-weather pitch to every community in excess of 5,000 people using proceeds of the national lottery. [12217]
    Mr. Sproat: The lottery sports fund for Wales has so far supported the provision of 20 all-weather pitches throughout Wales. The English lottery sports fund has so far supported the provision of 149 all-weather pitches, costing more than £11 million. In total, the national lottery has made more than 2,465 awards of some £428 million to provide new, improved and upgraded sports facilities across the UK.
    Mr. Ainger: Is the Minister aware that in my county council area, which covers a population of 110,000, there are only two all-weather facilities? Does he accept that the best way of distributing lottery money fairly in terms of improvements to sports facilities is to provide all-weather facilities? That is the view taken by sports development officers. Rather than spending a significant sum on a few individual and high-profile capital investments, is it not about time that we started spreading more lottery money into rural areas and providing basic facilities that take account of Britain's appalling weather?
    Mr. Sproat: It is certainly true that all-weather pitches are an extremely important addition to current sports facilities. Although 20 such pitches in Wales have been provided by the lottery, there are actually 62 all-weather pitches throughout Wales. The hon. Gentleman makes an important point, but all-weather pitches are not the only facilities that need to be provided. Where they are, however, the sports councils for Wales and England will take them fully into account.
    Mr. Harry Greenway: I welcome all new sporting facilities, including all-weather pitches. Is my hon. Friend aware of the serious situation that will arise if the new football stadiums are not taken up in 2006 for the World cup? Is it not a disgrace that Union of European Football Associations has gone behind the Football Association's back to promote Germany rather than this country without telling anyone?
    Mr. Sproat: It is certainly true that Wembley stadium is probably the biggest brand name stadium in the world, and that lottery money will be used to refurbish it to the highest possible standards.
    On the other implications of my hon. Friend's questions, I have spoken to the Football Association many times in the past few weeks, and I am seeing its representatives immediately after Question Time.

    Airport Tax
    Mr. Bayley: To ask the Secretary of State for National Heritage what representations she has received on the impact of the airport tax on tourism in the United Kingdom. [12218]
    Mr. Sproat: We have had representations from several tourism organisations. Tourism is a prosperous and expanding industry, and there is no evidence that the duty has had any significantly damaging effects on tourism. Indeed, since the duty was introduced in 1994, we have had record numbers of overseas visitors to the United Kingdom.
    Mr. Bayley: The Minister will be aware that, in its first year, the airport duty raised £350 million for the Treasury. Has his Department make representations to the Treasury proposing that some of that money should be used to expand the job of the British Tourist Authority abroad to encourage tourists to come to Britain?
    Mr. Sproat: No, it has not, because it is a well-known principle of government—it obtained under Labour Governments as well as the present one—that the Treasury does not like hypothecated income.
    Sir Donald Thompson: Has my hon. Friend considered the effect of the tax on destinations within the United Kingdom? Does it not put a strain on airlines, especially given the amazing and huge revival of the railways since privatisation?
    Mr. Sproat: I am glad about the improvement in the railways. It is true that the amount of money spent by our population on tourism has gone up at the same time as the spend by foreign visitors has increased. The answer to my hon. Friend's question is that the tax has not affected things one way or the other.

    National Lottery (Canals)
    Mr. Luff: To ask the Secretary of State for National Heritage how many canal restoration projects have received funding from a national lottery funding body; and if she will make a statement. [12219]
    The Secretary of State for National Heritage (Mrs. Virginia Bottomley): Canals and other inland waterways have been at the heart of many successful lottery bids throughout the country. They act as a focus for regeneration in their surrounding areas. So far, four major canal restoration projects have received lottery funding of nearly £52 million.
    Mr. Luff: Does my right hon. Friend agree that that answer puts a different gloss on the Inland Waterways Association's rather negative campaign on canal funding? Her statement will bring great hope to Worcestershire, where the rejection by the Millennium Commission of the bid to refurbish the Droitwich barge and junction canals was so disappointing? Does she agree that such projects bring enormous benefits to a huge area—not just the
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    immediate area around the canal—including to the excellent company, Viking Afloat, which is run by my constituent, Mr. Robert Bell, in Worcester?
    Mrs. Bottomley: I am well aware of the economic effects of investing in our canals, and the huge opportunities for canal projects that are provided by lottery funding. I met someone at the boat show from the project to which my hon. Friend referred. Those involved in inland waterways were enormously excited by the potential for the holiday and leisure industry of this substantial investment.
    Mr. Miller: If the Secretary of State recognises the importance of canals to our tourism infrastructure, why is she passing the responsibility on to the lottery rather than directly supporting projects, such as the Ellesmere Port boat museum, which is so important to tourism in my constituency?
    Mrs. Bottomley: The hon. Gentleman knows that I visited that museum and was very impressed by it.
    Mr. Miller: The right hon. Lady told me.
    Mrs. Bottomley: I told the hon. Gentleman, because it would have been contrary to usual practice to visit without having given him prior warning. He shows that the Labour party would ensure that all lottery money went to its friends in local government and elsewhere, and would dictate policy. It wants to dictate the distribution of lottery funds. Lottery funds are distributed by independent bodies, and judgments on particular projects are a matter for them. I hope that a great deal more money will go to museums, as set out in our excellent policy document "Treasures in Trust".

    Arts Access (Young People)
    Mr. Butler: To ask the Secretary of State for National Heritage what steps she has taken to make the arts more accessible to young people. [12220]
    Mrs. Virginia Bottomley: Increasing access to the arts, particularly for young people, is a top priority for my Department. In the last year, I have published "People Taking Part", a handbook of good practice on facilitating access; "Setting the Scene", containing a wide range of recommendations and commitments to encourage a greater involvement by the young in the arts; and "Treasures in Trust", which encouraged museums to look at new ways of reaching a wider audience. The national lottery has had an enormous impact in delivering the objectives, reviving the arts infrastructure throughout the country and now, through the new "arts for all" scheme, creating new revenue opportunities for a wide range of groups and organisations.
    Mr. Butler: I thank my right hon. Friend for that compendious answer. May I add that there is never any need for her to warn of visits to my constituency? Notice would be sufficient.
    May I ask whether my right hon. Friend enjoyed her visit to my constituency a couple of weeks ago, when she saw not only Olney rugby club and Olney tennis club but

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    John Dankworth and Cleo Laine's "The Stables", which have received more than £2 million of lottery funds? In particular, may I ask what view my right hon. Friend formed of the young people's summer camps, where each year several hundred children go to learn from experts in all sorts of music? Finally, may I ask whether my right hon. Friend has yet used John Dankworth's excellent book to learn to play the saxophone, and, if not, whether she will lend it to me?
    Mrs. Bottomley: I well remember my excellent visit to my hon. Friend's constituency. The lottery is bringing new opportunities to his constituency, as to so many other areas. There is the magnificent Wavendon project: I strongly commend its summer camps, which are involving more young people in a love of music and the arts. There is also the splendid £19 million project for the borough council, to promote its theatre. As my hon. Friends the Members for Milton Keynes, North-East (Mr. Butler) and for Worcester (Mr. Luff) are well aware, involving young people in worthwhile, constructive activity is extremely important.
    Mr. Tony Banks: May I say to the Secretary of State that there is nothing more artistic than a 40 yd pinpoint pass from Ruud Gullit or a pirouette from Gianfranco Zola on the football field? It is little wonder that football has been described as working-class ballet. Will the Secretary of State ensure that the working-class ballet is brought to this country in 2006 for the World cup, and that, when she and her colleagues go to protest about the failure of UEFA to consider the English bid, she takes the Leader of the Opposition with her so that we can see that there is an all-party effort to secure the World cup for Britain in 2006?
    Mrs. Bottomley: I do not think that I need reassure the House of the strength of feeling among all Ministers about the bid. The stadiums in this country are now formidable: they are of extremely high quality, thanks to substantial investment in them. Euro 96 was a great triumph, and I shall do all that I can to secure that long-term bid.
    Mr. Dicks: Why is my right hon. Friend so concerned about making the arts more accessible to young people? Most of the kids I know would go bonkers if they had to sit through anything like that. Why subsidise this? Why spend taxpayers' money on such nonsense? If kids want to go to the ballet or the opera, or to see classical plays, either they or their parents ought to be made to pay the economic costs. This is not just a subsidy; we are worse than the lot on the other side.
    Mrs. Bottomley: My hon. Friend has said that he will escort me to various arts events. We have not yet managed to arrange any such visits, but I am determined that he will join me at, for example, the National Youth Theatre. A £2 million lottery award enabled the theatre to buy its lease, and it provides opportunities for youngsters from all over the country. I know that, like me, my hon. Friend worries about young people who may be more bored than bad. Providing worthwhile activities, whether in sport or in art, is an excellent way of growing the citizens of tomorrow.
    Mr. Fisher: If increasing access for young people really is the Secretary of State's top priority, how does she explain the fact that her Government, through their dogmatic hostility to local authorities, which she has demonstrated again this afternoon, have presided over the reduction to a rump of our theatre and education network in schools, the destruction of peripatetic music teaching and the virtual elimination of all individual instrument teaching in schools? Is that the way to increase access? Has she ever had a meeting with the Secretary of State for Education and Employment to discuss increasing access through education and, if not, why not?
    Mrs. Bottomley: Once again, the Labour party is good at preaching to other people about homework, but it never does its own. I wonder whether the hon. Gentleman has actually read "Setting the Scene", in which he will find a programme of action to encourage more involvement by young people in the arts—despite my hon. Friend the Member for Hayes and Harlington (Mr. Dicks)—including the appointment of a schools governor, the involvement of the Office for Standards in Education, consideration of the school curriculum and consideration of all manner of practical ways in which to invest in the arts and young people.
    For the Labour party to say that no money goes into the arts when, this year, there have already been more than 2,000 lottery awards and £734 million has gone into the arts, is extraordinary. About 87 brass bands have been funded and any number of theatres have been supported, as have dance groups and public arts projects. The lottery offers schools the opportunity to become involved in those projects under new directions, which I issued last year, which the Labour party seems suddenly to have discovered and thinks might be a good idea for the future, and which are already enabling revenue funding to promote access and education in the arts.

    Tourism (Social Chapter)
    Mr. Nigel Evans: To ask the Secretary of State for National Heritage what assessments he has made of the impact of the social chapter on the United Kingdom tourism industry. [12221]
    Mrs. Virginia Bottomley: With the help of the Government's reforms, British enterprise has created an increase in employment of well over 500,000 jobs since 1993. The social chapter would damage labour market flexibility, raising costs, destroying jobs and reducing competitiveness in world markets. The Government will never willingly place unnecessary burdens on business, such as a statutory minimum wage or the social chapter.
    Mr. Evans: I am delighted to hear that, but does my right hon. Friend agree that it is not only Conservatives who are giving out warning signs about the social chapter and the minimum wage? Does she agree with the chairman of Bass, Sir Ian Prosser, who said that Bass was conscious of the difference between social on-costs in the UK of 10 per cent., and in Italy of 43 per cent., or with Forte, which says that social on-costs are 50 per cent. in France and Germany? Does she agree that it is pointless the Labour party talking about having a tourism strategy when it makes no reference to the fact that, if it introduces

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    a social chapter and a minimum wage, hundreds of thousands of jobs will go from all sectors of industry, but particularly the tourism industry in Britain?
    Mrs. Bottomley: My hon. Friend is exactly right. There has been a substantial increase in employment in the tourism and hospitality industry. It would be the most hard hit by the imposition of a minimum wage and social chapter.
    My hon. Friend refers to leaders in the industry who have already made the point powerfully. I would also quote Robert Collier, chairman of Inter-Continental Hotels:
    "This year the London Inter-Continental will run a gross operating profit 50 per cent. higher than the sister hotel in Paris.
    The difference is entirely in the costs of social benefits and insurances for which employers in France are liable. Put yourself in the position of a multi national corporation and I ask you which is the country you are more likely to invest in? Which economy is the more conducive to generating new jobs?"
    The Labour party's policy paper on tourism was disregarded as irrelevant. This is the key question that the industry minds about.
    Dr. John Cunningham: As for the untruthful claptrap and scaremongering that we have just heard from the right hon. Lady, let us face a couple of facts. The social chapter does not deal with incomes; nor does it deal with the minimum wage, as the hon. Member for Ribble Valley (Mr. Evans) implied; nor does it deal with the social costs of other nations.
    As the hon. Gentleman mentioned Bass in his inaccurate tirade, perhaps he would explain, and perhaps the right hon. Lady would explain, why Bass is one of the 57 British companies that has signed the European works council deal under the social chapter's provisions. As Bass is active in the leisure and hospitality industries, is it not clear that, far from what he has said, it sees no threat whatever from the social chapter? Finally, apart from the diatribe and nonsense from the right hon. Lady, perhaps she would also like to explain to people in the hospitality, tourism and leisure industries why she and her right hon. Friends are so intent on maintaining poverty levels of pay in those industries?
    Mrs. Bottomley: First, I welcome the right hon. Gentleman to our questions. We have missed him greatly. He looks refreshed from his world travel. It is a pleasure to have him back with us, from, I understand, visits to different parts of the world.
    Of course, we want to promote travel and tourism in Britain. We believe that the tourism industry is one of Britain's most important industries. It requires a flexible labour market. If the Labour party does not understand the damage that would be done to the industry by the social chapter and the minimum wage, it has failed to listen to all those leaders in industry who do understand. For example, a recent Confederation of British Industry survey showed that 80 per cent. of those surveyed were opposed to introducing paternity leave and 66 per cent. were opposed to other elements of the social chapter. We believe in jobs, in businesses and in the tourism industry.
    Mr. John Marshall: Does my right hon. Friend recall the comment of Mr. Jacques Delors, who said that Britain's exemption from the social chapter would act as a magnet for inward investment to the United Kingdom? Is that not as true for the tourism industry as it is for manufacturing industry?
    Mrs. Bottomley: I remember that comment. The tourism industry is flourishing—and is doing so because Britain has a Government who believe in deregulation, in liberalisation and in reducing the burdens on and the interference with employers. We want a well-motivated and well-employed work force, but not at the diktat of Brussels.

    Millennium Exhibition
    Mr. Austin Mitchell: To ask the Secretary of State for National Heritage what estimate she has made of the costs that would be incurred by her Department in the event of the cancellation of the millennial project at Greenwich. [12222]
    Mrs. Virginia Bottomley: As I informed the House on 20 January, an exhibition will take place in Greenwich to mark the millennium. Significant progress has been made on the project since then. Greenwich council gave planning permission last week and I understand that English Partnerships is close to completing its purchase of the site. The detailed design work is well under way and contracts have been let for work to begin on site. The millennium exhibition will be a showcase for Britain; it will be enlightening and enjoyable, involving the nation as a whole.
    Mr. Mitchell: The right hon. Lady has not answered my question, which was about the costs of junking the exhibition. Would not the cost of junking the exhibition be small compared with the humiliation and extravagance involved in going ahead with what essentially will be a boil on the bum of the millennium? It is a project which has no purpose—unlike the exhibition of 1851 and the festival of 1951—which business does not want, in which companies will not invest, which is being built in a place that no one wants to go to, and could not get to even if one did—and which will have no permanent value apart from a Hezza-dome, which is likely to be as transient and as vainglorious as its progenitor. Would not the money involved be better spent on putting schools, museums, galleries and public buildings on line to national culture, rather than being chucked away on an expensive piece of land reclamation?
    Mrs. Bottomley: Perhaps the hon. Gentleman should debate the design with his noble Friend Lord Richard Rogers, who may feel that it is a subject for a television debate with the hon. Gentleman.
    Despite the shameful amateur dramatics of the Labour party, it has consistently supported a millennium exhibition at Greenwich, both through its nominee on the Millennium Commission and in other discussions. The Labour party also believes that for Britain to have a world-class exhibition on a magnificent regeneration site, with a futuristic building alongside the wonderful naval college, will be a tremendous opportunity.

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    When the hon. Gentleman and, indeed, my hon. Friends see more of the detail of the exhibition, they will understand the messages involved and the degree to which the exhibition will involve the nation as a whole. I look forward to that shortly.
    Sir Norman Fowler: Do I understand that, in addition to a vast amount of public money, my right hon. Friend is considering setting up a public corporation with a Minister in charge? Are we not getting into rather curious policy territory with the exhibition?
    Mrs. Bottomley: It is the view of the Millennium Commission and the Government that the right structure for the operating company is a non-departmental public body, for which the Chancellor of the Duchy of Lancaster will be responsible—because, as chairman of the Millennium Commission, I cannot pay the grant to myself in another capacity. I know my right hon. Friend, and I was very surprised to hear him ask his question without mentioning that he is absolutely delighted by the launch of the Digbeth millennium point—a £50 million project in Birmingham—and by the many other ways in which the national lottery has supported his constituency, thanks to his active championing of the case.
    Mr. Thurnham: Will the Secretary of State say what lessons have been learnt from the very high costs of the Greenwich site? Are we not in danger of spending too much millennium money in London, as there are plenty of derelict sites elsewhere in the country?
    Mrs. Bottomley: I am grateful to the hon. Gentleman for accepting that as a planted question, because I wanted to tell him that Greater London has received only 15 per cent. for capital projects, as opposed to 19 per cent. for the northern region. To date, £767 million has been awarded to 94 projects in 2,045 sites across the United Kingdom. As I said, only a small share of that money has come to London from the Millennium Commission. In the past quarter, the largest increase was in the area in the west midlands represented by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler).
    The hon. Gentleman will also be aware that, apart from the £200 million being spent on the millennium exhibition, £200 million will be spent on millennium awards, which will have an endowment attached. I should like to spell that out to Labour Members, because they have invented a new concept, called an "endowment fund". If they did their homework, they would discover that the Millennium Commission has already taken up that concept.
    Mr. Jessel: As well as all those other schemes across the country, does not my right hon. Friend think that people at home and abroad will be absolutely astonished and utterly amazed if we get to the millennium—once in a thousand years—without some grand, national, central exhibition to celebrate it?
    Mrs. Bottomley: I do—[Interruption.] Labour Members cheer and sneer. The millennium is a quite remarkable and very exciting moment, and I pay tribute to the work of churches and of those in local authorities, the arts, sports and the heritage fields for the work that they have already done in finding ways in which the
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    millennium can be celebrated which will genuinely lead to renewal and regeneration of communities across the country. I hope that we will be able to set out those plans in more detail in the near future.
    Mr. Raynsford: Does the Secretary of State agree that, although some hon. Members on both sides of the House might have preferred another location, there is only one logical location for Britain's millennium exhibition—in the place to which the entire world will be looking in the year 2000? The meridian line in Greenwich determines time around the world. Now that we have a proper and sensible budget to which we can work, is it not essential to focus on making a success of the exhibition, so that all hon. Members and people across the country can take pride in it, as the rightful successor to the great exhibitions of 1851 and 1951?
    Mrs. Bottomley: Yes.
    Mr. Booth: In addition to that praise of Greenwich, may I ask my right hon. Friend whether holding the millennium celebrations there—on a derelict 400-acre site which is the last in central London to require urban regeneration, and which is one of the most polluted in the world—will not only transform it from dereliction to celebration but represent a great event for the normal people of London and a great triumph for the Government?
    Mrs. Bottomley: I thank my hon. Friend. The opportunity of such a major regeneration project close to the heart of our capital city is enormously worthwhile. I recently travelled on the new Jubilee line to see the large underground station that will be available at the site.
    My hon. Friends should also be aware that Bristol has a major £41 million millennium project, Newcastle has a £27 million regeneration project, Cardiff has a £46 million project, Salford has a £15 million project, Hampden Park in Glasgow has a £23 million project, Doncaster has a £50 million project, Portsmouth has a £40 million project and Birmingham—
    Madam Speaker: Order. Let's finish this off. Come on.
    Dr. John Cunningham: We all know that, if the right hon. Lady and her right hon. Friend the Deputy Prime Minister had had their way, there would have been an open-ended cash commitment to a project at Greenwich, which was heading towards costing the people £1 billion. Will she assure us that she, like us, is committed to working to make sure that the Greenwich millennium project stays on course and within budget, and that not a penny more than that budget will be spent on it?
    Mrs. Bottomley: The right hon. Gentleman knows full well that neither the Government nor the Millennium Commission had any intention of signing a blank cheque. The Labour party had a nominee on the commission. Information has always been readily available. I am delighted about the magnificent project, which I believe will be delivered to budget, in spite of the shameful scaremongering and positioning of the Labour party in recent weeks and months, which can only threaten the project, rather than achieve the result that would be in the nation's interest.

    National Lottery (Charities)
    Sir Ivan Lawrence: To ask the Secretary of State for National Heritage how many charities have been awarded grants from the national lottery. [12224]
    Mr. Sproat: The National Lottery Charities Board has made 6,925 awards totalling £478 million to charities and voluntary organisations. The other distributing bodies have made a total of 5,194 awards totalling £2.352 billion, many of which will also have gone to charitable and voluntary organisations.
    Sir Ivan Lawrence: Is it not a fact that all the good causes are charities and that the total so far received is nearly £3,000 million? Will my hon. Friend confirm that, although originally there were fears that charitable giving would fall off as a result of the lottery, that has not happened? Will he also confirm that one of the best ways to deal with the scourge of juvenile crime is to devote as much of the resources as possible to getting young people off the streets and into better sporting facilities and artistic facilities, or engaging them in other activities that will lead them away from delinquency?
    Mr. Sproat: My hon. and learned Friend is right. Well over half the awards funded by the distributing bodies have gone to voluntary charitable organisations. He is also right that, so far, there is no evidence that giving to charities has fallen. We are looking into that at the moment and hope to provide interim results in May. As for his third point, getting young people off the streets is extremely important. The National Lottery Charities Board funds the crimecrackers-Belgrano scheme in Wales and a scheme in Leeds to get young people into things other than crime in their spare time, particularly the many sporting facilities that it provides. Those are all good ways of channelling the energy and enthusiasm of young people.
    Mr. Cunliffe: Is the Minister aware that supporters of animal welfare charities are anxious because they are not getting their rightful share, considering the size of some of those organisations? They believe that they are discriminated against to some degree because they are not fashionable organisations, such as those for sport, culture and the arts. Will the Minister remind the distributing bodies that such organisations play a positive role in helping to create certain pleasures for society?
    Mr. Sproat: The hon. Gentleman makes an important point, which I will draw to the attention of the distributor body.

    Tourism (Social Chapter)
    Mr. Waterson: To ask the Secretary of State for National Heritage what meetings she has had with the tourism industry about the social chapter. [12225]
    Sir Wyn Roberts: To ask the Secretary of State for National Heritage what assessment she has made of the effects of imposing the provisions of the social chapter on the tourism industry. [12228]
    Mrs. Virginia Bottomley: The tourism industry is one of the most dynamic in this country, containing one in 12 of all small businesses and with 20 per cent. growth in employment over the past 10 years. The year 1995 was a record one for the industry and indications are that 1996 will be even better. We must ensure that the industry is not damaged by unnecessary burdens and I have discussed that point with industry leaders.
    Mr. Waterson: Does my right hon. Friend recall her excellent visit to Eastbourne pier last summer when she met representatives of the local tourism industry? Does she recall the concerns expressed about the effects of the social chapter and a national minimum wage? Does she agree that the danger of the social chapter is not just some of the provisions that already exist, but the fact that it could be extended limitlessly by the use of qualified majority voting? Would it not all end in tears?
    Mrs. Bottomley: Undoubtedly it would all end in tears. I well remember my visit to my hon. Friend's constituency; I was most impressed by all that I saw, especially his pier, which was one of the influences, during the year of the pier, in our trying to modify the lottery rules to ensure that private as well as public owners could receive lottery money. My hon. Friend is entirely right. The tourism industry needs flexibility and the social chapter would be a huge threat and danger to it.
    Sir Wyn Roberts: Does my right hon. Friend agree that it is precisely the small business element of the tourism industry, to which she referred, that would suffer most as a result of the introduction of the social chapter, the 48-hour working week and the minimum wage? Will she view with considerable suspicion the tendentious conclusions of the report on employment emanating from Brussels today?
    Mrs. Bottomley: My right hon. Friend is precisely right. One in 12 small businesses are involved in tourism and hospitality. The key is to ensure that there is a minimum of regulation, that liberalisation is promoted and that burdens are removed from employers. If one listens to the industry, one finds that that is the message that it gives time and again; that is the message that we have heard. When we set out our further strategy for tourism and hospitality later this week, we shall do so on the basis of working with the industry and not on the basis of imposing our ideology, as the Labour party does.
    Mr. Bermingham: Does the right hon. Lady agree that if she made any inquiries in, for example, the Derbyshire peak district, south Lancashire and the Fylde area around Blackpool, about the wages paid there, she would find that they are currently in excess of what is likely to be the minimum wage? [HON. MEMBERS: "How much?"] To continue, is it not reasonable in rural areas, where one of the primary sources of income is the tourism industry, that people who work in that industry should receive a decent living wage, which would protect not only their rights but the rural economy generally?
    Mrs. Bottomley: The Labour party never listens and never understands. It has heard representative after representative in the industry make it clear that a statutory minimum wage has an adverse effect on employment.

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    Most people would rather have jobs than a statutory wage that meant that they were without work. This country has been incredibly successful in terms of having a low level of unemployment; there is more to do. The Labour party threatens a successful industry and the jobs and livelihood of our people.
    Mr. Alan Howarth: Is not the right hon. Lady aware that her own Department's document on tourism, "Tourism: Competing with the Best", rightly makes the case for the need for quality and the need for training? Does she not understand that that quality of product will not be achieved on the basis of poverty pay and sweated labour?
    Mrs. Bottomley: Nobody wants poverty pay and sweated labour; that is precisely the Labour party's argument. I have said time and again that the industry wants well-motivated, well-rewarded staff with proper training; that is precisely what our work has been setting in hand. Coercion and compulsion are not the way in which to achieve that goal. That has been made clear time and again; people do not do the right thing because they are coerced into it.
    Mr. Bernard Jenkin: I congratulate my right hon. Friend on pointing out how destructive the encroaching tide of European legislation can be. May I point out, perhaps with some glee, what an effective recruiting agent to the Conservative cause the Labour party support for the social chapter is, because people realise how many jobs would be destroyed?
    Mrs. Bottomley: My hon. Friend identifies one of the most powerful influences in current political debate. Time and again, when people in the tourism and hospitality industry talk about what they most fear, it is the interfering, regulating, domineering approach proposed from Brussels and supported by the Labour party.

    Football Safety
    Mrs. Bridget Prentice: To ask the Secretary of State for National Heritage what steps she is taking to ensure the continued implementation of the recommendations of the Taylor report. [12226]
    Mr. Sproat: The Government remain committed to delivering essential football ground safety improvements agreed following the Taylor report.
    Mrs. Prentice: I thank the Minister for that reply. He is clearly aware of the problems facing the lower league clubs in implementing the safety work at their grounds following the impact of the national lottery on the Football Trust income from pools companies. He will also be aware that the Football Trust has now put a moratorium on any further awards. When he meets the Football Trust, will the Minister take a positive approach to ensure that all possible solutions are examined to ensure that those clubs can implement that important safety work?
    Mr. Sproat: The hon. Lady makes an extremely important point. She is certainly accurate in saying that the Football Trust has suffered because of the effect of the lottery on the pools industry. I am meeting
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    Lord Aberdare of the Football Trust on 5 March. Today the Sports Council is considering whether or not the Football Trust can be helped by the lottery. Above all I hope that all sports—particularly football which will receive some £700 million—that benefit from broadcasting rights will use some of that money to improve safety at sports grounds.

  LORD CHANCELLOR'S DEPARTMENT

    County Court Fees
    Mr. Cohen: To ask the Parliamentary Secretary, Lord Chancellor's Department what monitoring arrangements he has established to ascertain the effects of the new system of county court fees on low-income tenants seeking to use the judicial system. [12246]
    The Parliamentary Secretary, Lord Chancellor's Department (Mr. Gary Streeter): My Department has been collecting information on the number of non-possession housing disputes dealt with by the small claims procedure as part of our monitoring of the effects of the rise in the small claims limit. The information is currently being assessed. The majority of cases dealt with by that route are for less than £1,000 and the fee for those cases has not been increased. Low-income litigants bringing such claims may also have their fee reduced to £10. Moreover, litigants bringing larger claims who are eligible for legal aid will continue to have their court fees paid by the legal aid fund.
    Mr. Cohen: Have not citizens advice bureaux expressed dismay at the hike in court fees which they describe as being targeted at those least able to afford them? As the setting down for trial fee will be £150 and it will cost a tenner even to apply for an exemption for a court fee, will it not be easier for bad landlords to harass and evict tenants and harder for tenants to use the law to protect themselves?
    Mr. Streeter: The hon. Gentleman makes an important point. He will know that we have been moving towards full cost recovery of court fees for a number of years. It is important, however, to protect access to justice for those on modest incomes. We have done so in two ways: first, the Legal Aid Board continues to pay the court fees of those on legal aid and, secondly, those on low incomes who are not eligible for legal aid can apply for reduced fees. We believe that we have got the balance right. However, the hon. Gentleman must take something up with his own Front Bench. If Labour is criticising the increase in court fees, but refusing to say that it would reverse it in the unlikely event of forming a Government, that smacks of hypocrisy.
    Mr. Boateng: Is the Minister aware that court fees are not recoverable as disbursements under the green form legal aid and advice scheme? As they are not, will the Minister review the rules and regulations of that scheme to give at least some help to the poorest litigants? We will review the rules. Will he?
    Mr. Streeter: The green form scheme has never reimbursed court fees. It is a system for giving people

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    initial advice not for dealing with litigation, where full legal aid is available. I am surprised that the hon. Gentleman did not know that. I am coming reluctantly to the view expressed by Robert T. J. Brown of Darlington and Parkinson, Solicitors, who wrote to The Guardian on 29 January saying:
    "Paul Boateng displays a shocking combination of ignorance and prejudice."

    Judges' Statements
    Mr. Gordon Prentice: To ask the Parliamentary Secretary, Lord Chancellor's Department what guidance he (i) has issued and (ii) plans to issue to judges on the subject of public statements on (a) constitutional matters and (b) other matters of current party political controversy. [12247]
    Mr. Streeter: In accordance with the principle of judicial independence, my right hon. and noble Friend the Lord Chancellor made it clear in advice issued in 1989 that it is for each judge to decide individually whether to make public statements. A copy of that advice, which was sent to every judge at the time and is sent to new judges on appointment, is available in the Libraries of both Houses.
    Mr. Prentice: Do not judges feel that their independence is being compromised, as Lord Ackner very recently said in another place? Will the Minister join me in condemning the views of the chairman of the Conservative party, the Minister without Portfolio, the right hon. Member for Peterborough (Dr. Mawhinney), who was exhorting members of the public to write to judges and seek to intimidate them if they handed down sentences that were considered too light? Is it not about time that we took the appointment of judges away from politicians and instituted an independent system for appointing members of the judiciary? Will not many judges otherwise be fearful mat, if they speak out on controversial matters, they will be blackballed by the Government and not promoted?
    Mr. Streeter: That was a fairly extraordinary outburst. On appointment in 1987, my right hon. and noble Friend the Lord Chancellor relaxed the rules to enable judges to speak out on issues of the day. It is important that experienced and senior judges speak out, express their opinions and take a full part in debates in the House of Lords. If the hon. Gentleman expects me to condemn my right hon. Friend, the chairman of the party, he is living in a fantasy land. It is important that members of the public make their views known, if they feel that sentences passed in local communities are not appropriate, by going to see or writing to their Members of Parliament. That is what we call democracy, and Conservative Members actually believe in it.
    Sir Ivan Lawrence: Does my hon. Friend agree that it would be far better for the respect with which the judiciary is held if it were never tempted to get into any party political arena and never given the opportunity to do so?
    Mr. Streeter: My hon. and learned Friend makes a valuable point. It is not appropriate for members of the judiciary to involve themselves in party politics; I am not
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    aware that they are doing so. It is important, none the less, that debates on issues in which they have experience are enriched by their contribution. That has happened in the past and we look forward to it happening in the future.

    Magistrates Court, Bolton
    Mr. Thurnham: To ask the Parliamentary Secretary, Lord Chancellor's Department what recent representations he has had about the need for improved magistrates court accommodation in Bolton; and if he will make a statement. [12248]
    Mr. Streeter: Representations have recently been received from the Under-Secretary of State for the Home Department, my hon. Friend the Member for Bolton, West (Mr. Sackville), who is in his place, and from the chief executive of the Bolton metropolitan borough council. The Bolton scheme is in our existing programme, but was not selected as part of the first tranche to be taken forward, as others had an even more urgent need. A further selection is due to be made in the autumn.
    Mr. Thurnham: Is the Minister aware just how deeply disappointed, indeed angered, people in Bolton are not to be getting the long-needed new court? Will he act now to restore Bolton to its first place in the priority, as it has long deserved?
    Mr. Streeter: I am sorry that the hon. Gentleman has expressed his view in such strident terms. While the hon. Gentleman has been shouting and criticising from the sidelines, my hon. Friend the Member for Bolton, West has been working hard. Indeed, only last week, he brought to see me the chairman of the Bolton bench, and I believe that we have thrashed out a basis on which we hope to be able to support an interim refurbishment programme for the Bolton court. My hon. Friend has been working hard and getting results; the hon. Gentleman has been criticising from the sidelines and getting nowhere.

    County Courts
    Mr. Llwyd: To ask the Parliamentary Secretary, Lord Chancellor's Department how many county courts there were in England and Wales in 1967; how many there are currently; and if he will make a statement. [12249]
    Mr. Streeter: In 1967, there were 301 full-time county courts and 105 part-time offices. Currently, there are 240 full-time county courts and three part-time offices. Before the Lord Chancellor decides to close any county court, there is a full public consultation on the proposed closure.
    Mr. Llwyd: I thank the Minister for that reply. I do not know whether he is aware that the nearest county court trial centre to my constituency is at least an hour and a half's drive away. If there are to be any further closures pursuant to the Woolf report, I urge the Minister to consider carefully the issue of local access to justice, including county court centres.
    Mr. Streeter: The hon. Gentleman has been diligent in championing the cause of county courts in Wales and I pay tribute to him. He will understand that the Court Service constantly monitors and reviews the viability of the court

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    network in the light of workload trends and business needs. I can give him the assurance that he seeks because we intend to ensure that there are sufficient county courts throughout England and Wales as we implement the Woolf reforms in full over the next two years.
    Mr. Miller: Will the Minister look more carefully at the issue of the closure of court offices, to which he referred in his response? Does he not realise that his actions have meant that constituents of mine now have to make a bus journey to make payments at court offices and that, as a result of one of his earlier decisions, people now have to make two bus journeys to get to a magistrates court? That cannot be right.
    Mr. Streeter: I am sorry to learn of the hon. Gentleman's complaints about decisions that have already been made. He might have done better to come and discuss the matter with me at the time, but he will understand that it is important to review the efficient performance of the Court Service from time to time. We endeavour to make decisions that deliver access to justice at local level.

    Property Law Report
    Mr. Clifton-Brown: To ask the Parliamentary Secretary, Lord Chancellor's Department when he plans to introduce legislation to implement the recommendations of the Law Commission in its report "Property Law: Liability for Chancel Repairs", Law Commission No. 152. [12250]
    Mr. Streeter: My hon. Friend has long championed a change in the law relating to liability for chancel repairs. He will understand that the likelihood of legislation in this Parliament is now remote.
    Mr. Clifton-Brown: I thank my hon. Friend for that answer, although it was disappointing. This is a complex issue and the problem is that those people with the liability find that it is arbitrary both in the timing and in the amount that they have to pay. Will my hon. Friend accept that it is an anachronistic concept? Tithes were redeemed with compensation some time ago. Does my hon. Friend accept that that should be the ultimate aim for chancel repairs liability? Will he seek to continue to discuss the problem with the relevant parties so that something can be done?
    Mr. Streeter: My hon. Friend has been determined in pursuit of that important matter. He will know that the Law Commission report threw up some complex issues of principle and law that require full and careful consideration. Some of the concerns remain and we will of course continue to consider the matter carefully. I am sure that he will continue to lobby on behalf of his constituents.

    Legal Aid
    Mr. John Marshall: To ask the Parliamentary Secretary, Lord Chancellor's Department what representations he has received about the 1997–98 legal aid budget. [12251]
    Mr. Streeter: No representation has been made to me specifically about the 1997–98 budget, although I have on
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    a number of occasions received correspondence concerning the level of legal aid expenditure generally. The Government are introducing a major reform of the legal aid system to bring the budget under control.
    Mr. Marshall: I thank my hon. Friend for that answer. Does he accept that most people welcome some control over the legal aid budget, which they think has got out of control? Most people are appalled that the shadow Lord Chancellor wants to extend legal aid to industrial tribunals, which will cost the taxpayer dear and benefit his chambers.
    Mr. Streeter: My hon. Friend makes an important point. Our White Paper reforms are intended to bear down on and seize control of the legal aid budget to improve the service that we deliver. In contrast, the Labour party is talking openly and widely about expanding legal aid further by installing a law centre in every town and extending legal aid to industrial tribunals. Those proposals will cost the taxpayers many millions of pounds. There is an apparent conflict of interest when people call for an extension to the industrial tribunal system knowing that it would benefit themselves.
    Mrs. Dunwoody: Instead of talking about the amount that legal aid costs, why does not the Minister astonish the House by looking at the way in which legal fees are raised by solicitors who spend well over a year deciding on whether or not to pursue a case—all the time seeking legal aid fees—and who then tell some of my poorest constituents that there is no case to pursue? If he were doing his job properly, there would be more than enough money to extend representation to industrial tribunals.
    Mr. Streeter: The hon. Lady makes an interesting point, and I accept that there are times when the service delivered by solicitors falls short. If she is aware of a specific case, I hope that she will raise it with me, the Law Society and other appropriate channels.
    Dr. Spink: To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement about the level of the legal aid budget over the past three years. [12252]
    Mr. Streeter: In 1993–94, net expenditure on legal aid was £1.2 billion. In 1995–96, expenditure had risen to £1.39 billion, an increase of just under 15 per cent.
    Dr. Spink: Will my hon. Friend take time in the near future to set out how the Government intend to control legal aid expenditure more rigorously, and whether they will set caps on it? Is it not shameful that the legal profession and Opposition Members seek to extend the legal aid budget, particularly to industrial tribunals?
    Mr. Streeter: Once again, my hon. Friend is on to a good point. The White Paper reforms announced last July are right and have acquired an unstoppable momentum. They will resolve the current shortfalls in the system. Colleagues will be pleased to learn that I am examining a number of proposals to deal with some of the more obvious abuses in the short term, including perverse decisions by area committees and soft opinions by some barristers to enable their clients to get legal aid. I will have more to say on that shortly.

Point of Order
3.31 pm
Mr. Denis MacShane: On a point of order, Madam Speaker. I wish to raise a matter about which I have given notice to you and, by telephone and letter, to the hon. Gentleman involved. Last week, I received a letter from the hon. Member for Stafford (Mr. Cash), threatening me with legal action arising out of a speech that I made in the House 10 days ago, when I suggested or argued that he and other right hon. and hon. Members supported policies that would lead to the detachment or withdrawal of Britain from Europe. He now threatens me with legal action if I repeat those remarks. In no way did I question his personal honour, probity or integrity. I myself have been accused of being a Euro-federalist, which is a lie. Madam Speaker, is it in order for one hon. Member to threaten another with legal action on an important area of public policy debate?
Madam Speaker: I do not think that I can help the hon. Gentleman. He knows, as does the House, that nothing said during proceedings in this House can possibly give rise to action in the courts. If, of course, one hon. Member takes legal action against another for something said or done outside this House—whatever it may be—it is not a matter for the Chair.

Local Government Finance
3.32 pm
The Secretary of State for the Environment (Mr. John Gummer): I beg to move,
That the Local Government Finance Report (England) 1997–98 (House of Commons Paper No. 203), which was laid before this House on 27th January, be approved.
Madam Speaker: I understand that with this, it will be convenient to discuss the following motions:
That the Special Grant Report (No. 23) (House of Commons Paper No. 204), which was laid before this House on 27th January, be approved.
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1997–98 (House of Commons Paper No. 205), which was laid before this House on 27th January, be approved.
Mr. Gummer: On 27 November 1996, I issued my proposals for the 1997–98 local authority finance settlement for consultation. They included the provision for local authority spending, the level of central support for that spending and my proposals for calculating standard spending assessments. I also announced provisional capping criteria.
Since then, my colleagues and I have received written representations from 210 local authorities and have met delegations from 79 authorities. We have carefully considered all the points that were raised with us during consultation. Our final decisions in respect of grants and notional amounts are embodied in the reports before the House today.
As I made clear when announcing the provisional settlement, all public expenditure programmes have to be examined rigorously each year, and local government spending, accounting as it does for a quarter of all public expenditure, is no exception.
Bearing in mind the Government's objectives for the economy as a whole, I have looked hard both at the pressures on local government spending and at the scope for greater efficiency and effectiveness within local authorities. The days of rolling forward last year's budget and adding a wish list to that are long gone.
Mr. William O'Brien: When the Secretary of State considered the pressure on local authorities' resources, did he also considered the pressure on services? Because of the strictures of past years, the policy on funding local authorities is biting harder this year. Has the right hon. Gentleman considered the effect on services? Even libraries, schools and old people's homes are suffering because of the tightness of the budget provision. Will he give some assurances that he will undertake a review, as some authorities are having to impose restrictions on services, which are beyond the pale and not what they were set up to do? Will he give the provision of services some consideration?
Mr. Gummer: I always take into consideration what the hon. Gentleman says and I think that he will agree that I have dealt with a number of specific cases. I hope that he will take into consideration the words of the right hon. Member for Dunfermline, East (Mr. Brown), who said that if a Labour Government came to power,

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they would stick to the figures that we have in front of us and to the capping regime, not only for this year but for next. The hon. Gentleman has to accept that the pressures that we are discussing are now supported, at least nominally, by his party. I do not think that Labour would stick to them, of course, and I shall say something about that later. The hon. Gentleman should say what he has to say in the context of the fact that the Labour party is committed to supporting the figures that we have in front of us for this year and next.
Mr. Robert Jackson: As my right hon. Friend will recall, the Government kindly agreed that Oxfordshire faced particular problems last year and provided an extra £3.5 million in this year's settlement. It is my view and that of the Conservative group on Oxfordshire county council that the difficulties persist. I look to my right hon. Friend for an assurance that he will continue to look seriously into the case that is being put to him.
Mr. Gummer: As I have always told my hon. Friend, if new facts or a different way of looking at things emerge and the council wants to talk to me about them, I shall listen—my Ministers and I have always sought to listen. Last year, we had that situation—one does do that—but there are also difficult positions elsewhere.
Several hon. Members rose—
Mr. Gummer: Perhaps I may get on to the meat of my speech.
Mr. Eric Illsley rose—
Mr. Gummer: I will move on a little, but I shall remember the hon. Gentleman and shall not miss him in a moment or two.
The announcement on 27 November proposed total standard spending for England for 1997–98 of £45.66 billion. During consultation, we adjusted that figure slightly to reflect accurately the funding arrangements for the nationwide introduction of nursery vouchers. The final TSS figure for England for 1997–98 will be £45.67 billion, which represents an increase of £1.13 billion—2.5 per cent.—over the adjusted 1996–97 figure.
At a time of low inflation, that is a substantial increase and it reflects the importance that the Government attach to the services that local authorities provide and, in particular, to education, law and order, the fire service and social services. We have provided for a 3.6 per cent. increase for education, a 3.4 per cent. increase for the police and a 4.2 per cent. increase for the fire service, as well as a £325 million special transitional grant for new community care responsibilities.
Sir Anthony Grant: Is my right hon. Friend aware that, in spite of the extra £6 million for education in Cambridgeshire, the Lib-Lab coalition is proposing an across-the-board cut for schools of £8.8 million? Is not that yet another example, and an awful warning, of the dangers of Liberals getting into bed with Labour or vice versa?
Mr. Gummer: We have concentrated on education because we have good reason to believe that the majority of people feel that it should be a priority. That is as true in Cambridgeshire as elsewhere. If a local authority does not passport through the money, as is provided for, it will be for the electorate to ask it whether it shares their priorities. If it does not, they will no doubt know what to do when the county council elections come along on 1 May. I confidently expect that Cambridgeshire will be returned to sensible hands that will do the job properly.
Mr. Illsley: The Secretary of State said at the outset of his speech that the total amount of funding available had been agreed by Labour. Rather than talking about providing extra money for local government, will he consider a fairer distribution among the local authorities?
Mr. Gummer: We do that all the time, and we listen carefully to the views of the Labour-controlled associations of local authorities. From what I say later on, the hon. Gentleman will see that I have followed their views in some of the changes that we have made, and in the changes that we have not made. If he is referring to what John Humphrys the other morning called the "mathematics of the madhouse"—I refer of course to the mathematics of the hon. Member for Holborn and St. Pancras (Mr. Dobson)—I shall have a good deal to say about that later.
I think it only fair to give way to the hon. Member for Cambridge (Mrs. Campbell), whom I did not mean to ignore earlier.
Mrs. Anne Campbell: I am most grateful to the Secretary of State. To return to the subject of Cambridgeshire for a moment, is he aware that the £6.5 million that has been allocated for Cambridgeshire's education has been swallowed up by £8.4 million in inflation and an extra £1.3 million merely to stand still, because of the extra children in the county? That is hardly a fair deal, when we already have class sizes approaching 40 in some of our primary schools.
Mr. Gummer: What an amazing admission from the hon. Lady. She means that Cambridgeshire is so perfect that it can make no savings at all. She does not mention any possibility of anybody running anything better. What public company could begin to argue, year on year, that the next year it had to do everything as it did it before, or could constantly talk only about extra money and extra means?
The hon. Lady must realise that she no longer has the confidence of her Front-Bench spokesmen, because her party is committed to no increase. If she wants any extra money, she must say from which councils she wants to take it. No doubt she will soon tell me which counties, districts or metropolitan councils she wants the money to come from. Otherwise, she is running against her party's policy, and I know that she is committed to the Trappist vow never to do that.
Mr. John Marshall: My right hon. Friend spoke earlier about the need for efficiency in spending public money. Is he aware that when the London borough of Barnet put its refuse collection contract out to tender, it refused to accept the lowest tender, and voted instead for an in-house contract that would cost the

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ratepayers an extra £500 million—I mean £500,000—over the life of the contract? Is he surprised at that and at the fact that the Lib-Lab pact has censured those of us who pointed out the cost?
Mr. Gummer: I noticed that Labour Members laughed at the figure of £500,000, as if that were not a large amount or one that really mattered. We know their attitude to mathematics. We are currently investigating the case, to determine whether it is in accordance with compulsory competitive tendering. It is no surprise that the Labour party is opposed to competitive tendering, as it knows perfectly well that it does not want the competition or to look after the ratepayers; it wants only to pay for the trade unions, in whose pocket it increasingly is.
Mr. David Rendel: Will the right hon. Gentleman give way?
Mr. Gummer: I have not given the Liberals an opportunity to speak. As only one of them is here to take such an opportunity, I shall give way.
Mr. Rendel: The Secretary of State argued at length that there are always opportunities for efficiency savings. Since the Conservative Government came to power in 1979, by how much has real central Government spending been cut?
Mr. Gummer: We have done a great deal of efficiency saving. I shall give one example. There has been an enormous reduction in the number of civil servants and an enormous extension of outside contracting in my Department. I am now happy to preside over a Department that does a great deal more at a very much lower cost than before. That is the result of efficiency savings—something to which the hon. Gentleman cannot point in Liberal-controlled Newbury. I shall have something to say about that later.
I must ensure that we are making equal comparisons. We need to compare the total standard spending for each year to be able to discern the difference. We cannot compare the total standard spending figure for the next financial year with what local authorities are spending this year. Each year, there is an additional spend that comes from what local authorities bring down from reserves and from the levies, fees and charges that they make. Those make a difference. This year, local authorities are budgeting some £2.5 billion more than this year's TSS. No doubt they will do that next year. We have to compare like with like.
The Labour party is committed to TSS being at the level given in the Red Book. If it wants the TSS to be at the level at which local authorities actually spend, they must tell the House where in the Budget the money will come from—or will this be another occasion on which Labour's Front-Bench spokesmen say something different in debate from what the right hon. Member for Dunfermline, East says? We shall no doubt find out when the hon. Member for Holborn and St. Pancras speaks.
Mr. Roy Thomason: On budgeted expenditure, will my right hon. Friend confirm that he has
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received representations from Hereford and Worcester, as have other hon. Members, about the cost of local government reorganisation there? Will he confirm that money has been made available for that and that the county council's allegations that that money is grossly insufficient do not properly take into account commitments that the Government have made to give further moneys later in the year to meet redundancy payments? Are not, therefore, many of the county council's arguments specious and misleading?
Mr. Gummer: At the request of local government, we have a system that gives two tranches. Local government felt that it would be easier to account for the real cost of redundancies after reorganisation if it were done in that way. My hon. Friend is right. Anyone who has said the opposite in Hereford and Worcester can have done so only for party political reasons.
The total of aggregate external finance for England for 1997–98 will be £35.77 billion, as previously announced. That is an increase of some £530 million, or 1.5 per cent., on 1996–97. Within that total, revenue support grant will be £18.68 billion. That is slightly lower than the figure announced in the provisional settlement, largely because grant to provide transitional relief to council tax payers in reorganised authorities will be correspondingly higher.
The increase in aggregate external finance is less than the increase in total standard spending, reflecting the Government's belief that local taxpayers could meet slightly more of the cost of local services. However, the responsibility for council tax bills rests firmly with local authorities and not with the Government. The level of the council tax will depend on the decisions that they take, and I do not intend to speculate on what those decisions might be. However, I will say that, contrary to the claims made by the hon. Member for Holborn and St. Pancras, local authorities do not have to increase council tax bills next year if they want to maintain or improve services. That is not only my view, but one shared by many commentators and even by some Labour council leaders.
Councillor Mike Bower, the Labour leader of Sheffield city council, speaking to the Sheffield chamber of commerce, said:
"The Council probably has the capacity to make enormous improvements in the services it currently operates, with the resources it currently has".
It is a shame that Councillor Bower's colleagues on the Opposition Front Bench will not accept that what he says is true. However, that is hardly surprising—after all, two of his predecessors from Sheffield sit on the Opposition Benches. One has pretensions to preside over Britain's education system and both have an almost unrivalled record as leaders of a spendthrift, wasteful authority. It is no wonder that Councillor Bower has so much elbow room to improve services at no extra cost. We must recognise that the record of the hon. Members for Sheffield, Attercliffe (Mr. Betts) and for Sheffield, Brightside (Mr. Blunkett) is a warning of the true nature of new Labour.
Mr. Robert G. Hughes: I am sure that my right hon. Friend agrees that, regardless of party affiliations, a council leader's comments should be examined carefully. I hope that he shares my astonishment at the fact that the mention of Councillor

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Bower's name produced derision and laughter from the Opposition environment spokesman, the hon. Member for Leicester, East (Mr. Vaz), and other Opposition Members. That is an astonishing attack by Labour Members on a Labour city council leader.
Mr. Gummer: I understand the reason for that attack: Councillor Bower seems to have discovered that, over the years, two prominent members of the Labour party did not have the fingertip control of finances that the right hon. Member for Dunfermline, East claims that the Labour party has caught on to. Councillor Bower has let the cat out of the bag.
Mr. Tony Banks: It is clear that leadership of Sheffield city council is a passport to becoming a Member of Parliament, so no doubt we shall eventually welcome Councillor Bower to this place.
Does the Secretary of State accept that certain local authority problems derive essentially from central Government decisions? I am thinking of the issue of refugees who are allowed into this country and who move to areas such as Newham. There are 15,000 refugees in Newham, which puts enormous pressure on local services. What are the Government doing to recognise that problem and what additional assistance will be made available to boroughs such as Newham?
Mr. Gummer: The hon. Gentleman knows that we are discussing with local authorities precisely how we should deliver on our commitments, and he will no doubt find that those commitments are honoured fully. Perhaps he will recognise in future that this problem, like many others, must be faced squarely. We cannot allow problems to continue to arise in the way that they do at present.
However, that is not a key issue for Sheffield—I have outlined its problems already. We shall take Newham's problems seriously, and I hope that we shall be able to solve them.
Sir Irvine Patrick: The situation in which Councillor Bower finds himself is not of his making. As my right hon. Friend correctly points out, it is the result of the actions of the hon. Members for Sheffield, Attercliffe (Mr. Betts) and for Sheffield, Brightside (Mr. Blunkett). Council tax and rents were not collected. When I explained to the House the litany of mistakes in Sheffield, my comments were greeted with derision by the Opposition. Anyone who wants to see an example of Labour in power should look at Sheffield. We should also remember that Sheffield has had socialism for longer than Moscow had communism.
Mr. Gummer: My hon. Friend might also have said that all the things that the Opposition education spokesman wants in our education system could have been his when he was in Sheffield. However, there were no school uniforms, no standards and no comparisons then. The issues that matter so much now did not arise when the hon. Gentleman was in Sheffield. That is why most of us do not believe him when he speaks on education now. When he had the chance—it is the only chance that he will have—he did nothing to promote the very causes that he now takes so much to heart.
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I hope that many other Labour and Liberal—
Mr. Peter Hardy rose—
Mr. Robert Ainsworth rose—
Mr. Gummer: I must make progress. I shall give way shortly.
I hope that many other Labour and Liberal group leaders share Councillor Bower's attitude. At present, most councils are run by Labour or Liberal Democrat councillors, or a combination of the two. They will be the ones who take the decisions. If council tax bills increase, it will be because Labour and Liberal Democrat councillors choose to increase them. If services are cut, it will be because Labour and Liberal Democrat councillors choose to cut them. No one is forcing them to increase council tax bills or to cut services. What is more, the Labour party is committed to the proposition that they would not get any more money anyway. Whatever the hon. Member for Holborn and St. Pancras has to say on those matters, he is expressing his own opinions. The official opinion of the Labour party is that no more money will be forthcoming, not only this year, but next year.
Efficiency savings could be made, as the Audit Commission has shown. Labour and Liberal Democrat councils could collect more of the money owed to them. They could reduce their debt. If they do not or if they will not, they will be responsible for the cuts in services and the increases in council tax that will result.
Mr. Jerry Hayes: In the light of what my right hon. Friend has just said, is he surprised that the Opposition Front Bench is holding up Harlow council as a model Labour authority? That council has the second highest council tax in the country. It spent £28,000 on flowers and a flower bed outside the town hall. It blew all its reserves shortly before the previous general election because it believed that a Labour victory would produce a Government who would bail it out. If anyone wants to see the horrors of a Labour Government, let him or her come to Harlow.
Mr. Gummer: My hon. Friend is too kind to Harlow council. In 1994, it spent 34.2 per cent. over its standard spending assessment. It was 66.9 per cent. over that assessment in 1995–96. It is budgeted to spend 63.2 per cent. over its SS A in 1996–97. It is one of the worst councils in Britain. However, it is held up by the Leader of the Opposition as a model council. It is the sort of council that reflects what Labour would do in office—over-spend, over-tax and then over-spend and over-tax again. The task of clearing up the mess will then be passed on. That is what Harlow has done and what a Labour Government would do.
The attempts of the hon. Member for Holborn and St. Pancras to pin the blame on the Government for the high taxes and poor services of many Labour councils reveals a contempt for local democracy. It is about time that the hon. Gentleman started talking responsibly. He is—[Interruption.] Opposition Members do not like the word "responsibly" when it comes to the consequences of new Labour policies.
The standard spending assessments form the basis for the distribution of the revenue support grant. We seek to take account of the factors that affect the need for

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spending by each local authority. There are many such factors and there are continual pressures to refine the SSA formulae. There are also expressions of exasperation at the complexity that each refinement adds. In judging whether to change the SSA formulae, I wanted to be sure that changes really would produce a sounder assessment. No one would thank me for making changes one year, only to have to reverse them a year or two later in response to better evidence becoming available.
It is against that background that we have not adopted changes flowing from the review of the area cost adjustment and the major research on children's social services and residential services for the elderly. All the local authority associations argued that the results of last year's review of the area cost adjustment should not be implemented for 1997–98. They have agreed that further work should be done this year.
All of us recognise that the existing system is not satisfactory. People do not accept that it reflects properly the difference in the costs of employing people in different parts of the country. Both the Government and the local authority associations have tried to find better ways of addressing the issue, but have had to recognise how complex the problem is.
The most recent study gave us a great deal of valuable information without yet yielding a solution that we can incorporate into the SSA formula. We intend to press ahead with work to achieve a well-founded solution that can command broad support among local authorities. Once that is available, we shall want to incorporate it as rapidly as possible in the SSA calculation.
Mr. Tom King: I trust that all hon. Members recognise the duty on local authorities at all times to search for improvements in efficiency, and I warmly endorse what my right hon. Friend said in that respect. It is the duty of Government to ensure that grants are as fairly distributed as possible. The statement that my right hon. Friend has just made on the area cost adjustment will be particularly warmly welcomed in Somerset, where it is profoundly believed that the last attempt to review the matter was not satisfactory. We warmly welcome his promise that the work will be undertaken and that its results will be implemented as speedily as possible.
Mr. Gummer: I thank my right hon. Friend for his comments. I accept the fact that some people will be in favour of the changes and some against, so there will still be difficulties when I come to the House in a year's time. I am not sure whether I shall be able to carry out the work as quickly as that: it may take a bit longer, but I shall do my best.
Mr. Richard Tracey: I underline what my right hon. Friend the Member for Bridgwater (Mr. King) said. There is an agreed stance on the inequities between outer London boroughs and inner London areas. That was brought to the Secretary of State's attention by all-party delegations from the outer London boroughs. I hope that further studies will be undertaken with some urgency, because they will bring some rewards under the new Conservative Government.
Mr. Gummer: An equally powerful, all-party group from the inner London boroughs could point to other
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aspects of the problem. I have always been open and willing to consider any difficulties, and I have always sought an agreed response. I shall do my best in my hon. Friend's case.
Sir Peter Fry: I am not sure whether I am more pleased by the Secretary of State's comment that he will be standing at the Dispatch Box next year, or by his promise that progress will be made on the area cost adjustment. Will he underline what he has just said? Is it his intention that progress really will be made next year? I understand the problems that he has had to deal with for next year, but will he assure us that progress will be made, so that the unfairnesses that affect certain counties can, at last, at least begin to be reduced?
Mr. Gummer: I accept that it is widely felt that the present system does not reflect the situation as it really is. Local government organisations believe that this is not the right basis on which to move to a permanent change. I said that I shall do my best to ensure that we make a change as soon as possible—I hope that it will be next year. My hon. Friend must accept that that is the strongest assurance that I can give. We want a system that is acceptable to all, but it must have stability. He was the first to point out that we do not want a yo-yo position, whereby one cannot compare one year with another. I shall do my best to provide stability and to achieve the change that is necessitated by the extra work.
Mr. Robert Ainsworth rose—
Mr. D. N. Campbell-Savours rose—
Mr. Gummer: It is only fair that I give way to the hon. Member for Coventry, North-East (Mr. Ainsworth), because he has asked me several times.
Mr. Ainsworth: The Secretary of State says that he has been working on the issue for some time, and that he does not want to make any changes that are not complete in their effect, but surely he can do something about the most blatant consequences of the current grant system. For instance, he says that tax should reflect the efficiency of councils—but Westminster spends £214 per claimant on dealing with benefit administration, and has one of the lowest council taxes in the country. There is no excuse for discrepancies of that kind, is there?
Mr. Gummer: I shall have quite a lot to say about Westminster in a moment. If the hon. Gentleman will wait until then, he will find out what I have done. I hope that he noted that I took considerable pains, and encountered considerable difficulty, to meet Coventry city council's need for a particular way of looking at its problems in relation to the assessment of those receiving benefit. I also hope that he agrees that we try to meet requirements wherever that is possible.
Mr. Campbell-Savours rose—
Mr. Nigel Spearing rose—
Mr. David Sumberg rose—
Mr. Gummer: I shall be happy to give way in a moment, but I must get one more paragraph in first.

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During the period of consultation on our proposals, we have received representations from individual local authorities and from local authority associations, all of which we have considered carefully. Some of the representations concerned the accuracy of the data used in the calculation of the SSAs. We have examined each of the concerns, and have made corrections where necessary. As in previous years, we shall seek to discuss with representatives of local government possible ways in which the SSAs might be improved in the future.
No doubt the hon. Member for Holborn and St. Pancras will repeat his allegations about the SSA methodology in his speech. He has never quoted any significant expert opinion supporting his case—although that comes as no surprise, given that the last time we discussed those issues, he boasted that he
"never felt compelled to agree with experts."—[Official Report, 1 April 1996; Vol. 275. c. 56.]
Fortunately, the experts do not feel compelled to agree with the hon. Gentleman.
A report by the independent Audit Commission concluded that the SSA system was
"a more sophisticated system for equalising needs than any overseas system examined in this study and … an improvement on its predecessor in many respects".
It will be remembered that its predecessor was the system so often lauded by the hon. Member for Holborn and St. Pancras. Another study, by Rita Hale of the Chartered Institute of Public Finance and Accountancy and Tony Travers of the London school of economics, found that
"no overseas country appears to have a full grant system which goes so far in its attempt to achieve full equalisation".
If the hon. Gentleman wishes to continue his line of argument, he needs to answer two simple questions. First, if—as he alleges—the Government rig the system in favour of Westminster city council, why were the previous Labour Government more generous to Westminster, relative to most other authorities, than the present Government; and why, when Labour Members asked for the figures and they were put in the Library, did they discover that they were wrong and I was right? They do not refer to those figures any more.
Mr. Frank Dobson: The fact is that—as one of the junior Ministers pointed out in a letter to my hon. Friend the Member for North-West Durham (Ms Armstrong)—things have changed so much that the Government cannot say whether Westminster received more or less.
Mr. Gummer: The hon. Gentleman does not notice the truth. Westminster received proportionately more under Labour: in comparison with what other authorities received, it received more. That is a fact; that is the fact that Labour Members criticise; that is the fact that my figures in the Library prove. The hon. Gentleman's whole case is shot below the waterline, and he knows it.
That was pointed out to the hon. Gentleman this very Friday by John Humphrys—not a well-known supporter of the Conservative party. Mr. Humphrys described the hon. Gentleman's mathematics as the "mathematics of the madhouse". That is what he said when the hon. Gentleman could not answer any of his questions except by returning to the subject of Westminster.
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The second question is this. Why, in every local authority finance settlement since the SSA system was introduced, has Westminster done worse than the inner London average, while Camden and other councils receive more and more? Would the hon. Gentleman like to explain that? Again, his case is shot below the waterline.
As I said in November, I shall continue to pay a special grant to compensate authorities that have lost more than 2 per cent. of their SSA as a result of SSA methodology changes. That is a fair arrangement that recognises the special problem of a sudden drop in SSA, although also recognising the need to phase out such support, so that grant can be redistributed according to improved measures of need. The Special Grant Report (No. 23) will establish the grant for 1997–98 and some £65 million will be distributed to local authorities next year.
I also propose to damp council tax increases that are a direct result of reorganisation and come above a £52 threshold at band D—that is £1 a week—for authorities reorganised this year and last year. That threshold is lower than that on which we consulted and takes account of representations that were made to us by authorities. The scheme will result in the payment of grant worth £14.53 million and will benefit council tax payers in North Lincolnshire, Redcar and Cleveland, Rutland, Dorset and Bedfordshire. It builds on the scheme that has operated this year. I shall lay regulations to implement the scheme before the House tomorrow.
This morning, I received a letter from the chairman of the Association of Metropolitan Authorities, Sir Jeremy Beecham, objecting to one tenth of 1 per cent. of revenue support grant being used in that way. One tenth of 1 per cent.—so much for brotherly love. The Labour leader of the Local Government Association says no, not a penny more to help Labour North Lincolnshire, not a penny more to help Labour Redcar and Cleveland and not a penny more for independent Rutland or Liberal Democrat Dorset, let alone all-party Bedfordshire, despite the particular difficulties of their council tax payers. So much for the egalitarian Labour party and for those who want to share the burdens. They do not want us to give a penny more, even it amounts to only one tenth of 1 per cent.
Sir Peter Emery: Will my right hon. Friend take into account the fact that, although Devon county council cannot run a whelk stall, in the past two years, it has twice been given more than the average increase for its SSA, but has run its reserves down lower than is sensible, and lower than they have ever been? It suggests that it will give up educational discretionary grants because it cannot afford them, although the money would have been available if it had spent the budget properly.
Will my right hon. Friend take into account the fact that there is a real problem with Torquay and Plymouth leaving the Devon region? That involves educational factors and affects many local schools in villages. Torbay, Torquay and Plymouth are of course compact. Will he please consider those matters when he comes to the decision on the SSA for Devon as a single county?
Mr. Gummer: We shall certainly have to consider all the ramifications. That is why we have offered, for example, immediate help in two tranches to those that are reorganised. We shall of course have to consider the

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SSAs. That is true for special credit approvals as well, so my right hon. Friend is absolutely right to put that point to me.
Mr. Hugh Bayley: The Secretary of State will recall that, when the City of York was established as a unitary authority, people in the outlying areas that were absorbed into York received an assurance from the Government that their services and, in particular, their schools would be funded at the same level as the county council's, yet the SSA for City of York council has increased by less than the national average—by 1.1 per cent. compared with a 1.5 per cent. national average—and North Yorkshire county council's SSA has been increased by 2.4 per cent.
The Secretary of State will know that the Minister for Local Government, Housing and Urban Regeneration kindly received a deputation from myself, the hon. Member for Ryedale (Mr. Greenway), and councillors from all parties on City of York council, who believe that the SSA settlement was both unfair to York and broke the Government's pledge to treat York in the same way as the county council from which it was taken: in the final SSA figures, York's SSA has been reduced rather than increased. Will the Secretary of State comment on the position? What hope can he hold out that York will be treated as generously and in the same way as North Yorkshire county council?
Mr. Gummer: The disaggregation between the City of York and North Yorkshire county council was done by mutual agreement—both sides agreed to the disaggregation. Of course, it is right to say that in future we may look again at the way in which various figures are put together. However, the hon. Gentleman should not make the figures for this year the subject of disagreement between us, as there was agreement between the two local authorities involved. It was one area that did not have the fierce arguments that almost cause the need for someone outside to broker an agreement.
I am aware that we have received a delegation and we shall be considering certain aspects that it put forward. However, the hon. Gentleman should accept that for this year the disaggregation was agreed between the two authorities and was not imposed from outside.
Mr. Spearing rose—
Mr. Gummer: I must get on with my speech, but I shall give way to the hon. Gentleman later.
I am also specifying a base budget in the relevant notional amounts report for local authorities that are being reorganised, are subject to a boundary change, or whose budgets are affected by changes in funding arrangements for nursery vouchers or national parks. That will allow me to make a fair comparison between years for capping purposes.
Finally, I come to my proposed capping criteria. I have listened carefully to the strong arguments put to me to relax the provisional criteria that I announced in November. [Interruption.] I shall again take interventions from hon. Members. If that makes a little longer the time that the hon. Member for Holborn and St. Pancras will
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have to contain himself, it will not harm the House, as his contributions are universally and uniformly silly—as they are when he speaks from a seated position. If I am helping hon. Members by putting off the evil moment when the hon. Gentleman opens his mouth, I am sure that they will cheer me on.
As I said, I have listened carefully to the strong arguments put to me to relax the provisional criteria that I announced in November—[Interruption.]—arguments that Nottingham council would support. I am sorry that the hon. Member for Nottingham, North (Mr. Allen) is bored by his council. Both Nottingham and Nottinghamshire councils had their usual complaints, to which we listened with our usual courtesy—something that the hon. Gentleman has never extended either to them or to me.
I have decided to maintain the criteria. Our economy is one of the most competitive and successful in Europe. We have achieved that success by taking tough decisions to control public spending. Local government accounts for about a quarter of public spending, so the Government clearly need to keep it in check. The provisional capping criteria do just that. Copies of a table giving provisional cap limits for each authority will be available from the Vote Office after I sit down.
Final capping decisions will, as always, be taken after local authorities have set their budgets. I shall ensure that final caps are reasonable, achievable and appropriate to local circumstances.
Mr. Hardy: Will the right hon. Gentleman give way?
Mr. Gummer: Yes. Then, to be fair, I shall give way to the hon. Member for Newham, South (Mr. Spearing).
Mr. Hardy: From time to time in his speech, the right hon. Gentleman has tried to build divisions between different types of local authorities—for example, when he referred to Sir Jeremy Beecham. Does he agree that the vast majority of local authorities want a sensible relaxation in the capping level? He should look carefully at the possibility of relaxing the capping level, to allow local authorities to take from capital receipts their contribution to single regeneration budget repayments and capital challenge costs, so that they can contribute to the repair and essential maintenance of buildings that are beginning to fall apart because of neglect.
Mr. Gummer: I remind the hon. Gentleman that we recently made some changes along those lines. However, we understand that, in general, the capping arrangements are now to be supported by the Labour party. If he believes that there should be a change in the arrangements, I suggest that he first speaks to the right hon. Member for Dunfermline, East. He has said that, far from what was said last November, there would be no question of any relaxation, were there ever to be a Labour Government. He has said that capping arrangements would remain as they are, at least for the foreseeable future. So the hon. Gentleman must first convince the right hon. Member for Dunfermline, East, and then he can perhaps come to me.
Mr. Hardy: What about capital receipts?
Mr. Gummer: The hon. Gentleman should consider what the Labour party suggests on capital receipts. It now

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suggests that it could do a fiddle on capital receipts and move them outside controls, as a way in which it could get round its promise not to increase capital expenditure. However, Labour Front Benchers have not told anyone that, if they were to do so, authorities in many parts of the country that might think that they were to receive capital receipts would not, and many others that were not determined to require receipts for housing would receive them.
Under Labour's new fudge, Newcastle, Birmingham, Hackney and Southwark, which have no capital receipts, would not be able to build any new homes, whereas Newbury, Basingstoke, Malvern Hills and West Dorset would be able to build almost as many council houses as they wanted. That is what would happen under Labour's capital receipts system. Not only is it a fudge that no one else in the world would accept, but it increases demands on the Government and would not help the very areas that Labour claims would be helped. Capital receipts would go to the leafy areas and not to areas with the greatest need. Yet again, the Labour party—although not the hon. Member for Wentworth (Mr. Hardy)—has shot itself in the foot by trying to fudge and to slide in something.
Several hon. Members rose—
Mr. Gummer: I must try to continue, although I promised the hon. Member for Newham, South that he could intervene, and I keep my promises.
Mr. Spearing: Having heard Conservative Members' remarks in this debate, will the Secretary of State acknowledge that, two years ago, I led a deputation from Newham, when he acknowledged that Newham was an outer London borough with inner London needs? As my hon. Friend the Member for Newham, North-West (Mr. Banks) pointed out, one of those needs is connected with the social costs of 15,000 refugees. The Secretary of State has acknowledged that that is a national problem. However, there is a need for equity. Should not those additional costs be a national matter and not be laid upon residents in the areas to which refugees naturally tend to go? Is not the truth that he has done nothing yet about the matter?
Mr. Gummer: It is of course true that it is a national matter, but it has a local dimension; it is a mixture—[Interruption.] We have said that there would be special grants to help the localities most in need, and I have reaffirmed that. When we have completed the discussions, we shall ensure that the hon. Gentleman's local authority—like others, not least those in London—receives those grants as soon as possible. I say the same to the hon. Member for Newham, North-West (Mr. Banks), who is speaking from a sedentary position.
Mr. Rendel rose—
Mr. Geoffrey Clifton-Brown: Will my right hon. Friend give way?
Mr. Gummer: In a moment—I shall try to, but I must continue.
Having set out the Government's proposals in such detail, I should reply properly to a point made, sometimes sotto voce, by the Opposition. Fewer than three months
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ago, in reply to my oral statement on the settlement, the hon. Member for Holborn and St. Pancras said that our proposals for local government spending were inadequate, and that they made
"no allowance for inflation, the cost of pay increases or the cost of providing extra services for the growing number of old people and of children at school"
and that, consequently,
"local people will once again have to pay more and get less".—[Official Report, 27 November 1996; Vol. 286, c. 343.]
Although the hon. Gentleman did not say by how much, it was clear from his remarks that he believed that both total standard spending and aggregate external finance should be higher.
Those comments are why Conservative Members, and—judging from their interventions—some Opposition Members too, were very surprised to hear the right hon. Member for Dunfermline, East say that a Labour Government would not reopen departmental spending allocations for the financial years 1997–98 and 1998–99. If the shadow Chancellor is to be believed, Opposition Front Benchers have changed their mind and decided that our spending plans are adequate after all. That is the inevitable result. Either the right hon. Gentleman is right now or he was right in November—on any reading of either statement, he could not be right on both occasions.
In the light of what the shadow Chancellor has said, I was looking forward to the Labour party supporting the Government in the Lobby tonight. I was therefore astonished to hear the hon. Member for Holborn and St. Pancras on the "Today" programme on Friday morning repeating his previous claims that the settlement was inadequate and promising that Labour would vote against it. He does not seem to have heard what the right hon. Member for Dunfermline, East said.
The hon. Gentleman cannot have it both ways—either Labour Members agree with the level of next year's settlement or they do not. If they do not—if they think that local authorities need more money—they must explain how much more and which taxes they would increase to pay for it. It is time for the hon. Member for Holborn and St. Pancras to come clean. Does he think that local government needs more money?
There is one way—I hear it whispered on the Opposition Benches—in which the hon. Member for Holborn and St. Pancras always tries to duck out of that challenge: by mentioning Westminster. During the "Today" programme interview last Friday morning, John Humphrys told the hon. Gentleman that his proposal was—I have said this before—the "mathematics of the madhouse".
Everything would be all right, says the hon. Gentleman, if Westminster did not get such a large grant. I have done the maths for the hon. Gentleman. Various people have suggested different amounts by which Westminster's grant should be reduced. I have taken a figure three times greater than any put forward by the Labour party and have calculated what would happen if, instead of Westminster receiving the higher grant that it used to have under Labour or the grant that it has under the Conservatives, we halved the grant. Nobody, not even the Labour party, has suggested that, but let us see what would happen. I am prepared to provide the figures for any part of the country. I shall give one or two examples.

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Bury would get less than 0.5 per cent. more grant if Westminster's grant were halved—I repeat that nobody suggests that such drastic action is possible. Birmingham would get less than one third of 1 per cent. more grant. Bristol would get less than 0.5 per cent. more. Even if Westminster's grant were cut to a level that nobody has ever sanely suggested, there would be no significant effect on the figures elsewhere.
Constantly talking about Westminster is not a truthful argument. We know that it is nonsense, because Labour used to give proportionately more to Westminster. It is an excuse. Every time the hon. Member for Holborn and St. Pancras mentions Westminster, he is trying to avoid facing the real issues and the consequences of the public spending pledge made by the right hon. Member for Dunfermline, East.
Tonight we shall find out how much that pledge is worth. If the hon. Member for Holborn and St. Pancras, the right hon. Member for Dunfermline, East and the rest of the Labour party vote against the settlement tonight and continue to argue that the levels of total standard spending and aggregate external finance that we are proposing—levels that the shadow Chancellor has claimed to support—are inadequate, the electorate will be forced to conclude that new Labour's commitment to controlling public expenditure is a sham and that once again, as always, Labour is the party of higher taxes and higher spending. The £30 billion of extra public expenditure, with all the increase in taxes that that would require—an increase that the hon. Member for Oldham, West (Mr. Meacher) longs for—will prove to be an underestimate of tax-and-spend new Labour.
The matter is in the hands of the hon. Member for Holborn and St. Pancras tonight. We shall watch him. If he votes with us, we shall know that he is honourable. If he votes against us, we shall know that he is honourable, but in his own way—able to say both that he would keep to the rules and that he would spend and tax more.
I have dealt with the main issues covered by the three reports before the House. This settlement will help local authorities to meet the needs of their citizens in education and other key service areas but, at the same time, local authorities will need to continue to make every pound that they spend go further. I commend the settlement to the House.
4.29 pm
Mr. Frank Dobson: The Secretary of State should perhaps be awarded a charter mark for making a speech that lasted less than an hour.
The vote at the end of the debate will set the level of the Government's grant to each local council. The total was set by the vote on the Budget; we voted against. Today's vote will decide how that grant is shared out between the councils.
Conservative Members will be voting for a settlement that will force through average council tax increases of 6 per cent., equal to £40 extra for every household, together with cuts in services to local people. Most Tory Members will vote for their own constituents to pay more and get less, and will express their satisfaction with that
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arrangement. They will then try to blame their local councils for both the tax increase and the cuts in services, but they will not succeed because everybody knows that the council tax increases are part of the Government's plans.
When the Chancellor of the Exchequer introduced his Budget in November, he did his best to direct attention at the 1p cut in the standard rate of income tax. He tried to distract attention from his plan to force council tax up by an average of 6 per cent. this coming year and his plan over the next three years to force council tax payers to cough up an extra £4 billion, equal to a 2p increase in the standard rate of income tax. He was up to his usual trick of publicly giving with one hand while furtively taking away with the other, but he was found out straight away. In his response as Leader of the Opposition immediately after the Chancellor had presented his Budget, my right hon. Friend the Member for Sedgefield (Mr. Blair) pointed out what the Chancellor was up to.
The facts are clear, not from Labour party propaganda, but from the documents that the Government are forced to publish on Budget day. Figures produced on Budget day by the Department of the Environment show that the Government are planning a 6 per cent. increase this year on the council tax, equal to £40 per household, and a £4 billion increase over three years, equal to £200 per household. Figures in the Red Book, published by the Government on the same day, confirmed that they were planning for a council tax rise of 7 per cent. on average; that higher figure includes Scotland and Wales as well as England. All that is part of the Government's long-term plan to make council tax payers contribute more towards the cost of their council services and it is no use them denying it.
Government officials have publicly stated that Ministers take the view
"that the Council Tax can take more of the strain",
adding for good measure:
"The downside is that your taxes go up quite sharply".
No Tory Member should have any illusions about why the council tax is going up. It is going up because the Treasury intends it to go up.
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): The right hon. Member for Dunfermline, East (Mr. Brown) has said that, for the first two years, a Labour Government would observe the public expenditure framework set by this Government. Is the hon. Member for Holborn and St. Pancras (Mr. Dobson) now saying that a Labour Government would not allow council taxes to increase in year 2? If that were the case, where would a Labour Government find their public expenditure?
Mr. Dobson: I shall come to our intentions in due course. [Laughter.] Oh yes, I will.
Despite all the evidence, the Government have tried to blame the forthcoming council tax increases on councils, although the increases are the inevitable consequence of the Government's policies—the planned result of the grant settlement that will be forced through tonight. One item that will show up in the council tax bills which the Tories will try to blame on Labour councils is the increased contribution by council tax payers to the cost of their local police force, which is not covered in the settlement.

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The Government claim credit for increases in police funding. Their contribution averages less than 2 per cent. in England and ranges from a princely 0.01 per cent. in Essex to 3 per cent. in North Yorkshire. However, the council tax contribution to increased police funding is a different matter altogether. The average increase in England is 13 per cent. and is as much as 18.5 per cent. in Cleveland and 16 per cent. in both Humberside and Leicestershire. That is the result of deliberate Government policy, but you can bet your boots that the Tories will try to blame Labour councils when the council tax bills start dropping on people's mats.
Mr. Clifton-Brown: I thank the hon. Gentleman for giving way, but he cannot have it both ways on council tax. My right hon. Friend the Secretary of State for the Environment has progressively lightened the capping regime to allow councils more discretion in expenditure. The Labour party wants to increase council tax, but the hon. Gentleman is criticising councils that exercise that discretion. He can either have the discretion and the increases or not have the discretion or the increases. Which way does he want it?
Mr. Dobson: Whether or not councils have the discretion, it is the Government's intention that the average council tax increase should be 6 per cent. this year and they are forcing it through.
The Tories claim to have provided 3.6 per cent. extra money for education. There is just one problem with that claim: it is not true. The Government have said that they will let councils spend more money on education provided that most of it comes from increased council tax bills and cuts in other services such as the protection of children, help for elderly people or maintaining local roads.
It is no good the Tories trying to deny the truth of what we are saying. Whatever fiction they may wish to peddle, if, next year, every education authority in England kept its spending to the Government's target, the amount spent on each pupil would be £41 less. What Ministers and Tory Members are calling an increase is actually a reduction of £41 per pupil.
It is no wonder that people are concerned about numeracy skills. The Government do not even understand the difference between plus and minus. The problem goes deeper than that. The Tories do not just have problems with numeracy and literacy; their real problem is with veracity. They are no longer able to tell the difference between fact and fiction.
The reduction of £41 per pupil is a national average. The figure varies between education authorities. Let me give some examples. The Secretary of State for Education and Employment represents a Norfolk constituency. If Norfolk education authority set its spending next year at the level suggested by the right hon. Lady, it would have to spend about £70 less per pupil. Education authorities in Birmingham, Bury, Coventry, Croydon, Leeds and Sandwell would require a reduction in spending of more than £100 per pupil to comply with the Government's target.
That inevitably takes me on to the unfair way in which the Government's grant is distributed between councils. Everyone knows that it is a racket. It is designed to look
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after the interests of a few privileged Tory councils. It all springs from the way in which the Government rig the system for judging the needs of each area.
Mrs. Alice Mahon: Is my hon. Friend aware that a 6 per cent. cut in Calderdale will require raiding the primary school budget by about £1 million, central services by about £1 million and possibly not funding the teachers' pay rise? That is a triple whammy and anyone who votes for the motions tonight will be betraying the children of Calderdale.
Mr. Dobson: I am sure that my hon. Friend will agree that the fourth part of the whammy will be when the local Tory candidates blame Calderdale council for what has happened.
The problem with the allocation of funds springs from the way in which the Government rig the system for judging the needs of each area. They decide which areas are most deprived and give them extra money. That sounds fair until we find out which parts of the country the Government have decided are most deprived.
The Government rank councils in an order from one to 357, with Tower Hamlets in first place as the most deprived, Hackney second and Islington third. Few people would dispute those rankings, but how can anybody explain why Runnymede is 37th when Great Yarmouth is 50th, or why Hereford is 41st when Basildon is 121st and Gravesham is 117th? How can anybody justify Mole Valley in Surrey being 102nd when Corby is 220th and Forest of Dean 233rd? Why is Guildford in Surrey 133rd when Waveney in Suffolk is 251st?
Huge question marks arise over any scale of deprivation under which Mid Sussex, which is 231st and Surrey Heath, which is 249th, are regarded as more deprived than Wigan, which is 276th, St. Helens, which is 279th and Rotherham, which is 280th? More startlingly still is the ranking of Huntingdonshire, which includes the Prime Minister's constituency. It is 295th and therefore treated by his Government more generously than Barnsley, which is 326th, Amber Valley which is 293rd, Bolsover which is 322nd, Warrington which is 332nd and Easington which is 331st. Nobody on earth can seriously believe that Easington, Barnsley, Bolsover, Warrington and Amber Valley are among the least deprived places in England—but that is the system that the Secretary of State is running.
Sir Peter Fry: The hon. Gentleman has clearly shown some of the unfairness of the present formula. Will he give the same assurance as my right hon. Friend the Secretary of State on changes to the area cost adjustment, bearing in mind the fact that any proposed change this year was effectively torpedoed by Labour-controlled local authority organisations?
Mr. Dobson: The undertaking that I give is that we shall have a fair system of allocation. The present one is manifestly not fair.
Mr. Gummer: If what the hon. Gentleman says is true, is it not surprising that he appears to muddle up different sorts of authorities? More important, if what he says is true, why does not one of the Labour-controlled local

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authority organisations support him or demand such changes? All the levels on which we operate have been set in consultation with them. Will he explain that?
Mr. Dobson: I shall come to that in my speech—[Interruption.] If I say it now, I shall be saying it twice. The Secretary of State has made it quite clear that he consults the local authority associations, and then decides. It is no good him pretending that he can shuffle responsibility on to other people; the decisions are his decisions.
Mr. Robert G. Hughes: Will the hon. Gentleman give way?
Mr. Dobson: No, I have given way about three times on this issue.
The rankings are determined by the Government. The low rankings of deprived areas are used by the Government to reduce the grant that such areas get. If, on the other hand, one uses a scale that reflects the wealth of the wealthy areas, Runnymede would move from 37th to 327th and Bromley from 115th to 310th. It is obvious that the system has a racket right at its heart.
Mr. Sumberg: The hon. Gentleman's answer to my right hon. Friend the Secretary of State just will not do. He has to explain why the Labour councils that control the metropolitan authorities are not pushing for the change to which my right hon. Friend referred. In the unlikely event that the hon. Gentleman becomes Secretary of State for the Environment, what will he do to impose such terms on them?
Mr. Dobson: The local authority associations and individual local authorities accept that, while the Government are in power, all that they can expect is fine tuning of the system. The more I look at the system, the more I believe that it needs to be changed root and branch because it is a racket.
Mr. Gummer: May I ask the hon. Gentleman the following very simple question? He uses the word "racket", so will he please explain why, in almost four years as Secretary of State for the Environment, none of the local authority associations in any of the many friendly and reasonable meetings that I have had with them—even though such associations are controlled largely by the Labour party—has ever asked me to do what he is saying ought to be done?
Mr. Dobson: My understanding is that they have asked for some of the things about which I am talking to be done.
The biggest scandal of the lot—the racket at the heart of the racket—is the Westminster racket—[Interruption.] The problem is, "They don't like it up 'em!"
According to the Government and nobody else on earth, Westminster is the fourth most deprived place in England. That must come as a surprise to the residents of Belgravia and Mayfair. In fact, it is remarkable that some estate agents in those areas have not challenged the Government for threatening property values by bringing the area into
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disrepute. Nobody denies that there are not some deprived parts of Westminster—the Government use such parts as their excuse to entitle Westminster to so much extra grant—yet the money that is earmarked for them does not get there or deal with people's problems there. It is squandered instead on the most expensive local services in the country and concentrated on the least deprived parts of Westminster.
I shall give just one example of the squandermongers. By not collecting service charges from people who had leased houses and flats from the council, £7 million was squandered. It is simple: the council was supposed to ask people for that money, but the man chairing the housing committee in 1988 ordered that it not be done.
Westminster council is showered with help by the Government. According to a brief produced by Conservative central office—so it must be true—if every council in the country had the same level of help as Westminster, it would cost the taxpayer £23 billion. That shows the extent of the racket. That figure is the Government's, not mine. Westminster does not deliver the goods. It is on record that its education service, for instance, is not very good.
Mr. Robert G. Hughes: Will the hon. Gentleman give way on that point?
Mr. Dobson: No, the hon. Gentleman is not from Westminster, and I am talking about Westminster. He may live there, but I do not know.
The Government grant per pupil for education in Westminster vastly exceeds that of most other education authorities. If Essex, Kent and Lancashire got the same Government help per pupil, they would each be able to take on more than 7,000 extra teachers in the coming year. Given the same help as Westminster, Cheshire, Nottinghamshire and Staffordshire would be able to take on 5,000 more teachers; Hertfordshire, Birmingham, Devon and Derbyshire would be able to take on 4,000 extra teachers; and Berkshire, Gloucestershire, Hereford and Worcester, Leeds, Leicestershire, Lincolnshire, Northamptonshire, Norfolk and Suffolk would each be able to take on more than 3,000 extra teachers. Yet tonight, Tory Members of Parliament from the areas that I have mentioned will traipse through the Lobby to force through a grant settlement that will swindle the people whom they are supposed to represent and betray the children, parents and teachers in their areas.
The unfair way in which the Government have allocated grants to local councils is not, of course, confined to education. Let us look at it another way: the contribution that council tax payers are expected to make towards the cost of their local council. The Government say that Westminster is their flagship council, so we can assume therefore that the contribution that the residents of Belgravia and Mayfair make towards the cost of their council is roughly what the Conservatives think to be right. It is certainly the level that Conservative Members will be voting for tonight. So what are the facts? In Westminster, council tax payers next year will contribute around 10 per cent. of the cost of their council services, so that must be the level that the Government believe to be fair.
What are we to make of a proposed settlement—for which Conservative Members will vote tonight—which will leave the average council tax payer in the rest of

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England contributing 25 per cent. of the cost of council services, compared with 10 per cent. in Westminster? In some areas, the Government's allocation of the grant means that local people will have to find a higher proportion. The Government are planning for the people of Harlow and Crawley to find 45 per cent. of the cost of council services. In Basildon, the figure is 42 per cent.; in the Forest of Dean, 39 per cent.; in Stevenage, 37 per cent.; in Amber Valley and Redditch, 34 per cent.; in High Peak, 32 per cent.; in Falmouth and Camborne, Corby, and Worcester 31 per cent.; in Chorley, Dover, South Derbyshire and Thamesdown, 30 per cent. Tonight, Tory Members who represent those areas will vote for a settlement that leaves their voters contributing between three and four and a half times more towards their local councils than the rich voters in Belgravia and Mayfair. Tory Members for another 30 areas will vote tonight for a settlement following which their constituents will have to pay more than twice the 10 per cent. required of council tax payers in Westminster.
Local people will be entitled to ask where the loyalties of those Members of Parliament lie. Do they lie with the people who elected them, or with the discredited Government? If Tory Members opt for party loyalty tonight, they will pay a heavy price in fewer than 100 days from now.
Mr. Gummer: My right hon. and hon. Friends will opt for party loyalty tonight. Their constituents know that the figures obtain because when a local council spends more than it ought to, it does not receive as much grant. Otherwise, the rest of the country would be subsidising overspending Harlow and Basildon, as well as the other Labour overspenders. Will the hon. Gentleman answer one simple question? When Labour was in power, did it give proportionally more grant to Westminster? If it did, the figure that he quoted earlier would be better than the figure when Labour was in power. How would he explain that to the country?
Mr. Dobson: The Government know, the officials know and the Secretary of State ought to know by now that the figures for the past and for the present are literally incomparable.
Mr. Gummer: They are comparable.
Ms Hilary Armstrong: The Secretary of State is lying. He said that himself in a letter.
Mr. Dobson: If they are comparable, will the Secretary of State tell us what the figures are? I will allow him to intervene.
Mr. Gummer rose—
Mr. Deputy Speaker (Mr. Michael Morris): Order. I think that I heard an hon. Member use the word "lying" from a sedentary position. I would be grateful if the hon. Member concerned would withdraw that word or confirm that she did not say it.
Ms Armstrong: I am happy to withdraw it, and I shall deal with the issue in my winding-up speech.
Mr. Deputy Speaker: I am most grateful to the hon. Lady. I think that the hon. Member for Holborn and St. Pancras (Mr. Dobson) had the Floor.
Mr. Dobson: I was just about to give way to the Secretary of State.
Mr. Gummer: The hon. Member for Holborn and St. Pancras knows perfectly well that he asked for details that are in the Library. These prove him to be wrong and me to be right. The hon. Gentleman has repeated something that is not true. The Labour party gave a greater grant proportionately to Westminster than the present Government, and that shoots his argument below the waterline.
Mr. Dobson: The fact that the Secretary of State—who is privileged to come to this House armed with innumerable advisers—has not produced a figure suggests that there is something amiss in his argument.
Sir Peter Fry: The hon. Gentleman should give us the figures.
Mr. Dobson: It is not my argument—I do not need to produce the figures.
Why do the Tory Members support this unfair settlement? If every council received the same help per head as Westminster, most would not need to collect any council tax at all. Most would be able to pay rebates instead. In Luton, the council would be able to pay a rebate of £529 to every council tax payer. In Bedford, the figure would be £499; in Erewash, £812; in Burton-on-Trent, £796; in North-West Leicestershire, £798; in Corby, £795; in Stourbridge, £700; in Gloucester, £831; in Lincoln, £731; in Staffordshire, Moorlands, £781; and in Slough £865. People in those places will want to know why their Members of Parliament have not got them a better deal.
The fiddling of the deprivation rankings does not stop with the residents. Councils get their grants increased in proportion to the number of visitors they get—in Westminster, it amounts to 81 per cent. The fiddling does not even stop there. According to the Government, visitors to an area are just as deprived as the inhabitants. So, according to the Government, all the people who stay overnight in Westminster are—like its residents—the fourth-most deprived in Britain.
We all know that homelessness and the numbers of people sleeping rough reach record levels under the Government, but the typical overnight visitor to Westminster is not homeless—far from it. Yet the settlement assumes that all Westminster's visitors are deprived. So we have the unbelievable situation that, for the purposes of calculating the Government grant, 12 per cent. of the people who stay at the Ritz, the Savoy, the Lanesborough and the Park Lane Hilton tonight will be regarded as living in grossly overcrowded conditions. Westminster is therefore entitled to extra grant to deal with that overcrowding.
If I said that, the Tories would accuse me of jeopardising the tourism industry by talking down the quality of London's hotels, but that is the Government's official position. Westminster does not just get a grant to match the number of overnight visitors—it gets extra

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grant to compensate for the deprivation those visitors have never experienced. The Secretary of State has described this situation as the "mathematics of the madhouse".
I will use one example to illustrate how crazy the system is. Let us follow a couple of foreign tourists as they visit places of historical interest in England. They come to London and stay at a hotel in Westminster. While they are in Westminster, they are regarded as being among the fourth-most deprived people in the country, and Westminster receives extra grant to meet their needs. When that same couple tire of sightseeing in London, they go to see the Brighton pavilion and immediately go up in the world. They become only the 32nd-most deprived people in England.
When this upwardly mobile couple go to see the imp in Lincoln cathedral, they move up to 59th, and they move up to 62nd when they pass through the Erpingham gate into the cathedral close at Norwich. They move up to 68th when they visit Exeter cathedral, and 87th when they visit Gloucester cathedral to see the first perpendicular gothic window in the world. They move up to 125th when they visit Worcester cathedral, and 219th when they gaze down from the ancient walls of Chester. A visit to York minster further improves their social standing to 274th, while a visit to the red sandstone of Carlisle elevates them to 288th. A visit to the High Peak secures them yet higher status, 290th, but even that cannot compare with the superiority they gain from a view of Durham castle and cathedral, which puts them at 334th.
Let me remind the House—these are the same tourists, but, according to the Government, they are not the same. The further they get from Westminster, the less deprived they become. That is social climbing with knobs on. It is not just ridiculous—it is unfair. It is also serious because, as the Government's ranking of deprivation is reduced, so is the grant that the councils receive.
The fiddle does not end there. Westminster council takes in more than £20 million a year in parking charges levied on those poverty-stricken visitors. It is allowed to keep all that money, which is not netted off against the grant for visitors. It is true that the same rule applies to every council. It is just that Westminster has more visitors who are more impoverished—according to the Government—and who pay more parking charges. The arrangement may apply to everybody, but it was custom-built to benefit Westminster.
The Government always claim—the Secretary of State has done so today—mat the allocation of funds is backed by the local authority associations. That is not true. They are consulted, but they do not make the decision. As the Secretary of State has said—
Mr. Robert G. Hughes: Will the hon. Gentleman give way?
Mr. Dobson: Please do not interrupt—I am about to quote the Secretary of State. He said last year:
"Someone has to decide … That is a responsibility of mine".
Mr. Hughes: Is not one of the holes in the hon. Gentleman's argument the fact that local authority associations have not seriously queried the Secretary of State's methodology? If they did, as the marionette sitting
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next to him cannot stop shouting, they would not only tell the Secretary of State but take him to court on judicial review. If the hon. Gentleman is right, they would win. They have not done so and they have not even argued that case. In other words, they think that the hon. Gentleman is talking complete nonsense.
Mr. Dobson: The hon. Gentleman's electors in Harrow will probably think that his time would be better spent ensuring that he does not vote for a system under which, if his area got the same help per head of population as Westminster, people would get a rebate of £416, or for a settlement under which his local people will have to pay 26 per cent. of the cost of the council instead of 10 per cent. as they do in Westminster.
Mr. Gummer: Can the hon. Gentleman just answer this question? If it is as he says, why have the local authority associations not asked for the root and branch change that he is proposing? Given that he has made this speech on previous occasions, why have none of the four associations supported him? He has made it at least five times to my certain knowledge.
Mr. Dobson: First, on an issue of principle, I am not me mouthpiece of the local authority associations. Secondly, as I have explained, those associations believe that they cannot expect any root and branch change from the Government and so, as long as they remain in power, they are looking for limited adjustments.
Mr. Charles Hendry rose—
Mr. Dobson: I shall not give way at the moment. Recently, Ministers—including the Secretary of State today—have started to claim backing from the Audit Commission for their system of funding local councils. The Secretary of State quoted an Audit Commission report today, but the quote was pretty partial. The commission said that the present system was more sophisticated than foreign systems and better than the Tory scheme that preceded it. It did not leave it at that, however, and went on to say:
"there is nothing indisputably right about the present system … Its basis is simply a set of imperfect statistical models. Yet immense authority is invested by the Government in the current SSA formula".
The Audit Commission went on to point out that
"some of the system's objectives were contradictory".
For good measure it added:
"Comparing the system with a checklist of objective criteria reveals that it is deficient in several ways … The technical performance of the system delivers a degree of fairness which could be improved."
The commission continued:
"The system is neither simple to understand nor stable in outcome",
adding that
"Some authorities receive grant and spending power for services they do not provide."
As I said, the Government have been planning for months to drive up council tax bills this coming April by an average of 6 per cent. or £40 per average household

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and to blame councils, but they have been found out. The Government have told too many lies and broken too many promises. Scarcely anyone believes a word they say.
Mr. Hendry: Will the hon. Gentleman give way?
Mr. Dobson: No.
On top of that overall plan to blame councils for the cuts in services and council tax increases that will follow this settlement, the Government are persisting in their now discredited, unfair share-out of grant between councils. So, if the Government force through the settlement, the distribution will be unfair and we shall vote against it. As I made clear before Christmas and on 6 January, if the settlement is forced through tonight, councils will perforce have to live with it. That is because the Government's craven postponement of the general election means that there is no alternative.
Under laws passed by the Government, councils have to decide their budgets by 11 March, which means that they have to know the level of Government grant that they will be getting well before that date. To ensure that all councils knew where they stood, I made it clear in December and January that, whatever the settlement forced through by the Government tonight, it will be the settlement for the forthcoming year and that that must include the capping levels.
We want to get rid of capping, subject to fall-back powers to deal with any council that might get totally out of line, but that certainly cannot be done this year. Councillors and council officials were entitled to know that, so we made it clear. Councils know where they stand. We are determined not to do as the Tories did at the last general election, when they made promises that they knew they could not keep. They promised tax cuts; they delivered tax increases. They promised increased public services; they delivered cuts in public services. Then they tried to blame everyone but themselves for what they had done.
The incoming Labour Government will be based on the supposition that democracy depends on the people who take the decisions carrying the can and the people who carry the can taking the decisions. So we shall be honest in our relations with local councils and we shall take responsibility for our share of those decisions. We shall not roam around the country blaming local councillors for decisions that we have taken in the House of Commons. We shall take responsibility for our decisions and they will have to accept responsibility for theirs.
Tonight, we shall vote against the grant settlement because it is unfair. If the Government manage to force it through, it will be with the help of many Tory Members whose constituents are being dealt with unfairly. Those hon. Members will be held responsible for their decisions, not by me or the Labour party, but by the—
Mr. Hendry: On a point of order, Mr. Deputy Speaker. The hon. Gentleman has referred to my constituency twice. Is it not the convention in the House that, if that happens, the hon. Member who represents that constituency should be heard?
Mr. Deputy Speaker: Conventions are not the responsibility of the Chair.
Mr. Dobson: I was trying to speed things up, Mr. Deputy Speaker. Hon. Members who vote for the
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settlement tonight will be held responsible for their decisions by the voters at the general election and that election cannot come a minute too soon.
5.7 pm
Mr. David Sumberg: I make no apologies for devoting all my speech to the serious situation faced by my constituents in Bury because of the threat by the Labour council to cut vital public services drastically.
The council has put forward proposals for consideration that will reduce spending on primary, secondary and community education and cut out three public libraries in my constituency. There is much anger and fear in the community at those proposals, as they would severely damage the excellent quality of education in Bury—the ratings and examination results have been among the highest in the country. If the measures are implemented when the council sets its budget in a few weeks' time, it will be an outrageous attack on the education system that operates in my community and it will be entirely unacceptable.
Unfortunately, this is not the first time that the Labour council has threatened those vital public services. It is almost an annual exercise—an exercise that causes great distress and anger among the children and parents whom I represent. Last year, the council threatened to close every public library. In previous years, it threatened to close nursery education in its entirety and old people's homes and to cut adult education severely. Year by year, such threats have been made at this time. On each occasion, the council has been forced to decide where its priorities lie. It was forced to do so by public protest and outrage, and those important community services were all saved and they still operate effectively to this very day.
That record of threats followed by the withdrawal of threats leads to a certain amount of scepticism. If the threats were genuine in those previous years, when those council services were faced with extinction, I have to ask why action was not taken year on year—perhaps in a more modest way—to avert the serious situation that we face today.
It is convenient that that situation has arisen just before a general election. We all know from our experience of life and business and our professions that, if one fails to deal with a financial problem when it first arises, achieving the eventual solution becomes all the more difficult.
Bearing in mind the sorry chapter of events over several years, there can be only two verdicts on the way in which the council has behaved: either it was working year by year on the Micawber principle that something would eventually turn up to solve the problems, or it was deliberately misleading the public each year about the severity of the cuts to vital services so that, when they were saved, as I have explained they all were, the Labour council could pose as the white knight in shining armour coming to the rescue of parents, children and the community in general. Either verdict would be a sorry one: financially incompetent or morally unacceptable.
If, unlike in previous years, the financial crisis in Bury today is real—I think that there is indeed a real threat to the primary and secondary schools and colleges—two factors must be taken into account. One is extremely old, and the other new.

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The old factor is a unifying point for the council—whatever its politics—for my constituents, for me and for my hon. Friend the Member for Bury, North (Mr. Burt): the formula that is used to decide how much each local authority is to receive from central Government and, in particular, the area cost adjustment. It has not worked well for Bury and the unfairness has persisted over many years; it does not take account of the borough's special position as a small authority with no economies of scale which is neither overwhelmingly rich nor especially poor.
I accept 100 per cent. the difficulty in changing a formula for anything, as consensus must be reached with other authorities. As has been vividly demonstrated in this debate by remarks from the hon. Member for Holborn and St. Pancras (Mr. Dobson) and others, there is a great difficulty in getting that consensus from all concerned. It is an obvious difficulty, because those who gain from a formula do not want to give up their advantage, while those who lose press them to do so.
It is misleading to say, as the Opposition have said, that the only gainer from the formula is Westminster city council. It may well be that many other Labour and Liberal councils also gain. That is why the metropolitan authorities are incapable of coming to my right hon. Friend or to any future Secretary of State for the Environment with a united voice, presenting a formula to deal with the matter differently.
Mr. Robert Ainsworth: Does the hon. Gentleman accept that there will never be a consensus about changes across the whole of local government, that his authority is losing out massively from the current formula, and that the Secretary of State could change it if he wanted? Why then does the hon. Gentleman continue to support him?
Mr. Sumberg: I entirely accept that my local authority is losing out massively as a result of the formula, but the hon. Gentleman and the hon. Member for Holborn and St. Pancras know that there is no large bank of money sitting in Whitehall that could do something about it. Nor can—nor should—my right hon. Friend make changes without consensus. The formula applies not to one authority alone but to all of local government.
Having said that, I must tell my right hon. Friend that my hon. Friend for Bury, North and I have urged a change in the formula that would apply throughout the system. I wish it were possible for the change to apply only to Bury, but it is not. We have long urged the Department to do something, because the current position is not fair and cannot continue. I understand the difficulties, but I am sick and tired of making this point, which I have made before in the Chamber and in delegations. I say to whomever will be Secretary of State for the Environment after the general election that something will have to be done.
I referred to an old and to a new factor. The new factor will require hon. Members to use a little bit of imagination and believe the Labour party's promises. Unlike in previous years, when I have faced criticism in Bury for the amount of local government expenditure, that criticism has this year been followed by a demand for more public money to be spent on local government.
This year, and next, we face a Labour commitment that, if Labour were in government, it would not increase by a single penny the amount decided by the Government for
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the next two years. Unless the Labour party is prepared to respond to that point, all its injunctions for Tory Members to vote with it tonight will fall on very stony ground.
Labour Members know the truth: if they come to power, there will be no alteration in the formula or in the amount of money that will be allocated to local government. That has been made absolutely clear by the right hon. Member for Dunfermline, East (Mr. Brown).
Mr. Dobson: There can be no change in the formula this year, because councils have to set their budgets by 11 March, but I can assure the hon. Gentleman that, if there is a Labour Government, there will certainly be changes in the allocation next year.
Mr. Sumberg: We shall wait and see. I do not believe it, because none of the hon. Gentleman's friends in local government, as I said before, has proposed any change whatever in the formula. On the whole—almough some of them lose out as we do in Bury—they are satisfied with it. In the unlikely scenario that the hon. Gentleman posits, he will face exactly the situation currently faced by my right hon. Friend.
Mr. Robert G. Hughes: This debate has been revealing about Labour policy—or not even policy, but merely tactics. The hon. Member for Holborn and St. Pancras (Mr. Dobson) read out great lists of councils that he alleges would receive more money under a Labour party allocations scheme. In other words, Labour is promising any part of the country, any town, city or county, that a change in the allocation would give it more money. Is that not profoundly dishonest?
Mr. Sumberg: It is profoundly dishonest for the hon. Member for Holborn and St. Pancras to refuse to make a commitment, today or ever, that there will be more money for local government. I cannot tell the people of Bury that, in the unlikely event of a Labour Government, they will have more money. They will not.
The hon. Member for Holborn and St. Pancras tells me that there will be a review of the formula, and I am sure that, if there is a Labour Government, we shall have reviews coming out of our ears; but can he give a commitment that the people of Bury will benefit from the change in formula after that review? I very much doubt it.
Mr. Dobson: In case the hon. Gentleman misheard, I said not that there would be a review of the formula but that there would be a change in the way in which the money was allocated.
Mr. Sumberg: The hon. Gentleman will not speak again in this debate, but perhaps the hon. Member for North-West Durham (Ms Armstrong) will set out in detail the way in which the formula will be changed rather than regaling us at length with what Westminster council gets or does not get. If she is prepared to do that, the House and the country may be prepared to listen.
Every local council now knows without a shadow of doubt that, whatever the outcome of the general election, or of tonight's vote, there will be no more money for local services. Bury's Labour council must face the difficult reality of the present situation. Whatever Government are

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in power, Labour or Conservative, next year and the year after, our problems will not disappear overnight. To accept that reality would be honourable and honest, and would not mislead our constituents, who are already angry and anxious enough. The really important vote, with all due respect to the House, is not tonight's.
Mr. Jon Trickett: When will the Government have the nerve to call the general election?
Mr. Sumberg: The really important vote will be called soon, because it will take place in Bury council chamber some time in March to decide what priority the Labour council gives to the services enjoyed by my constituents. I make no bones about the fact that some elements of the situation are unfair to Bury and to the council. However, just as we in our private lives must accept the situations that we face and deal with them, so must local councils. We cannot pretend that our bank manager is charging us 5 per cent. when he is charging 15 per cent. on our overdrafts, because that would result in financial disaster. Equally, while the situation may be difficult and harsh, the council cannot pretend that it lives on another planet.
If my community is to maintain our excellent education services—which is what I and the people whom I represent want—every other aspect of council spending must be examined. Some harsh, politically difficult decisions must be taken by people in the Labour party, who, I accept, hold their views very sincerely. As Aneurin Bevan said, they must use the language of priorities. Our children's education should be a priority. If the Labour council in Bury is prepared to do that, to put aside political prejudice and to work to find a solution that will preserve our excellent primary and secondary schools and adult education, it will rightly command the respect and admiration of the community; it will also have my total support.
5.23 pm
Mr. Jim Marshall: Mr. Deputy Speaker, the last time I was involved in a local government finance debate, I think that you were also involved. We both realise how long ago that was. As I listened to the Secretary of State's bluster, I reflected that I had not missed much over the past few years. If it were not for an pressing problem in the city of Leicester—I mention that to ensure that the Minister knows where my constituency is—the Secretary of State might well have driven me from the Chamber. I cannot but believe that his speech, and that of the hon. Member for Bury, South (Mr. Sumberg), had more to do with the coming general election than with the needs of local government. However, like the hon. Member for Bury, South, I am seeking the Secretary of State's assistance, so perhaps I should curtail my criticism and get on with my substantive point.
I think that all hon. Members accept that councils of all political persuasions—even the few remaining Tory administrations—agree that this year's proposed spending limits are inadequate. Despite the vehemence with which Ministers put their argument, local government and local authority bodies believe that, on a like-on-like basis, local authority spending in 1997–98 will increase by 1.5 per cent., not by 2.5 per cent. as Ministers claim. Inevitably, that will increase pressure on service provision and lead to the difficult problems highlighted by the hon. Member for Bury, South.
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Nowhere are such problems clearer than in Leicester. The Minister received a deputation from Leicester in December 1996. He knows that Leicester will become a unitary authority in April. Everyone in Leicester agrees that this is one of the most traumatic periods in the political life of the city council. At this traumatic time, the city is faced with the worst budget settlement in its history. The Minister knows that Leicester is the only 1997 unitary authority that is capped at its notional 1996–97 budget plus 1 per cent., even though Ministers accept that inflation forecasts are running at between 2.5 and 3 per cent. The council faces the lowest budget settlement of any reorganised authority, this year or last. If that goes through unaltered, it will have disastrous consequences for service provision and development.
The Minister knows that, as a non-metropolitan district, Leicester is permitted to overspend to the tune of 40 per cent. above standard spending assessment. It gives me no pleasure to say that, because I know that political opponents will seek to attack it, but that is the reality. As part of the agreement with the Government, the council pursues a strategy of managed budget reduction. When it becomes a unitary authority in April 1997, it will be an authority with a spending limit of 2 to 2.5 per cent. above SSA. If the council does not receive additional assistance from Government, it will have to reduce its budget by £15 million to £18 million.
If services transferred from the county council, such as education and social services, are ring-fenced and protected from cuts to avoid the draconian action that the hon. Member for Bury, South described, the consequences for services presently provided by the non-metropolitan district, such as leisure, housing and planning, will be horrendous. The housing renewal strategy in the inner city, which assists owner-occupiers, will be especially hard hit; it will virtually cease. Neighbourhood centres throughout the city will face closure. Leisure service provision in Leicester will be decimated.
There is real disquiet among city council employees who sense the threat of redundancy. They have already seen the present Leicestershire county council issue 600 redundancy notices as a consequence of reorganisation. We hope that many of those redundancies will not occur. Nevertheless, the redundancy threat is having an enduring effect on the morale of staff of the county and city councils, which will persist long after 1 April 1997.
I hope that the city of Leicester and I can convince the Secretary of State and the Minister that it would be disastrous for the new unitary authority to start its life with large service cuts and redundancies as a consequence of the unexpected harshness of the revenue settlement. I realise—I am sure that my realisation will be borne out by experience as the debate continues—that the Government will be subjected to special pleading from hon. Members on both sides of the House. Nevertheless, I hope that Ministers will take further action to ameliorate the consequences of the decisions that they have taken already regarding the city of Leicester. Some of the worst consequences may be avoided if they consider the views and options identified by the delegation that met the Minister. I await the Minister's reply in hopeful anticipation of further assistance for the city of Leicester.
5.30 pm
Sir David Madel: The hon. Member for Leicester, South (Mr. Marshall) and my hon. Friend the Member for Bury, South (Mr. Sumberg) drew

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attention to the fact that the debate is about the important issue of state spending levels. The hon. Member and my hon. Friend drew attention to education and its importance locally and nationally, and both pointed to the relentless pressure on Government for increased state spending. That is particularly true at local government level, as I believe that the country is now much better informed about the activities of local authorities. Local authorities today spend much more time informing the electorate of their aims and achievements, and Governments will face continuing debate about how much the country can afford to give them in order to assist with important expenditure items.
Like the hon. Member for Leicester, South and my hon. Friend the Member for Bury, South, I shall devote my remarks to my local situation. I believe that the debate is not so much a time for special pleading but a time for drawing special attention to particular local problems. I am grateful to my right hon. Friend the Minister for Local Government, Housing and Urban Regeneration for receiving a delegation from Bedfordshire county council that my hon. Friend the Member for North Bedfordshire (Sir T. Skeet) and I brought to see him last month. Some progress has been made following that meeting, which I shall outline later.
My right hon. Friend is well aware that Bedfordshire faces particular difficulties as a consequence of local government reorganisation. Luton has been separated from Bedfordshire for the second time in 35 years, and it will become a unitary authority. One may ask whether Luton should have been joined with Bedfordshire in 1972 or been allowed to retain its county borough status—which it was granted in 1962, and thus had enjoyed for a mere 10 years. The answer is that it should have remained as it was and been allowed to develop in that direction. However, in the 1970s the Government of the day were involved in Common Market negotiations, in altering housing benefit, introducing value added tax, reforming industrial relations, and changing Ulster's constitution—it was helter-skelter legislation. Against such a background—with the Government desperate to move on—mistakes will inevitably occur, and I think that the Government's decision regarding Luton in 1972 was a mistake.
Nevertheless, Luton will become a unitary authority on 1 April. I believe that the consequences of local government reorganisation in Bedfordshire require further rapid detailed discussion between the county and the Department of the Environment. The reorganisation decision will result in the transfer of resources to Luton. The problem is that Bedfordshire's assessment of how much is currently spent in Luton is different from the Department of the Environment's provisional assessment—that is, the notional amount. Based on current expenditure levels, the county estimated that the notional amount should be £6 million more than the Department's initial estimate. As my right hon. Friend knows, that factor formed part of our representations to Government.
The transitional costs of local government reorganisation involve two elements: making the change—that is, providing information to Luton about services and reorganising the county—and compensating staff, especially those who are made redundant.
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The greatest concern in Bedfordshire at present is the cost of redundancies. It is impossible to predict what that will be, as the county is in the middle of reorganisation and Luton is still recruiting staff. The Government have made available resources of £2.5 million over two years, which the county council has supplemented with resources generated internally.
The Government have asked what Bedfordshire county council is doing about the reorganisation problem, and the response has been good. The district auditor has commented:
"Bedfordshire County Council is handling the challenge of local government reorganisation well."
I draw my right hon. Friend's attention to three developments in Bedfordshire. First, departmental structures have been reorganised and there has been a 60 per cent. saving in chief officer posts, with the number of departments reduced to four. Secondly, staffing structures for core staff are being filled at only 60 per cent. of current staffing levels, which amounts to a saving of £4.5 million after adjustments for the transfer to Luton. Thirdly, central support services, such as finance and legal, have been reduced more than front-line services.
I thank my right hon. Friend for the changes that he has made to the damping grant. The Government have confirmed that Bedfordshire will receive an extra £4.2 million in Government grant, which aims to reduce the impact of local council tax increases caused by the cost of local government reorganisation. Departmental estimates suggest that that will be worth £33 to the average band D council tax payer in the county. That was one welcome consequence of our meeting with my right hon. Friend last month.
However, other problems remain, which I ask my right hon. Friend to consider. Bedfordshire county council expects to have reserves of about £1.5 million at the beginning of 1997–98. That leaves no scope for using reserves in the short term while long-term savings are realised. I offer two suggestions to my right hon. Friend which could assist the county. The Government could provide additional capital approvals or allow the county council to utilise some of the capital receipts that are frozen. That would allow expenditure to be incurred in order to achieve long-term savings.
In making that plea, I do not suggest that the Government should take the general brake off local government spending. We know what would happen if they did so: someone, in the guise of the late Anthony Crosland, would have to say "the party is over"—we all remember those vivid words. There is a risk that spending would shoot out of control, as it did when Mr. Crosland was Secretary of State for the Environment in 1974. However, I believe that there are several different brakes that could be eased gently when it comes to local government reorganisation, and one of them applies to Bedfordshire.
I ask the Government to take a swift and detailed look at my two proposals to ascertain whether, because of the costs of reorganisation, the brake on Bedfordshire could not be gently and temporarily eased. The council understands that it is asking for temporary and special treatment to see it through its temporary difficult position. There is a willingness at county hall not to spend through the roof. In other words, there is a willingness to keep expenditure reasonable. I ask the Government to

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understand that only a minority of councils have been reorganised in the way that Bedfordshire has. I hope that my right hon. Friend may be able to inch his way forward and accept one or other of my two suggestions to help Bedfordshire.
5.40 pm
Mr. David Rendel: It is sad that the debate is a depressing one for all those who are involved in local government, not least because of a sense of déjà-vu. There have been similar debates in previous years, and I recall particularly the debate that took place on 31 January 1996. The same points had to be made in January last year because the Government were doing very much the same thing.
The settlement this year will lead inevitably once again to cuts in local government spending and, at the same time, to higher council taxes. The spending assessments determined by the Government are increased in total by about 2.5 per cent. while the grant that the Government are providing for local authorities is increased overall by only about 1.5 per cent. That means that even if local authorities were to do no more than spend at the rate at which the Government expect them to spend, there would have to be huge increases in council taxes. It is a choice, perhaps, between huge increases in council taxes and cuts in local authority services, but I suspect that most local authorities will find that they must do both.
The Secretary of State said that in every area of Government spending we need regularly to undertake a review to ascertain whether things might not be made more efficient. When I asked him whether that had applied to central Government spending over the period of the Conservative Government, it was interesting that he failed effectively to reply. He merely said that central Government had apparently become more efficient and that any extra savings had immediately been spent on further central Government services.
I wonder why the Secretary of State thinks that it is so important for central Government to spend more on new services out of their efficiency savings while demanding that local government makes those savings and does not introduce any new services, especially when central Government are insisting on local authorities introducing new services year after year.
Central Government spending is up while, on the whole, central Government have been shedding their responsibilities to local authorities. Local government spending is down while, on the whole, it has been receiving extra responsibilities from central Government. How can the Secretary of State complain, when that is the position, that local authorities are inefficient? Clearly central Government must be more inefficient than local authorities.
This year, nine out of 10 of district councils throughout the country have had their standard spending assessments reduced in real terms, and rather more than that have received a reduced grant towards that spending. It is clear that districts will be under immense pressure. One of the extra responsibilities of which the Government have taken all too little account is the extra costs this year of reorganisation in those areas where that is taking place.
There is another factor that has not been mentioned so far. It is that to pay for local authority pensions, which were underfunded at the time of the poll tax,
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all authorities are now having to put extra sums into their pension funds. Many of the local authorities that received an undue bonus as a result of underfunding pensions at that time were then Tory controlled. Now, when they are run by Labour or Liberal Democrats, they must find extra money from the council tax payer. At the same time the Government have the cheek to try to blame those councils for raising council tax, when the fault rests with the Conservatives in their decision on pensions. For example, Waverley in Surrey has decided this year that an extra £25 per head is due as a result of the underfunding of pensions when the council was Conservative controlled in previous years.
Education always lies at the heart of local government spending. It is the most crucial area of that spending as well as the largest total amount. Most local education authorities are spending above the standard spending assessment. Why is that? The answer is that traditionally, local government has put a much higher value on education than have central Government.
I shall give an example. Last year, the budget for schools in Kingston upon Thames was £46.45 million as against an SSA which was nearly £2 million lower. This year, Kingston believes that it will have to cut its spending on schools by about £1 million. That will be a real cut in spite of the fact that there will be higher pupil numbers and many other needs. Nevertheless, the reduced spending of £45.3 million will still be larger than the Government believe that Kingston should be spending. Its spending will be greater than the Government-set SSA. That demonstrates clearly how any Government pretence that more money is being provided for education now by central Government than in the past is incorrect.
What is more, the Government have failed properly to take into account rising pupil numbers and rising special needs. All the time, more and more people realise that special needs are not being properly met. The problem of the early retirement of teachers is now being thrown on to local authorities. I can give an example of the result of these increased costs. In Northumbria, there will be a gap of about £10 million between a real-terms, stand-still budget and the capped limit. In other words, Northumbria will not be able to achieve a real-terms, stand-still budget. Instead, it will have to cut its spending on education by about £10 million.
A further example is close to my heart. A school in my constituency—Enborne Lodge—is run not by the LEA of Berkshire but, for some time, by Lambeth. It is an old Inner London education authority school. It is a boarding school for those with severe emotional and behavioural difficulties. The school has done brilliant work, achieving results with students who have had the most unbelievable difficulties. It has enabled them to experience a happy and worthwhile childhood while having a proper education and achieving some excellent exam results. It has enabled them also to lead useful lives in society, as perhaps they never could have done otherwise.
This year, the school had to close. Not only that, but the plan of the governing body to enable Enborne Lodge to continue as a grant-maintained school—I thought that the Government would like that—run by a charity has collapsed. Why is that? Lambeth has decided that it must sell the school on the open market for the best price rather than allow such a brilliant school to continue to do that which it has so successfully undertaken.

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That is a tragedy. The school has been much valued in the community and by the London boroughs that have sent pupils to it. It has had a huge value to society as a whole. It has enabled its pupils to receive a decent education and then to return to the community to lead happy and normal lives thereafter.
It is a tragedy that that school has been closed, but before anyone gets the idea that it was the Liberal Democrats' fault—we are now the largest party on Lambeth council—let me say that the decision to sell on the open market was taken last Friday night as a result of a Con-Lab pact.
Way back before the last general election, the Liberal Democrat party said that education was a priority. We are delighted that the other two parties now agree with that point of view, and claim to have made education their priority, too. But the Prime Minister's pledge to put education first is seen in this settlement to be a sham, and he should never have made it.
Social services is another crucial area of local authority responsibility. Every year, local authorities are given further responsibilities for social services, but without the funding to match. In the debate last year, I referred to a 90-year-old resident in my area who was trying to obtain bath aids to enable him to remain in his own home. He was told that it would be as much as a year before he would be assessed for those aids, and that it would take a great deal longer than that before they would be installed in his home.
This year I did something rather different: I went to a meeting of people whose family members have learning difficulties. It was a fascinating meeting, and it showed me that there is a real need for the provision of further respite care. Such people should be given a chance to keep members of their family at home, but should be relieved of those duties for a short period each year.
As a result of that meeting, I agreed to spend a day visiting four such families. It was a fascinating and emotional day, and it showed me the difficulties that those families have to cope with. One child with autistic tendencies spent his whole time running round the house destroying it. He tore the paper from the walls, tore at the chairs and knocked over the crockery so that it fell on the floor and smashed, and his parents could do very little to control him. They have to live with him day after day, and they love him dearly. It is unfair for society to decide that such a family cannot have any respite care month in and month out, because of cuts in local government funds. Some councils find it almost impossible to meet even their statutory responsibilities for social services.
Many other areas of local government funding are being cut. Even the Government, in their SSA figures, have accepted that spending in other areas will have to be cut; and that is before they have taken account of the extra costs to local government of the landfill tax.
Transport will be cut, which will mean worse road maintenance year on year. Environmental services will be cut: it will be more and more difficult for local authorities to establish recycling schemes. Recreation and the arts will be cut: they draw tourists into this country. Today, I went to the launch of an appeal by the Watermill theatre in my constituency—I hope that many hon. Members
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have been there—which is desperately short of funds. I was told that it provides to the Government more in VAT on its ticket sales each year than it receives from the Government in subsidy. None the less, that theatre faces closure because of the Government's policies.
A cut in those areas of local government spending will produce short-term savings, but there will be long-term costs. That is the tragedy of the Government's spending settlements. It is the old story of knowing the price of everything but the value of nothing.
Today's announcement on capping will be a great disappointment, particularly in Oxfordshire. It is interesting that even the local Conservatives are saying that the capping limit is unsustainable and must be broken. All three parties seem to agree—although I understand that the Labour party has refused to propose a budget. The other two parties agree that the budget to be set must be above the capping limit. [Interruption.] If the hon. Member for North-West Durham (Ms Armstrong) wants to intervene, she is welcome. I understand that the Labour party has proposed two budgets, but has said that they are for consultation purposes only.
The Tory policy has been to abolish capping: that was agreed at the 1995 Tory conference. The Tory conference produces one or two weird ideas, but it is a great pity that the Government did not listen to what Tory party members told them on that occasion. Capping means that virtually all council spending is, in practice, determined by central Government. It is interesting that the Secretary of State said that his proposals for local government were supported by the local government associations, whereas all those associations have been saying for a long time that capping should go; and so it should.
It saddens me to say that I now regard the Labour party as little better than the Tories when it comes to local government. Labour Members have made a great fuss today, but will they follow up their words with actions? They seem terrified of Tory attacks on their tax policies. They failed to oppose this year's income tax cut, and thereby forfeited their right to demand more central Government grant this year—to be fair to the hon. Member for Holborn and St. Pancras (Mr. Dobson), he admitted as much. They say that they will stick rigidly to Tory spending and taxation levels in what appears to be yet another Con-Lab pact. They seem to be trying to prove that there is no longer any point in voting Labour.
The cut in income tax, which must be paid for by a rise in council tax, is at the heart of this settlement. The Tories are replacing what is undoubtedly a fairer form of taxation with a less fair tax. Pensioners and people on low incomes do not pay much income tax, but they will be just as hard hit—perhaps harder—by the rise in council tax that the Tories propose. It is hardly a surprise that the Tories have fallen to third place in local government. Why have they not learnt their lesson? Why have they not learnt where they have been going wrong in local government all these years? If they had listened to those of us who have been telling them where they have gone wrong, they might have done better in local government elections.
The council tax is unfair to the elderly and the poor. The real tragedy is that spending cuts will also hit those who are most in need. They will hit children, the elderly, people with learning difficulties and all those who depend on social services. It has been reported in the press today that the Government are prepared to allow the sick in our

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hospitals to go unfed. Is this really Britain in 1997? This is the shame that the Government have brought on our country. They should go, and they should not be allowed to return for many years.
5.58 pm
Sir Peter Fry: There used to be a saying among Conservative Members: "Vote Labour for higher taxation." We still say that, but we have just had a wonderful illustration of the fact that, if we vote Liberal Democrat, we shall be taxed even more than we would be taxed by a Labour Government. All that we have heard is a catalogue of complaints about more and more money being required. Does the hon. Member for Newbury (Mr. Rendel) not realise that there always will be a greater demand for public expenditure? He seems to forget that, because his party will never be in government—unless the Labour party lets the Liberal Democrats into government—he will never have responsibility for raising taxation to meet his demands.
I would prefer, however, to spend a few minutes commenting on what we have heard from the official Opposition. I am coming to the conclusion that, if Westminster council did not exist, it would have to be invented. Virtually all the attacks on the policies of my right hon. Friend the Secretary of State and his colleagues relate to the anomalies that Opposition Members claim exist in that council. I find it much more interesting that—apart from a peculiar phrase about root-and-branch reform—we have heard very little about what the party that expects to take office intends to do about local government. Its policy on capping, for instance, is rather unclear. Does it want to abandon capping completely, and allow councils to let rip and spend as much as they like—obviously, the hon. Member for Newbury would like one council to be able to do that—or will the right hon. Member for Dunfermline, East (Mr. Brown) make that impossible?
We cannot assume that a large amount of extra money will be available for local government purposes. We should ask ourselves, therefore, which party is the more hypocritical. Is it the Conservative party, which says, "That is the amount that you will receive; you must make the best of your budget within it," or is it the party that says, "Nowhere near enough is being spent in this or that part of the country, but there will be no extra money to fund what needs to be done"? I suggest that the official Opposition's stand is totally hypocritical and totally inconsistent.
There are those who complain that insufficient grant leads to a considerable reduction in services. As I have said before, we have been given no idea of how any increase in services—or even leaving them at their present level—can be maintained if we stick to the present guidelines for two years. Let me remind the House, and the Opposition in particular, that when a new system is adopted, the present system is generally supported by most people in local government. They may not like this or that aspect, but the overall feeling is an unwillingness to undergo another major change. As my hon. Friend the hon. Member for Bury, South (Mr. Sumberg) pointed out, there is increasing concern about the way in which the area cost adjustment has been reached in recent years. It is often forgotten that that is a comparatively recent problem, because the formula was revised only three or four years ago.
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I have made it abundantly clear on previous occasions in the House that, in my view, the way in which the ACA is currently calculated is grossly unfair to the county of Northamptonshire. Despite what my hon. Friend the Member for South-West Bedfordshire (Sir D. Madel) has said, I find it difficult to understand why Bedfordshire receives £100 per pupil per year more than we do in the adjoining county. I accept, however, that if the proposals in the Elliot report had been introduced for 1997–98, the system would have been fairer. Northamptonshire would have gained up to £13 million, but—and it is a big but—many local authorities would have received less, and presumably the squeals that would have come from those authorities would have carried more weight than the arguments advanced by those who felt that they were being unjustly treated under the current arrangement.
I agree that all the local authority organisations are resisting change, and I understand that it will take time to negotiate the changes that I would like. I thank my right hon. Friend for his statement this afternoon, and for his answer to my intervention, but what I would like to hear—as, I am sure, would my constituents, no matter which party they vote for—is a similar commitment from Opposition Front Benchers. It is no good talking in vague terms about a fairer system without giving some indication of how the present system is to be made fairer.
Mr. Robert Ainsworth: Am I right in interpreting what the hon. Gentleman is now saying as meaning that he intends to vote for what he has exposed as a totally unfair settlement for his county?
Sir Peter Fry: Over the past three years, I have expressed extreme concern about the way in which the area cost adjustment has been defined and operated. Two years ago, I refused to support the Government in the Lobby because I felt that—
Mr. Ainsworth: The hon. Gentleman is fishing now.
Sir Peter Fry: The hon. Gentleman asked me a question. If he is kind enough to allow me, I will now answer it.
Two years ago, I refused to support the Government because I believed that no progress was being made in ironing out the difficulties of the area cost adjustment. Last year, largely owing to the intervention of all the Northamptonshire Members of Parliament, the Government decided to set up a review of the ACA under Professor Elliot. We made a start in the right direction, and that, along with the amount of grant that we received last year, enabled me to feel that I could support the Government in the Lobby.
This year, I made it clear to my right hon. Friend the Secretary of State, the Chief Whip and my constituents that, unless there was a meaningful move towards a change in the ACA, I would consider my position in regard to supporting the Government tonight. I have received an assurance from my right hon. Friend, and I have heard not a word in support of that from the Opposition. I—dare I say it?—would rather believe the assurance that I have been given, in very clear terms, because I think that it is generally agreed that some change should take place. That is what the Government have promised, and I would like to think that the Opposition have the courage to make the same kind of commitment.

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As I have said, we have experienced problems in Northamptonshire. It has been claimed that the county council is underfunded by some £28 million. That, of course, is the difference between what the Labour county council would like to spend and what the Government feel that it should spend. When we start to investigate the source of that £28 million, we find that, interestingly, there have been enormous overspends for years in both the education and the social services budgets. It is fairly simple to put a finger on where things went wrong in the education budget. The county council decided to educate all the rising fives without obtaining any Government grant to support it; the cost has continued to increase, and now accounts for some £9 million or £10 million of expenditure—money that comes directly from the council tax payer, without Government grant.
We have not looked closely enough at the question of social services. One of the biggest grey areas in recent years has been policy on residential care. Labour's policy in Northamptonshire, where it has been the controlling party for the past few years, has undoubtedly been politically biased: it has attempted to dissuade people from choosing private home care rather than care in county council homes. The committee of the council met on 13 June 1996. The report from the director states:
"Action … will continue to ensure maximum use of services that are already funded. This means that directly provided services … must be used to the maximum."
The report goes on to refer to
"Making sure that residential beds provided by the county council do not remain empty."
For years, the policy of those who obey the orders of their political masters has been to steer to a county council home anyone who applies for or needs to go into residential care, despite the fact that it is cheaper and often more convenient to go into a private home. People are deliberately not informed of their rights of choice. It is interesting to see how the Labour party in power operates against individual constituent's interests.
For example, a constituent of mine who is 91 years of age was moved into a home outside his home town. As a result, he could not be visited, he was grossly unhappy and he asked to be moved back. I am still waiting to hear from the county social services department whether he can be moved back into the town in which he has lived for many years. There are two private homes, the costs of which are certainly not as high as those of the county homes, yet he is refused the choice that he wants: to stay in the town in which he, his friends and family have lived. That is the choice that the Labour county council has given him. It ill behoves anyone to defend such a policy when it leads to a certain amount of personal unhappiness for elderly people.
The refusal to give people choice is unfair, but the practical matter of cost must also be considered. It has been estimated that about 14,000 people are in residential care in my county. Private home owners claim that they could save up to £100 a week on the true costs of running the county homes. The total saving would amount to £7 million. If it were only half true, the saving would still be more than £3 million and the county council could have avoided some of the cuts that it has had to make this year and in previous years.
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I understand that a council cannot suddenly change from putting most people into county homes to putting no one into county homes. A gradual alteration in policy and a rundown in the present structure would be necessary. My criticism is that the county council has known for at least three years of the difficulties that it was going to have. It made no attempt to make major changes to its policy, so it is guilty of mismanaging the social service needs of the people of Northamptonshire. It has restricted choice and undertaken unnecessary over-spending. It has therefore failed to change its policies and to live within its budget.
The effect is that the county council has had to make cuts elsewhere—in other social services—which, if it had followed a sensible policy, would not have been necessary. Other people in Northamptonshire have suffered unnecessarily because of the service reductions that the county council has had to make and because of its failures. I am therefore entitled to accuse its leadership not just of being hypocritical and of pursuing party dogma but of not getting down to managing the council's resources properly.
The county council has decided that, for 1997–98, there will be no increase in the amount paid per pupil to school governors and managers—a real cut in funding. It has already refused in the current year to pass on to school managers and governors about £2 million that the Government had allowed it in last year's settlement. To reduce the amount in real terms and to make no allowance whatever for a teachers' pay increase next year clearly passes the buck from the county council to school governing bodies. Despite that, the local education authority still keeps about 25 per cent. of total education income.
This year, the county council has decided to cut hard in many regions because, according to the blurb from county hall, the position is so serious, but the truth is that the county council, or the LEA, are acting too late. They are just making matters worse than they might have been if they had tackled the problems earlier.
I understand that my friends on the county council who represent the Conservative cause will present an alternative budget that would increase the moneys given per pupil to schools. That will be an excellent proposal because it will help schools to fund the teachers' pay increase. I commend that alternative budget to the Labour party and to the Liberal Democrats and hope only that they will vote for it.
This year, budgets will of course be tight. All along I have felt that the only proper solution to the difficulties faced by many counties is to have a fairer calculation, but I was slightly taken aback, as I am sure other hon. Members were, by the emphatic and ringing declaration by the hon. Member for Holborn and St. Pancras (Mr. Dobson) that there was going to be root-and-branch reform of local government financing. I do not detect any great enthusiasm among local government officers or councillors, no matter which party they belong to, for another root-and-branch reform. Such a statement, with the only justification for the reform being that it will be fairer, tells us only that some sort of revolution will take place in local government financing. We are told, however, that nothing will happen for the next 12 months. If the reform is going to be that radical, it will take rather more than 12 months to introduce a totally new system of

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local government financing. I surmise that what we have been told is going to be radical will be just another sort of tinkering with the present system.
Whatever the reform is, those words from the hon. Member for Holborn and St. Pancras should send a chill down the spine of every councillor throughout Britain. He claimed that the Labour party had a clear policy, but instead we have a threat of great change when most people in local government want a period of stability. They want the unfairnesses taken out, but they do not want another new system of local government finance. There is no demand for it in the country or in local government. It is just one of those pipedreams that the Labour party has invented, but, as with all its pipedreams, it will not tell us how it is going to pay for it.
6.17 pm
Mr. Jon Trickett: I think that I heard the hon. Member for Wellingborough (Sir P. Fry) refer to the current settlement as tight. In Wakefield, the region that I represent, it is far more than tight; it is devastating. It will devastate local communities. As you are no doubt aware, Mr. Deputy Speaker, even as we hold this debate, local councils are meeting to discuss precisely how to cope with the financial crisis. On the reform of local government finance, the settlement may be tight, but what is unacceptable is that it is inequitable. It is precisely that which is at the core of the Labour party's charges against the current settlement.
I understand that the matter was last debated in the House on 31 January last year. Unfortunately, I missed that debate because I was happily campaigning in the Hemsworth constituency waiting for the result that would be announced the following day. It was—
Mr. Mike Hall: Very cold.
Mr. Trickett: It was very cold. I recently referred to that in Committee. I should like to share these comments with all hon. Members. It was so cold that parts of my anatomy—certain extremities—have still not defrosted, at least according to my wife.
Although I could not be in the House on that day, I am familiar to some extent with the secrets and mysteries of local government finance, as I was leader of Leeds city council for seven years and, before that, I sat on the management team for three years. Over a period of 10 years, I was responsible for discussing the expenditure of about £10 billion at today's prices. During those years, I learnt a great deal about local government; indeed, I became fondly attached to local government. I was able to witness at first hand the intelligence, integrity and entrepreneurial skills that many people brought to local government. The commitment to public service and civic values was, above all things, what inspired the vast majority of practitioners in local government.
During that period, local government quite literally had dozens of Acts of Parliament or legal enactments of one sort or another imposed on it by this Conservative Government—all of which, without exception, were aimed at constraining the ability of local government to serve its communities. I have every sympathy with local government because of the Government's record and, in particular, the current revenue support grant settlement, which I would describe as both misleading and perverse.
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I understand that it is not parliamentary to use the word "dishonest" when referring to hon. Members, but I hope that it is not unparliamentary to describe a policy as dishonest—if it is, I withdraw the word immediately and shall return to using the word "misleading".
It is misleading, if not downright dishonest, to reduce national taxation while squeezing local government—thereby bringing about an increase in local taxation and, therefore, an aggregate increase in the overall taxation burden. The Government have made a number of misleading statements. For example, they constantly claim—although it does not fool anybody—that the total increase in local authority spending is 2.5 per cent. However, local government reorganisation must be paid for out of that money, as well as additional policing and new community care clients. In addition, account must be taken of the demographic growth factors in education. Therefore, the spending increase is more like 1.5 per cent. There are further pressures on local government spending, such as inflation and a range of pay settlements that are outside the scope of local authority control.
The truth is that, whatever they say, the Government are effectively setting council tax levels. The scope for local action or creativity by local councillors and officials has all but disappeared. During the seven years that I was leader of my council, we experienced three different tax systems for local government—the old rating system; the ill-fated, disastrous and reactionary poll tax; and, now, council tax. The one that has finally put a straitjacket on local government is the council tax, with all the legal ramifications of capping and so on.
The settlement will cause real problems for local government. I want to talk about the national position before dealing with Wakefield in particular. The Department of Transport has admitted that the £146 million allocation for local road maintenance is inadequate if councils are to comply with the Department's code of practice, let alone with commitments under the citizens charter. The Office for Standards in Education, the Government body that regulates education, has said that standards in more than 5,000 schools have been adversely affected by book or equipment shortages. The British Geriatrics Society has said that shortfalls in social services funding are a significant contributory factor in NHS bed blocking. Serious problems face local government, which impact on local councils, on communities and, ultimately, on individuals throughout the length and breadth of the country.
I want now to deal with the problems facing the authorities that are described as the Webber-Craig authorities, of which Wakefield is one. If the settlement is severe nationally, the formula by which the RSG is distributed is perverse. It is that perversity which lies at the core of many of the problems facing authorities such as Wakefield and others in the Webber-Craig basket.
It has already been said that the formula under which the standard spending assessment is distributed is wholly perverse and does not have a semblance of fairness or equity about it, as can be shown times without number throughout the country. The index of social conditions tries to identify the amount of deprivation within an authority. It puts Wakefield as the 232nd most deprived council area out of 358. Why does Wakefield suffer so badly under the RSG distribution system? Why is

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Wakefield's SSA per head of population only just over £703, when the average for the whole of England is £37 more?
Everyone is aware of the extent of deprivation in the Wakefield area, so how can Wakefield end up £12 million short compared with the average? Indeed, if Wakefield were raised to the average of metropolitan districts, it would receive £20 million in additional resources. That would mean a great deal in, for example, Hemsworth—traditionally a solid mining area which, over the centuries, has contributed to the wealth of the nation. Now, sadly, it faces severe deprivation because of the closure of the mines.
Mr. David Hinchliffe: My hon. Friend is making an important point. During the past 15 years, Wakefield has lost 20,000 mining-related jobs, yet there appears to be no means within the mechanism for calculating the revenue support grant to take account of the efforts that the local authority has made on economic regeneration. That anomaly in the current arrangements affects my hon. Friend's constituency as well.
Mr. Trickett: My hon. Friend makes a telling and important point. A range of indices is used within the calculations, some of which are given far too much weight, while others are almost entirely ignored. For example, the devastating impact of the closure of mines on the local economic and social infrastructure should be taken into account.
I have been trying to illustrate the perversity in the way in which the formula operates. Why does Wakefield receive £2,536 per pupil when Wandsworth receives £3,551—a differential of about £1,000 per child? Perhaps we should worry about a system that puts a price on the head of a child. It is worrying to think that a child in Wandsworth is somehow considered to be worth £1,000 or 40 per cent. more than a child—or any other individual human being—living in Wakefield. It is a disgraceful system. How can it be justified, morally or otherwise?
Mr. Curry: I should like to pursue the hon. Gentleman's point. Is he saying that the amount per child should be the same across the country, or is he saying that he accepts that it should be different, but that the differential is too wide? It is a very important point. Does he accept, for example, that educating a population with a large ethnic minority group costs more? It is important to know exactly where he stands. It is easy to remark, "We get less, so it is unfair." In that differentiation, he must spell out what he thinks are the bounds of fairness.
Mr. Trickett: I thank the Minister for raising that issue. There are two or three issues to consider in the way in which the SSA system works, and the first is the system's obscurity. It is difficult for lay individuals, elected officials, hon. Members and, undoubtedly, Ministers to understand precisely how the figures are derived. When one analyses them, in many cases, it is difficult to justify the weight given to certain factors. Ethnicity is a difficult example, and it could bear further examination. I do not believe that an individual should be rewarded by additional funding under the SSA simply by
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virtue of his or her ethnicity. Funding should depend purely on a child's individual characteristics. Ethnicity illustrates the weaknesses of the SSA system.
I was asked about differentials. I find it very difficult to understand how a child in any area can possibly be worth £1,000—or about 40 per cent.—more to one local education authority than to another. The differential is large, and it will take some explaining. Human beings have different requirements and need different educational inputs, but it is difficult to understand how one child can be worth £1,000 more of Government money.
Mr. Clifton-Brown: I thank the hon. Gentleman for allowing me to intervene, which I do in a constructive manner. The Environment Committee—an all-party Committee—spent a great deal of time examining the current SSA system. We concluded, on the basis of all the evidence that we heard—we heard evidence from all the experts—that, although the system was not perfect, it was the best yet devised. Today I have heard much criticism of the system from the hon. Gentleman and from his colleagues, but none of them has been able constructively to tell the House how they would reform it so that it is fair to all councils.
Mr. Trickett: It seems to me, as the new boy, that the duty of the Opposition is to oppose, and not necessarily to make detailed proposals—at least not at this stage. It is up to the Government to propose a system, to live with the consequences and to face the Chamber's probing.
Another matter that I should mention in reply to the Minister's intervention is differentials between affluent and deprived areas. Wandsworth and Westminster, for example, are manifestly more prosperous than Wakefield. In children's social services, however, Wakefield receives £112 SSA per resident child aged 0 to 17 years, whereas Westminster—hon. Members may be astonished to learn—receives £554, which is almost 500 per cent. more. How can that possibly be justified, even if it were not manifestly obvious that Wakefield's needs are at least as great as those of Westminster?
The way in which all the factors are aggregated compounds the insult to the authorities forming the Webber-Craig group. If Wakefield were to receive per head the same SSA and RSG as Westminster, today a Labour group meeting would not be considering £15 million in cuts and a 9 per cent. council tax increase. If it were to receive the same amounts, we would be facing no cuts and there would be an £825 refund to every household.
Mr. Robert G. Hughes: Is that the policy that the hon. Gentleman has advocated?
Mr. Trickett: I shall not give way again, because that was an extremely silly point. The point that I am trying to make—I do not think that the hon. Gentleman is listening—is that the system is operating in an entirely perverse manner. How can a system allow such a result? If Wakefield were to receive the same per capita levels of RSG and SSA as Westminster, we could give away £825 to every household in the district and provide current service levels. That demonstrates the problem.
Mr. Hughes: Will the hon. Gentleman give way?
Mr. Trickett: I will not give way again, because the hon. Gentleman's previous point was so absurd that I can

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only presume that he will try to make another. I should also make some progress, as one of my hon. Friends on the Opposition Front Bench told me that I should not speak for more than 10 minutes. I apologise to hon. Members who are waiting to speak.
I should like to make one final point on the system's perversity. An index is used in social services which shows money allocated for children at risk, and one of the factors is the number of homeless households comprising a child and pregnant woman. In the past year in Wakefield, 26 individuals in that category have been housed. However, the consequence of that efficient management of resources and humanitarian attempt to get people back into housing has been an SSA reduction of almost half a million pounds. It is a bizarre situation, when efficiency and humanity in housing homeless women have been rewarded by cuts and vicious attacks on the authority.
Wakefield district, because of a perverse RSG settlement, might have to impose a 9.21 per cent. increase—which is £50 per household, or £1 per person per week—in council tax and £15 million in cuts. Hundreds of jobs are at risk, and individuals and families across the district are living in fear of what the council might decide. However, no one will make the mistake of attributing blame to Wakefield council, because the cuts are widely understood to be the result of central Government attacks.
6.38 pm
Sir Irvine Patnick: I follow the hon. Member for Hemsworth (Mr. Trickett) and note that many hon. Members from Yorkshire constituencies are present. With you in the Chair, Mr. Deputy Speaker, at least what we are saying will be understood.
As my hon. Friend the Minister will anticipate, I am still concerned about the funding for supertram. I have mentioned the issue before and I shall mention it again. I am convinced that, if the problems with supertram were remedied, it would assist Sheffield with its funding.
The council summons records the treasurer's report on 4 December that,
"Government grant to Sheffield has actually gone down in cash terms by £2.8 million and the Council Tax is likely to have to be increased at the capped level by 8.1 per cent."
Since then, he has recast the figure, and it could be lower.
Over the years, Sheffield city council has compared itself with many cities. There is huge rivalry—as you are well aware, Mr. Deputy Speaker—between Sheffield and Leeds. Sheffield used to compare its funding with Leeds, taking into account facilities such as television centres. As soon as Leeds received less grant than Sheffield, the council moved its sights. I do not know how the council could have done this, but it then looked at Lancashire and started comparing itself with, of all places, Manchester. I thought that those on the council had taken leave of their senses. All along, Sheffield has looked around for a council that is receiving more grant and compared itself with that council.
The council summons gives the city treasurer's forecast that the city council will be £3.8 million overspent on its 1996–97 budget. As a result, it has put a stop to all non-essential expenditure, including staff overtime and many other items.
I read through the council summons report of the meeting on 29 January. It was like all my yesterdays again. Sheffield city council still carries on doing its great
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things. It has increased the size of the council summons, which is now up to 935 pages. It still has the attitude of a spend, spend, spend council.
As many hon. Members from Yorkshire will know, Sheffield city council used to have its own defence policy, its own foreign policy and its own constitutional policy. From my reading of the council summons, it seems that not a lot has changed.
This year, the council will have written off a further £411,000 of its housing committee debts—that is the amount of rent that it has been unable to collect. Once upon a time, the debt stood at £10 million. I have not had an opportunity to check the latest figure. In addition, it is still owed a lot of council tax and community charge.
I remember looking through the invoices not paid by the county council when I was deputy chairman of the South Yorkshire residuary body. I discovered that, in the 1980s, there were still outstanding unpaid debts from 1972–74, when the council was set up. The figures were shown in the accounts every year. I frequently wondered whether the money would have been forthcoming if the council had sold those debts. History will never let me know.
The council summons also shows that it let 12 contracts for housing maintenance. One of the organisations that weighed in with a tender was, of course, the Sheffield works department. The value of the works—painting, repairs and heating maintenance—was £9.45 million. A private contractor submitted a lower tender. There is a lovely piece of legalese in the council summons, referring to
"the quality criteria weightings for capability assessment, systems procedures. Council values/flexibility and user interface upon which the tenders have been evaluated"
and
"the quality points scored by the two lowest tenderers".
It came to pass that those tenderers were the works department and a private contractor. There are no prizes for guessing who was awarded the contract. Just in case it is not clear, the contract went to the works department.
What does that say about how Sheffield city council works? It had design fees for a school estimated to be £50,000 on a contract of £275,000, with a Government borrowing approval of £177,000, but the £50,000 went up to £65,000 and the £275,000 went up to £343,143.
Many Opposition Members have made much of Westminster. Coming from Sheffield, I find many differences in Westminster: refuse collection here is done by private contractors; street repairs are done by private contractors; road sweeping is done by private contractors. Sheffield had to be dragged, kicking and screaming, to bring such policies in. Road sweeping in Sheffield is still done by the local authority, whatever it wants to call itself, as is refuse collection.
I have listened to what Labour Members have said. If they think that the settlement is inadequate, they should provide some figures—such figures have been non-existent—on how much they would increase funding, and admit to the tax implications of that approach. Councils make decisions that determine the level of council tax. That is shown by the huge variations between bills. On average, band for band, Conservative councils cost nearly 50 per cent. less than Labour councils in 1996–97.

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I have heard nothing from the Opposition about how they think the Government should change their policy. In Sheffield, we carry on in our own sweet way. We have the regional assembly. As I have mentioned to the House before, suddenly, funding was found for that.
The Labour party is trying to reassure everybody about what it will do. The hon. Member for Holborn and St. Pancras (Mr. Dobson) said on BBC news on 6 January this year:
"Councils are making their budgets at the moment and they're entitled to know where they stand. And I've made it quite clear that whatever settlement the Government forces through the House of Commons at the end of this month"—
I presume that that means today—
"will apply for the coming year—and that, of course, includes the capping limits which the Government has set."
Mr. Dobson: Spot on.
Sir Irvine Patnick: Pardon?
Mr. Dobson: Spot on.
Sir Irvine Patnick: I am sorry. I thought that I was going to have an aberration. The jokes have been the same, but there has been no new policy. I am sure that the hon. Member for Holborn and St. Pancras will not mind me saying that he has increased his volume of delivery.
The Leader of the Opposition, the right hon. Member for Sedgefield (Mr. Blair), said:
"You may have heard Frank Dobson say a couple of nights ago to local government: 'You have to work within the existing spending limits.' We could not be clearer about this, and if there are any proposals at all they will be made clear to people, but nothing in this programme implies rises in personal taxation."
As my right hon. Friend the Secretary of State remarked, the shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), has said similar things.
A new Labour Government would mean higher council taxes and higher council debts as a result of Labour's commitment to allow councils to spend their capital receipts, which are currently set aside to offset council debt. We never hear in the Chamber about the fact that, because councils have capital receipts, they are reducing council debts. We just hear capital receipts talked about as a separate chunk of money which should be available to councils.
Across the country, Labour councillors have been criticising the amount that they will get from the Government next year, yet before the settlement, the chairmen of the Labour-dominated local government associations called for an increase in local authority spending of 5.1 per cent., which works out at £2.3 billion. That is a modest figure, so they advise me.
A survey conducted by the Sunday Times on 28 April 1996 showed that four out of five Labour council leaders hoped that a Labour Government would increase the money that councils could spend. Of the 80 council leaders questioned, 46 said that their authority would have spent more in the current year if it had been allowed to do so by the Government. The total amount required by
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the 49 leaders who were prepared to say how much they needed would mean an extra tax bill of almost £500 million.
The Liberal Democrats are not the angels they would have us believe. We heard nothing from the hon. Member for Newbury (Mr. Rendel) about what the Liberal Democrats would do about council tax. They confirmed in their "Alternative Budget" that they are the party of high taxation. In that document, they restated their intention to put a penny on income tax if they were in government, which would cost £12 a month for people on average male earnings. They announced their intention to introduce a higher rate of income tax of 50 per cent. on incomes above £100,000 and to introduce a new carbon tax which, they admitted, would cost everyone a "great deal of money".
One thing that becomes clear from the council summons for this year—this great book—is that the Liberal Democrats are fiddling while the city burns. While the city council was juggling away to balance the books in 1996–97 and setting a budget for 1997–98, Liberal Democrat councillors proposed a motion for the council minutes, calling on the city council to support the
"replacement of the House of Lords by a democratically elected second chamber … establishment of democratic parliaments in Scotland and Wales … devolution of power to the regions and communities of Britain",
and the introduction of "fair voting" and a "Freedom of Information Act". As I said earlier, Sheffield city council looked at foreign policy and the constitution. Years on, councillors are still doing that.
A confidential internal review of Liberal Democrat policy, "Towards 1996"—it was so confidential that it was leaked to The Daily Telegraph—contains a number of insights into the Liberal Democrat approach to finance. It admits that the Liberal Democrats are a "high tax party" and suggests that they
"should not be prevented from stating … strong principled support for an issue, just because it would unbalance the books."
The Liberal Democrats just want to throw money at education. That is a regressive party because its education policies are designed merely to thwart and dismantle Conservative reforms.
The Audit Commission, in its report "Paying the Piper" which was published on 6 January 1995, highlights clearly the areas where further efficiency savings in local government can be made. It says that 60 per cent. of council expenditure is on staff, yet its study of non-manual staff has found that
"few authorities have a consistent and coherent approach to three crucial questions: How many staff do they need? How much should they be paid? How can they get the best from their staff?"
I want to put on the record the words of Councillor Bower, the leader of Sheffield city council. He said:
"There is a great deal we can do with a budget of £600 million a year, and we ought to be doing it better than we currently are."
He was speaking at a meeting of the Sheffield chamber of commerce, and he added:
"The Council probably has the capacity to make enormous improvements in the services it currently operates, with the resources it currently has."
That was reported in The Sheffield Star of 17 December 1996.

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Economies can be made in council spending. However, I finish where I started—if the funding for supertram can be sorted out by the Minister, the extra cash that would go to Rotherham, Barnsley, Doncaster and, above all, Sheffield would be gratefully received.
6.55 pm
Ms Jean Corston: I welcome the opportunity to talk about the funding crisis facing the city of Bristol. For this financial year, Bristol city council had to reduce its budget by £20 million to £310.1 million just to stay within the capping limit set by the Government; half the £20 million of cuts have yet to be implemented. Just to stay within the capping limit for 1997–98, the council will have to reduce its budget by a further £16 million.
It is important to remember that Bristol gets less Government financial assistance per head of population than any comparable city in England. Indeed, when I quoted some of the figures to colleagues who come from other metropolitan and large urban authorities, they thought that I must have made a mistake. There is no mistake. Bristol gets £538 per head of population compared with £747 in Birmingham, £835 in Manchester and £741 in Leicester. Bristol is, of course, an education authority. Next year's contribution from the Government is set to fall to £530 per head, so Bristol city council will remain the lowest spender per head of all the big urban authorities while we have the third highest council tax in England.
Bristol city council has made representations on the area cost adjustment—the Under-Secretary seems to think that this is funny—to the Minister for Local Government, Housing and Urban Regeneration. During the time in which I have been a Member of Parliament, Bristol—this was also true of the old county of Avon—has sent annual deputations to the Department of the Environment pointing out that Bristol is a high-cost area in a low-cost region and that the area cost adjustment is manifestly unfair. The Government must have accepted that there was some unfairness in the area cost adjustment, because they would not otherwise have asked Professor Elliot of Aberdeen university to conduct a review. If that review were implemented, Bristol would get an extra £11 million a year.
In Bristol, the uniform business rate is beginning to be called the missing millions. The Government say that they are against nationalisation, but they seem to have nationalised the business rate. Many people in Bristol are angry about the fact that £15 million of the money that Bristol businesses pay in their business rate to the city goes straight to Whitehall and is distributed by the Government to other councils. We were astonished to discover that in the uniform business rate regime Bristol lost, while towns such as Tewkesbury gained considerable sums. Nobody can say that the costs of running Tewkesbury are comparatively greater than the costs of running Bristol.
Bristol also had to face the costs of reorganisation when it became a unitary authority earlier this year. The Government have not fully recognised those costs.
Bristol was proud of its record as an education authority until local government reorganisation in the early 1970s. We have an excellent nursery education system and there are seven nursery schools in my constituency. There is
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none in the entire county of Gloucestershire. Bristol is pioneering the idea of community schools which stay open from early in the morning until late at night. They attract people of all ages from all sections of the community and reinforce the concepts of lifelong learning and the learning family. That good work will be threatened, because the 1997–98 base budget is £17 million more than the Government consider necessary. They then have the cheek to say that Bristol is getting more money for education.
The allowed increase in education—1.8 per cent.—will not cover inflation, let alone the teachers' pay award. This year, Bristol will have the first ever cut in its schools' budget, which will be reduced by 1 per cent. It is likely to be followed next year by a cut of between 3 and 5 per cent. The city of Bristol and Avon county council have always protected the aggregated schools budget, which is why none of our schools considered opting out.
It is all a far cry from Westminster. As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said, we are talking about unfairness. If Bristol received the same funding as Westminster, it could reduce the council tax by £484 or employ an extra 1,531 teachers. This year, Bristol may have to sack 450 teachers. If it received the same funding as Westminster, Gloucestershire could have 3,091 extra teachers or reduce the council tax by £831 in the city of Gloucester and £612 in the Forest of Dean. I am amazed that Tory Members can troop into the Lobby to support a local authority settlement that causes such damage to their own areas.
Mr. Clifton-Brown: The hon. Lady may be deceiving my electors in Gloucestershire. Opposition Front Benchers have already agreed not to increase expenditure next year, the year after and the year after that. If the hon. Lady is proposing an increase in overall expenditure for local authorities, will she please tell us where the money will come from?
Ms Corston: It is amazing that Conservative Members are increasingly behaving as if they were in opposition. We are debating a settlement that has been imposed by the Government and their record of 18 years. Let the hon. Gentleman defend that to the people of Gloucestershire; I do not have to do that.
Mr. Clifton-Brown: Will the hon. Lady give way?
Ms Corston: No. I have given way to the hon. Gentleman and he can make his own speech later.
Bristol also has regional responsibilities. Bristol council tax payers are expected to provide cultural, arts, leisure, recreational and tourist facilities and regional shopping for people who live in the surrounding area—those people do not have to make any contribution; Bristol council tax payers have to pay the bill.
On 10 January, there was a conference at the Council house in Bristol to enable the city council to explain to representatives from different sectors of the community the depth of the funding crisis facing the city. The chairman of Bristol 2000 asked:
"Why is the Government behaving so illogically towards Bristol?"
A head teacher said:
"The only remaining cuts are of people."

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The chief executive of the Bristol chamber for commerce and initiative said that there was an obvious disparity in funding and, although there were exemplary partnerships between the public and private sectors in Bristol, the private sector could not possibly fill the gap.
The conference debunked many of the myths about Bristol which had been put about by Tories in and outside the city in respect of money being wasted on bureaucracy—an accusation that did not stick—and collection rates for the council tax. The latter story was put about by the Chief Secretary to the Treasury, the right hon. Member for Bristol, West (Mr. Waldegrave), but it has been demonstrated that Bristol's council tax collection rate is only 2 per cent. below the national average. The most amazing aspect is that the architect of the two budgets that have caused Bristol's problems is none other than that right hon. Gentleman. No one would deny him his place in the Cabinet or the opportunity to sit on the Government Front Bench, but he should stop and consider that his prime duty is to the people of Bristol, who feel angry at the way in which he has sought to evade responsibility.
The right hon. Member for Bristol, West attended the conference on 10 January, as I did, and it was extraordinary that he did not take the opportunity to explain or defend the Government's financial settlement for Bristol and other local authorities. I gather that he is now writing to constituents acknowledging that Bristol is hard done by—but it was done by him.
The Tories have grown used to pushing certain buttons in respect of local government. They talk about high-spending Labour local authorities, but that is a bit rich, considering that people have rejected Tory authorities wholesale. The Tories can no longer rely on that. The local press reaction in Bristol was not what they expected. The leading article in the Bristol Evening Post on 13 January said:
"making final choices will not be easy."
It acknowledged that
"no one will envy the councillors the tough choices they must make."
and asked:
"How do you choose between employing fewer teachers and closing an old folks' home?"
That was a sympathetic and understanding response.
The choices facing the city of Bristol are: axing up to 450 teaching posts, closing up to three homes for elderly persons, and closing youth clubs and up to two child and family support centres. This year's settlement will inflict real damage and harm on one of our foremost cities. Not a single alternative proposal has come from local Tories.
We cannot put children on a waiting list for their education in the same way as patients are on waiting lists for hip replacements. Children must have their education tomorrow, this term and this year. They cannot wait another two or three years for things to get better. Parents in Bristol want an assurance here and now that they will be able to provide the best for their children. Many of them have written to me saying, "We shall have a Labour Government in May, so things can change on 2 May, can't they?" However, the measures that we are debating now
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will take effect next year. Local authorities have to set their budgets by the beginning of March, so any changes will not come through for a couple of years.
We have such a thing as local democracy. Many of my hon. Friends and I have been astonished at the Government's denial of local democracy and accountability and the overcentralisation of power. It was once explained to me somewhat patronisingly by a Conservative Member, who said, "We do not have to take quite so much notice of local government as you suggest, because more people vote for us than vote for them. Only a few hundred people vote for local councillors, whereas tens of thousands of people vote for us." That seemed to be a pretty bogus argument, because local councils and local government have the same political legitimacy as we do and the way in which the Government have treated local authorities in general, and my city of Bristol in particular, is one reason why at the next general election there will be no Conservative Members left in our city.
7.9 pm
Mr. Robert G. Hughes: Normally, one thanks Madam Speaker or the Deputy Speaker for calling one early in a debate. I am glad that I have not been called too early in this debate, because I have been able to listen with interest to various voices on the Opposition Benches. Opposition Members have been very good, followed their brief, kept their heads down, avoided the arguments and banged on about points made by Labour party researchers, which is very commendable from their party's point of view.
Such speeches have been interesting, because Labour Members have been trying to peddle points that are incompatible with each other. They have been trying to tell people that, if there were a Labour Government—the hon. Friend the Member for Bristol, East (Ms Corston) said it too—they could do nothing for a couple of years because the budgets would have been set by the councils. Let us be clear: that is simply not true.
If there were a Labour Government and they wanted to increase the money going to local authorities, they could do it in a new Budget. They could make extra money available, change the regulations, change the capping levels and give more spending and borrowing permission. Labour Members recognise, however, that, if they say all that, the financial writers and people who understand the economy will rumble what the Labour party is about. Labour Members recognise that they cannot breathe a word of all that before the election. If the Labour party wants to pretend to be a tax-cutting party—
Ms Corston: What about the Government's policy?
Mr. Hughes: With the greatest of respect, the hon. Lady spent most of her speech talking about Conservative Members. It is therefore perfectly reasonable for me to talk about Labour policy. I shall come to Conservative matters in a moment. [Interruption.] Oh, God, I see that twittering Hilary is back just in time for my speech.
Mr. Deputy Speaker): Order. The hon. Gentleman should retract what he has just said. That is not the type of language that should be used in the House.
Mr. Hughes: I should have said the twittering hon. Member for North-West Durham (Ms Armstrong).

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The Labour party wants us to believe that it is financially responsible and would not increase taxes, yet we get all the talk about Westminster. Why do Labour Members go on and on about Westminster? It is because they want us and their constituents to believe that what happens is all a political fix—that Westminster and Wandsworth are given all the extra money because they are Conservative authorities. Why do Labour Members not look at the figures? I see that all the Labour Members have briefing notes in lovely Labour party yellow.
Ms Corston: I have the report.
Mr. Hughes: If the hon. Lady had read it—it is a rather nice yellow—she would have the same figures as me.
Mr. Dobson: The hon. Gentleman is a clown.
Mr. Hughes: Being called a clown by the hon. Gentleman is praise indeed.
Mr. Hardy: Would the hon. Gentleman care to comment on his calculation? He will agree that roughly two thirds of local authority expenditure goes on education. If the proportion of Westminster's population of children in school is half that in Rotherham, why does Westminster get between four and five times per head more from central Government?
Mr. Hughes: Obviously, I do not know, because I do not know the hon. Gentleman's constituency well. [Interruption.] If the hon. Gentleman wants to intervene again, I shall let him do so in a moment. The point is, why does Islington get much more than Westminster? If I represented Westminster or Wandsworth, I would demand to know why my council was not getting as much as Hackney, Tower Hamlets or Islington. I do not think that anybody in the House would disagree that the cost of running services in inner London is higher than in the rest of the country. Why does Westminster, which is so often quoted by the Labour party, come only about halfway down the league table of inner-London authorities? There are only 12 authorities in inner London, yet Westminster is sixth in the table.
Why does the Labour party bang on about Westminster? It is because Westminster is Conservative controlled and Labour Members can make a cheap political point, and because they want people to believe that, were there ever to be a Labour Government, somehow more money would be given to each of their Labour local authorities, just like more money is given to Westminster. There can be no other reason for banging on about the same point speech after speech. They do so simply to mislead people into thinking that more money will be forthcoming.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) has told us that there would not be any more money. His speech was designed for the shadow Chancellor and the City. We are, however, told that more money would go to some local authorities because the way in which the grants were allocated would be changed. What the hon. Gentleman omits to tell people is that calculations must be made on the basis of the most recent information in the Secretary of State's hands and that, if the Secretary of State does not use it, that Secretary of State will be up for judicial review.
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If the system were rigged as the Labour party claims, and it were based on the Secretary of State's political will, it would be inconceivable that Labour local authorities would not try for a judicial review and win it. If the money were there, they would go after it. Many of us, on both sides of the House, who have served in local government know that. It is notable that authorities have not taken such an opportunity. Why have they not done so? It is because they know that what the hon. Member for Holborn and St. Pancras says is complete nonsense. They know that, were there to be a Labour Government, the formula would have to be of the same sort, however it was tinkered with, and that such a formula would inevitably produce a system that could be parodied as unfair.
Hon. Members who probably have almost no knowledge of Wandsworth or Westminster ask how such areas can possibly be more deprived than others, especially the ones that they represent. They do not know whether such areas are more deprived. Such a judgment can be based only on the proper indices. If the indices were not the correct ones, they could not have been used because the Government would not have been able to sustain them.
Mr. Harry Barnes: Does the hon. Gentleman accept the enhanced population figures with which my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) dealt?
The other side of the coin of Westminster's population being swollen by 81 per cent. and being added to the calculation due to people entering the area to work is that areas such as north-east Derbyshire lose 18 per cent. of their population under the calculation because people work outside them. North-east Derbyshire therefore loses grants for that 18 per cent.
A sensible and reasonably weighted enhanced population figure would mean that Westminster would receive much less grant and areas such as north-east Derbyshire much more. Such a methodology for the standard spending assessment would be much more reasonable.
Mr. Hughes: There are, of course, two sides to each element. In a sense, it is swings and roundabouts—sometimes one loses, sometimes one wins. Such arguments have to be put by individual local authorities. Indeed, local authorities have to try to persuade their political friends that such changes should be made.
I turn to one element that affects the borough of Harrow in my constituency: the area cost adjustment, of which much has been made in this debate. What happened with the Association of London Government? It was a Labour party stitch-up. The Labour party in central London did not, of course, want to lose the money that it would inevitably lose if there were a change in the area cost adjustment, as has been suggested.
What happened? Outer London Labour boroughs—not all, but some—voted with the Labour party in inner London to say that they did not want any change in the area cost adjustment and that further studies should be carried out. They did that because they wanted to maintain Labour party solidarity—not solidarity with the people in the boroughs. Their decision had nothing to do with fairness. Local government should not be run in that way.

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The Labour party in London voted virtually unanimously to stop a change in the area cost adjustment that would have been to the benefit of my constituents.
I wish to refer to the Liberal Democrats, for whom the hon. Member for Newbury (Mr. Rendel) made a characteristic speech. It is also characteristic that, although the Liberal Democrats bang on about these matters throughout the country, there has been one Liberal Democrat Member in the Chamber—perhaps on a shift system—to listen to or take part in the debate. The Liberal Democrats tell us that they would pay for extra services, and speak as if they were the only honest people in politics. They always refer to the extra penny on income tax that would pay for these extra services.
Even in the limited speech that we heard from the hon. Member for Newbury, we heard about the tax increase. However, that increase would not be a penny—a penny does not sound like very much. It is interesting that, when detailed opinion polls are done, people think that the Liberals are talking about just a penny more. They do not understand that the Liberals are really talking about £12 a month in extra taxation for an average wage earner. When that is explained, people are much less ready to back the Liberals' suggestion for an increase in income tax.
The hon. Member for Newbury was not talking about £12 a month, and his shopping list would amount to more like £24 or £26 a month. Add that figure to all the extra money that the Liberals want to spend in other areas—which were not mentioned tonight—and we are speaking about £30 or £40 a month in extra taxation. We can dismiss the Liberals' tricks from this debate, and I now wish to refer to my borough of Harrow.
First, I thank the Under-Secretary of State for the Environment, my hon. Friend the Member for Croydon, Central (Sir P. Beresford), for his patience in dealing with a delegation from some parties in Harrow. I am afraid to say that the matter has become so politicised by the Liberal and Labour parties in Harrow that it was impossible to have a joint delegation. As is typical of the Liberals in Harrow, so political did they want to make the matter that they did not want to consult the Members of Parliament who represent Harrow. We had to fight to find out when the delegation was visiting my hon. Friend the Under-Secretary.
Even to this day, the Liberal council has refused to give me the paper that it gave my hon. Friend the Under-Secretary in support of its argument. The council tried to fob me off with a paper that I was told was the paper presented, but I know different. All the council gave me was the crib sheet from which it was working when it spoke to my hon. Friend. I am grateful to him for seeing that delegation, and I know from the people who attended that he listened patiently to what was said.
I am also grateful to my hon. Friend the Under-Secretary for the patient way in which he has listened to the arguments from me and my hon. Friend the Member for Harrow, East (Mr. Dykes). We have sought to put to him the important point about the area cost adjustment, and—even if it is not this year—I hope that he realises that outer London needs a change in the adjustment. We have made our points to him with some force, and he has listened patiently.
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Harrow has made some points about its education standard spending assessment, but even the council officers say that their argument is weak and that they are obliged to accept that the methodology of the Department is right. For example, Harrow has argued that it has lost money in education SSA because of a change in the way in which the number of income support claimants is measured. The council wants to return to the old method. I can understand that—Harrow did better under the old method.
The old method of collecting data was based on a 5 per cent. survey which showed that, in 1997–98, there would be 10,626 children of income support claimants in Harrow schools. When a 100 per cent. survey was done, it showed that the figure would be 9,726—a 3.5 per cent. reduction. That does not sound like much, but it is a significant amount of money out of Harrow's education SSA. It can hardly be argued that it would be right to return to the previous way of assessing these matters—a 5 per cent. survey—rather than using the current 100 per cent. survey. Much as I would like to see the money going back to Harrow, no one could argue logically for the use of the old methodology. There must be boroughs and councils up and down the country that gain from the new methodology and that would therefore object strongly if we were to return to a less accurate way of doing things.
This is a tight settlement for Harrow, and I do not object to that. In running the economy, the Government must take account of the fact that local authority expenditure is 25 per cent. of the whole of Government expenditure. Therefore, not controlling local authority spending would be foolish indeed. That is certainly not the way in which I or my voters would expect a Conservative Government to behave. What do we get from Harrow? We get an absolute torrent of invective from the Liberals, who do not control the council but form the largest group. They say that they have been handbagged by the Government, and they have used the word "mugged" in their newsletters. They said that they expected £22 million extra from the Government, but that was not true and it never has been true. That figure was the difference between their wish list and the money that was to be made available to them.
I pay tribute to the Liberal party, as it is a fantastic campaigning organisation. In terms of propaganda, it is second only to Goebbels. The Liberals are wonderful at getting their message across. If they would use only 1 per cent. of the energy they use in putting across their propaganda in running the finances of Harrow council properly, Harrow would be a better place today. For three years, we have suffered under a Liberal-run administration whose profligacy has been amazing.
There is a hole in the council's budget—it has had to threaten large cuts in delegated school budgets—because it has spent money on pet projects, notable among which has been the establishment of a driving centre. That is a centre where trainee drivers can go and where the highway code can be taught. It is commendable, but is it a priority? A driving centre in Harrow—which was opened when my party controlled the council—ran reasonably successfully for a number of years, but it was a huge drain on resources. When the time came to make a choice between social services and education on the one hand and keeping open the driving centre on the other, a Conservative administration in Harrow had no choice and closed the driving centre. I think that was the right decision.

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When they took power, the Liberals made it a priority to reopen the driving centre. How can that possibly take priority over education? They have spent money on pet projects and ordered council officers to stop looking for savings. Everyone who has been on a council knows that, throughout the year and outside the normal budgeting process, the council has to look for sensible savings. It has to look for money that is wasted or that can be clawed back to be spent on priority areas, and that is true whether the council is run by the Labour party or the Conservatives. The Liberals have stopped council officers doing so, have spent money on pet projects and have upped their councillors' allowances to the tune of £190,000, which is a lot of money for a council. The Liberals have spent that money on other things and have a hole in their budget which is difficult to fill.
The Conservatives have not been in power in Harrow, so we have not been able to make those savings. All that we can do is to try to patch up the budget as it stands. It is clear from the Conservative alternative budget, however—the Labour and Liberal parties even tried to block debate on that, but failed because we called a special council meeting—that it is possible to maintain school budgets without any cuts, retain the vital social services threatened with cuts and make cuts in other areas. That is what a responsible council would do in Harrow. That is what anyone running the council who meant business would do.
I shall make one prediction. I do not believe that the school budgets will be cut, and I shall tell hon. Members why. Once again, the Liberals have been led up the hill by the Labour party. Whereas I may disagree with Labour party policies in Harrow, I think that Labour councillors know what they are doing. They have led the Liberals by the nose and will cut them off when they get to the top of the hill. The Labour party will then come up with a budget that will mean no cuts in school budgets. Doubtless, that will come through.
I hope that the Liberals will be left high and dry where they ought to be—exposed as a bunch of amateurs who do not know how to run a council, who are dangerous to the people of Harrow and who ought to be drummed out at the first opportunity.
7.31 pm
Mr. Jim Cousins: This is the fag end of a Parliament and of a Government. The sole remaining serious business of the Government is to make life as difficult as they can for those who will come after them to pick up their burdens.
Since the present Prime Minister became Prime Minister, we have doubled the national debt. In six years, we have borrowed the amount of money that it took 300 years of British Governments to borrow from when the national debt began to May 1979. That is an inheritance that all hon. Members who speak in such debates must bear in mind.
With respect, the hon. Member for Newbury (Mr. Rendel), who spoke for the Liberals, sought to bypass that problem, unwisely. It ought to influence all our discussions on this matter. I do not, therefore, come here from the city of Newcastle to ask for bold changes in the Government grant system from this Government. I do not even come here, as every Conservative Member who has spoken in the debate has come here, to ask for
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changes in the Government grant regime, welcome though those might be in some respects. All we ask in the city of Newcastle at this time—as time is running out for this Government—is a little flexibility to manage our affairs with our money and to have a sensible debate in our city about how much we think we can afford to put into our local council services.
The problems in our city are formidable. Across the city, two in five of all children are brought up in families who are dependent on income support. My predecessor tried a ludicrous stunt—trying to live for a week on the dole. In the city of Newcastle, those two in five children are not living for a week on the dole—most of them have spent a lifetime in families who are dependent on income support. That damages them, their neighbourhoods and their community.
In one small area of the west end of Newcastle, which is represented by my hon. Friend the Member for Tyne Bridge (Mr. Clelland) and myself, 1,000 children between 18 and 20 have left school and have no work. The effect on the neighbourhoods in which they live is dreadful. Their prospects are limited.
The Government have cargo culted in sums of money that are time limited over a brief period, leaving an inheritance of voluntary sector projects that are doing good work. We should have the flexibility to absorb some of those projects into the main spending of the local authority. All that we ask for is that the city council should have enough money to match the resources that it is supposed to match within the terms of the additional Government grant scheme, which the Government gave to the city only this year.
All that we ask for is a little flexibility to deal with our education problems. The Government grant assessment per child in Newcastle has changed by £35 in the past four years. It is a totally unrealistic figure. Due to the way in which the capping limits now work in Newcastle, we are contemplating spending only £2 per head more per child next year than we spent in schools four years ago. Is it any wonder that every school in the city has run out of supply cover and has mixed-year classes and that 3,000 more children are being educated in classes of more than 30 than were four years ago?
We do not ask the Government to cargo cult in more money from Government. We ask that, in the time left to them, they give us the opportunity to have a sensible debate within our city about how much more we can all afford to contribute as citizens of that city to make up that difference. That is all we ask. In the time remaining to this Government, it is not an unreasonable request.
That is the issue that we put to the Government tonight. We do not expect them to do now things that in the past 18 years they have never done, or to solve all the problems of our city that have been created in those 18 years. It is too late for them and it is now too late for us. All that we ask is that in the last few weeks of this Government, while they still have the authority of a Government, they give us the opportunity as a city to debate how much of our money we will put in. It is not much to ask. In the remaining time of this Government, surely it is a request that, even now, they might meet. It will cost them nothing.
7.37 pm
Sir Teddy Taylor: The speech by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) has been the only speech that I have enjoyed in a debate that has been appalling. In general, I try to avoid these debates because basically they are made up of a politically motivated exchange of views that are a load of rubbish and, unfortunately, one finds that the Opposition say today what the Conservative party may well say if there is a change of Government after the election. The situation is complex, with standard spending assessments, grants and capping levels. Unfortunately, it is so complex that it is possible for almost everything to be misinterpreted.
On the strict understanding that I do not single out the Opposition for blame, I must draw attention to their campaign against Westminster. If, by chance, it happened to be true that the Conservative Government have deliberately picked on Westminster and said, "We will give you a nice settlement because you happen to be a nice Conservative council," I hope that the Opposition will say why the previous Labour Government were even more generous to Westminster.
The hon. Member for North-West Durham (Ms Armstrong) is shaking her head, but I happen to have the figures. Westminster was given £487 per head, compared with £327 for Liverpool, a difference of 50 per cent.; so the last Labour Government gave Westminster 50 per cent. more than they gave the unfortunate, sad and miserable people of Liverpool. That seems a foul and filthy thing to do, but they did it.
Under the present Government, in every year since 1991, the SSA for Westminster has increased by less than the inner London average. [Interruption.] The hon. Member for Wentworth (Mr. Hardy) may shout about it, but he should consider why the last Labour Government gave Westminster 50 per cent. more than Liverpool, whereas today it gets only one third more. That is a straight fact, although I see that the hon. Member for North-West Durham wants to challenge it.
Ms Armstrong: The problem is that the Minister has written to me, after many months of my trying to get an answer, to say that the figures for the year that the hon. Gentleman has cited are not in any way comparable with the current figures for Westminster. He said:
"In my written answer, I pointed out that figures on a comparable basis, to facilitate year on year comparisons, are available only from 1992–93 onwards."
That is the reality that the Minister had eventually to admit. We cannot compare the figures, because the calculations used to be made on a totally different basis.
Sir Teddy Taylor: I am sure that there have been many changes, but I am making a simple, basic point. Is it or is it not true that the last Labour Government gave 50 per cent. more to Westminster than to Liverpool, and that the wonderful—or miserable, depending on one's point of view—Conservative Government are giving it only one third more?
What has been happening is appalling. Labour issued figures that I know about, because my local press said, along with everyone else, that the proportion of expenditure from the council tax for Westminster was only 4 per cent., and that that was terribly unfair,
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when the figure for Tower Hamlets was 10 per cent. and for Lambeth 13 per cent. It seemed as though the Government were giving a big handout to Westminster while poor old Tower Hamlets and Lambeth were being hammered.
The fact, however, is that the figure cited by the Labour party was for 1994. Currently, the figure for Westminster is 14 per cent.; for Tower Hamlets, 10 per cent.; and for Lambeth, 13 per cent. I am not trying to say that the Labour and Conservative parties are comparing bad with good. When the Government have imposed a tight settlement and we all know that the Labour party would make no significant change but would apply the same tight figures if it came to power, the political gerrymandering and fiddling with figures that we have heard are almost an insult to democracy.
I am no special friend of Westminster, because I have to work there, but the plain fact is that it has a higher density of population than Hackney, Islington, Lambeth or Southwark; and a higher proportion of people from ethnic minorities, people living in overcrowded accommodation and people aged over 85 than Islington, Lambeth and Southwark. If there has been any unfairness and Westminster has been given a special privilege, that was more pronounced under a Labour Government and has grown steadily less. I challenge any Labour Member to say that that is not true.
Some of my hon. Friends have said equally unfair things about Liberal councils. I wish in all sincerity that people would appreciate that most councils, irrespective of who controls them, are trying their best to do an extremely difficult job and need encouragement, not propaganda.
I have a couple of questions for the Government which are important to me as a representative of Southend-on-Sea. Southend has accepted the great challenge of becoming a unitary borough next year. When it takes responsibility for social services, for that part of education that we still control, and for libraries and museums, there will obviously have to be a new grant settlement. We are worried, because we have listened for years to Essex county council saying that it has to subsidise Southend.
Essex county councillors have told me that they are giving us lots of money because of our special problems. Those problems include a higher than average share of unemployment; a large number of houses in multiple occupation; and a large number of elderly people. We simply want to know whether, when the grants are reviewed, Southend will get a fair deal that takes into account its special problems. Will the Minister give me some assurance that that will happen and some idea about how it will happen? I appreciate that almost every council has difficulties, but when there is a change in the system the specific problems of a place should be taken into account.
I want to make a point about the situation facing Essex county council, from which Southend will break away next year. Like many councils, Essex county council has an acute financial problem.
Mr. Cousins: Did the hon. Gentleman argue in favour of unitary status for Southend and, if so, why did not he consider those issues then?
Sir Teddy Taylor: I supported Southend becoming a unitary borough, because I always feel that it is better

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for decisions to be made at local level by one group of councillors, so that we do not get into the position where the borough blames the county and the county blames the borough.
I endeavoured at the time to get the issue of funding clarified by the Government. I received some helpful messages and I hope that, as the change is about to happen, they will be confirmed. That is one reason for saying these things in this debate, in which everything is on the record.
Even if Southend does not get better services, it will certainly have less confusion. Nothing is worse in local government than to have one part blaming the other for its problems. If everything is run by one council we shall at least know where responsibility lies—to the extent to which it is not assumed by central Government.
Essex county council has acute financial problems even though, unlike Southend borough, it had what appeared to be a reasonable financial settlement. The problem is that the county council has for several years been overspending by about £5 million a year on its fire budget, taking money away from other services. It is important to find out why that is so, because there could be several reasons.
One reason could be appalling inefficiency, but an investigation recently conducted by an outside authority said that the Essex fire authority was extremely efficient and appeared to live up to all the appropriate priorities and responsibilities for such departments, so that cannot be the answer.
What is the fire authority to do when suddenly faced, as at present, with a new report saying that it has to open extra fire stations? One of those is in an airport of which the Minister will be well aware—the local national airport, not far from where I live—and the other is in a town in the constituency of my right hon. Friend the Member for Braintree (Mr. Newton), where there are big fire problems.
Essex county council faces a bit of a nightmare, as it is already overspending and has been asked to provide that extra fire cover. It has proposed closing three fire stations: one in Rochford; one in Leigh-on-Sea; and the other in Canvey Island. Those proposals are considered preposterous and outrageous by the local community, because we have more people, more buildings and more calls on the fire service than we have ever had, and it seems especially unfair to choose three stations in the south of the county, where we cannot call on other fire authorities, as can be done in the north, because there is water between us and Kent. What can be done about that? Essex could have requested additional SSA from the Government before 10 January to enable it to spend a little more money. Unfortunately, it did not, but it says that it wrote to the Minister expressing its concern about spending at the end of December. It had a reply before 10 January saying that the Government would bear that point in mind.
The big problem is what to do now. Would the Government consider, in the light of the special circumstances, the council spending above its capping level? The difficulty for the county is that if it takes a gamble and spends more than its capping because of the special problem and the Government say, "Get lost," it could face a horrendous bill of £500 million and have to send new local taxation demands to all residents.
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Another problem is that Essex county council seems to have had favourable financial settlements over the years. However, the fire service presents a special problem. I would like the Minister to say that he appreciates that carefully negotiated schemes have been drawn to assess priorities. However, what can be done when a service facing special demands, and which has been overspending rather wildly in recent years, has huge new demands placed on it? It would help Essex if the Minister would consider this special, acute problem and would have a word with local Members and councils—not confrontationally, but to examine what can be done.
I in no way suggest that things are necessarily better under a Conservative Government than under a Labour Government. As a Conservative, I believe that our long-term policies are better for the country, but I fear that when special local government funding problems arise, there appears to be no system for examining them and finding whether they can be solved. I hope that the Minister will examine the problem and realise that a serious issue is involved. Although none of the fire stations involved is in my constituency, I would be appalled if fire stations that served areas of increasing need had to be closed simply because an addition burden had been placed on the service. The Government may consider that because our national airport requires additional cover, something extra should be done.
I hope that we can resolve the matter without getting involved in politics. Sadly, politics has been one of the nightmares of local government. I was a councillor for five years in the city of Glasgow, where I represented the Glasgow Progressive party. It was not linked to any other party but it controlled Glasgow and things went very well. When politics came into local government, everything was blamed on the other parties and if we could not blame them, we tended to blame the Government. Whether Labour, Conservative or Liberal Democrat, most councillors endeavour to do the best job that they can for their communities.
The blatant misrepresentation of the Government's policies in the debate has been appalling. The Opposition have tried to suggest that the Government tried to resolve the matter in favour of Conservative councils. My local paper telephoned me before the debate and told me that it had been telephoned by Liverpool Labour party, which had said that if Southend-on-Sea had the same education settlement as Westminster, it could have 7,000 more teachers. That must be either true or untrue. It is either devious, horrible and miserable or wildly out of range. I told the paper that I would raise the matter in the House. I ask the Minister for his thoughts, which I shall ensure are communicated to the people of Southend. We need the truth in such matters, not the blatant distortions that we get from all parties, and especially, I am afraid, from parties in opposition.
In view of the present campaign to bash policy on Westminster, I hope that the Minister will remind people that Westminster got a far better deal under a Labour Government than it gets under this Conservative Government. The facts are clear. If there is any doubt, let hon. Members examine the figures that I have with me. I hope that the Government will try to do what is proper and correct, and tell people the truth. Truth is the secret weapon in politics. If we had more truth and less propaganda, there would be less disappointment in local government and less of a feeling that nobody understood its problems or responsibilities.
7.54 pm
Mr. Michael Clapham: I was interested that the hon. Member for Southend, East (Sir T. Taylor) said that local councillors are hard working and require encouragement: that is precisely what the Opposition try to give.
I shall briefly consider the national settlement and relate it to the local settlement and the implications for Barnsley. The Secretary of State announced his 1997–98 proposals for local government finance on 27 November 1996. Total central Government support is £33.185 billion. After taking account of nursery vouchers and community care, that represents a year-on-year increase of only 0.6 per cent., which is further reduced to 0.2 per cent. if police funding is removed. As my hon. Friend the Member for Hemsworth (Mr. Trickett) said, the figures are misleading and they impose a harsh settlement that will cause enormous difficulties, especially in my local authority of Barnsley.
In their submissions to the Secretary of State, the local authority associations pointed out that in the previous year, 1996–97, local authorities budgeted to spend £2.522 billion, or 5.6 per cent., more than was provided for in the actual settlement. Their assessment was that the 1997–98 settlement would require another £2.264 billion if services were to be maintained. They argued for a 9 per cent. increase. The hon. Member for Harrow, West (Mr. Hughes) said that the local authority associations have not suggested any formula changes. They may not have suggested changing the methodology, but they certainly said that some modification to the way in which the settlement was made was needed.
It is clear that the Government's settlement falls well short of what the local authority associations required. After adjustment for funding changes, the 1997–98 settlement is an increase of only 1.8 per cent. When that is further adjusted to take account of the disproportionate increase for police services, the result is a 1.5 per cent. increase for other local authority services. In real terms, it is effectively a 1 per cent. reduction. Perhaps the Minister could comment on that.
The implications for Barnsley are enormous. Its provisional standard spending assessment for 1997–98 is £156.63 million. After adjusting for changes in national funding arrangements, that is only 0.8 per cent. higher than the current year equivalent. However, in real terms, according to figures from the local metropolitan borough council treasurers department, it is a reduction of 1.7 per cent. Barnsley's increase is broadly in line with the overall metropolitan district increase of only 0.9 per cent. For SSA per head of population, we are still in 31st place in the league table of 36. Although there have been no major SSA methodology changes in 1997–98, Barnsley, which is a good provider of nursery education, has suffered as a consequence of the Secretary of State's decision to make deductions from the under-fives SSA block based on current nursery provision for four-year-olds. Although that is presumably an unintended consequence, it must be taken into consideration.
Under the proposed capping criteria for the metropolitan districts, Barnsley's 1997–98 provisional cap is £160.869 million. The cap is roughly 2.6 per cent. above SSA, compared with the 2 per cent. tolerance for the current year. However, that tolerance remains significantly lower than the metropolitan district average
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of 6.4 per cent. It compares particularly unfavourably with Stockport's tolerance of 12.5 per cent. The difference between Barnsley's tolerance above SSA and the metropolitan district average equates to about £6 million in budgetary terms. Perhaps the Minister will consider that point. Calculations have confirmed that the capping level will force Barnsley metropolitan authority to cut services by about £10 million this year. In the eight years since SSAs were introduced in 1990–91, Barnsley metropolitan council has been forced to cut community services by almost £60 million. Such cuts are enormously detrimental to the community.
I urge the Minister to consider the problems and the needs of Barnsley metropolitan borough council. The cut in local authority services in Barnsley is particularly devastating as it comes on top of the collapse of the coal mining industry and associated engineering business. The Minister winces—I do not know whether that is because he is reaching over or because I have mentioned the coal industry—but I assure him that Barnsley is in enormous trouble, despite its attempts to regenerate the local economy. For example, employment in Barnsley fell by 19 per cent. between 1981 and 1991, compared with a 3 per cent. increase nationally. That shows the scale of our unemployment problem.
I refer the Minister to a recent study conducted by Coopers and Lybrand and Sheffield Hallam university, which confirmed that Barnsley is one of the worst areas for unemployment in England, with high unemployment and hidden unemployment. Barnsley needs 19,000 new jobs—a 25 per cent. increase in total employment—to reduce unemployment to the national average by 2001. I think that the Minister will agree that that illustrates the dire situation facing Barnsley metropolitan borough council.
The Henley centre recently conducted a study that predicted that Barnsley's gross domestic product growth from 1995 to 2001 will be the fourth lowest in Britain. South Yorkshire's GDP is currently only 76 per cent. of the national level. With national GDP expected to grow at four times the rate of GDP in south Yorkshire, areas such as Barnsley will require a great deal more Government support than they are receiving at present.
Despite those dismal predictions, Barnsley has faced the challenge and invested heavily in regeneration. Much derelict land—in the Dearne valley, for example—has been recovered and access is afforded by the Dearne valley link road, which will eventually join the M1 at junction 36. It is predicted that that development will create 8,600 jobs in the next few years. Barnsley has a great deal of poverty. When the methodology was drawn up after the SSA review in 1993, poverty and unemployment levels were not taken into account.
Some 23 per cent. of dependent children in Barnsley live in households with no adult in employment, compared with a national average of 17 per cent. Deprivation is an obstacle to opportunity. Rather than restricting the local aumority's attempts to deal with the problem, the Government should give active assistance. Only one in three households in Barnsley receive a council tax benefit—in other words, there is little opportunity to raise additional finance through me imposition of council tax.
The measures of need in Barnsley clearly show that, in terms of unemployment, poverty and disability, the area requires greater consideration from Government than it

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receives through the SSA and the tolerance above SSA. Perhaps the Minister will comment on the supertram project, which the hon. Member for Sheffield, Hallam (Sir I. Patnick) mentioned and which could worsen Barnsley's economic position.
Mr. Illsley: My hon. Friend knows that, if the capital funding for the supertram project this year is not met by some Government allowance—either in terms of SSA or funding—council tax in Barnsley could increase by about £150. Will he press the Minister to say what action the Government will take to prevent supertram funding from falling on the four local authorities, including Barnsley?
Mr. Clapham: I thank my hon. Friend for his intervention. I have asked the Minister to respond to that issue. Perhaps he will tell us what assistance we can expect from the Government.
Barnsley's needs clearly show that, even if the SSA formula cannot be modified—I doubt that that could occur at this late stage—the Government must provide more financial assistance. Perhaps the Minister could meet the three Members of Parliament from Barnsley to discuss the possibility of introducing a cap allowance. That would help Barnsley metropolitan borough council to tackle the severe problems that it must face in the next few years.
8.8 pm
Mr. Geoffrey Clifton-Brown: I thank you, Mr. Deputy Speaker, for allowing me to catch your eye. As I have only about 10 minutes in which to speak, I shall not accept any interventions.
The local authority in my constituency, Gloucester county council, is Liberal dominated and nearly 100 per cent. supported by the Labour party. Every year, the Liberals and Labour say that they wish to have a budget of so many millions of pounds more than the previous budget so that existing services might be maintained. That figure is usually entirely unrealistic. When my right hon. Friend the Secretary of State gives them a more "realistic" budget, they claim that they face a cut of so many per cent. That is a bogus way of representing the real financial position.
Gloucester's standard spending assessment this year is £323 million. There is an increase on general services of 2.5 per cent., while the specific increase in spending on education is 3.6 per cent. Any company that could not find some efficiency savings in a budget of £323 million should not be in business. The Chartered Institute of Public Finance and Accountancy has calculated that labour costs account for about 60 per cent. of most local authority costs, and that if each local authority could make a saving on such costs of 5 per cent. the total saving countrywide would be more than £500 million.
I am certain that if a clever firm of management consultants examined Gloucester county council's huge budget it would find savings. Indeed, I know that it would find savings. I am almost certain that it would find many areas in which the council has increased staff.
In the short time that is available to me, I make the plea that the 3.6 per cent. that my right hon. Friend is making available to Gloucester county council for education should go directly to the schools. It would be a disgrace—it would be short-changing our children and their
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parents—if the extra money did not go straight to schools. I expect that it will do so but I am not certain, because Gloucestershire has one of the highest rates of top slicing of any local authority in the country.
Top slicing is the amount that each local authority withholds for central administration before moneys are made available to schools. I should like Gloucestershire's top slicing to be drastically reduced so that we might push as much money as possible directly into schools.
I spend much time visiting schools in my constituency, where I see a huge amount of dedicated work being undertaken by teachers and by parents helping those teachers. At the same time, I have seen some remarkable new building projects. The other day I visited a brand-new school in Tewkesbury, which had cost £1.5 million. That must be set against the nonsense that we hear from Opposition Members who claim that North sea oil revenue has been squandered. That assertion cannot be true when we have seen new schools, new additions to schools, new hospitals and new additions to hospitals over the past 18 years. It is a misrepresentation of the facts to say that the assets of North sea oil have been squandered.
I return to the issue of increases in council tax. As I said to the hon. Member for Holborn and St. Pancras (Mr. Dobson) in an intervention, he cannot have it both ways. Will he allow local authorities discretion in deciding by how much they should be able to raise their council tax? It is clear that they will do so if they have that discretion. The Sunday Times recently conducted a survey of 180 Labour authorities. Of 80 council leaders questioned—all 180 authorities were up against current capping limits—49 said that they wished to increase their spending over and above the Government's capping limits. It is clear that as much as Ministers relax capping limits, Labour-controlled authorities will spend up to those limits ad infinitum.
Yesterday, I was sitting next to a senior member of the Bristol chamber of trade. He wanted the uniform business rate repatriated to local authorities. I believe that that is the Labour party's policy, if not the policy of the Liberals. I had to remind him—he had entirely forgotten—that when we had local control of business rates we had Labour local authorities pricing businesses out of business. I do not want that to happen again. That is why I am delighted that in the settlement my right hon. Friend has been able to provide help for all businesses. No business should face an increase in UBR over and above the rate of inflation.
Much more important than that, the UBR of many hundreds of thousands of small businesses will be pegged to the same rate as last year. In other words, they will experience a real reduction in their UBR.
Oxfordshire receives the area cost adjustment whereas Gloucestershire does not. That puts Oxfordshire at an advantage of some £20 million. I have suggested that there should be a better tapering of the ACA. There should not be a line on a map that means that one authority gets something and the next-door authority, which faces broadly similar costs, gets nothing.
In answer to a question tabled by the hon. Member for Holborn and St. Pancras—the answer appeared in column 85 of Hansard on 27 January—we learnt that teachers' labour costs for Gloucestershire amounted to £178 million whereas those same costs for Oxfordshire were £187 million. That goes to prove that labour costs in

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Oxfordshire are only marginally higher than those in Gloucestershire. I welcome my right hon. Friend's assurance this afternoon that he is continuing to examine ACA weighting within the SSA system to ascertain whether in the longer term there cannot be a fairer distribution method.
I make special pleading on the ACA but I am delighted that the sparsity factor has not been altered. It is clear that we cannot have something in one hand and gain something with the other. It is right that the sparsity factor should be carefully applied to rural constituencies such as my own where it is more expensive to deliver local services.
There are many good provisions in the settlement which time prevents me from mentioning. I merely say that I have every sympathy with the deprived areas that are represented by Labour Members—for example, Barnsley and Newcastle, Central, in the context of the debate—but it is probably true that spending per pupil in Newcastle, Central is about double, if not treble, the spending of Gloucestershire. I am well aware that Gloucestershire has one of the lowest expenditure per head figures of any local authority in the country, yet it still manages to provide a reasonable level of services.
We have heard much from Labour Members about paucity of provision, but many of the constituencies that they represent receive help that is not extended to Gloucestershire. They receive city challenge, sector challenge, the single regeneration budget and European funding in the form of 5b and 2b, for example.
I guess that Labour-controlled authorities are similar to Liberal-controlled Gloucestershire county council when it comes to indebtedness. Nine of the most indebted local authorities are Labour controlled. The same can be said of Liberal-controlled authorities and their indebtedness. When Conservatives last had control of Gloucestershire county council in 1985, it had a debt of £25 million. When I inquired last year what its debt was, I was told that it had risen over the past 10 years to a staggering £135 million. I guess that it now stands at almost £150 million.
That is a staggering cost for the council tax payers of Gloucestershire. They must pay interest on that debt year in and year out. If the Liberals are in charge for another 10 years, I hate to think of the debt with which the children of my constituents will be saddled. The Labour and Liberal parties want to free up capital receipts. If that happens, indebtedness will increase. That will put an even greater burden on our council tax payers in meeting interest payments. Our children will eventually have the burden of repaying that debt, as all debt has eventually to be repaid. My message to council tax payers in Gloucestershire is that they must beware of re-electing Liberal councillors in the county on 1 May. If the Liberals are re-elected, council tax payers will be saddling themselves and their children with increased costs.
8.19 pm
Mr. Jack Thompson: Conservative Members' contributions have been intriguing. I have heard all but one of their speeches. They have made many criticisms—the Secretary of State was no exception—of Labour and Liberal-controlled councils. Conservative Members have not asked why there are Labour and
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Liberal-controlled councils. They are Labour and Liberal controlled because there is a lack of confidence in the Government and in Conservatives at local government level.
The hon. Member for Newbury (Mr. Rendel), the Liberal spokesman, referred to the county council in the area that I represent. We are very sensitive about that, because when he talked about the £10 million cut, he referred to us as Northumbria. The county is called Northumberland. I hope that he accepts that correction. Northumbria is a mythical area: at one time, it was a kingdom that stretched from the Humber to Edinburgh. It is reduced to a county in the north of England, which reflects a thousand years of boundary changes.
Like all right hon. and hon. Members, I have an interest to declare—I have not heard anyone make this declaration yet. We are all council tax payers and users of local authority services in one form or another. As such, we should have a keen interest in the on-going effects of the revenue support grant settlement, which have followed reduction after reduction in expenditure in previous years. We have now reached the point of no return.
Three local authorities provide services in my constituency—Northumberland county council, Wansbeck district council, which are controlled by Labour, and Castle Morpeth borough council, which has a mixture of independent, Conservative and Liberal councillors, although I am never sure which is which. They have all made representations to the Secretary of State with little hope of success. From the figures that the Secretary of State presented, I imagine that most of the other local authorities in England have also made representations with the same amount of success.
Reference was made to local council associations. The Secretary of State specifically said that he had not received representations from local authorities, but he did not say that they were not prepared to make them. Given the Government's life expectancy, there is no point in making representations to them.
Criticism of the Government's policies on funding is universal, and relates to councils with all forms of political control. The Government, in effect, set council tax levels, and leave the local administration to be little more than agents of Whitehall, with front-line responsibility for trying to explain to the residents why they are being asked to pay more for poorer services.
Local authorities have attempted, year on year, to maintain a reasonable level of service—I include all authorities, whatever the political control, in that comment. The long-term effects of the reduction in funding in previous years are now beginning to show through in a range of areas in my constituency, at both county and district level.
Given the time constraints, I shall concentrate on the problems facing my county council, although the limitations are felt in both district authorities in my constituency. One of the biggest problems that Northumberland county council faces is the determination of the sparsity factor. The county is the most sparsely populated shire county in England, yet it is recognised as being only eighth in the sparsity factor element of the SSA. That issue cuts across all the services that the authority provides. The huge rural areas in the north and west of the county create costs in the provision of adequate education, highways, fire and library services, economic development and social services.

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The council has tried to maintain good schools in those areas. It is estimated that the cost of educating a child in a rural school is five times higher than in the urban parts of the county, such as my constituency. Although rural schools have small class sizes, the council is determined to keep them open. However, that is at the expense of class sizes in urban areas. Statistics show that the average class size in primary schools is 27 and in secondary schools it is 22, but those figures are distorted by some extremely small class sizes in rural areas, especially in first and middle schools.
I refer to a letter from the chairman of governors of one of the schools in my constituency, to the leader of the county council. It says:
"Dear Mr. Swithenbank
I know it saddens you to preside over the end of education in Northumberland"—
that is a strong statement to make in the first place—
"but that will be the impact of the cuts being considered. It is true you will still have a schools system, albeit an underfunded one, but education is more than schools. There are many other opportunities being denied to children just because they live in Northumberland, whether these be in Music and Drama, Outdoor Education or from a lack of practical activities in overcrowded classrooms.
There is no equality of service within Northumberland as long as rural children are educated in a class of 6 while urban pupils are with over 40 others and each is demanding the attention of one teacher. Five years ago, when asked about the closure of small schools, you said the savings were not significant. Last night you said it would require fifty to close—well the saving from 10 closed schools over 5 years is more than that from fifty closures in one year. This may be the price to be paid for living in a rural area but it should not be at the cost to children in urban South East Northumberland."
There is a high price to be paid by schools in the south-east urban part of the county, to maintain schools in the rural areas. As a socialist, I do not disagree with that. We should provide the best education we can for our children, but the price to be paid is becoming too high. [Interruption.] Does someone want to intervene? Apparently not.
The council faces problems in other areas. A problem arises from the sparsity factor as it affects the fire service. We have more fire stations than one would expect in a county of its size, but that is necessary because of its large rural areas. If a there is a fire on a rural farm, it may take the fire engine a long time to get there on difficult roads. We are supposed to be classified as a remote rural area under the fire risk categorisation. We spend 25 per cent. above the fire SSA to provide sufficient cover.
The mobile library service is beneficial to rural areas, but it is a high-cost facility. It does not seem to be recognised that a county with a population of about 300,000 and a land area of more than 500,000 hectares requires 4,500 miles of road, because it receives no SSA for highways on the basis of usage and population. Although it has 3 per cent. of national vehicular users on its roads, road users in my area suffer because of that unfair provision.
My county council has genuinely attempted to comply with the reduced expenditure that has been thrust on it. The youth and community service has been cut in the past five years by 48 per cent., road maintenance by 36 per cent., winter road maintenance by 27 per cent., and book provision by 41 per cent.; and in the same period, pupil:teacher ratios have risen by 15 per cent. The reserve
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balances are now at the all-time low of 1.5 per cent. of net revenue expenditure, which is well below the recommended level.
I and my council claim that not only are the overall revenue support grant arrangements unsatisfactory, but the distribution is out of all proportion to local authorities' needs and responsibilities. The whole system should be radically reviewed.
Conservative Members referred to the area cost adjustment. That also affects my authority. Local government associations strongly advocate that Professor Elliott's recommendations should be closely followed. Professor Elliott made a statement with which I totally agree:
"whilst most discontent has been directed at the ACA, it should be focused more appropriately on the SSA system as a whole."
The present arrangements for the council tax are only a marginal improvement on those for the almost entirely forgotten poll tax. The introduction of the poll tax was a mess, and it looks as if we are heading for the same problems with the present system.
8.29 pm
Mr. Christopher Gill: Like many other speakers, the hon. Member for Wansbeck (Mr. Thompson) expressed his dissatisfaction not only with the system but with the way in which the revenue support grant is allocated. In my county, there is certainly continuing dissatisfaction with the weighting given to the sparsity factor—to which the hon. Member for Wansbeck referred—and to the area cost adjustment, to which able reference was made by my hon. Friend for Cirencester and Tewkesbury (Mr. Clifton-Brown). In Shropshire, the sparsity factor is now a serious consideration—we do not feel that enough weighting is given to it—but the problem will become even more acute after reorganisation. Once Telford becomes a unitary authority, the rest of the county, far from experiencing sparsity problems, will experience super-sparsity problems.
Let me offer the House a little homespun philosophy. I say to my Front Bench that, regardless of who wins the next general election, the incoming Administration will have to re-examine the structures of local government. There will have to be a further attempt to improve the present system, which, as hon. Members have already pointed out, leaves much to be desired. I am aware that we have had two reorganisations of local government. We have had three local government finance systems: the old rates system was followed by the community charge, which has now been succeeded by the council tax. What we seem never to have done satisfactorily is sit down and decide exactly what we expect local authorities to do. We have not agreed on a division of responsibilities between local government and central Government. I am anxious that there should be a clear-cut division, rather than the continuing confusion that results from central Government's having so much hand in what goes on in local government.
I believe that, sooner or later, Parliament will have to consider making education and social services a direct responsibility of the national taxpayer, leaving all other services as a charge on the council tax payer. The present system is a recipe for failure: as long as it is perpetuated, there will be continual wrangling between local government and central Government. We have seen that

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again this evening. We must try to sever the umbilical cord between the two, to set local government free and to establish an arrangement under which local authorities fund themselves and all their services, justifying every aspect of their expenditure to their voters. If we are to pay more than lip service to local democracy, we must enable the electorate to understand how local government works, how it is financed and who pays for local services. We must enable voters to judge how well, or how badly, their local councils perform, and to hold their councillors to account for whatever they do.
In Shropshire—and I am sure that the position is mirrored in many other counties—there is currently wrangling about the winter road maintenance expenditure. In former times, no one doubted that that was a local authority function, and that the local authority would decide how much provision to make and how much to spend. Now, when the electorate complain about winter road maintenance in Shropshire, councillors immediately blame the Government for not providing enough revenue support grant. That cuts across all the best traditions of local democracy, and it must end. I do not accept the Whitehall view that the way in which to improve local government is to impose ever-greater limitations and control from the centre.
I know the old argument—used by many in Whitehall and Westminster—that, if such matters are not controlled from the centre, the calibre of local councillors is such that the whole process will run amok. I do not believe it. This is a case of cause and effect: if the authority for discharging such responsibilities is removed from local councillors, the calibre of people who are attracted to local government will continue to spiral downwards.
If we are to have local democracy, there must be clear accountability in local government. It must be plainly demonstrated to the voters that, when they elect councillors, those councillors will be spending council tax payers' money. The financial picture must not be confused by the granting of money from the centre, in accordance with the complicated formula that we are now discussing. If we are to have local democracy and local accountability, the system must be intelligible: the voters must be able to understand it. I stress again the importance of placing authority and responsibility in the same pair of hands.
May I draw my right hon. Friend the Minister's attention to a specific aspect of local government finance affecting my constituency? He will, I am sure, be aware that Shropshire will have no transport programme policy allocation for the 1997–98 financial year. How can that possibly be equitable, given that Shropshire is England's largest inland county? My right hon. Friend also knows that we have been unsuccessful in bidding for capital challenge money. The Whitburn street relief road in Bridgnorth, in my constituency, has been half built, and £250,000 from the district council is promised for its completion. The county council has confirmed that, if there were any money in the TPP allocation, the relief road would be its top priority; but the whole project has now stalled.
We can extend that example. It is appalling that the way in which the money is allocated leads to such waste. Men and women employed in the Department of Transport, in departments at shire halls and in district
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council offices have no projects to complete, because no money is forthcoming. Surely, if there were any equity or fairness in the system, there would be some money for all local authorities under all headings. The current stop-go arrangement is leading to enormous frustration among the local electorate: schemes that they fully expected to proceed do not. The way in which these things are organised represents a negation of local government and local accountability, as local priorities are either ignored or never fulfilled.
8.39 pm
Mr. Gordon Prentice: I agree with some of what the hon. Member for Ludlow (Mr. Gill) said, but it is a pity that it has taken him 18 years to discover the truth.
Mr. Gill: Will the hon. Gentleman give way?
Mr. Prentice: No. I have only a few minutes.
Mr. Gill: I simply want to point out—
Mr. Deputy Speaker (Mr. Michael Morris): Order. The conditions in this Chamber are that an hon. Member either gives way or does not and they must be respected.
Mr. Prentice: Ordinarily, I would give way, but I am conscious that many of my colleagues have been in the Chamber all day and will not have an opportunity to make a contribution, so I want to keep my comments brief.
The Conservatives are an endangered species in local government. There are only 13 Conservative councils nationwide. There is only one Conservative county council—Buckinghamshire—and a handful of Conservative London boroughs. There are no Conservative councils in Scotland or in Wales, yet Conservative Members come to the Chamber and thunder their prejudices with nothing behind them. After the general election, the House of Commons will be devoid of many Conservative Members as well.
A story in today's press is testimony to our times. It shows how local government services are fraying at the edges. Hammersmith bridge, which is 110 years old and is located in a region of London that I know well, is being closed indefinitely because it is unsafe.
Mr. Toby Jessel: It is a Labour council.
Mr. Prentice: The hon. Gentleman says that the bridge is being closed by a Labour council. A total of £130 million is needed to repair all the London bridges, including Westminster bridge. The riparian boroughs made a submission for £44 million, but the Government allocated only £22 million and that is why Hammersmith bridge is closed. West London could seize up because of that. For Conservative Members to try to make cheap party political points beggars belief. The revenue support grant settlement contains no increase at all for highway maintenance.
We never hear about the other services block. One may ask: what on earth is the other services block? It includes things such as food safety. Only a few days ago, the Minister of Agriculture, Fisheries and Food said in the House that the Government were going to appoint a food

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supremo. The other services block, which pays for environmental health officers who inspect greasy spoon cafes throughout Britain, is going to be cut by £3 million.
I have examined the food safety inspection figures for all districts in England. In 1992, 22,414 improvement notices were served; by 1995, 2,314, a tenth of that number, had been served. In my authority of Pendle, in 1992, there were 1,241 visits to cafés and food establishments by environmental health officers, yet, by 1995, there were 728 visits. It is one of the services that does not receive the Ritz treatment, but it is important and should be important to the Secretary of State for the Environment, who famously ordered his daughter to sink her teeth into a hamburger, saying that there was no problem with food safety in Britain, when people were first nervous about BSE. We now have E. coli and listeria. In 1990, there were 90 deaths from food poisoning in Britain; in 1995, there were 202 such deaths.
After the deaths in Wishaw and elsewhere, I shudder to think what the 1996 figures may be. In December, there was an E. coli outbreak in Pendle, yet Conservative Members seem to think that this is amusing and that they can make cuts in food safety, while making glamorous speeches in the Chamber that do not accord with the reality of what is happening outside. Under 40 per cent. of all the food establishments in Blackpool that were subject to food enforcement law were inspected in one year; they should all have been. The figures come from an Audit Commission report, so those matters are not trivial, but important.
In the few minutes left to me, I shall say a word about my own local authority and about Lancashire as a whole. For the fourth year running, Pendle council, which is responsible for the food safety enforcement that I have been discussing, has a standstill budget. It has been allowed to increase its budget by a miserly £2,000 a year and it just cannot cope.
My constituency has the oldest and most decrepit housing in England. Only two inner London boroughs have more housing that was built before the first world war than does Pendle. That housing is falling down. My local authority, which has to cope with all the effects of that—the poor health and the deprivation—has been told for the fourth year in a row that it must deal with a standstill budget. It simply is not good enough.
The hon. Member for Newbury (Mr. Rendel) and my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), the Labour Front-Bench spokesman, mentioned that education is important because it is such a large spending service. We again had a complete distortion from the Secretary of State. He was very economical with the truth because he was trumpeting the education increase—
Mr. Dobson: Miserly.
Mr. Prentice: Indeed. The Secretary of State was trumpeting the education increase of 3.6 per cent. That is totally fictitious. My hon. Friend the Member for Holborn and St. Pancras said that the figure is correct only if the education spending increase is loaded on to council tax payers. If all education authorities throughout Britain had to spend at the SSA level, which is the level that the Government think is right for all the authorities, there would be not an increase next year, but a decrease
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per pupil of £41. How on earth can we believe anything that the Secretary of State says when he is prepared to dissemble on that gargantuan scale? In Lancashire, we are already spending 7 per cent. above SSA. Three quarters of all local education authorities are already spending above SSA, so the Secretary of State should take that 3.6 per cent. and stuff it up his jumper. It is completely wrong.
I have got to say this on behalf of my county council. Many Members have spoken about the area cost adjustment and I took some comfort from the fact that the Secretary of State has finally seen the light and acknowledged that there is a problem that has to be addressed. The problem will be dealt with not by him, but by my hon. Friend the Member for Holborn and St. Pancras. However, it was encouraging to know that, after 18 years, or since it became a problem in 1990, Ministers finally acknowledge what we have been saying for years and years: that it is a problem.
I look at the spot where the hon. Member for Southend, East (Sir T. Taylor) spoke in the few minutes when he was in the Chamber. He came in, delivered his speech and disappeared again. A primary school child in Essex receives £112 more than a primary school child in Lancashire. In Essex, a secondary school pupil receives £145 per year more than a secondary school pupil in Lancashire. It is little wonder that teachers in my constituency and in Lancashire are up in arms and infuriated about the unfairness of it all. I take comfort from the fact that, before too long, perhaps before the passage of a couple of months, these unfairnesses will be seriously addressed by my hon. Friend the Member for Holborn and St. Pancras.
8.48 pm
Mr. Toby Jessel: It is a pleasure to have been invited to take part in the debate, but I was astonished by the temerity of the hon. Member for Pendle (Mr. Prentice)—if he would give me his attention for one second—when he referred to Hammersmith bridge, as the news of its closure was extraordinarily sudden. We were given only a week or two's notice. Hammersmith and Fulham council simply failed to inspect it and everyone has been taken by surprise by its sudden closure. That has considerable effects throughout west London, and it will cause great inconvenience to hundreds of thousands of people, including many of my constituents. He might have been wise to have kept quiet on the subject.
My hon. Friend the Member for Ludlow (Mr. Gill)—if I may make this point before he leaves the Chamber, which I thought he was about to do—made some most interesting comments on the structure of local government. Of course it must be a compromise because the ideal size of a local authority would be quite different for its different functions. For example, we might want a very small local authority to look after footpaths; we might want a bigger one for rubbish collection; a bigger one again for old people's homes; and an even bigger one than that for education, which would have to cover special overheads such as the employment of education officials expert on the special needs of, for example, handicapped children. However, we cannot have five, six or seven local authorities covering one area, so the size of local authorities, as decided by Parliament, must be a compromise.

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Education is the most important of all local authority functions. It is also the most expensive. Increasingly, we have handed over powers to schools and their governing bodies while curtailing the corresponding powers of local authorities. One of the arguments for keeping local authorities big has, therefore, diminished. The next time that Parliament reforms the structure of local government—perhaps in five, 10 or 20 years' time;—we should move to smaller local authorities, especially in London. The London boroughs typically have populations of 180,000 to 350,000. Therefore, the smallest unit of local government is the size of a fairly large city such as Portsmouth, Coventry, Bradford or Cardiff. That militates against local government being local.
Something else that militates against local government being local is the ward system, where there might be two, three or four councillors to a ward rather than one. That is absolute nonsense. A ward should have only one councillor; that would bring that councillor closer to the electors. It should be one polling district covering a couple of thousand people. We should do away with the wards in towns and cities that have 6,000 people represented by, perhaps, three councillors, who are hardly known to most of the people other than by their party labels.
It is absolutely wrong of hon. Members on the Opposition Benches to want to impose regional government—however suitable that might be for Scotland or Wales—across England, including Greater London. There is no desire for that among the population of the south-east and London, which is the area that I know best. It is ludicrous to consider having a regional government covering Canterbury to Chichester, or stretching across London. The functions of the former Greater London council were gradually whittled away and there is no need to replace that body. To do so would add hugely to the expense for council tax payers, whose position we are considering tonight.
My constituency includes Teddington, all the Hamptons and Whitton. It suffers considerably from the extravagance and waste of money by Richmond upon Thames borough council. That is most blatant with the so-called civic centre—a sort of town hall that the council constructed in York street, Twickenham, about six or seven years ago at a cost of £12 million or £13 million. It would have been perfectly possible to have built, for a very much smaller sum—perhaps £4 million to £6 million—a local authority headquarters with adequate prestige, had the design been less extravagant. It has see-through lifts. It has a big hall in the middle called an atrium, which takes up a substantial amount of space. In the hall there are statues climbing up ropes. The outside comprises several different colours of brick so that the building looks the same as it did before it was rebuilt.
Mr. Bayley rose—
Mr. Jessel: If the hon. Gentleman will forgive me, I will not give way as I have only a few minutes left.
The council has been run by the Liberal Democrat party since 1984. In order to build the civic centre, the council borrowed money at a high fixed rate of interest. It was about seven or eight years ago, when interest rates were high. Of course, it was not long before interest rates began
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to fall, so the unfortunate inhabitants of the London borough of Richmond upon Thames—represented in this place by my right hon. Friend the Member for Richmond and Barnes (Mr. Hanley) and myself—were forced, through their council taxes, to pay out for a hire purchase scheme for the civic centre, at a high fixed rate of interest. Local people were therefore unable to take advantage of the fall in interest rates during the early 1990s in response to the world trade recession. It was an unutterably stupid action by the majority of councillors on the council. Most of them could not run a business; most of them could not run a whelk stall.
Not surprisingly, there was a fall in public support and, at the last council elections in 1994—in London the whole of a local authority is elected once every four years, not some each year as is the case outside London—the Liberal Democrats lost six seats in the Twickenham constituency alone, four to the Conservatives in Central Twickenham, South Twickenham and Hampton Wick, and two to Labour in West Twickenham—Labour won seats for the first time in 20 years.
Recently, there have been other extravagances, such as the so-called millennium markers. The council wanted to put 10 tall prongs, every half mile, along one of the most beautiful stretches of the Thames between Kew and Hampton Court, at a cost of £5.5 million. The millennium fund said that it would put up half the money, with the other half having to be found by the councils of Richmond, Hounslow and Kingston. Those councils employed a full-time fundraiser, at council tax payers' expense. Six months passed, but they had raised only £500,000 and had no convincing plan of how to raise the other £2.25 million. Not surprisingly, the millennium fund said that they could not continue the scheme, which then had to be dropped. Meanwhile, they had produced a large amount of expensive promotional material; they have refused to say how much they spent on it.
The council spent a great deal of money on fruitless lawsuits on aircraft noise—which have not resulted in any noise reduction, as they were simply cosmetic. It also installed road humps, some of which had to be removed because they were in the wrong place—such as at Egerton road, Twickenham, outside the Richmond upon Thames tertiary college. Despite all the money that it wastes, the council has the cheek to claim that the Government do not give it enough money.
Richmond is a most unsatisfactory council, and I am not surprised that the Government have determined to clamp down on the amount of money that it will be allowed to spend. The amount of money is being reduced regardless, because, since the passage of the Higher and Further Education Funding Act 1992, the tertiary college—which takes young people at the ages of 16, 17 and 18, which was formerly a local authority function—has been placed under the Further Education Funding Council, which is funded by the Department for Education and Employment. Therefore, that important and expensive sector of public education no longer relies upon council taxes.
I am glad to have taken part in this debate, to draw attention to those matters. I hope that my right hon. Friend the Minister will refer to them in his reply.
8.58 pm
Mr. Robert Ainsworth: I shall not follow the hon. Member for Twickenham (Mr. Jessel) in speaking about sleeping policemen, statues, atriums and

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fancy bricks, although there was a serious point in parts of his speech. Once upon a time, local government had much greater control over how it raised money and dealt in the money markets. Perhaps his council would have been saved some of the debt incurred if it had that degree of autonomy today.
I shall start my speech on a note of thanks—although it may not continue throughout my speech—to the Parliamentary Under-Secretary of State for the Environment for meeting a delegation from Coventry during this year's standard spending assessment review. We came, as we have for the past four or five years, to talk about specific issues affecting Coventry. We will not necessarily fall out about those issues politically, but they can nevertheless have damaging effects on the SSA and on the grant made to Coventry. He received us courteously, and I hope that the issue that we raised will be taken on board by his officials, if not by himself—as I rather hope that he will not be in office for very much longer.
It was a constructive meeting, and I hope that the exchanges that Coventry has conducted on many matters have been helpful not only to the city but to the Department. There are problems with the SSA—as it is a complicated issue—although not all of them are equally controversial. At the meetings we attempted to raise some relatively non-controversial issues. I hope that the Minister will confirm that he will examine, for example, Coventry's problem with nursery voucher numbers, as it could easily cost us £100,000. According to the response that we have received from the Department's officers, double-counting has occurred, although it was unforeseen and they thought that they were dealing with accurate numbers.
Although we have raised such issues as homelessness year after year, I hope that the Minister will seriously consider whether it should be a factor in the SSA formula. There are so many different methods of assessing homelessness. Moreover, a perverse disincentive can be provided in that local authorities that truly and successfully deal with the problem of homelessness may lose money.
I also hope that the Minister will deal seriously with the issue of whether owner occupation is a genuine measure of deprivation. There are very high levels of rented accommodation in some areas, particularly in parts of the capital, such as Westminster, whereas there are very high levels of owner occupation in Coventry, which does not mean that we are a rich city by comparison. I do not believe that owner occupation provides an adequate measure in determining deprivation. If we were to sort out some of those smaller problems and clear anomalies over time, I am sure that Ministers would not leave themselves and the system open to the type of ridicule poured on them so well by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson).
At meetings we do not raise the issue of the area cost adjustment, because there is no point in having a political row over it. However, there is no excuse for a 29 per cent. gap in consideration of payments to teachers between the midlands and London, because the actual gap in teachers' salaries between London and the midlands is more like 10 per cent. There is a definite skew against areas outside the south-east, which cost them a great deal of money.
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Ministers get annoyed when we mention Westminster and say that it is an irrelevance to mention it. However, we mention it for a very simple reason: it is the most blatant example of the way in which the area cost adjustment is deliberately fiddled—I cannot use any other word to describe what happens. We raise it because it is the most blatant example. Why should we talk about percentages and get into complications when we are trying to spell things out in a way that people understand on this difficult issue?
The Audit Commission's figures show that Westminster is one of the least efficient councils in the country. Its refuse services cost £55 a head; Coventry's cost £12.44. Street cleaning in Westminster costs £36 a head; in Coventry it costs £5.51. Westminster spends £241 per claimant on benefit administration—the most expensive benefit system in the country.
Why is Westminster's council tax so low? We have shown that it has wasted huge sums of money on gerrymandering. It is so incompetent that it cannot get insurance for much of its housing because of the asbestos problems that it has imposed on its tenants. I am reminded of the television programme that investigates interesting topics—"How Do They Do That?" How does Westminster council manage to behave in that way, waste so much money and yet have a council tax that is so low in comparison with Coventry? How do they do that? The answer is simple. Westminster's council tax is so low because it is fiddled. The Department of the Environment does not just turn a blind eye to that fiddling, it actively participates in it.
Westminster has recruited consultants at fantastic costs to make its case, not under the rules in the way that Coventry and other authorities make their case every year, but by putting pressure on Conservative Members and Ministers suggesting what they could do for the council, making the case politically for help to maintain control. If Coventry got Westminster's level of grant, we would hand back a £212 rebate to council tax payers instead of charging them. If we got that much grant, we could employ another 1,496 teachers. If all councils got Westminster's grant, 334 of the 356 councils would charge no council tax, but would pay rebates. That is why we expose Westminster—it is the most blatant fiddle of the standard spending assessment.
I have one other point to make, not about the distribution, but about the total grant. The Secretary of State made great play of his argument that if council taxes go up in May, everybody will know who is to blame—he wants people to believe that it will be the Labour councils, not the Government. In the same speech, he tried to say that he consults local authority associations and does business through them. When it suits him, he puts the blame for decisions on the local authority associations.
The local authority associations say that the Government grant support for councils with education responsibilities has increased this year by 0.4 per cent. For districts, without education responsibilities, the grant has been cut by 3.6 per cent. If that is wrong, I ask the Minister to say so clearly and to justify what he says. The Minister knows the inflation rate faced by local authorities. He therefore knows that he has effectively planned for a £40—6 per cent.—across-the-board council tax increase. That is the situation that, on average,

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will face council tax payers across the country and the responsibility lies fairly and squarely with the Secretary of State and this Government.
9.9 pm
Mr. Peter L. Pike: I want to turn the clock back to what the hon. Member for Bury, South (Mr. Sumberg) said at the start of the debate. He said clearly that the difficult decisions that would be taken in Bury as a result of its financial position would be blamed on Bury local authority. He said that the Labour council would be blamed for increasing council tax and cutting services. The hon. Gentleman is not living in the real world.
People know that the Tory Government are to blame for the position of local government; they know what the Tories have done to local government over the past 18 years. Whether they are in Blackpool, Bury, Lancashire generally or anywhere else, they know that the council tax will go up because of what the Government have done. People know that services will be cut because of what the Government have done and they will tell the Government that it is time to go as soon as they get the opportunity to vote at a general election. The Government have kidded the people for far too long and their time is now up. People know the truth.
The hon. Member for Bury, South referred to the importance of education. We all accept that education is the most crucial service provided by local government. However, the Government were misleading and dishonest last year, even about education. They increased the grant for education, but they did not increase the overall revenue support grant by the same level. That meant that if the increase was passed on to schools, as the Government expected, local authorities had to make cuts in their other services. Virtually the same is happening in 1997–98.
It is no good giving increases for education unless they are matched fully throughout the funding for local authorities. As several hon. Members have said, three quarters of local authorities already spend above the level of their standard spending assessment. The Minister looks dismayed when I say that, but it is the reality. He has said that spending is up to local authorities and that the system is flexible. We accept that, but if the Government believe that a good local authority should spend at a certain level, it is time that the SSA reflected that.
The reality is that councils cannot spend above the SSA under every heading so they have to make cuts, whether in social services or in other equally important services. That is the problem with the SSA system. We all know about the difficulties with previous systems, such as the grant-related expenditure assessment, and we know that we have moved to a simpler system. It involves fewer factors and it is easier to work out, but because it is easy, it can sometimes be flawed. I believe that if we are serious about education, we must ensure that the SSA level contains adequate provision for it throughout local government. We all know that the reality is that for 1997–98, the increased provision for education is £20 million less than local authorities are spending this year. That illustrates the problem.
Many hon. Members have referred to the area cost adjustment; I have met the Minister to discuss that and I accept that the figures will be examined again. We all
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know that the way in which the area cost adjustment was originally to change this year would have been acceptable to some, but not to others. I recognise that it is not easy to change the ACAs, but I believe that if we are to have the ACA system, it must be seen to be fair. The present system is not fair. The difference between Lancashire, Essex, Hampshire and other authorities is not acceptable in terms of education alone; that gives us a major problem.
The Department of Transport admits that this year's allocation of £146 million for local road maintenance is inadequate to comply with the code of practice and citizen's charter commitments. Ofsted reports that standards in more than 5,000 schools have been adversely affected by shortages of books or equipment. Those are just two of the condemnations. After 18 years of Tory Government and despite what they have called, certainly in the past few years, an economic miracle, there are major flaws in local government and an inability to maintain services.
The Association of District Councils points out:
"The local government finance settlement is particularly bad for non-metropolitan districts. Provision for spending and the amount of grant they will receive for 1997–98 will severely restrict district councils' ability to respond to the demands on their services. This extremely poor settlement follows a run of bad settlements in recent years."
That is important. We cannot look at 1997–98 in isolation. We have to consider what the Government have done over many years, causing tremendous problems for local government.
Having been a local councillor, at times I wonder why people serve on Lancashire county council or Burnley borough council as their ability is now so limited. They can only touch things at the edge and that is a major problem.
In 1997–98, 241 shire districts—more than nine out of 10—will receive less grant support than they did in 1996–97. That is appalling. Burnley is concerned about the population figures—a matter that we have pursued with the Minister for several years—which have a major effect. A further drop in the population of 2,670 in the past three years has caused financial problems. In 1992–93 the capping level was £11,886,000. In the coming year it will be £12,109,000. In the same period the SSA has reduced from £11,744,000 to £9,489,000. In 1992–93 Burnley spent 1.2 per cent. above the SSA; it now spends 27.6 per cent. above the SSA. That has occurred with almost no increase in the council's spending over the period. In real terms it represents a reduction in spending of 16 per cent. The council is portrayed as a serious overspender. That is simply not true. It tries to provide good local services for the people of a deprived area.
Finally, let me refer to Westminster. I live in the London borough of Wandsworth, which has not been mentioned tonight. Wandsworth is not a very good provider of local services. The roads and pavements are as full of dog dirt as those in many other local authority areas. The funding that Tory Westminster has received is clearly an outrage. Three authorities—Kent, Lancashire and Essex—could employ 7,000 extra teachers at no extra cost if they received the same as Westminster. Lancashire could employ 7,371 extra teachers. The people of

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Burnley, Blackpool and Bury believe that it is wrong. They believe that it is time for the Government to go and the quicker that happens the better.
Mr. Deputy Speaker: I call Mr. Peter Atkinson.
Mr. Hardy: On a point of order, Mr. Deputy Speaker. I understood that hon. Members who had only just arrived would have to wait a reasonable time before being called. Some of us have been here all day.
Mr. Deputy Speaker: I am grateful to the hon. Gentleman for that observation. Had he been a little more observant, he would have checked at what time the hon. Gentleman came in. I can assure him that the Chair did so. As hon. Members will note, I have called two Labour Members in succession.
9.18 pm
Mr. Peter Atkinson: For the benefit of the hon. Member for Wentworth (Mr. Hardy), I was here at the start of the debate. I had a reception for some of my constituents, so I have been absent and I apologise to the House. I am glad briefly to take part in the debate, particularly as the hon. Member for Holborn and St. Pancras (Mr. Dobson) is back in his seat as I wanted to congratulate him on his efficiency and economy—two issues that concern us both.
I refer to the efficiency and economy in the hon. Gentleman's speech. I read his speech from 1995 and the one he made last year and they are exactly the same. He has taken it back off the shelf, dusted it down, tweaked it a little and gone on about exactly the same lines as last year. There is nothing new from the Opposition tonight. He mentioned the same old names, such as Runnymede, about which he was very keen to talk, as well as Knowsley and Easington. He made the same mistake in constructing the league table as he did the previous time. He picked one line—the social needs line—out of the many that make up the standard spending assessment. Since he has made the same point for the third year running, we should try to impress on him that awarding money to local government is not done simply on the basis of social need. It is about the delivery of services to all members of the community.
The implication of what the hon. Member for Holborn and St. Pancras says is that people in Runnymede, who are apparently all very affluent, should have less money, poorer quality teachers and education and a less safe fire service than, for instance, Easington. That is nonsensical. Fixing the SSA is entirely about providing service and is a mixture of all sorts of ingredients.
When I had to leave the Chamber earlier, Opposition Members were whining on about Westminster. When I came back, they were whining on about it again. The entire debate appears to have been based on the Opposition saying that Westminster gets too much money and other local authorities do not. The system is vastly more complicated than that. I am rather alarmed that the hon. Member for Holborn and St. Pancras does not understand local government finance.
I turn to Labour-controlled Northumberland county council in my constituency, which, like the hon. Member for Holborn and St. Pancras, is rather like a record. Every year at this time it launches an amazing public relations
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campaign about the cuts that it will face. This year it says that it faces £10 million-worth of cuts. Northumberland county council is not facing £10 million-worth of cuts. It sets a wish-list budget, says how much it thinks that it needs, puts a price on it, and when it does not get it from the Government and cannot raise it from the council tax payers, it hollos about a cut.
Every year for the past three years, Northumberland county council has had more money in real terms. If one read the local papers that swallow some of the council's press releases, one would think that it is once again facing doom and gloom. It is again threatening to cut school budgets. Last year, it said that it might have to abolish every free school meal due to budget cuts. This year, it is doing the same.
Mr. Jack Thompson: The hon. Gentleman represents a constituency in Northumberland, as do I. I am sure that he is fully aware that Conservative councillors support the county council's view. His own colleagues in Northumberland do not support his arguments.
Mr. Atkinson: I think that Conservative councillors would support the argument that the claim that there is to be a £10 million cut is bogus. They can add up the figures. I am glad to say that some of the local press are beginning to add up the figures, too, and are realising that the council is using the problems of their budget—I accept that there are problems and shall turn to them later—to play a political game, which damages the county council's credibility and makes it harder for us to address the real problems in Northumberland.
I am happy to make it clear that there are problems with delivering services to a very sparse rural county. Northumberland has the smallest population of any shire county and enormous expanses of some of the least inhabited areas of countryside in the north-east—indeed, in the United Kingdom. Unfortunately, most of its population is tucked away into one small corner of the county, which of course makes it difficult to get the proper sparsity payments out of the system which it needs. I think that most of the Conservative county councillors would accept that.
Instead of running an annual PR stunt to try to blame the Government for purely political reasons, the county council would do very much better to heed the words of the right hon. Member for Dunfermline, East (Mr. Brown) that there will be no money coming from Labour, and heed the fact that there will be no more from the Government, and get down to addressing the problems of running services in a very sparse county.
The hon. Member for Wansbeck (Mr. Thompson) may not know that Northumberland has the highest SSA per head of population of any county, receives the biggest grant per head of population of any shire county and has the highest capping level per head of population of any shire county. When representatives from Northumberland come to see Ministers—I am grateful to my hon. Friend the Under-Secretary for receiving an all-party delegation—they should talk seriously about readjusting the budget to deal with elements such as sparsity and the recouping of education fees, another local problem. They should not run stupid campaigns every year in an attempt to persuade council tax payers that this is all the Government's fault.

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Northumberland would have vastly more credibility if it did not waste money. The council is about to embark on an utterly unnecessary public inquiry into the Army's plans for the Otterburn training range. Local people want the project, as it will provide them with jobs and will secure the future of the training area. There is unanimous local agreement that the development is a good idea, yet the local authority is running a full-scale public inquiry which will cost Northumberland county council—according to one estimate—almost £1 million. They would do better to use that money for the purposes that the people of Northumberland want.
I appreciate that every local authority has different problems and needs, and that is why we have an SSA system which, inevitably, is not perfect. We need to develop the system, but this must be done after sensible discussion and not with hysterical outbursts claiming that this is all the Government's fault.
9.25 pm
Mr. Peter Hardy: I shall be brief, as part of the argument that I would have advanced has been presented by my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham). My local authority is in a similar position to that of my hon. Friend, as we too need to know about the position on the supertram, which the Government support.
I am not surprised by the present position. We have had 18 years of Conservative rule, economic incompetence, lost opportunities and other failures. The sheer misjudgment and incompetence that the Conservatives have shown in local government has demonstrated that they are not fit to be in charge. One does not need to look merely at the period of this Administration; during the past 25 years, we have seen two of the most inflationary exercises in Britain's history—the reorganisation of local government in 1974, and the poll tax, which costs up to £20,000 million in administration and related costs.
What grieves me is the slick response that I received from the Secretary of State when I asked him about capital receipts. I asked if we could allow capital receipts to be released to cover the necessary local authority contributions to the single regeneration budget, city challenge and cases of maintenance which would offer serious cost if they were not carried out in the year ahead.
Mr. Curry: Will the hon. Gentleman give way?
Mr. Hardy: No. The Minister will have a longer time to speak than I have.
I was making a prudent point. Unemployment costs about £10,000 per person, and it would be sensible if local authorities were allowed to release their capital receipts to allow people to get back to work. I would be glad if the Minister would reassure me on that matter.
I have not "bleated" about the subject of Westminster in this debate, as I first raised what I called "the arithmetic of corruption" about Westminster 10 years ago. That local authority boasts that it does not levy a rate or that it has levied the lowest rate in the land year after year. But people can see the equation that I offered the House when I intervened on the hon. Member for Harrow, West
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(Mr. Hughes). This House may not see it, but the rest of the country does. Conservative Members should understand that the Government have allowed the Tory fleet to sink so that the Tory flagship can remain afloat. That flagship has remained afloat on the basis of an arrangement and a calculation that can only be described as corrupt.
When I got home last week, I read in my parish magazine a piece by the Bishop of Sheffield, who is shortly to retire. The Conservatives in South Yorkshire screamed blue murder. The bishop referred to the prophet Joel, when he said, "Old men dream dreams". He also offered one other quotation, which seems to have offended the hon. Member for Sheffield, Hallam (Sir I. Patnick) and all the other Tories in our county. It was simply this:
"From each according to his abilities, to each according to his needs."
If we had gone along that road a little further in the past decade, Britain and local government would be a great deal better off.
9.29 pm
Ms Hilary Armstrong: I am delighted that my hon. Friend the Member for Wentworth (Mr. Hardy) managed to speak in the debate. We tried to cut short the winding-up speeches so that as many hon. Members as possible could speak. Most hon. Members have expressed concern about constituency issues. Indeed, many Conservative Members upheld our contention that the allocation system is unfair and needs to be tackled. It is remarkable that, after all this time, and after having constructed and reconstructed the system several times, the Government have still not managed to come up with a system of grant allocation that gets anything like support on both sides of the House.
Many hon. Members have raised issues that arise from the real difficulties facing their local authorities. Many, including my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins)—in a remarkable and powerful speech—and the hon. Member for Ludlow (Mr. Gill), made important and telling points about the inability of local government to be properly accountable because of the way in which the Government have constructed the local government finance system.
An effective democracy depends on alternative and competing sources of power; yet the Government have centralised power and enfeebled local government to such an extent that commentators say that it is worse than at any time this century. It is small wonder that many councillors feel that they have become little more than an administrative outpost for Government. It is no good the Government complaining that councils blame central Government. Central Government have so constructed the system of local government finance that they tell it how much it can have, what it can spend it on and how to spend it. The country has rumbled that and knows that central Government are taking the decisions and deciding how those decisions will impact in every area.
Local government has the potential to be the engine of regeneration in the locality. It is local rather than central Government that has a clear awareness of the needs and desires of the local community; it is local and not central Government that is best placed to respond flexibly to changing circumstances in the locality; and it is local

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rather than central Government that works closely in its area on a daily basis with other public agencies, local businesses and community groups.
As a result of the poll tax fiasco, local government is exceptionally reliant on central Government for its funding. The poll tax fiasco and the nationalisation of the business rate mean that councils are now responsible for raising less than a quarter of what they spend. That is not an accident, but the result of deliberate decisions. Indeed, Sarah Hogg commented in her book:
"More and more Tory MPs thought that the logical solution was for central Government to take over completely."
However, those Members still moan and say that local government continues to recognise that central Government are taking the decisions.
Mr. Clifton-Brown: Will the hon. Lady give way?
Ms Armstrong: I am coming to the hon. Gentleman. Perhaps I can deal with his intervention then.
The revenue support grant settlement this year places councillors—even the rare Tory councillor—in a straitjacket designed by central Government. Many local politicians do not even have a choice between cutting services and hiking up the council tax, because the settlement forces them to do both. Local people will pay more in tax and get less in service.
The Government have turned their back on giving local people more choice and are trying to use local democracy as a cover for further tax hikes. The Budget figures have revealed that, over the next three years, the gap between what central Government believe that local government should spend and the amount that they will fund will widen by £4 billion. The Government have planned for council tax rises next April of about 6 per cent. That would mean a rise in the average band D council tax of about £40 a year.
Councils have been forced to make difficult choices. To protect school budgets, many councillors have to slash other services, including social services, that are already under strain because of the rising community care costs; at the same time, they have to increase council tax bills by more than inflation. The Government have been rumbled, and people know whom to blame.
The Government said that the distribution was fair. Almost every hon. Member who has spoken in this debate has made it clear that that was not so. The Secretary of State kept trying to say that all the associations accepted the settlement. However, the chairman of the Association of Metropolitan Authorities, who also chairs the new Local Government Association, wrote a letter to the Secretary of State on 13 May 1996, so the right hon. Gentleman should have had time to come to terms with what he said.
Sir Jeremy Beecham said that none of the associations was content with the present distribution of SSAs. He said that associations and authorities put in representations each year to try to persuade the Government to change the distribution, but that in the end the decisions were for the Department. It seems that the Secretary of State has a short memory and does not remember what people say to him.
Mr. Gummer: Will the hon. Lady explain why no Labour chairman of any of the associations has ever used
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the argument of the hon. Member for Holborn and St. Pancras (Mr. Dobson) and asked for the far-reaching proposals that he has advanced to the House on five separate occasions?
Ms Armstrong: The Secretary of State has already demonstrated this afternoon that he has little credibility, and he is continuing that.
The letter from Sir Jeremy Beecham said that he had pointed out to the Environment Select Committee that some authorities, including Westminster, had benefited from some very strange decisions on SSAs made by the Secretary of State's predecessors. That backs up the arguments of my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). If I were in the Secretary of State's position, I would want to apologise to the House.
Mr. Clifton-Brown: The hon. Lady has spent her entire speech criticising the present distribution system. Does she recall her interview with the Local Government Chronicle on 5 January 1996? She was asked whether she would change the system, and replied:
"Of course we will be looking at it but I would not like to promise major changes at this stage. I know too much about it to be flippant enough to say you can quickly shift it."
Ms Armstrong: I shall certainly deal with that. In his speech, the hon. Gentleman raised various issues that demonstrate that his only information source has been the Tory central office brief. I expected more from him.
There are clear problems with the system. Several hon. Members have raised the problems with the manner in which Westminster council has been awarded its grant. I invite the hon. Member for Southend, East (Sir T. Taylor) to examine work that I have, from the Library and the Ministry, which demonstrates that the Tory central office brief is leading him up the garden path and that there is serious unfairness. Opposition Members are not naive about the difficulties of getting a fair allocation system, but we are determined to seek one. I am not going to con anyone that it can be done overnight; it has taken the Government years to get to the present unfair position.
In The Daily Telegraph, which is not a newspaper that normally supports the Opposition, the independent, slightly right-wing commentator John Grigsby writes:
"The Westminster case does matter because it is so illogical."
He says that it is of
"fundamental importance that justice should not only be done, but should manifestly and undoubtedly seen to be done."
The iniquities of the system are likely to get worse. The deduction of SSA funding because of the introduction of nursery vouchers, which was raised by my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), will penalise forward-looking councils that provide nursery education for most or all of their four-year-olds and divert it to authorities that choose to provide fewer places. We have made it clear that the system for allocating local authority funding should be open, transparent and independently verified. That means that it will change.
Several hon. Members tried to say that everything was all right and that local councils had got it wrong. That belies the history of the past 18 years. The gap between what the Government acknowledge councils should spend

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and the funding that they receive from central Government is widening. The economy has been mismanaged by the Government. They have pursued short-term policies that have failed to equip our economy for the future. It is not surprising, given the record and given the tax rises that the country has had to suffer, that we now know that the Tories are the party of high taxation.
The typical family will have paid £2,120 extra tax since 1992 and will be paying 35 per cent. of its gross income to the Exchequer by the time of the next general election, compared with only 32 per cent. in 1979. Taxation has gone up by 3 per cent. for every taxpayer. Given that record of mismanagement, it is not surprising that the public sector borrowing requirement is expected to be £4 billion higher than was forecast last year. Projected borrowing has been revised up for next year by another £4 billion. There has been £66 billion more public borrowing in this Parliament, which is £66 billion more man the Tories claimed in the pre-1992 general election budget.
More borrowing means a higher debt interest burden. This afternoon, Conservative Members—including the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown)—complained about local authority debt. They believe the Tory central office brief issued by the Under-Secretary, the hon. Member for Croydon, Central (Sir P. Beresford). Let us compare local government debt with that of Tory central Government. Between 1990 and 1996, local authority gross debt per head decreased by 6.2 per cent., while central Government debt exploded by more man 133 per cent. from £2,412 per head to £5,638 per head. Those figures speak for themselves. It is not Labour councils that have squandered the £85 billion in North sea oil revenues or the proceeds of privatisation; it is not local government that has pursued short-term policies at the expense of this country's long-term interests.
This is a dishonest settlement. Council tax payers and service users are paying the price of this Government's economic incompetence and waste. That is why we cannot promise them more money next year. [HON. MEMBERS: "Oh!"] The electorate will not be fooled: when services are affected and council tax is increased, the people will know that the Tory Government are to blame. They will know that Tory Members supported the unfair settlement tonight. The people want a general election. The Government are frightened of a general election, but at a general election the people will decide.
9.46 pm
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): It is perhaps worth recalling the background to this settlement. Interestingly, Opposition Members spoke almost exclusively about redistribution; they did not address the amount available for local government in the public expenditure round. In previous years, the Opposition call was "Spend, spend, spend". Suddenly, the tune has changed: it is now all about redistribution.
The background to the change is that we live in a competitive world marketplace in which no one owes us a favour. Sensible people recognise increasingly that
764
international competition imposes strong constraints. Whether the Opposition like it or not, that means that there will be increasing demands for the private sector to assist with the delivery of public services, as that is a way of securing efficiency and value for money. It means also that we shall have to control the level of public expenditure. Everybody recognises that fact—the Chancellor recognises it and, if we can believe him, so does the shadow Chancellor. That has put the hon. Member for Holborn and St. Pancras (Mr. Dobson) in a straitjacket. Instead of his usual rant and incitements to Labour local authorities to increase expenditure, he is under lock and key, and the key has been thrown away.
This is a tough settlement, but it is necessarily tough. It is less tough than the settlements that many Government Departments have had to accept. It is the end of the first stage of a process. Local authorities may set their budgets and, if they do so above the prescribed cap, they may put their case to the Government. We have shown that we will listen to local authority representations when there is an inescapable need to exceed that figure.
Several hon. Members mentioned the area cost adjustment, so let me be clear about it from the start. The Government and the local authority associations have tried for some years to find a way of assessing real labour costs—the total costs of employment—throughout the country. That is an extremely difficult exercise, and it is not easy to translate it into a workable mechanism. The latest Elliott report has provided much additional information, and we shall work with local authorities to try to arrive at a sensible, comprehensible mechanism that will command wide support, which we shall include as soon as possible.
The hon. Member for Wentworth (Mr. Hardy), who got in for a quickie at the end—he is now engaged in conversation—asked about the use of regeneration receipts. Perhaps someone should prod him to get his attention. It is possible for local authorities to use capital receipts specifically in the regeneration process. Speaking from memory, there are four wards in Rotherham that apply themselves to that approach. It is possible to use regeneration receipts alongside private sector money in the process of regeneration.
Mr. Hardy: It is capped.
Mr. Curry: It is not capped. It is not revenue support grant money but money that is realised for investment in regeneration. I hope that the hon. Gentleman will urge his local authority to do that, as I hope that he will urge it to transfer housing stock and to understand that local authorities should be in the business of service, not ownership. The authority should explore the full use of the private finance initiative. Local authorities that are imaginative and want to improve services have a great opportunity to do so if they get out of the old mindset of what they think local government is in place to do.
The hon. Member for Holborn and St. Pancras inevitably asked more questions than answers. Off hand, I cannot think of any question that he answered. He said that Labour would follow the expenditure pattern set this year by the Government. But he does not need to do that. If he wanted to, he could get rid of capping overnight. Legislative change is not needed. The capping orders that the House may consider when local authorities set their

765
budgets will necessarily come after the election. He could say now, "We shall cap nobody. Go ahead boys, do what you want to do." It is not necessary to legislate to do that.
What would be the position in year two? If the hon. Members for Holborn and St. Pancras and for Durham, North-West (Ms Armstrong) are attacking the Government figures on council taxes in the Red Book, and if a Labour Government would maintain the Conservative Government's public expenditure control, the incoming Labour Government will have to agree to an increase in council taxes or cut the revenue support grant, which would cut public funding to local authorities from the centre. What would the Labour Government do? It is an important question. Opposition Members cannot have it both ways. Either a Labour Government will observe the expenditure constraints that have been set or they will throw them overboard. We need to know what the Opposition intend to do.
If the hon. Member for Holborn and St. Pancras is to use capping only as a reserve power—I use the words that he used—where is the saving to come from? If councils are not capped, there will be an increase in expenditure. Of course, the hon. Gentleman must find savings, because if we are to believe the right hon. Member for Dunfermline, East (Mr. Brown) the overall total will not change. The hon. Gentleman said that the distribution "will change". He said that he would see changes in the way in which the money will be allocated. He did not say anything about consulting anybody about the changes. Apparently that is not the same as changing the formula. I did not understand where the hon. Gentleman drew his distinction.
If distribution changes, those authorities whose provision increases will be able to spend more. That is a logical necessity. Authorities whose standard spending assessment reduces will still be able to spend at the same level, however, unless they are spending vastly over their SSA. So capping cannot force budget reductions. The effect of a major forced change in grant distribution can mean only an increase in public expenditure, which the right hon. Member for Dunfermline, East has said he will not tolerate. If capping is loosened, there will be an even greater increase in expenditure, which the right hon. Gentleman has said he will not tolerate.
We need to know where Labour stands. Is it a theoretical constraint or a practical constraint? Does it apply to the hon. Member for Holborn and St. Pancras or is it just for the birds? Where does this leave the Opposition in their claims about public expenditure?
We have heard the litany about Westminster, which is the Opposition's favourite council. We have heard notably about day visitors. Let us say that Westminster receives a grant of about £25 million for day visitors, which is 0.1 per cent. of RSG. What would happen if we opted for a great redistribution of that money? Let us suppose that we opted for County Durham, or the Durham authorities, as recipients of this munificence. It would amount to about £100,000 to be shared between County Durham, which is the county council, the seven districts, Darlington unitary authority and the police authority. It is worth noting who the big winners would be. Let us take Sedgefield, for example? Will it be £1 million or £2 million, £100,000 or £200,000? What will it be? It comes to a little over £20,000. Derwent Water would get £9,000, and Durham city would lose £34,000, because it receives a lot of money from the day visitor calculations.
766
It would not be the only loser. Camden would lose £5.5 million, Tower Hamlets £1 million, Manchester £1.5 million, and even Blackpool, that haven of fresh air and fun, to which the hon. Member for Holborn and St. Pancras did not take his continental tourists—a terrible mistake that will be deeply resented in the town of the party conferences—would lose £150,000.
That is what would happen if the hon. Gentleman did nothing to damp the changes. If he damped the changes, the net benefit would be the square root of tuppence ha'penny. That shows how poverty stricken the Labour party's central proposition is.
The hon. Gentleman referred to the index. Let me tell him what is in the index that he so derides. It is about the proportion of households living in housing that is not self-contained or permanent, the proportion of households in overcrowded accommodation, the proportion living in rented accommodation, the proportion likely to be from ethnic minorities—born outside Britain, Ireland, the European Union, the old Commonwealth or the United States—or the proportion of households in priority need of housing. Those are the indicators of need that we use, and which are so roundly ridiculed and condemned by the Opposition.
Mr. Dennis Turner: Will the Minister give way?
Mr. Curry: The hon. Gentleman was not present for the whole debate, so I shall not give way to him now.
Mr. Turner: On a point of order, Madam Speaker. The Minister said—as he did in the previous debate on local government—that I was not in my place during the debate. I was present during the speech of my hon. Friend the Member for North-West Durham (Ms Armstrong) and during the Minister's winding-up speech, and I wanted him to give way so as to hear about Wolverhampton.
Madam Speaker: I think that that was a point of frustration rather than a point of order.
Mr. Curry: We had the maiden voyage of Labour's new flagship local authority, which appears to be Harlow. In 1996–97, Harlow budgeted 40 per cent. above SSA, and this year it will budget at 43 per cent. above SSA if it is at its cap. Its council tax collection costs per household are £26.79 against a family average of £16.90. Its number of staff per thousand population is 17.5 against a family average of 8.7. Harlow is to efficient local government what J. Paul Getty is to beachcombing. If that is Labour's flagship, heaven help the flotilla and God save the admiral in charge of the fleet.
Hon. Members raised a great many points on the details of the settlements, a number of which related to the new unitary authorities. They will be looking for the efficiencies that we expect will come from bringing services together under one roof. A further tranche of credits will be released later in the year to deal with matters such as redundancy, because local authorities have asked for that.
My hon. Friend the Member for South-West Bedfordshire (Sir D. Madel) and others referred to transitional grant for council tax. I have noted the points that were made. Of course we will consider the needs of

767
local authorities that face the particular strains of transition. My hon. Friend the Member for Wellingborough (Sir P. Fry) referred to social services, and his points were extremely well made in a debate in which individual services have figured very little.
The hon. Member for Hemsworth (Mr. Trickett)—who can be sensible when he does not think about it—said that the formula should take account of mine closures. The formula takes account of the number of short-term and long-term unemployed, and of the number of people who receive housing benefit and income support. He made a serious point about weightings for children, but he will know that the idea that everyone should receive the same value is nonsense. How would he weight the needs of a city such as Bradford, which has a high immigrant population, and some areas in South Yorkshire, which have a small immigrant population? It is a question of judgment and detail, and not of fundamental principle.
It must be recognised that the supertram is a fundamentally misconceived project. If Sheffield had accepted some of the offers from the bus operators to carry out a joint ticketing operation at the start, it might have worked rather better. It seems that to go from where no one lives to where no one wants to go is an interminable journey—but there is still a problem to be solved, and I shall be meeting people shortly in that connection.
This is a sensible settlement, and a necessary settlement. The Opposition are talking nothing but hot air, and I commend the settlement to the House.
Question put:—
The House divided: Ayes 311, Noes 269.

Division No. 63]

[9.59 pm

AYES

Ainsworth, Peter (E Surrey)

Boyson, Sir Rhodes

Aitken, Jonathan

Brandreth, Gyles

Alexander, Richard

Brazier, Julian

Alison, Michael (Selby)

Bright, Sir Graham

Allason, Rupert (Totbay)

Brooke, Peter

Amess, David

Brown, Michael (Brigg Cl'thorpes)

Ancram, Michael

Browning, Mrs Angela

Arbuthnot, James

Bruce, Ian (S Dorset)

Arnold, Jacques (Gravesham)

Budgen, Nicholas

Arnold, Sir Thomas (Hazel G)

Burns, Simon

Ashby, David

Burt, Alistair

Atkinson, David (Bour'mth E)

Butcher, John

Atkinson, Peter (Hexham)

Butler, Peter

Baker, Kenneth (Mole V)

Butterfill, John

Baldry, Tony

Carlisle, John (Luton N)

Banks, Matthew (Southport)

Carlisle, Sir Kenneth (Linc'n)

Banks, Robert (Harrogate)

Carttiss, Michael

Bates, Michael

Cash, William

Batiste, Spencer

Channon, Paul

Bellingham, Henry

Chapman, Sir Sydney

Bendall, Vivian

Clappison, James

Beresford, Sir Paul

Clark, Dr Michael (Rochf'd)

Biffen, John

Clarke, Kenneth (Rushcliffe)

Body, Sir Richard

Clifton-Brown, Geoffrey

Bonsor, Sir Nicholas

Coe, Sebastian

Booth, Hartley

Colvin, Michael

Boswell, Tim

Congdon, David

Bottomley, Peter (Eltham)

Conway, Derek

Bottomley, Mrs Virginia

Coombs, Anthony (Wyre F)

Bowden, Sir Andrew

Coombs, Simon (Swindon)

Bowis, John

Cope, Sir John

768

Cormack, Sir Patrick

Hogg, Douglas (Grantham)

Couchman, James

Horam, John

Cran, James

Hordern, Sir Peter

Currie, Mrs Edwina

Howard, Michael

Curry, David

Howell, David (Guildf'd)

Davies, Quentin (Stamf'd)

Howell, Sir Ralph (N Norfolk)

Davis, David (Boothferry)

Hughes, Robert G (Harrow W)

Day, Stephen

Hunt, David (Wirral W)

Deva, Nirj Joseph

Hunt, Sir John (Ravensb'ne)

Devlin, Tim

Hunter, Andrew

Dicks, Terry

Hurd, Douglas

Dorrell, Stephen

Jack, Michael

Douglas-Hamilton, Lord James

Jackson, Robert (Wantage)

Dover, Den

Jenkin, Bernard (Colchester N)

Duncan, Alan

Jessel, Toby

Duncan Smith, Iain

Johnson Smith, Sir Geoffrey

Dunn, Bob

Jones, Gwilym (Cardiff N)

Durant, Sir Anthony

Jones, Robert B (W Herts)

Dykes, Hugh

Jopling, Michael

Eggar, Tim

Kellett-Bowman, Dame Elaine

Elletson, Harold

Key, Robert

Emery, Sir Peter

King, Tom

Evans, David (Welwyn Hatf'ld)

Kirkhope, Timothy

Evans, Jonathan (Brecon)

Knapman, Roger

Evans, Nigel (Ribble V)

Knight, Mrs Angela (Erewash)

Evans, Roger (Monmouth)

Knight, Greg (Derby N)

Evennett, David

Knight, Dame Jill (Edgbaston)

Faber, David

Knox, Sir David

Fabricant, Michael

Kynoch, George

Fenner, Dame Peggy

Lait, Mrs Jacqui

Field, Barry (Isle of Wight)

Lamont, Norman

Fishburn, Dudley

Lang, Ian

Forman, Nigel

Lawrence, Sir Ivan

Forsyth, Michael (Stirling)

Legg, Barry

Forth, Eric

Leigh, Edward

Fowler, Sir Norman

Lennox-Boyd, Sir Mark

Fox, Dr Liam (Woodspring)

Lester, Sir Jim (Broxtowe)

Fox, Sir Marcus (Shipley)

Lidington, David

Freeman, Roger

Lilley, Peter

French, Douglas

Lloyd, Sir Peter (Fareham)

Fry, Sir Peter

Lord, Michael

Gale, Roger

Luff, Peter

Gallie, Phil

Lyell, Sir Nicholas

Garel-Jones, Tristan

MacGregor, John

Garnier, Edward

MacKay, Andrew

Gill, Christopher

Maclean, David

Gillan, Mrs Cheryl

McLoughlin, Patrick

Goodlad, Alastair

McNair-Wilson, Sir Patrick

Goodson-Wickes, Dr Charles

Madel, Sir David

Gorman, Mrs Teresa

Maitland, Lady Olga

Gorst, Sir John

Malone, Gerald

Grant, Sir Anthony (SW Cambs)

Mans, Keith

Greenway, Harry (Ealing N)

Marland, Paul

Greenway, John (Ryedale)

Marlow, Tony

Griffiths, Peter (Portsmouth N)

Marshall, John (Hendon S)

Gummer, John

Marshall, Sir Michael (Arundel)

Hague, William

Martin, David (Portsmouth S)

Hamilton, Sir Archibald

Mates, Michael

Hamilton, Neil (Tatton)

Mawhinney, Dr Brian

Hampson, Dr Keith

Mayhew, Sir Patrick

Hanley, Jeremy

Mellor, David

Hannam, Sir John

Merchant, Piers

Hargreaves, Andrew

Mitchell, Andrew (Gedling)

Harris, David

Mitchell, Sir David (NW Hants)

Haselhurst, Sir Alan

Moate, Sir Roger

Hawkins, Nick

Monro, Sir Hector

Hawksley, Warren

Montgomery, Sir Fergus

Hayes, Jerry

Moss, Malcolm

Heald, Oliver

Needham, Richard

Heath, Sir Edward

Nelson, Anthony

Heathcoat-Amory, David

Neubert, Sir Michael

Hendry, Charles

Newton, Tony

Heseltine, Michael

Nicholls, Patrick

Hicks, Sir Robert

Nicholson, David (Taunton)

Higgins, Sir Terence

Norris, Steve

Hill, Sir James (Southampton Test)

Onslow, Sir Cranley

769

Oppenheim, Phillip

Stern, Michael

Page, Richard

Stewart, Allan

Paice, James

Streeter, Gary

Patnick, Sir Irvine

Sumberg, David

Patten, John

Sweeney, Walter

Pattie, Sir Geoffrey

Sykes, John

Pawsey, James

Tapsell, Sir Peter

Peacock, Mrs Elizabeth

Taylor, Ian (Esher)

Pickles, Eric

Taylor, John M (Solihull)

Porter, David

Taylor, Sir Teddy

Portillo, Michael

Temple-Morris, Peter

Powell, William (Corby)

Thomason, Roy

Rathbone, Tim

Thompson, Sir Donald (Calder V)

Redwood, John

Thompson, Patrick (Norwich N)

Renton, Tim

Thornton, Sir Malcolm

Richards, Rod

Townend, John (Bridlington)

Riddick, Graham

Townsend, Sir Cyril (Bexl'yh'th)

Rifkind, Malcolm

Tracey, Richard

Robathan, Andrew

Tredinnick, David

Roberts, Sir Wyn

Trend, Michael

Robertson, Raymond S (Ab'd'n S)

Trotter, Neville

Robinson, Mark (Somerton)

Twinn, Dr Ian

Roe, Mrs Marion

Vaughan, Sir Gerard

Rowe, Andrew

Viggers, Peter

Rumbold, Dame Angela

Waldegrave, William

Ryder, Richard

Walden, George

Sackville, Tom

Walker, Bill (N Tayside)

Sainsbury, Sir Timothy

Waller, Gary

Ward, John

Scott, Sir Nicholas

Wardle, Charles (Bexhill)

Shaw, David (Dover)

Waterson, Nigel

Shaw, Sir Giles (Pudsey)

Watts, John

Shephard, Mrs Gillian

Wells, Bowen

Shepherd, Richard (Aldridge)

Wheeler, Sir John

Shersby, Sir Michael

Whitney, Sir Raymond

Sims, Sir Roger

Whittingdale, John

Skeet, Sir Trevor

Widdecombe, Miss Ann

Smith, Sir Dudley (Warwick)

Wiggin, Sir Jerry

Smith, Tim (Beaconsf'ld)

Wilkinson, John

Soames, Nicholas

Willetts, David

Speed, Sir Keith

Wilshire, David

Spencer, Sir Derek

Winterton, Mrs Ann (Congleton)

Spicer, Sir Jim (W Dorset)

Winterton, Nicholas (Macclesf'ld)

Spicer, Sir Michael (S Worcs)

Wolfson, Mark

Spink, Dr Robert

Wood, Timothy

Spring, Richard

Yeo, Tim

Sproat, Iain

Young, Sir George

Squire, Robin (Hornchurch)

Stanley, Sir John

Tellers for the Ayes:

Steen, Anthony

Mr. Richard Ottaway and

Stephen, Michael

Mr. Matthew Carrington.

NOES

Abbott, Ms Diane

Betts, Clive

Adams, Mrs Irene

Blunkett, David

Ainger, Nick

Boateng, Paul

Ainsworth, Robert (Cov'try NE)

Bradley, Keith

Allen, Graham

Bray, Dr Jeremy

Alton, David

Brown, Gordon (Dunfermline E)

Anderson, Donald (Swansea E)

Brown, Nicholas (Newcastle E)

Armstrong, Ms Hilary

Bruce, Malcolm (Gordon)

Ashton, Joseph

Burden, Richard

Austin-Walker, John

Byers, Stephen

Banks, Tony (Newham NW)

Callaghan, Jim

Barnes, Harry

Campbell, Mrs Anne (C'bridge)

Barron, Kevin

Campbell, Menzies (Fife NE)

Battle, John

Campbell, Ronnie (Blyth V)

Bayley, Hugh

Campbell-Savours, D N

Beckett, Mrs Margaret

Canavan, Dennis

Beith, A J

Cann, Jamie

Bell, Stuart

Carlile, Alex (Montgomery)

Benn, Tony

Chidgey, David

Bennett, Andrew F

Chisholm, Malcolm

Benton, Joe

Church, Ms Judith

Bermingham, Gerald

Clapham, Michael

Berry, Roger

Clarke, Eric (Midlothian)

770

Clarke, Tom (Monklands W)

Hoon, Geoffrey

Clelland, David

Howarth, Alan (Stratf'd-on-A)

Clwyd, Mrs Ann

Howarth, George (Knowsley N)

Coffey, Ms Ann

Howells, Dr Kim

Cohen, Harry

Hoyle, Doug

Cook, Frank (Stockton N)

Hughes, Robert (Ab'd'n N)

Cook, Robin (Livingston)

Hughes, Roy (Newport E)

Corbett, Robin

Hughes, Simon (Southward)

Corbyn, Jeremy

Hutton, John

Corston, Ms Jean

Illsley, Eric

Cousins, Jim

Ingram, Adam

Cox, Tom

Jackson, Ms Glenda (Hampst'd)

Cummings, John

Jackson, Mrs Helen (Hillsborough)

Cunliffe, Lawrence

Jamieson, David

Cunningham, Jim (Cov'try SE)

Janner, Greville

Cunningham, Dr John

Jenkins, Brian D (SE Staffs)

Dafis, Cynog

Johnston, Sir Russell

Dalyell, Tam

Jones, Barry (Alyn & D'side)

Darling, Alistair

Jones, Ieuan Wyn (Ynys Môn)

Davies, Bryan (Oldham C)

Jones, Jon Owen (Cardiff C)

Davies, Chris (Littleborough)

Jones, Dr L (B'ham Selly Oak)

Davies, Denzil (Llanelli)

Jones, Martyn (Clwyd SW)

Davies, Ron (Caerphilly)

Jowell, Ms Tessa

Davis, Terry (B'ham Hodge H)

Keen, Alan

Denham, John

Kennedy, Charles (Ross C & S)

Dewar, Donald

Kennedy, Mrs Jane (Broadgreen)

Dixon, Don

Khabra, Piara S

Dobson, Frank

Lestor, Miss Joan (Eccles)

Donohoe, Brian H

Lewis, Terry

Dowd, Jim

Liddell, Mrs Helen

Dunwoody, Mrs Gwyneth

Litherland, Robert

Eastham, Ken

Livingstone, Ken

Ennis, Jeff

Lloyd, Tony (Stretf'd)

Etherington, Bill

Llwyd, Elfyn

Evans, John (St Helens N)

Loyden, Eddie

Fatchett, Derek

McAllion, John

Faulds, Andrew

McAvoy, Thomas

Field, Frank (Birkenhead)

Macdonald, Calum

Fisher, Mark

McFall, John

Flynn, Paul

McKelvey, William

Foster, Derek

McLeish, Henry

Foster, Don (Bath)

Maclennan, Robert

Foulkes, George

McNamara, Kevin

Fraser, John

MacShane, Denis

Fyfe, Mrs Maria

McWilliam, John

Galbraith, Sam

Madden, Max

Galloway, George

Maddock, Mrs Diana

Gapes, Mike

Mahon, Mrs Alice

Garrett, John

Mandelson, Peter

George, Bruce

Marshall, David (Shettleston)

Gerrard, Neil

Marshall, Jim (Leicester S)

Gilbert, Dr John

Martin, Michael J (Springburn)

Godman, Dr Norman A

Maxton, John

Godsiff, Roger

Meacher, Michael

Golding, Mrs Llin

Meale, Alan

Gordon, Ms Mildred

Michael, Alun

Graham, Thomas

Michie, Bill (Shef'ld Heeley)

Grant, Bernie (Tottenham)

Michie, Mrs Ray (Argyll Bute)

Griffiths, Nigel (Edinburgh S)

Milburn, Alan

Griffiths, Win (Bridgend)

Miller, Andrew

Grocott, Bruce

Mitchell, Austin (Gt Grimsby)

Gunnell, John

Moonie, Dr Lewis

Hain, Peter

Morgan, Rhodri

Hall, Mike

Morley, Elliot

Hardy, Peter

Morris, Alfred (Wy'nshawe)

Harman, Ms Harriet

Morris, Ms Estelle (B'ham Yardley)

Harvey, Nick

Morris, John (Aberavon)

Hattersley, Roy

Mowlam, Ms Marjorie

Henderson, Doug

Mudie, George

Heppell, John

Mullin, Chris

Hill, Keith (Streatham)

Murphy, Paul

Hinchliffe, David

Oakes, Gordon

Hoey, Kate

O'Brien, Mike (N Warks)

Hogg, Norman (Cumbernauld)

O'Brien, William (Normanton)

Home Robertson, John

O'Hara, Edward

Hood, Jimmy

Olner, Bill

771

O'Neill, Martin

Spearing, Nigel

Orme, Stanley

Spellar, John

Pearson, Ian

Squire, Ms R. (Dunfermline W)

Pendry, Tom

Steinberg, Gerry

Pickthall, Colin

Stevenson, George

Pike, Peter L

Strang, Dr Gavin

Pope, Greg

Straw, Jack

Powell, Sir Raymond (Ogmore)

Sutcliffe, Gerry

Prentice, Mrs B (Lewisham E)

Taylor, Mrs Ann (Dewsbury)

Prentice, Gordon (Pendle)

Taylor, Matthew (Truro)

Primarolo, Ms Dawn

Thompson, Jack (Wansbeck)

Purchase, Ken

Thurnham, Peter

Quin, Ms Joyce

Timms, Stephen

Radice, Giles

Tipping, Paddy

Randall, Stuart

Touhig, Don

Raynsford, Nick

Trickett, Jon

Reid, Dr John

Turner, Dennis

Rendel, David

Tyler, Paul

Robinson, Geoffrey (Cov'try NW)

Vaz, Keith

Roche, Mrs Barbara

Walker, Sir Harold

Rogers, Allan

Wallace, James

Rooker, Jeff

Walley, Ms Joan

Rooney, Terry

Wardell, Gareth (Gower)

Ross, Ernie (Dundee W)

Wareing, Robert N

Watson, Mike

Rowlands, Ted

Wicks, Malcolm

Sedgemore, Brian

Wigley, Dafydd

Sheerman, Barry

Williams, Alan (Swansea W)

Sheldon, Robert

Williams, Alan W (Carmarthen)

Shore, Peter

Winnick, David

Short, Clare

Wise, Mrs Audrey

Simpson, Alan

Worthington, Tony

Skinner, Dennis

Wray, Jimmy

Smith, Andrew (Oxford E)

Wright, Dr Tony

Smith, Chris (Islington S)

Smith, Llew (Blaenau Gwent)

Tellers for the Noes:

Snape, Peter

Mr. Kevin Hughes and

Soley, Clive

Ms Angela Eagle.

Question accordingly agreed to.
Resolved,
That the Local Government Finance Report (England) 1997–98 (House of Commons Paper No. 203), which was laid before this House on 27th January, be approved.
MADAM SPEAKER then put the remaining Questions required to be put at that hour.
Resolved,
That the Special Grant Report (No. 23) (House of Commons Paper No. 204), which was laid before this House on 27th January, be approved.
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1997–98 (House of Commons Paper No. 205), which was laid before this House on 27th January, be approved.—[Mr. Peter Ainsworth.]

DELEGATED LEGISLATION
Madam Speaker: With permission, I shall put together the motions relating to delegated legislation.
Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),
EMPLOYMENT AND TRAINING
That the draft Industrial Training Levy (Construction Board) Order 1997, which was laid before this House on 14th January, be approved.
That the draft Industrial Training Levy (Engineering Construction Board) Order 1997, which was laid before this House on 14th January, be approved.—[Mr. Peter Ainsworth.]
Question agreed to.

EDUCATION AND EMPLOYMENT
Ordered,
That Mr. Michael Brown be added to the Education and Employment Committee.—[Mr. Eastham, on behalf of the Committee of Selection.]

West Middlesex University Hospital
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Ainsworth.]
10.16 pm
Mr. Nirj Joseph Deva: Madam Speaker, thank you for this opportunity—[Interruption.]
Madam Speaker: Order. Mr. Deva is speaking. Hon. Members must take their seats.
Mr. Deva: I am grateful for this opportunity to raise an issue affecting the health, care and well-being of a majority of my constituents in Hounslow, Brentford and Isleworth: the future of West Middlesex University hospital. The hospital also serves the constituents of my hon. Friend the Member for Twickenham (Mr. Jessel)—who works very hard on behalf of his constituents, and whom I am pleased to see in the Chamber for this debate—and of the hon. Member for Feltham and Heston (Mr. Keen), who is not here because he is indisposed, although he has sent his apologies.
The West Middlesex University hospital, in Isleworth, is a key acute hospital in west London. It serves a local population of more than 310,000 people and plays a vital role for Heathrow airport, not least in offering speedy access to hospital facilities in emergencies. After much careful planning by the hospital NHS trust, the hospital is now preparing for a major redevelopment, which will allow it to respond to the health care demands of the local community well into the 21st century.
There are always many people involved in such a project, but it is right that I should place on record my congratulations to Mrs. Jane Kelly, the chairman of the trust, and to Mr. John de Braux, the chief executive, on everything that they have done to bring the project to its current state of readiness. They have kept me fully involved in the preparations for the proposal as it has developed, for which I am also very grateful. They were ably supported by members of the NHS trust board and all the staff groups at the hospital—the consultants, the junior doctors, the nurses and the ancillary staff, all of whom are united in their support for the proposal, which bodes well for the future.
Three key features distinguish the project. The first is that the West Middlesex's plans allow for redevelopment with no disruption to existing facilities—which is important for patients to know. Secondly, the project has the merit of delivering improved health care services more efficiently. Thirdly, the proposal's flexibility will permit the hospital to alter its operations according to changing demand. I hope that, as a result of those factors, the Minister will be able to give an assurance that all necessary support will be given to help that vital redevelopment programme to proceed as contracts are drawn up and commitments obtained over the next few months.
A few statistics will help to demonstrate the ever-growing need for the high-level care that the West Middlesex University hospital provides. In 1995–96, the hospital provided care for more than 60,000 accident and emergency attendances, resulting in nearly 15,000 admissions. The accident and emergency unit is one of
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the busiest in west London. Last year alone, over 7,000 more patients attended the West Middlesex accident and emergency department. The value of the service provided by the accident and emergency department has become all the more apparent because of the rationalisation at other hospitals in the area.
Last year, West Middlesex University hospital cared for more than 124,000 out-patients, as well as 16,000 planned admissions. It has also been caring for the future of the community, delivering more than 2,000 babies—an average of five babies a day. Not only has it delivered the babies, but it has provided what have been recognised as some of the best maternity services in the country. In addition, mental health services, renal dialysis and endoscopy services are all part of the health care provisions on site. In short, the West Middlesex is wholly capable of providing the high-quality health care that is so desperately needed and greatly valued by the community that it serves.
The existing buildings reflect their 19th century origin. All the patient care is provided by a dedicated staff from many dilapidated and outdated buildings, sprawled across a 20-acre site. Originally built for a workhouse and infirmary, many of the buildings are in poor physical condition and are no longer suitable for the provision of acute care to modern standards. The fact that such care is provided from those outdated Victorian buildings speaks volumes for the staff.
There is a backlog of £28 million-worth of maintenance work, which is needed simply to bring the fabric of the building up to modern standards. It would be far better to spend the money on a new hospital, rather than trying to patch up old, out-of-date buildings.
One example of the inconvenience arising from the situation at the most basic level of patient care is that, because of the site layout, critically ill patients requiring admission frequently spend 15 minutes or more in electric ambulances while being transferred to wards, operating theatres or intensive care units. Excellent care is provided by dedicated staff, but everyone could do without such inconveniences.
The Minister knows that plans are well under way for the hospital site to be redeveloped, with modern facilities of exactly the kind that the community needs. Once approval has been given, there is every possibility that a new hospital can be up and running, serving the people of my constituency and those of my hon. Friend the Member for Twickenham and the hon. Member for Feltham and Heston as early as 1999 or 2000.
Approval of the project would provide the community with a new purpose-built hospital. The benefits would be seen in improved patient care, better value for taxpayers' money, much needed increased accident and emergency capacity, improved facilities for coronary and high-dependency care and wards designed to offer high-quality, single-sex accommodation—an issue that has been in the press recently. In short, it would be a flagship national health hospital for the 21st century, with the flexibility needed for expansion.
The West Middlesex University Hospital NHS trust has already shown its foresight and effectiveness by putting into operation privately financed projects that have led to improved patient services. Last September, for example, the West Middlesex announced a ground-breaking arrangement for the provision of hospital pathology

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services in collaboration with Smith-Kline Beecham. The hospital's new endoscopy unit is another clear example of the management of a privately financed project already in place and working well.
Both projects are ideal models of the way in which the private sector can deliver high-quality services in the public sector, an initiative that has been spearheaded by the Government and is now generally endorsed as the way to the future. Latterly, the idea has even been taken up by some Labour Members.
I note with some concern, however, that my Labour opponent in Brentford and Isleworth still cannot bring herself to support the scheme. She says that she wants a new hospital, but that she is not sure about the private finance initiative. That is an example of her usual fence-sitting; she has nothing to say and no policies, just smiles for the cameras with Tony. If she is waiting for her Labour shadow Chancellor to pay for the development, she and the voters of Brentford and Isleworth will wait for a very long time.
The shadow Chancellor has now accepted the Government's Budget plans, so no more money will be forthcoming. I suggest that my Labour opponent comes off the fence and supports the West Middlesex, its management and staff, all of whom want the private finance initiative project to go ahead. If she found time to visit the West Middlesex University hospital, she could hear that opinion from everyone involved. I do not mean that she should just pop into the hospital to see her Hospital Alert cronies. She could meet the management of the hospital, see the plans for herself and talk to staff groups, none of which she has done so far.
Based on all its experience, the West Middlesex University hospital is extremely confident of its ability to bring about the many benefits that the proposed redevelopment promises. While hands-on patient care will remain exclusively with the national health doctors, nurses and therapists, the consortium will be able to tender for the management and non-clinical functions on site, subject to the normal rules on market testing.
Surplus land will be sold for the development of 350 new homes and all the proceeds will be used to defray the costs of building the new hospital. The West Middlesex University Hospital NHS trust has now completed a careful review of the options for taking the redevelopment forward and it is confident that the £50 million privately financed option will provide significantly greater benefits than those associated with the £11 million Treasury-funded proposal for a partial refit, which was on offer 18 months ago.
It is also agreed that the PFI proposal is considerably better than the only other option, which is to do nothing. Even the do-nothing approach would require considerable expenditure on a backlog of maintenance, just to deliver health care in a safe and acceptable environment. At this point, it is worth stating the obvious; the hospital must develop to survive. It will not be possible for the high standards of care, which everyone rightly expects, to continue in the long term under the present arrangements. Action must be taken if local health care demands are to be met and if services are to improve.
I was grateful to receive in December, as a result of my previous lobbying, a letter from the Minister in which he noted his understanding of the urgency of the situation
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and the need for new facilities in Brentford and Isleworth, which the project will make possible. The PFI option being pursued by the trust has all the strengths of value for money and risk transfer benefits that one could expect. Discussion on those points is under way with the private finance unit.
The consortium is led by Health Care Development Advisory Ltd., Taylor Woodrow plc and Siemens plc, which have significant experience in PFI projects. The proposal is sound. It will provide better health care and it will give value for taxpayers' money within the framework of accepted public policy.
There is now a growing sense of urgency about the need for a firm commitment and approval for the project to secure the future of the hospital. I know that the Minister will understand the difficulties of planning for the future of health care provision without a clear idea of when that future will be decided. In an atmosphere of uncertainty, any community concerns can be played on by the unscrupulous. The West Middlesex plan may not be the largest or best known of the PFI projects currently under review, but it is exactly the type of project that is designed to deliver the highest standards of health care which the Government have tried to promote. I know that the hospital will greatly welcome the Minister's acknowledgement of the importance of the project and I hope that he will support its development into a finished and approved scheme as soon as possible.
10.29 pm
Mr. Toby Jessel: I warmly congratulate my hon. Friend the Member for Brentford and Isleworth (Mr. Deva) on his initiative and success in winning the ballot for tonight's debate on West Middlesex University hospital. He is second to none in his zeal and energy in fighting for all his constituents.
Many of my constituents use the West Middlesex University hospital. It is only one mile from the Twickenham border and is linked by long-established bus routes, so there is a regular flow across health district boundaries from Twickenham, Teddington, the Hamptons and Whitton to the West Middlesex University hospital.
On 21 January, during the debate on the national health service, I intervened in the speech by my right hon. Friend the Secretary of State for Health and asked him to
"comment on the private finance initiative in relation to West Middlesex University hospital, which is a matter of eager and enthusiastic interest to my hon. Friend and me."
I asked him whether he could
"give us any encouragement on that matter, which is important for our constituents so that the existing, old hospital"—
which is 100 years old—"can be replaced". My right hon. Friend replied that I was right to raise my constituents' concerns about the West Middlesex University hospital. He said:
"it is one of the many schemes that local managers are preparing to meet real local need with health authority support and that the Government are determined to see carried through to projects that modernise the capital stock—
that is the buildings—
"of the health service. I can give him every encouragement that the Government are determined to carry that through."—[Official Report, 21 January 1997; Vol. 288, c. 764.]

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On 5 November 1996, in answer to a parliamentary question, the Under-Secretary of State for Health, my hon. Friend the Member for Orpington (Mr. Horam), who will reply to the debate, told me that:
"the trust and consortium that are behind the scheme are now meeting twice a week to give it maximum impetus. I hope that it will proceed at full speed."—[Official Report, 5 November 1996; Vol. 285, c. 1029.]
The hospital urgently needs replacing. On that, I feel as strongly as my hon. Friend the Member for Brentford and Isleworth, as do my constituents. The hospital comprises a large number of deteriorating buildings spread across too wide an area. It has high medical and academic standards and there is great esprit de corps among the staff, but when the buildings are so old it is more difficult to recruit first-class doctors, nurses and other staff. It is not an attractive building to work in. The problem is exacerbated by the pressure from other parts of west London due to changes at Queen Mary's University hospital, Roehampton and Ashford hospital.
The scheme would produce a brand new national health service hospital on an existing site. It would be built on land owned by the national health service and the building would be leased back to the West Middlesex University Hospital NHS trust for 60 years. The hospital would have to find another lump sum, or perhaps after 60 years the new building would again be out of date and would again have to be replaced.
The scheme would mean that hands-on care for national health service patients remained free at the point of service and it is important that it should go ahead without delay. Any hitch in the negotiations would put the whole scheme in jeopardy. There could even be a hung Parliament after the forthcoming general election. That could lead to uncertainty and perhaps a temporary decline in the economy, which might slow down capital projects. We do not know what might happen. I realise that my hon. Friend cannot give a firm undertaking now, but if the scheme could be contracted within the next few weeks, my constituents and those of my hon. Friend the Member for Brentford and Isleworth would have it in the bag, and that is what we dare to hope for.
10.33 pm
The Parliamentary Under-Secretary of State for Health (Mr. John Horam): I am pleased to have the opportunity to respond to the remarks of my hon. Friend the Member for Brentford and Isleworth (Mr. Deva). I congratulate him on securing time to debate the development of the West Middlesex University hospital, which provides crucial services to his constituents. I am aware of his unceasing efforts in pressing the case for improved hospital services in his area. I know that he has left no stone unturned in his efforts to see that West Middlesex University hospital has suitable modern facilities. I know that my hon. Friend the Member for Twickenham (Mr. Jessel) feels equally strongly and has been equally unceasing in his efforts to secure better facilities for his constituents.
I have listened carefully to the points made by my hon. Friend the Member for Brentford and Isleworth. I know very well the inadequacies of the buildings that form the West Middlesex University hospital. Both my hon. Friends made that fair point very strongly. I can understand local concerns to ensure that everything possible is done to bring to fruition proposals for a new hospital development.
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The provision of health care buildings well suited to the delivery of modern health care and their upkeep and maintenance is a major undertaking. The national health service capital building programme is the largest of its kind in the world. More than 750 schemes, each costing more than £1 million, have been completed over the past 10 years. This year, about £1 billion of taxpayers' money will be spent on modernising and improving health buildings and about £500 million will be spent on maintenance. Further projects are at various stages of planning, design and construction.
As my hon. Friend the Member for Brentford and Isleworth will be aware, the proposed redevelopment of West Middlesex University hospital is one of a number of capital schemes being tested for the private finance initiative in the NHS. I am pleased to note that the number of schemes exploring PFI possibilities are increasing. One hundred and fifty schemes, with a total capital value of approximately £2 billion, are testing private finance options at the moment. Those include 22 major schemes worth more than £10 million each. To date, 71 projects have been approved, with a capital value of £626 million. Of those, 43 schemes, of a total capital value of £317 million, have passed contract signature stage.
By vigorously pursuing PFI options that represent value for money, not only can more capital assets be made available, but the NHS can devote more resources to patient care. With the private sector being responsible for providing buildings, the NHS is free to make clinical decisions that are in the best interests of patients.
I am sorry to hear that the Labour opponent of my hon. Friend the Member for Brentford and Isleworth appears to be opposed to the development. My hon. Friend is entirely right to say that the PFI is the way in which to make progress in providing modern health care facilities. As he says, the comparable public sector scheme was smaller and less comprehensive than the scheme now in front of us. As he is well aware, the amount of available public sector finance is strictly limited.
The PFI enables a good scheme, such as the one for West Middlesex University hospital, to jump outside the queue for limited public sector finance and be judged on its merits, and thereby bring to fruition all the hopes of the clinicians and people of Brentford and Isleworth and Twickenham much more quickly than would otherwise be possible. That point seems to be missed by so many Opposition Members, who cavil and whinge about PFI projects.
Despite operating from relatively poor buildings, West Middlesex University Hospital NHS trust provides a full range of excellent health services to the considerable credit of the 1,200 or so doctors, nurses and other staff employed by the trust. The trust provided about 160,000 patient treatments in 1995–96, and my hon. Friend the Member for Brentford and Isleworth will be pleased to know that waiting times have reduced substantially. No one has had to wait more than 18 months for an operation and the total number of patients waiting has dropped from 3,641 in September 1995 to 2,693 in September 1996. More evidence of good performance is to be found in the NHS performance tables. [Interruption.]
Mr. Jim Cousins: On a point of order, Mr. Deputy Speaker. I too have an interest in the West Middlesex University hospital.

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I am trying to follow the Minister's arguments extremely closely, but I am being distracted considerably by a private conversation in the corner of the Chamber. I wonder whether you could bring that to the attention of the hon. Member for Colne Valley (Mr. Riddick).
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): I am sure that the hon. Member's point has been noted.
Mr. Horam: The hospital achieved a significant improvement in the percentage of patients seen within 30 minutes of an out-patient appointment time. I wholly agree with my hon. Friends the Members for Brentford and Isleworth and for Twickenham when they say that first-class medicine is being conducted in what are clearly out-of-date facilities. There is no doubt that something must be done to improve them.
I now refer to the scheme itself. My hon. Friend the Member for Brentford and Isleworth made a point in passing about the excellent maternity facilities at West Middlesex, and referred to the fact that five babies a day are born at the hospital. He and my hon. Friend the Member for Twickenham know that there will be a transfer of maternity and children's services from Ashford hospital to West Middlesex and St Peter's hospitals. This will lead to an increase—more than five babies a day will now be born—in the number of patients referred to the West Middlesex University hospital.
The additional demands on the hospital in terms of a rise in accident and emergency attendances—an increase of 13 per cent. in 1995—and bed-blocking problems has created pressure on the hospital infrastructure, particularly on in-patient admissions. The proposed redevelopment will address these issues, as well as the problems with the existing hospital. It is important not only from the point of view of existing facilities, but in terms of the future demands on the hospital to which we will move new facilities.
The West Middlesex University hospital comprises a large number of deteriorating buildings—some over 100 years old—spread across a wide area. Some of the buildings are no longer suitable for the provision of acute care to modern standards. As a result of the dispersed nature of the hospital, the trust has to use—as my hon. Friend the Member for Brentford and Isleworth said—electrically powered vehicles to transport patients across the site. That is astonishing in the modern age.
The planned redevelopment represents a rationalisation of an extremely inefficient acute site. The scheme originally proposed in the outline business case was a small redevelopment of the surgical and accident and emergency specialties which was constrained by the availability of public funding. This scheme was given outline approval by North Thames regional health authority in 1994.
The Treasury-funded scheme is being tested against a more extensive private finance initiative proposal. The private finance partner has put forward an innovative, although much more capital-intensive, scheme involving
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the rationalisation of a much greater proportion of the trust's estate. It involves the development of three separate health care buildings to provide ambulatory care, medical in-patient facilities and surgical in-patient facilities. The Marjorie Warren unit built in the 1960s would be the only existing building to remain on the site. The PFI proposal is the preferred option of the trust board.
The PFI option allows for greater efficiencies in the use of both clinical and non-clinical manpower which were not envisaged in the original outline business case. The key features of the scheme are: a new NHS hospital on the existing site; a new accident and emergency department, with increased capacity and room for expansion if necessary; a flexible design, allowing bed numbers to rise or fall according to need—this is very important in looking at the planning of modern health care facilities, and flexibility is built into the scheme; one central entrance; and the fact that it will be built on NHS land and leased back to the hospital for up to 60 years.
The scheme also provides opportunities to reduce further the trust's revenue spend year on year, which will be invested in health provision elsewhere in the health authority's area. At this point in time—before analysis of the full business case has taken place and before further negotiations between the trust and the consortia have occurred—it is difficult, as my hon. Friend the Member for Twickenham acknowledged, to be precise in relation to a figure. However, the results are expected to be worthwhile. The health authority supports the principle of the scheme.
The trust has tested for PFI and has chosen a Taylor Woodrow-led consortium as its preferred partner. The trust is now working with Taylor Woodrow to deliver a final draft of the full business case and detailed contracts to North Thames regional office, although there are a number of contractual issues still outstanding. A draft business case has been submitted to the regional office in the last few days. This represents the first opportunity the regional office will have to examine the privately financed proposal in detail in terms of value for money and affordability to the NHS.
My hon. Friend the Member for Brentford and Isleworth said that he wanted me to assure him that the Government would give all necessary support to the scheme, and I can do so. There will be no delay in examining the scheme, and we will give it the attention that it requires to allow it to proceed as fast as it can. He knows that there is a lot of work to be done and that our contractual negotiations have to be completed. We must see the full business case, and the consortiums and the trust have to come forward with a scheme that the health authority can afford. All these hurdles have to be jumped, but I can assure him that we shall give it all the support necessary. The scheme is making good progress, and I will do all that I can to ensure that the excellent progress continues in the interest of providing good health care in modern facilities to the people of Brentford, Isleworth and the surrounding area.
Question put and agreed to.
Adjourned accordingly at sixteen minutes to Eleven o'clock.

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

War Crimes Trials
Lord Campbell of Alloway Lord Campbell of Alloway asked Her Majesty's Government:
Whether the Attorney-General, having consented to the institution of proceedings under Section 1(3) of the War Crimes Act 1991, will consider, before committal for trial, fitness to plead and delay relevant to abuse of process, with a view to exercising his discretion to enter a nolle prosequi.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the power to direct the entry of a nolle prosequi only relates to cases proceeding on indictment, that is, already committed for trial. I understand that the Attorney-General would expect to take account of any available medical evidence when deciding whether to consent to the bringing of proceedings under the War Crimes Act 1991 and in the Serafinowicz case did offer the defendant an opportunity to submit any such evidence, and kept this aspect together with the evidence generally under close review.
Lord Campbell of Alloway: My Lords, I thank my noble and learned friend for his reply. Does he agree that these preliminary objections for trial will inevitably be taken in all these cases and that Mr. Attorney, when he gives his consent to the institution of proceedings, has absolutely no means of knowing the substance of the objections? If so, before protracted committal proceedings, would it be appropriate for there to be some form of ex officio appraisal of consent to prosecute in the light of available evidence, at all events in such cases where the accused is about 85 and suffering from advanced Alzheimer's?
The Lord Chancellor: My Lords, the Attorney-General takes account of all the material available to him at the stage when he agrees to consent for prosecution in these cases. In the particular case to which reference was made, the Attorney-General had regard to all the evidence and information available at the time when he granted his consent. At the time the Attorney caused an inquiry to be made of those representing the defendant whether there was any medical bar to a prosecution and in particular whether the defendant wished to make any representations to the Law Officers concerning his health, mental or physical. No representations were forthcoming.
So far as concerns the other matters preliminary to trial, they were argued before the judge and the judge agreed that the case should go forward to trial, first, of course, on the question of the accused's fitness to plead.
Lord Acton: My Lords, is the noble and learned Lord aware that the Hetherington-Chalmers inquiry which led
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to the War Crimes Act made the key finding in paragraphs 9.10 and 9.50 that there were three cases with a realistic prospect of a conviction? Is he further aware that the noble Earl, Lord Ferrers, wrote to me on 11th March 1994 to say that one of those cases had been abandoned because of a lack of evidence and a second case had been abandoned because the person had died? As The Times of 18th January reported that the Serafinowicz case was the third of those cases, has not the underpinning of the Hetherington-Chalmers Report now collapsed?
The Lord Chancellor: My Lords, the Hetherington-Chalmers Report was based on information available at the time it was made and matters move on. The Act under which these prosecutions were taken was the basis on which the Attorney-General acted in this particular case.

Landmines: Manufacture and Export
2.41 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe asked Her Majesty's Government:
What is their policy on the manufacture and export of landmines.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, the Government's moratorium prohibits the export of all anti-personnel landmines to all countries. There are no such restrictions on manufacture but, as far as we are aware, no British companies have manufactured these weapons for several years.
Lord Taylor of Gryfe: My Lords, I very much welcome the assurance of the Minister. Will she accept that my Question was prompted by the apparent disagreement over the plea by Princess Diana for the complete abolition of anti-personnel mines? I am glad that the position has now been clarified. The initiative taken by the Government last week at the disarmament conference in Geneva was welcome. But will that impede in any way the processes which were agreed at the Ottawa Conference on this subject last year? Can the Minister also confirm that these devices will not be used by British troops, in view of the general agreement that they have no military strategic importance?
Baroness Chalker of Wallasey: My Lords, I can assure the noble Lord that we welcome the comments made by the Princess of Wales in support of a total ban on anti-personnel mines. That is the Government's view also. I can assure him also that our tabling of a mandate in the Conference on Disarmament was done because we believe that that is the best place to achieve the goal of a total ban. We are pressing for an early start to negotiations.
The CD has a good track record in arms control and the wide membership essential for such an agreement. It is notable that Canada, the UN Secretary General and a significant number of countries have already

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pronounced themselves in favour of the Conference on Disarmament considering the APL. That is a good step forward, so there is no disagreement in that regard. In relation to working towards a unilateral ban on the use of mines, it is not the British Army that caused the problem. We do not ban their use if it is for a special purpose. But any such use will be subject to ministerial consent.
Lord Chalfont: My Lords, does not the Minister agree that landmines, whether anti-personnel or anti-tank, are quintessentially defensive weapons? Contrary to what might have been suggested by the noble Lord, they have enormous military significance, especially in the defence of small forces against substantially larger ones. Does not the Minister agree also that it is misleading to say that the mines have no military application? Can she give the House an assurance that the high profile publicity campaigns carried out by people who do not always understand the military implications will not lead the Government into any unilateral action?
Baroness Chalker of Wallasey: My Lords, I agree with the noble Lord that anti-personnel mines, particularly the SMART mines—the only ones now permitted—are defensive weapons. However, if he could see, as I have seen in country after country the terrible situation that exists for ordinary youngsters and adults who have become innocent victims of landmines which were not SMART mines, he would understand why I and so many others are committed not only to demining but also to gaining a global ban. We should not seek to have unilateral bans which allow certain countries to go on using mines. They have a proper military use, but it is extremely limited. I am glad to say that the British Army, when it has to use such mines, does so for limited purposes only, and we hope that that will decrease year by year.
Viscount Waverley: My Lords, I recently returned from Afghanistan, where there are an estimated 10 million unexploded landmines. Can the Minister say whether there is a move to harmonise export arms controls at IGC? If so, which governments are supporting the move?
Baroness Chalker of Wallasey: My Lords, it is not the IGC; I believe the noble Viscount means the Conference on Disarmament.
Viscount Waverley: My Lords, is there a move to harmonise at IGC on arms export controls?
Baroness Chalker of Wallasey: My Lords, there is no such move at the moment. However, our commitment to a total global ban on the transfer, as well as the production, use and stockpiling, of anti-personnel landmines will go a long way to bring that about. The critical need is to persuade all countries to ban the production, use and transfer and to stop indiscriminate use. That is what we are working well towards.
Lord Haskel: My Lords, is the Minister aware that since the Scott Report the Government's credibility on
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the matter of arms exports is at a low ebb? For that reason, can the Minister once again confirm that there are no exports, direct or indirect or by transfer to third parties—third countries like the Channel Islands or the Isle of Man—or in the form of component parts?
Baroness Chalker of Wallasey: My Lords, this Question has nothing whatever to do with the Scott Report. Last week I answered the question which has just been repeated by the noble Lord and I have nothing further to add.
Lord Elton: My Lords, in light of my noble friend's reply to the noble Lord, Lord Chalfont, regarding the horrors of the effects of mines, does she accept that the most humane action we can now take is urgently to lift the mines? We should concentrate our efforts on lifting known mines and convincing the military to mark and map all minefields when they are laid.
Baroness Chalker of Wallasey: My Lords, my noble friend is absolutely right. That is why we have contributed £22 million to humanitarian mine clearance over the past five years. We shall maintain our position as one of the world's leading contributors to demining and shall contribute to the European Union support for humanitarian mine clearance. We have always said that mine lifting is one of the most valuable actions we can take and we are helped in that by the Royal Army Ordnance Corps. However, the marking of minefields needs the consent of those who laid the mines in the first place. I know from bitter experience in Angola that many layers of mines had no such maps or, if they had, they have been destroyed.
Lord Molloy: My Lords, is the noble Baroness aware that our Royal Engineers have given an exemplary example in mine laying? In the last war, every mine that we laid, when it was necessary, could be picked up with the greatest of ease by another group of Royal Engineers when taking over the plans. If the rest of the world had the same ability as our Royal Engineers, laid mines would not be a difficulty.
Baroness Chalker of Wallasey: My Lords, the noble Lord is absolutely right. One of the most heartening things that I am seeing these days is retired members of the British Armed Forces joining with groups such as the Halo Trust and the Mines Advisory Group to teach people in countries which are littered with anti-personnel mines how to lift them safely. We wish them well in that work. The Royal Army Ordnance Corps and other soldiers have also been involved in that work.
The Earl of Lauderdale: My Lords, can my noble friend tell the House which are the countries that seem to be resisting our policy in this matter?
Baroness Chalker of Wallasey: My Lords, it is not yet clear. We do not have a complete rundown. However, we have had support in favour of the Conference on Disarmament considering anti-personnel

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mines from the United States, Canada, France, Italy, Japan and Australia. Some countries, probably among the non-aligned, are not yet ready to sign up, but our persuasion goes on.
Lord Mackie of Benshie: My Lords, I apologise if I asked this Question some time ago, but has progress been made in devising new methods of detecting and destroying the mines, which at the present time is an enormously expensive and laborious business?
Baroness Chalker of Wallasey: My Lords, there may have been, but I am not technically expert in these matters. There is good ability now among many local demining teams. However, the noble Lord is right. It is extremely time-consuming. It can take up to an hour to search thoroughly an area of a square metre. If one thinks of the many square miles that are littered with these mines, it will obviously take a very long while to carry out the clearance. Automatic mine clearance is fine in certain countries that have power and have the facilities to use very expensive equipment. But most clearance is carried out locally by small groups who are specially trained to detect very carefully.
Lord Bruce of Donington: My Lords, is the noble Baroness aware that our Ghurka colleagues are especially skilful in mine clearance?
Baroness Chalker of Wallasey: My Lords, I am sure they are. They have been so skilful in every other task they have ever been asked to undertake that I have no doubt that they are skilful in mine clearance too. I have not met them on mine clearance operations but I have met many others. Most British soldiers know how to do it.

Bus Industry: Privatisation
2.51 p.m.
Lord Clinton-Davis Lord Clinton-Davis asked Her Majesty's Government:
Whether they are satisfied that privatisation of the bus industry has in overall terms been of benefit to the travelling public.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, yes. The Government firmly believe that the travelling public and indeed the taxpayer have benefited substantially from the privatisation and deregulation of the bus industry. They have brought greater operating efficiency, introduced the benefits of competition and innovation in meeting passenger needs and given a reduction in the burden on the taxpayer of subsidising the industry.
Lord Clinton-Davis: My Lords, I thank the Minister for that extraordinary reply. Is he unaware of the fact that a government-appointed committee has in the past few days reported lower service quality, vehicles that are too old, unreliable services, loss of ticket
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interchangeability, lack of information for the travelling public and fares higher in real terms than before deregulation? How does he square that criticism with his response?
Viscount Goschen: My Lords, I do not believe that that is a fair summary of what the report says. We believe that it is a useful contribution to the debate on bus deregulation and on transport generally. What the noble Lord also failed to mention is that bus mileage has increased by around 25 per cent. outside London, bus operating costs per vehicle mile have decreased and there has been a total decrease of 58 per cent. since 1985 in terms of the subsidy to the bus industry. Deregulation and privatisation have worked. We do not say that there are no problems with the operators disseminating information, and so forth, and we are keen to work with the industry to help improve that.
Lord Berkeley: My Lords, is the Minister aware that the report from which he has just quoted states that the number of bus passenger journeys has fallen over the past 10 years by 29 per cent.? The report makes eight recommendations on how to improve ticketing and the cost of journeys as between road and rail. Do the Government have any plans to implement what is in the report?
Viscount Goschen: My Lords, the report has only recently been published. We shall certainly be looking at it very carefully. We think it is a contribution to the debate on the issue. The fact is that bus usage in terms of patronage of the buses has been declining certainly since the 1960s and possibly since before then. But we have seen a levelling off of that decline. As I said, we have seen a healthy increase in bus mileage driven as well as the innovative type of services—for instance, using small buses—that were not in existence before deregulation.
Lord Borrie: My Lords, does the Minister agree that one of the purposes of the privatisation of the industry was to increase competition; that the competition authorities have spent an inordinate amount of time trying to deal with takeover bids and other anti-competitive and predatory activities by bus companies; and that the Government have failed to implement the promises made as far back as 1989 to increase the investigative powers of the Office of Fair Trading and the sanctions available against anti-competitive practices and to enhance competition policy in this country?
Viscount Goschen: My Lords, competition is of key importance to the bus industry. Since deregulation and privatisation, we have seen an increase in competition, with all the benefits that has brought to passengers. I certainly have not heard any calls to renationalise the bus industry or indeed to reregulate it. But perhaps the Opposition can put me right if that is not the case.
As the noble Lord correctly said, the Government intend to bring forward legislation as soon as parliamentary time permits. Meanwhile, the Office of

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Fair Trading booklet, Restrictive Fair Trade Practices in the Bus Industry, explains the present need and procedures for registering agreements between parties. This is certainly an important area.
Baroness Thomas of Walliswood: My Lords, is the noble Viscount aware of the great problem of the non-availability of tickets across different companies, so that one cannot go in with one company and out with another? The problem is having a severe effect on the use of buses in other than urban areas. Can he confirm that the perceived cost of bus transport outside urban areas puts local authorities which are attempting to reduce the amount of travel by private motor car at a severe disadvantage?
Viscount Goschen: My Lords, the bus industry is key to the achievement of that aim. The noble Baroness may be interested to hear that 85 per cent. of services are currently run on a commercial basis. Subsidy is given to routes that are not run on a commercial basis. The question of ticketing and the co-operation, or otherwise, between bus companies are central issues and are ones which I understand the report considers. We shall want to respond in fuller detail to the report when we have had more opportunity to consider its recommendations.
Lord McIntosh of Haringey: My Lords, on the one hand the Minister acknowledges that bus "ridership" has declined dramatically and on the other hand boasts an increase in the number of bus miles run. Does that not indicate at the very least commercial incompetence, and surely, much more: a decline in the quality of service?
Viscount Goschen: No, my Lords, I do not agree. I do not agree that there is any contradiction in what I said. It is important that more bus mileage is run. The innovative services that have come forward have been a factor in the reduction of the rate of decline of bus usage, which, as I am sure the noble Lord will admit, has tailed off over the past year or two.
Lord Teviot: My Lords, I agree with my noble friend that, by and large, privatisation has been a success. However, as he has rightly said, after 10 years certain matters have to be looked at. Is he aware that this is far too large a subject to be dealt with by a Starred Question? Does he agree that it might be better to delay the discussion until my Unstarred Question is debated on 10th March when we can deal with things properly?
Viscount Goschen: My Lords, I am all for dealing with things properly. Indeed, I relish talking about the bus industry at the Dispatch Box. However, that is a matter for the usual channels.
Lord Stoddart of Swindon: My Lords, I am quite prepared to wait until March for the Unstarred Question debate. But, in the meantime, will the Minister go to Oxford to see how privatisation is working there? If he
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does, and manages to get through the air pollution and noise pollution, will he make inquiries to see whether the law of diminishing returns is operating in that city?
Viscount Goschen: My Lords, from time to time I go to Oxford, but I am sure that my colleagues in the department with direct responsibility for this area of policy are fully aware of developments there.
Lord Clinton-Davis: My Lords, perhaps I may recommend that, before 10th March, the Minister reads the report to which I referred earlier? Does he agree that it makes very serious criticisms? Therefore, what is being done to deal with them instead of doing so, as the Minister has done, in a somewhat complacent way?
Viscount Goschen: My Lords, the noble Lord may be interested to know that I have read the report. It was a major contribution to the enjoyment of the weekend to make sure that I had read it before coming to the Dispatch Box. It is an important subject. As the noble Lord will be aware, it is a very full report; no doubt he has also read every word of it. The fact is that, rather than coming to an instant conclusion on a first reading, it is better to digest the great amount of work that has gone into the report before arriving at our firm conclusions.
Lord Cledwyn of Penrhos: My Lords, will the noble Viscount take the trouble to travel by bus and train from North to South Wales? If he does, he will find himself back in 1850.
Viscount Goschen: My Lords, I have spent quite a good deal of time in Wales during the past year. I shall certainly wish to talk to my colleagues about bus travel in Wales. I shall seek to inform myself further on the subject.

Rochester Prison: Hunger Strike
3.1 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
What they are doing to bring to an end the hunger strikes by asylum seekers and others in HM Prison Rochester.
The Minister of State, Home Office (Baroness Blatch): My Lords, the prison and immigration service at Rochester prison are making every effort to care for those detainees who have chosen to refuse to take regular prison meals, but they are also making it clear to them that it is in their own best interest to stop their hunger strike. There is no justification for them to take this action and the right course is for them to end their protest immediately.
Lord Dubs: My Lords, no one will condone a hunger strike—but this is by people who are the victims of torture and persecution throughout the world. Is not the right answer for the Government to say that it is wrong that we should detain people in prisons and detention centres against whom there are no criminal charges

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whatsoever merely on the decision of an official? Would not the right answer be to have a judicial process other than the bail system, which does not work, to safeguard these people and ensure that justice is done? The hunger strike would then be over immediately.
Baroness Blatch: My Lords, I am not absolutely certain what the noble Lord is suggesting. There is a proper process. There is the right of appeal for all people who enter this country and apply for asylum. We detain in our prisons about 1 to 1.5 per cent. only of those applicants whose cases are outstanding. That means that between 98 and 99 per cent. are allowed into the community awaiting the appeal procedure.
The noble Lord referred to offences. I do not intend to use names because it would be inappropriate for me to do so. But some of the people who are operating this protest are involved with crimes, including child abuse, shoplifting, drugs, blackmail, living on immoral earnings and fraud, to name but a few.
Baroness Gardner of Parkes: My Lords, in view of the remark made by the noble Lord that these people have been tortured and have suffered terrible conditions throughout the world, can my noble friend assure us that they are not suffering such terrible conditions in our prisons and there is no question whatever of continuing torture and maltreatment of these people?
Baroness Blatch: My Lords, I can say two things to my noble friend. First, if people are genuine victims of torture that would be sorted out in the substantive consideration of their case. Secondly, these asylum seekers are being looked after. There is a separate wing in the prison and there is no connection with convicted prisoners. There are D and E wings. There is also a hospital wing where some of the detainees are sent if they need medical care and attention. Food and water are provided throughout the day if they wish to partake of it. Medical attention is offered, although sometimes some of them refuse it. Care, attention and counselling have been given to persuade these people not to continue with the protest, and they are continuous.
Lord Jenkins of Putney: My Lords, does the Minister agree that it is quite wrong that anyone should be imprisoned without trial? Why have we reverted to this barbarous and uncivilised practice?
Baroness Blatch: My Lords, I do not agree with the noble Lord that it is barbarous. I have mentioned how few people are detained. They are detained because it is judged that they would not conform to the normal conditions of release. There are good reasons why they are detained, and it is done very rarely. The asylum seekers still have the freedom to apply for bail. Some have done so and in fact one was granted bail. Bail is considered independently of government and after taking into account the likelihood of a detainee conforming to the conditions of release.
Earl Russell: My Lords, can the noble Baroness tell us of any other circumstance in which people may be
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detained in a British prison without trial, without cause shown and without limitation of time? If the answer is no, can she tell us whether asylum seekers are so treated because they are seen as lesser breeds without the law or because the Home Office regards the safeguards as outdated and they are no longer taken seriously?
Baroness Blatch: My Lords, I find that a preposterous premise on which to base a question. I have already given some reasons. Sometimes asylum seekers are detained because on an independent judgment there is considered to be a decided likelihood that they will abscond while awaiting either deportation or for the process to be completed. Some have been detained on conviction or on suspicion of having committed a crime. I have given reasons why they should be detained; and they are treated humanely. We have conformed to all our obligations under national and international law in the way in which we are caring for these detainees.
Lord McIntosh of Haringey: My Lords, the Minister referred to independent judgment. Is it not the case that the United Nations High Commissioner for Refugees requires that the granting of bail should be considered by a competent, independent and impartial authority, whereas in this country it is in the hands of Immigration Department officials, who can hardly claim to be independent? Is it not also the case that, even when bail is granted, an asylum seeker has to obtain two referees and find £2,000 for bail? Does that not of itself increase the number not only of those who are held in detention but of those who feel themselves to be unjustly held?
Baroness Blatch: My Lords, unless the noble Lord has evidence to the contrary, we are not in contravention of our obligations under national and international law. We certainly conform to the United Nations Convention on Refugees.

Selective Cull (Enforcement of Community Compensation Conditions) Regulations 1996
3.7 p.m.
Lord Carter Lord Carter rose to move, That an humble Address be presented to Her Majesty praying that the order (S.I. 1996/3184) laid before the House on 18th December be annulled.
The noble Lord said: My Lords, as these orders were laid under the negative procedure, I have tabled these prayers in order to secure a debate on them. Perhaps I may make it clear at the outset that I do not intend to divide the House at the end of the debate. I believe that it will be for the convenience of the House if we debate the two orders together. The second order can be dealt with more formally when we reach it on the Order Paper.
With these orders—to coin a phrase as regards the BSE saga—we have reached the end of the beginning. I do not intend to rehearse the whole sorry BSE story today; it has been done often enough. Each time a new piece of information comes to light the responsibility of the Government for this disaster becomes clearer and clearer. Perhaps one day it will be possible to conduct an independent, authoritative inquiry—not to apportion political blame—in order to learn the many lessons to be learnt for government, public administration, scientific policy and the restoration of consumer confidence in our beef industry.
These orders comprise the final part of the five parts of the Florence Agreement negotiated by the Government in June last year. The House will recall that the Prime Minister returned from Florence, claiming a negotiating triumph, saying:
"This timetable is essentially in our hands".—[Official Report, Commons, 24/6/96; col. 22.]
I can recall remarking at the time that I thought that it was very unwise of the Prime Minister to make such a claim and then indeed to compound the problem by actually saying that the export ban would begin to be lifted by October/November of last year. When the Minister replies to the debate, perhaps he could give us the Government's estimate of when they expect the export ban to begin to be lifted.
Having agreed to the selective slaughter scheme as an integral part of the Florence Agreement, the Government announced in September that they were not, in fact, going ahead with the scheme after all. They claimed new scientific evidence in support of their change of stance and suggested that, because of the backlog of slaughterings in the over-30-month scheme, sufficient abattoir capacity was not available for them to be able to implement the selective slaughter scheme.
Two questions arise from the Government's stance last autumn. If the new scientific evidence then was a reason for not going ahead with the selective slaughter scheme, what is the even newer scientific evidence which the Government must now have which has enabled them to change their mind again? Also, if—as was certainly the case—the Government's mismanagement of the over-30-month scheme created an enormous backlog in the abattoirs, why did not the Government lay the orders, take the power to identify the animals to be caught by the scheme and then place restriction orders on those animals? The Minister will remember that the original proposals for the selective slaughter scheme mentioned slaughter or restriction. Indeed, that could have been done under the third order, which does not require parliamentary procedure—the BSE (No.2) Order 1996.
If the Government had done that, slaughtering under that scheme could have started as soon as the backlog of the over-30-month scheme had been cleared. Above all, the farmers who are involved in the scheme would have known where they stood. They would have been able to plan. They would have known what replacements were needed and how many animals they were going to lose. Why did not the Government do
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that? They said in a Statement made by Mrs. Angela Browning that they originally intended to lay the orders last July. Why this incessant chopping and changing? Why did not the Government take the powers last July so that the vets could get on to the farms, identify the animals and place restriction orders on them so that the farmers and everybody else would have known where they stood?
Of course, we all know the real reason for the delay and indecision. The Government knew that whatever they did the export ban would not be lifted. What a triumph of negotiation! First, we had the policy of non-co-operation with our European partners. I can remember the Minister telling me across the Floor of the House last summer that the policy of non-co-operation had produced the Florence Agreement, which the Prime Minister then said would lead to the beginning of the lifting of the export ban by October/November. The Government then said that they would not complete the Florence Agreement after all because the ban would be lifted anyway. Now they are introducing a selective slaughter scheme with apparently no commitment from Brussels regarding the lifting of the ban. Could the Minister please tell the House exactly what has been achieved by those six months of dither and indecision?
There are, of course, a large number of questions about the details of the scheme. It would be helpful when the Minister replies if he could explain how many of the detailed provisions are required by European regulations and how many are entirely within the remit of the UK Government and are not required by the European Union? If one looks at the two orders, it seems clear that the provisions of the first order (on BSE compensation) are entirely within the power of the UK Government and that the second order is required to bring them into line with European requirements. It would be helpful if the Minister could tell us how much of the detail of the scheme is entirely within the remit of the UK Government.
It would also be helpful if the Minister could tell us something about the situation now regarding the proposed certified herd scheme. Has a formal submission been made by Brussels regarding the scheme and the way in which it is supposed to work? When do the Government expect the scheme to start? How will it operate? Is it correct that the great majority of the certified herds at the outset are likely to be in Ulster? Incidentally, the MLC has suggested the title "Export Beef Scheme" rather than the "Certified Herd Scheme", which seems like a good idea.
The Minister will be aware of the very considerable concern that has been expressed by farmers and their organisations regarding the way in which the compensation is to be calculated, the definition of the number of productive animals in a herd and the capping of compensation payments. It would be helpful if the Minister could go into some detail regarding the operation of the scheme and particularly about how the Government respond to the practical points that have been put to them by farmers and their organisations.
Then there is the extraordinary decision to include in-calf heifers in the calculation of productive animals in the herd. In 40 years of farm management accounting,

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I have never included in-calf heifers in a calculation of average herd size. It seems to be a straight Treasury trick just to reduce the number of herds that qualify for top-up compensation through over 10 per cent. of the herd being taken. If the size of the herd is increased by 25 per cent., the chances of having 10 per cent. taken are reduced.
The Government have already said that they estimate the total cost of the scheme as around £120 million. To calculate that figure, they must have an estimate of the amount of top-up compensation within the £120 million. Average herd replacement rates are between 20 per cent. and 25 per cent. A farmer will keep about 25 heifer calves, 25 yearlings and have 25 heifers to be put in calf for every 100 cows. That is how one calculates the replacement rate. As I have said, the Government must have a figure for the amount of top-up compensation within the £120 million. We all know what average herd replacement rates are. Therefore, it should not take a moment to calculate the saving to public funds as a result of including in-calf heifers in the definition of a "herd". It would take only a moment, so perhaps the Minister can give the House the figure when he replies to the debate. We are talking about the saving to public funds of including in-calf heifers in the calculation. Incidentally, how is the in-calf heifer to be defined? Presumably, it will be on a positive pregnancy diagnosis. Who is to do that, and who pays? I saw in the farming press that one of the definitions being suggested was when the heifer is first put to the bull or to AI. If that is correct, it reflects a remarkable degree of optimism regarding the outcome of the service procedure.
On the question of payment, the NFU has pointed out that the Intervention Board has a target to pay farmers within 21 days of animals being removed from the farm. Are the Government prepared to guarantee that timescale? After all, we had a target for the over-30-month scheme which missed by a mile and we were given a target for the lifting of the export ban. The Government must not be surprised, therefore, if in the case of BSE their targets are regarded as something of a movable feast.
I am sure that the Minister will also want to deal with the important question of the effect on quotas in the dairy and suckler herds if animals are removed from the herd as a result of the scheme.
Only this morning a point of which I was not previously aware was drawn to my attention. It seems that if a herd is subject to TB restrictions, movement is controlled and any reactors are taken for slaughter on the basis of 75 per cent. of valuation, subject to the current maximum of £630. It appears that under these orders any BSE selective slaughter culls which are found on farms with TB restrictions will be compensated as TB reactors and not by using the compensation formula set out in the statutory instrument. That compensation formula is on a replacement basis, not market value, and is not subject to the 75 per cent. reduction. It would be helpful if the Minister could clear up that point.
There is also the vexed question of maternal transmission. Can the Minister give the House the latest information on that? How will the selective slaughter scheme accommodate the problem if there is found to be a low level of maternal transmission in the national herd?
Throughout this whole sorry business the Opposition have behaved responsibly. There has been no attempt in the other place to exploit the Government's non-existent majority. We have every right as an Opposition to point out the Government's shortcomings. As it happens, my time as an Opposition spokesman on agriculture in this House, which commenced in 1987, has almost exactly coincided with the BSE crisis—although the philosophers among your Lordships will recall that a connection is not a cause. I can well remember over the years how the Government have been pressed to take certain actions and how they have responded—or failed to respond. However, my honourable friend Mr. Gavin Strang made it clear in the other place on 21 st January when the orders were debated there that he would not ask the House to vote against them, as I did at the beginning of this debate.
We supported the Florence Agreement and made it clear that we would support all necessary measures to bring this crisis to an end. But it is a sorry commentary on this whole business that we are now forced to support orders that will result in the slaughter of perhaps 100,000 perfectly healthy animals with the resultant worry and frustration of the farmers who own them and the cost to the taxpayer. Although the BSE crisis and the stance of our European partners in this matter come long after the days of Winston Churchill, an observation that he made in another place in 1934 is peculiarly apt:
"…the greatest target in the world, a kind of tremendous, fat, valuable cow tied up to attract the beast of prey, we are in a position in which we have never been before".
I beg to move.
Moved, That an humble Address be presented to Her Majesty praying that the order (S.I. 1996/3184) laid before the House on 18th December be annulled.—(Lord Carter.)
3.21 p.m.
The Earl of Kinnoull: My Lords, it is a privilege to follow directly the noble Lord, Lord Carter, on the subject of agriculture. I congratulate him on having achieved 10 years as Opposition spokesman. Perhaps he will continue that role! The noble Lord has introduced a number of timely debates on BSE for which I am sure the House and my noble friend are grateful. However, I detected that the noble Lord's usual balance of experience was somewhat tainted by a political eye in terms of blaming the Government for virtually everything that had happened. No doubt that is totally unfair. This has been the most horrendous experience for agriculture, producers, the Government and even consumers.
I support the regulations despite the fact that there is to be a further dreadful slaughter of approximately 100,000 dairy cows and suckler cows which are to be sacrificed without any real scientific evidence. The

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noble Lord reminds us that as this is the fifth and final stage of the Florence Agreement, in the next few months surely we must expect the start of the lifting of the ban by the Commission.
Like others, I received a comprehensive briefing from the National Farmers Union. I pay tribute both to the National Farmers Union of England and Wales and the National Farmers' Union of Scotland. They have done a fantastic job on behalf of producers and the industry generally in providing hope and seeking to get to grips with this dreadful situation. I cannot claim to have mastered all the nuances of the compensation regulations. No doubt the noble Lord, Lord Mackie, will guide us with his incisive description of what all this means. But it was clear from the briefing that there were two matters which appeared to be unfair and did not really achieve what the Government hoped to achieve—that is to say, the replacement value of the cattle to be slaughtered and fair compensation. The noble Lord, Lord Carter, mentioned in-calf heifers. The situation is a strange one. I am sure that my noble friend will provide a clear explanation as to why this has been drawn as it has. Further, the top-up payment arrangements appear to be somewhat ungenerous at the threshold level. I hope that my noble friend will be able to say something about that.
Referring to the details of the regulations, I hope that my noble friend will have time today to say a little about the programme and procedures for the relaxation of the EU ban and the introduction of the certified herd scheme. At the same time, it would be interesting to know what contribution was being made by the Commission to these regulations in regard to compensation. No doubt my noble friend has figures relating to that.
Clearly, the most important task that faces the Government and producers is to win back the confidence of consumers. This has not been helped by the extraordinary report of the European Parliament committee. I note that it was designated a temporary committee. I hope that it is "very" temporary. It has not been helped by rumours that one reads about, for example, that a German Galloway cow may have passed the disease through maternal transmission. All of these are continuing uncertainties.
I feel that the best way that the industry and both Houses of Parliament can fight on behalf of the industry for the confidence of the consumer is to bring forward the computerised tagging system or tell them what is happening about the investigation and report of the committee and support the efforts of producers in the premium quality beef programmes. I suggest that the important consumer leaders in this country are such organisations as McDonald's and schools. I very much hope that they are looking carefully at all of the actions that the Government and the producers have taken to cleanse the industry of this dreadful disease.
I hope that when my noble friend replies not only will he clarify the compensation terms under the regulations but confirm his confidence that producers can look forward to a light at the end of the tunnel in the not too distant future.
3.27 p.m.
Lord Mackie of Benshie: My Lords, I like to speak after the noble Lord, Lord Carter, and the noble Earl, Lord Kinnoull. Certainly, the noble Lord, Lord Carter, has provided all of the detail. It gives me greater scope to look at the general situation than if I have to pose the questions that I trust the Minister has taken away to answer.
It is true that this is a necessary political move simply to restore the confidence that we have lost in Europe by making an agreement and then reneging on it for no very good reason. A great many animals which have no prospect of having BSE will be slaughtered, but if that takes out a number of such animals, restores confidence and gets the Government back on a decent footing in Europe there is a chance that the whole matter may be cleared up. We can then make a start on putting the herds in Northern Ireland and Scotland that have had very little BSE onto a footing where they can begin to recapture the markets that they have lost.
I turn to the attitude of the Government. I believe that they need to learn a lesson from the payment of half-compensation originally proposed for animals with BSE which were slaughtered. That must have resulted in quite a number of animals going back into the food chain. They corrected that and paid full compensation, but I hope and trust that they will learn that lesson when it comes to dealing with the herds which have BSE in them. As I understand it, a rough basis is simply going to be that if a herd has an animal which has had BSE, then they will look at all the cattle born in the same year and they may well be slaughtered. This can have an appalling effect on the herd.
I was never a very good stockman, although I was a dairy man. I am afraid to tell you that I was always more interested in the end result in terms of pounds, shillings and pence than I was in the animals; but I know that most breeders of stock are passionately interested in what they are doing and in the animals which they are breeding. I also know that a great many farmers who suffered the complete elimination of their herds in the days of the foot and mouth slaughter suffered terribly, some to the extent of the distress actually killing them.
The Government should approach the negotiations with the farmers whose herds are affected with a great deal of sympathy. Certainly, they want a far higher possible level of compensation than £1,000. I see that the NFU is suggesting a figure of £2,500. A pedigree cow which is producing and has been producing youngsters, whose milk yield rises, is worth a great deal of money in a herd, and to limit it to a figure such as £1,000 cannot be right.
The noble Lord, Lord Carter, correctly attacked the Government for saying that they will change the basis of the herd. I have never heard of a herd of 100 cows being described as 100 cows with followers; one always has the milking cows and then one has the followers: a herd of 100 with the followers associated thereto. It would be grossly unfair. Compensation will be infinitely greater for farmers who buy in the replacements than people with closed herds—and these are the people who are proudest of their herds, who have worked hardest

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with them. It is unfair if there is to be a different basis of compensation. It is a petty, unworthy move, one quite unworthy of our Minister in this House. I am sure that he personally disapproves of it, and I hope that he wins the fight to have it removed.
There is a number of other particular points, but I wish to stress the treatment of the negotiations which take place during the selection of the animals to be taken out of a herd. The compensation is important; but a sympathetic treatment of the individual problems of a pedigree herd owner is also very important.
From this, I hope that the Government will go on to convince first the people of this country and the people of Europe that British beef is the safest in Europe. It almost certainly is, if we are carrying out the regulations properly, because nowhere else are so many safety measures taken, because we had the biggest outbreak. It is as certain as it can be that our beef in this country is probably the safest in Europe. We have taken out the affected parts and we inspect the slaughterhouses properly, I hope. Perhaps the Government should ask a member of the Commission to come and look at any slaughterhouse they choose, without any warning. This sort of thing would do a great deal to advance the day when we can register the animals along the lines already followed in Northern Ireland, where we can promote the excellent product and get the industry back on to a decent footing.
3.35 p.m.
Lord Palmer: My Lords, I too am grateful to the noble Lord, Lord Carter, for once again raising this tragic subject. As I live in Scotland, I wish to support the principled position that has been adopted by the National Farmers' Union of Scotland; namely, the implementation of the Florence Agreement and the lifting of the export ban.
From an early date in this sad business I have had no interest to declare, having gone out of dairy and beef production some years ago. But Scottish farmers have been and are realists. They have recognised and understood consumers' concern for responsible fanning practices. They have realised that the Florence Agreement pre-conditions—right or wrong—have set a template for getting back consumer confidence and for getting the export ban lifted. Already during this debate we have realised how increasingly complicated this whole BSE subject has become.
These orders are therefore most welcome. They implement the undertakings given by the Prime Minister last June, since when BSE as been discussed six times in your Lordships' House and there have been no fewer than 60 written answers. These orders provide the opportunity, once in place, to negotiate sales of Scotch beef in overseas markets.
Scottish agriculture is particularly sensitive to the prevailing conditions of beef production and it accounts for 28 per cent. of total Scottish agricultural output. So its exclusion from export markets has been very harmful. Not only did it deny sales that have accounted for 20 per cent. of all markets; it removed the least price-sensitive part of demand. Scotch beef has for
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many years had a deserved niche at the top end of the market throughout Europe. It should be allowed back, and as soon as possible.
As to the details of the measure, only close investigation will prove how many animals actually are in the "at risk" group by virtue of being suspected to have fed from the same materials as calves, as known cases of BSE. As the noble Lord, Lord Mackie, has already mentioned, the number of BSE cases in Scotland was extremely small in any case, and it may be supposed that not many animals will be involved in this additional slaughter. But no matter how small or how large the numbers, it is right in principle that we should support the measure as being in the wider public interest and in the interest of restoring confidence in our rural areas.
For farmers themselves, there is bound to be some disquiet about the compensation scheme. It should not be allowed to delay implementation and some parts have indeed been less than generous. I would like to refer to two aspects of the arrangements. One involves money, the other does not.
The aspect which does not carry any cost implications is the matter of timing. We should not ignore the potential disruption to farm businesses—both beef and dairy—which could arise if a number of cattle have to be taken from a single farm. Where this happens, a suitable transition period must be allowed. In the case of dairy farms, this could be accomplished by a phased removal of animals. Thereby, milk quota obligations could be observed and there could be prevention of too much dislocation to farm businesses.
For beef herds—the suckler herds which are mainly in the most difficult upland areas—it is more a case of extending the timing of replacements. Animal breeding is not like making cars. You cannot step up the production line and make a few more on any given day. This is a terribly important point to take on board. So we must be sensitive to the needs of the farmers affected, most especially where pedigree animals are involved. The recommended solution is to allow an extended period during which compensation assistance can be applied to the replacements.
That brings me to the compensation itself, the money issue. Market value compensation is inadequate for making up the numbers of beef suckler herds. Full replacement cost, including replacement cost of a cow by a heifer with calf at foot, is recommended. And where dislocation costs can be proved, for example in closed herds which have to breed replacements, these should be widely available.
I look forward to receiving the Minister's assurance and I commend the measure to this House.
3.39 p.m.
Lord Stanley of Alderley: My Lords, I am a beef producer, not a dairy farmer, so I reluctantly accept that if we are ever to get the EU to allow our beef into Europe, we must make obeisance, worship, and obey the craven images in Brussels and instigate this totally illogical slaughter.

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The thought of that unnecessary slaughter appals me and if a similar thing happened to my flock, I should be very reluctant to co-operate, to the extent of breaking the law. Our bureaucratic masters must try to understand that to many farmers building up a herd or a flock is their life's work and endeavour. They will feel very strongly about it.
However, at the end of the day, financial considerations can sway ideals and, given fair compensation and efficient management by MAFF, I suppose that I might be persuaded to co-operate. But, sadly, this order does not inspire me with confidence in either the compensation or efficient management by MAFF. I realise that some noble Lords may think that it is not right to compensate at all, but I feel sure that, the Government having taken the decision to do so, all noble Lords would agree that it should be done fairly and efficiently.
This order does not compensate fairly. I see no evidence that MAFF will organise it any more efficiently than it did with the original cull. To embarrass my noble friend Lord Lindsay, I only hope that MAFF will try to do as well in England and Wales in the future as it has in the past done in Scotland.
On compensation, the definition of a "herd" to include in-calf heifers is a disaster. It will militate against our best self-contained herds in favour of the flying herd, for all the reasons given by the noble Lords, Lord Carter and Lord Mackie of Benshie, and clearly stated in the other place on 21st January. This will cause and already has caused ill feeling and non-co-operation. If the scheme is to work, such co-operation is vital.
Can my noble friend therefore help on the following matters: first, will he give a more specific definition of how vets will interpret "cohort years" and "feeding groups"? I hope that he will be able to say that they will be allowed to be flexible and, having been flexible, I hope that he will be able to confirm that their definitions will be acceptable to our lords and masters in Brussels. Secondly, will the Inland Revenue now follow the pattern of including in-calf heifers in the herd as being eligible in future, for Inland Revenue purposes, for the herd basis? What is sauce for the gander must be sauce for the goose, or whichever way it is.
How will vets deal with incorrectly maintained records? It is no good saying that farmers should keep good records. I am sure that I should. That will not solve the problem. If there are bad records we must try somehow to get them right. The only way in which that will be done is by sympathetic and understanding officials, and enough of them.
Finally, there is the matter of payment. The Government have said that they "hope to pay" within 21 days of slaughter. That means 28 days plus from leaving the farm. Bearing in mind the past record of MAFF and WOAD and their poor performance and slow payment with things such as IACS and headage payments, will my noble friend say whether that timelag could be shortened. It would help restore some confidence in MAFF's efficiency. I should say that I have nothing but admiration for the unfortunate
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MAFF officers on the shop floor. My complaint, as I have said before, is further up the line. I would not trust MAFF in Whitehall to run a burger bar. I wish that it would import just one person with current practical knowledge. I suppose that there are no burger bars now!
As the whole BSE problem is crazy, I suppose that we must suggest crazy solutions, such as this order. I wonder whether, like the noble Lord, Lord Carter, my noble friend will say that, if and when we complete the cull, there is any hope of lifting the beef ban.
3.44 p.m.
Lord Grantchester: My Lords, I thank my noble friend Lord Carter for bringing the attention of the House to these statutory instruments relating to the accelerated cull of cattle. I should at the outset like to declare an interest in that I own a dairy farm in Cheshire.
It is generally agreed that this cull cannot be justified on scientific grounds. It has been reported that BSE will die out around the year 2001 irrespective of this cull. Nor can the cull be justified on the grounds of public health, as all at-risk animals are excluded from the food chain by the over-30 months scheme. It cannot be justified on the grounds that it will open up either the domestic market, even from BSE-free herds, as this is a process of discreet proposals; or the export market, as there is no quid pro quo for this in the Florence agreement. If farmers are being asked to support a cull without foundation and to little avail, the response will largely depend on their perception of how they will be treated. It behoves the Government to restore farmers to the position they would have been in had there been no cull. These statutory instruments are deficient on both these points.
Before examining these orders, I should like to point out to your Lordships the unsatisfactory manner in which matters are proceeding at the farm gate. These orders came into force on 24th January and visits to farms by the state veterinary service started on 27th January. I received a letter from my MAFF service centre dated 23rd January which referred me to a scheme booklet. When I telephoned my regional centre I was informed that these booklets had yet to be produced and that I should telephone headquarters at Tolworth. I was visited last Friday by a divisional veterinary officer to have the procedures explained, but even he had not seen the booklet. This is an extremely unsatisfactory state of affairs. In December, the ministry published a discussion document and I am disappointed that the statutory instruments do not differ from this document, given the robust challenges which the industry made to certain proposals contained in it.
There are several deficiencies in the Sis. Take, for instance, the definition of "herd" in paragraph 4(3)(a). The definition's inclusion of immature heifers in calf is entirely contrary to common practice. It also contradicts the Government's usual practice in relation to schemes, census figures and legislation, including that covering taxation on the herd basis. A herd of cows in all other circumstances is considered to include only productive animals; that is, cows that have calved at least once.

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Farmers will inevitably conclude that this unprecedented definition has been used simply as a device to reduce their eligibility for top-up payments. Furthermore, these savings will fall only on those producers and pedigree breeders who rear their own replacements. This definition is unacceptable.
Another deficiency relates to the compensation payments referred to in paragraph 4(1)(a). As the cull is irrelevant as regards public health, any taking of animals by the state must be fully compensated. And by that I mean full replacement cost, not 90 per cent. as in the order. Compensation should also cover consequential losses.
The enhancement of compensation set out in Schedule 2 is also inadequate. Consequential losses do exist below the 10 per cent. of herd threshold proposed by the orders. Also, the £1,000 per animal top-up limit and the maximum level of 25 per cent. of herd are entirely arbitrary figures. The top-up should have no per animal limit, which would simplify calculations. The banding limit should also be amended to reflect the levels proposed by the Country Landowners' Association: namely, below 5 per cent. of herd culled will receive a 10 per cent. top-up; between 5 and 10 per cent. of herd, a 20 per cent. top-up; between 11 and 20 per cent of herd, a 30 per cent. top-up; and more than 20 per cent. of herd, a 40 per cent. top-up.
Perhaps I may also draw your Lordships' attention to the ministry's discussion document and its definitions of "cohorts", "cohort years" and "feeding groups". It is very helpful and welcome that common sense and individual farming practices will be taken into account in drawing up each farmer's list of "exposed" cattle. However, I would ask the noble Earl, Lord Lindsay, to confirm that objections will not be raised by the Standing Veterinary Committee such that the approval of the cull is jeopardised. In this regard, the question of the definition of cohort being extended to include maternal transmission, as mentioned in paragraph 7, has still to be resolved.
The Natal Herd Report, which must be filled in by the veterinary officer when visiting each farm, refers only to the last born calf of BSE cases and then only if it is still in the herd. It would be unacceptable for the cull to begin and payments, including top-ups, to be determined before it was agreed what bearing, if any, maternal transmission has on the scheme as approved. It would be unacceptable for this process to have to be done all over again.
Paragraph 9 of the discussion document refers to "solid food". Are the Government aware that certain milk replacer powders contain added animal protein? I understand that there has been a case of BSE in a herd that did not buy in any foodstuff other than milk replacer.
As regards, paragraphs 23 and 27, accountability for the farmer must end when the animal leaves the farm and the period of compensation must start then. Payment must be within a defined period of time, with penalties for late payment. Discipline is demanded of the Intervention Board. But to make compensation pay-outs only after slaughter is confirmed by the abattoir places the farmer at a disadvantage, complicates matters and lengthens the time period.
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The discussion document also states that the Government will approach the Commission about the impact of slaughtering on other schemes. Can the noble Earl confirm that the HLCA beef and suckler cow premiums will still be paid to fanners who will no longer be able to meet the animal retention conditions of these schemes as a result of the cull? Can the Minister confirm also that there will be no difference in the tax treatment of compensation between animals taken under the compulsory and voluntary provisions of the orders?
These orders are not mere legislative detail but are of fundamental importance to the future of our farming industry. Everyone wishes to see an end to BSE as quickly as possible. All the measures now in place must be enforced fully and effectively as part of the process of building greater confidence in the safety and wholesome nature of British beef. It is, therefore, with great dismay that farmers learned of Germany's rejection of implementing a Community-wide extension of UK safety measures such as the rejection of specified bovine material. That is appalling after last week's news that there has indeed been a case of BSE in Germany.
In view of that, I hope that the noble Earl will confirm that the Government will press for the enforcement of all measures across the whole European Union. As other countries' under-reporting comes to light and further bans are implemented, such as the ban by Russia and Egypt on Irish beef, concern increases that, just as the United Kingdom rebuilds its beef industry, we could suffer from a new collective ban of all European countries' products to third party countries.
Regarding cattle of European origin, can the noble Earl confirm how many have subsequently become confirmed BSE cases? Is it the case that BSE-positive cattle that have been imported and reared in the UK for a period exceeding 22 months are deemed to have become infected from feed within the UK? If this is the case, how will cohorts of these cattle be determined and traced?
Finally, serious thought must be given to ending the rolling nature of the 30-month age for exclusion of beef from the food chain. If we claim that all possible precautions are being enforced, beef can be deemed safe from animals born after a certain date. What is the Government's thinking on this and what date do they have in mind?
Re-cycled meat and bonemeal was rejected from all feedstuffs earlier last year. I understand that a team of EU inspectors declared themselves satisfied with all the measures being implemented, at abattoirs during September 1996. Will the noble Earl confirm that the date of 1st September 1996 could be the definitive date?
The farming industry has been in crisis for 10 months and still the Government have not been able to come up with the right measures to give farmers the confidence and security they need to plan for the future. We have before us today two further measures which fall short in several regards. Until the Government respond to these concerns, our doubts over Ministers' ability to find a way out of the crisis will remain. Perhaps it will take a change of government for us to get the action we need.
3.56 p.m.
Lord Marlesford: My Lords, first, I must declare my interest as a dairy farmer who has had BSE within his herd. I certainly could not support these orders, although I understand that it is a tradition of your Lordships' House that we do not vote against secondary legislation. However, we owe a debt of gratitude to the noble Lord, Lord Carter, for giving us the opportunity to debate these orders. I believe that in order to judge them and learn the lessons, we should look at them against the whole background of this sorry story.
I suggest that the BSE saga has been one of the most expensive examples of government muddle in the annals of public administration in this country. I do not know how much it has cost. We are told £2 billion, £2.3 billion and £2.5 billion. For the purpose of argument, I would happily settle for £2 billion; that is, two thousand million pounds. Let us think of the opportunity cost of that money.
The greatest part of that expenditure cannot be justified neither on the basis that it has contributed significantly and proportionally to public health; or that it has succeeded in restoring our markets overseas; or that it was necessary to restore the British beef market (because I understand that the British domestic beef market, outstandingly in the European context, is already very close to what it was before BSE arose. Of course, that is much to the credit of the good sense of the British people).
First, on public health grounds, as I understand it—I shall be subject to correction—so far there have been only 14 cases of the dreaded CJD. That is with every hospital and doctor in the country on the sharp lookout for cases. It is questionable as to whether CJD is caused by BSE. That is in no way proved as yet. Even if it were, in terms of proportionality and the other calls on public spending of that amount of money, bearing in mind the other diseases which humankind suffers, I do not believe that we could conceivably justify that level of expenditure for that incidence of disease. That is my personal view. Speaking as a farmer, I am not sure that I do not feel more sorry for the taxpayers than for the farmers in this matter with this huge amount of public spending.
In order to learn from the past and thus be able to judge the orders now before us, we need to look at what I believe to have been the four fundamental errors which have been made in handling BSE. I should like to say a few words on the first three but will merely refer to the fourth because it has already been so fully dealt with by other speakers.
The first error was the failure to prevent cross-contamination of foodstuffs. That dates right back to when the noble Lord, Lord Carter, first became Labour spokesman on such matters—no cause and effect—in 1987 or so. It means that no steps were taken by the Ministry of Agriculture at that time to prevent manufacturers of animal foodstuffs from making the foodstuffs in which the suspect materials were not to be included in the same plant as the foodstuffs in which they were still allowed. That was an unforgivable and
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hugely costly mistake which I believe to have been largely responsible for the level of BSE cases over the past eight years. I believe that it has been a major factor.
There will I hope one day be a very specific inquiry as to exactly where the technical advice to Ministers fell down. I believe that fingers should be pointed. Clearly this was not a political matter; indeed, you cannot expect a Minister to think of such things. But the risk became apparent much earlier than when the Government finally took action in March of 1996. That was the date from which it was forbidden to use the same plant and machinery for making foodstuffs in which the banned substances were incorporated as well as foodstuffs in which they were not allowed. I would also suggest that there is quite a responsibility—I hesitate to use the word "liability"—on some of the manufacturers because they continued to use the same plant, thereby hazarding so many animals which ate the contaminated foodstuffs.
The second error was the sad mishandling of public relations in this country. I am afraid that I must blame my right honourable friend Mr. Stephen Dorrell to a large extent. I remember hearing with horror that broadcast on the "Today" programme during which he was being pressed in the irresponsible way that the media engage in from time to time. He said that he would take whatever advice was given, and was then asked whether that meant that he would, if necessary, order the destruction of the entire national herd. Instead of saying, "What an absurd hypothetical question; I have no intention of commenting on such nonsense", he said, "I will merely say that we will take the advice that we are given". Of course, the nine o'clock news led on that—indeed, I sat in my car and listened to the headline, "Minister envisages possibility of the destruction of the entire national herd". As I said, the public relations were not well handled either by the Government or by the media. For the latter, it was a perfectly lovely scare story but it just happened to be a rather serious one for all of us as taxpayers, as farmers and as a nation.
The third error was a lack of appreciation of the diplomatic dimension of the whole affair. There was the assumption that our European colleagues would be united with us in the desire to get British exports of beef back on to world markets and into their markets as soon as possible. However, nothing could have been further from the truth. We all know the degree of Schadenfreude that there is in Europe about Britain. It was really very predictable that, for all sorts of reasons which there is no time to go into now, there was little likelihood of there being other than the rubbing of salt in every wound that could be found. It is of course ironic that, as I understand it, the Germans are those who are now suffering the most in terms of their domestic market because the German people appear to be more panicky about beef than any other country in Europe.
I turn now to the fourth point, which has already been dealt with by other speakers in detail. There has been a lack of clarity, of certainty and of logic in the various schemes which have been muted, "unmuted", put forward, not introduced and which are now being introduced. What, therefore, would be my own view of the final situation? I have examined the incidence of

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BSE at the present time. I have with me one of the Written Answers of 23rd January in which my noble friend Lord Lucas most kindly provided the weekly number of confirmed cases in each week during 1995-96. There has, of course, been a fall but it has been a pretty irregular one.
Let us, for example, compare the average of the first 10 weeks of 1996 with the average of the last 10 weeks of 1995; that is, a 20 week-period. If we do so, we actually find that in the first 10 weeks of 1996 there were 234 confirmed cases a week and that in the last 10 weeks of 1995 there were only 221 cases—an actual increase of 6 per cent. Since then there was a welcome reduction in single figures in the closing weeks of 1996. The average for the last 10 weeks in 1996 is 113 confirmed cases, which means under half the rate during the first 10 weeks of 1996. I believe that at least part of that is due to the fact that no animals are now being fed with contaminated food. Indeed, I believe that that was probably being phased out before the Government introduced their regulations in March 1996.
Given the real situation in Europe, the domestic market in Britain and, indeed, the huge costs incurred so far, quite frankly, if I were advising the Government, my inclination would be to let BSE come to its natural and—it is to be hoped—rather rapid end, which I believe it will. Only when that happens will we be able to get back overseas markets. Perhaps some of those countries will realise that in order to restore confidence in their own beef they should play down rather than play up the risk of British beef. That would be my recommendation. However, I fear that it will fall on deaf ears. Nevertheless, if my noble friend Lord Lindsay has the time to comment on what I have said, I should be most grateful. Indeed, had my noble friend been handling the matter from the beginning, I suspect that we would not be in this situation today.
4.7 p.m.
Lord Peyton of Yeovil: My Lords, I hope that noble Lords will bear with me if I take the opportunity at this stage of the debate to express a few opinions. First, I rather regret—and not for the first time—the convention in your Lordships' House not to oppose or vote against secondary legislation. Secondly, although I shall not go into the details, for me the orders are the culmination of a nightmare saga which seems to have a quality of unreality, garnished with stupidity and even wickedness. The effect of the orders will be destructive of healthy animals; it will be crushing for the people principally involved who have spent a lifetime building up a herd; and it will also be onerous in the extreme for the taxpayer. I beg leave to doubt whether the estimates of the cost will prove to be adequate or whether the compensation thereby provided will be fair.
I fear that we have here just one more instance of a reactive gesture which will be very expensive and which will achieve nothing. I hope desperately that I am wrong, but I cannot imagine that any of those scientists who are at present advising either the Commission or member governments will be ready to recommend the raising of the ban on British beef. That being so, nothing will be achieved by this measure except a great deal of
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expense and considerable misery. I would not have spoken in this debate at this stage had it not been for my heavy heart in the face of proposals which I think are totally unwarranted and ridiculous.
4.10 p.m.
The Parliamentary Under-Secretary of State, Scottish Office (The Earl of Lindsay): My Lords, I join other noble Lords in expressing my gratitude to the noble Lord, Lord Carter, for giving the House the opportunity to discuss the selective cull regulations. It also gives the Government the opportunity to set out the wider context of this almost unprecedented event.
I stress to noble Lords on the other side of the House and to my noble friends Lord Marlesford and Lord Peyton that the Florence framework placed five commitments and prerequisites on which the opening up of the export markets depends. At the same time it placed obligations on our European colleagues and on the European Commission. When this selective cull is under way we will have complied with the fifth and last of the obligations to which we signed up. We will then have kept our side of the bargain. It will then be for all of us, through negotiation, to make sure that the commitments made by our colleagues are also honoured.
I was surprised when the noble Lord, Lord Grantchester, suggested that it would take a change of government to sort this out. I was especially surprised when the noble Lord, Lord Carter, seemed to agree with that sentiment. I think everyone in the entire country believes that the ban is unjust, that it has no basis in common sense, and that there is no scientific basis for the ban on British beef whatever. Yet it was the colleague of the noble Lord, Lord Carter, in another place—the Opposition spokesman on agriculture—who described the ban as being both prudent and wise. The industry was disappointed when it heard that assessment by the honourable Member for Edinburgh, East. This House must remember that it was the Labour Party which felt there was some sense in this ban. The noble Lord, Lord Carter, looks puzzled, but I can refer him to both quotations if he needs them. That single, unjust, unscientific act of banning British beef has caused a greater loss of confidence in the product and throughout our industry than any other single event.
The noble Lord, Lord Carter, in some of his more general remarks, made some allegations which ought to be dealt with. It was at Florence that the Prime Minister insisted that as far as possible the Florence framework would be negotiated through scientific and veterinary committees, and the political element of the lifting of the ban would be minimised as far as possible. It was regarded as being something of a victory—because it was resisted initially—that the political dimension should be put on the back seat as much as possible.
Having established therefore that science and empirical data form a part of the process, it would have been a dereliction of duty on the part of the Government if, when the new scientific evidence was produced over the summer, we had simply ignored it and pretended that, despite the scientific element discussed at Florence,

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we were going to disregard science from then on. Since BSE was first identified in the late 1980s we have always taken account of the latest scientific understanding of it, and we have always promptly followed the advice of those scientists who are widely considered to know most about it. To have then disregarded the scientific data that emerged this summer—which was not available to anyone else in Europe when the Florence Agreement was signed—would have been bad government. It was not only the United Kingdom Government who wanted to assess that new science in the light of the selective cull that had been agreed at Florence; the European Commission and Commission advisers wanted to make sure whether or not the new science could be reconciled with the selective cull.
The noble Lord, Lord Carter, suggests that we were chopping and changing; we were quite simply making sure that the latest science did not in any way cast doubt on the plans that had been signed at Florence. I reiterate that the Commission as much as ourselves sought to examine that. The noble Lord, Lord Carter, also suggested that the backlog in the abattoirs created by the over-30-months scheme, which was a legitimate obstacle to starting the selective cull sooner, was an irrelevance. I remind the House and articulate an interest on behalf of our dairy and beef industry in saying that, had we identified farms and placed restriction orders on individual animals on farms before we were able to process them, slaughter them and pay compensation for them, we would in effect have blighted not only animals but, inevitably, have cast a blight over farms too. What would the farmers have been able to do? The restriction orders would have been in place, the reactor ear tags would have been in the ears of the cattle, and people would have known that those farms were listed as BSE-affected farms. However, the cattle would have stayed on the farms because the over-30-months scheme was taking all our capacity. The farmers would have had to look after those animals without any compensation and without our being able to see the process through quickly and efficiently. There was a sound practical reason for making sure that we had capacity in our slaughter system before we started on the selective cull.
A number of noble Lords have mentioned some general points, not least the noble Lords, Lord Mackie and Lord Grantchester, and my noble friends Lord Peyton and Lord Marlesford. I must turn to some of the specific details of the orders, but I shall deal with one other aspect that lies behind the need for these orders. A number of noble Lords have suggested there is no scientific basis for a selective cull. However, there is a scientific basis for it in that veterinary scientists have identified these animals as being those which are most likely to have been exposed to infected feed. Therefore, these are the animals which are conceivably most at risk. The scientific community has said that BSE will not die out before a specific year—which may be the year 2001—through introducing a selective cull. The logic of choosing these animals is based on science.
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The noble Lord, Lord Grantchester, and my noble friend Lord Marlesford were in a sense right to say that the end date of BSE as a problem in this country would not change. However, the decline in the incidence of BSE in the United Kingdom has already fallen dramatically, despite the specific periods to which my noble friend Lord Marlesford chose to refer. The selective cull can only accelerate the speed with which that decline is evidenced.
The noble Lord, Lord Grantchester, was absolutely wrong when he suggested that there was no link between the selective cull and the reopening of the export markets. I think it is common knowledge throughout the industry—I know that he is a prominent member of that industry—and it is certainly common knowledge throughout all the farmers' unions of the United Kingdom which all endorse this cull, that we shall not get beef or beef products from this country back on to the world markets until we have carried out this selective cull. Therefore there is an inextricable link between a selective cull being initiated and negotiations to open up our export markets. No noble Lord should forget that there is a link between the selective cull as the last prerequisite to the opening up of the export markets, and the lift that that will give to the British domestic market in beef.
My noble friend Lord Marlesford doubted whether there was a link between the £2 billion so far committed—it will probably be more in the three years from March 20th 1996—and the recovery of confidence within the British domestic market. I have to disagree completely with my noble friend. It was the measures that we took quickly after 20th March, not least the over-30-months scheme, that helped restore British public confidence in beef as a product. While I disagree with my noble friend's analysis, he was right to point out how strong has been British consumers' confidence in beef. It is heartening to everyone involved in the crisis.
Towards the end of last year, there were months when more hindquarter quality British beef products were being sold than were sold 12 months earlier, prior to the BSE crisis. Two large retailers at present are selling more beef from Scotland, for instance, than they ever sold before. The confidence that the British consumer has shown in British beef has been tremendous. However, the £2 billion, as part of the first two years of confidence building and industry building measures, will be vital to that trend. My noble friend cannot say that there is no connection between the two.
The issues relating specifically to the orders are the result of the agreement that we signed at Florence. As I said, the possibility is that although the science that emerged during the summer months has not caused us to change our minds about the current details of the cull, when the maternal transmission results from the long-running study are available in February or March, some adjustment may be made to take account of the findings. We cannot be definitive on that at present but it will become clear shortly.
Therefore, in this debate we are dealing with cattle born in one voluntary and three compulsory cohorts spanning July 1989 to June 1993. Various noble Lords

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have speculated about the exact numbers with which we are dealing. No one—not even the veterinary scientist charged with seeking to give best estimates—knows how many of the cattle from those cohorts will have been dealt with through the over-30-months scheme or some other means.
The orders concerned are the Selective Cull (Enforcement of Community Compensation Conditions) Regulations 1996 and the BSE Compensation Order 1996. Noble Lords will be aware that there is a third related order, as the noble Lord, Lord Carter, pointed out, which is not subject to parliamentary procedure. That is the BSE (No.2) Order 1996 which confers powers to restrict and slaughter animals. Taken together, these measures provide the enabling framework for the selective cull.
The selective cull compensation regulations give effect to the European Commission regulation which provides for the co-financing of the compensation by the European Union. I can tell my noble friend Lord Kinnoull that the European contribution is 70 per cent. of the market value of the compensation that will be paid to affected animals. The Commission regulation relates to the slaughter, treatment and disposal of cull animals identical to those for the over-30-months scheme. Finally, the compensation regulations create offences and specify penalties.
The BSE Compensation Order 1996 revokes and replaces the 1994 Order, and contains new provisions prescribing the amount of compensation payable for animals slaughtered under the selective cull. I cannot give the noble Lord, Lord Carter, an exact distribution among the orders between those details which can be attributed directly to a UK prerogative and those which can be directly attributed to European obligation. However, the entire framework of orders with which we deal today arises from the commitments we made at the Florence framework, so there is a European dimension to almost everything at which we look.
I shall turn to compensation payments to farmers in a moment, but first, I wish to cover other issues which do not deal with compensation.
Most importantly, I must stress that the cull arrangements between the agriculture departments and Intervention Board will be kept under close review by Ministers. Various noble Lords have expressed some misgivings that perceived failures in the system to date might mar the operation of the selective cull. We very much hope that, however accurate or inaccurate their perceptions, the selective cull will be a smooth and efficient operation. Operational details will be provided in a scheme booklet to be sent to all beef and dairy farmers probably in the week beginning 10th February. Perhaps I may echo a point made by the noble Lord, Lord Mackie. Tracing will be very thorough, as will be all the other details connected with the scheme, in the expectation of an EU mission to examine the detail of the procedure of the selective cull in due course.
The State Veterinary Service will be thorough but it will also be as flexible and sensitive as possible. The SVS has already started detailed discussions with farmers. Any practical difficulties experienced by
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farmers will be handled, we hope, both with sensitivity and consistency. I pick up a point made by the noble Lord, Lord Palmer. We shall seek wherever possible, and wherever requested, to phase the slaughtering of a herd with the corresponding need to complete the cull as quickly and sensibly as we can. But we hope that flexibility and sensitivity will be able to accommodate the concerns raised by the noble Lord, Lord Palmer.
We shall liaise closely with farmers to achieve minimum disruption to herd management in every other way. It goes without saying that welfare issues will be uppermost in the practical arrangements made.
My noble friends Lord Stanley and Lord Grantchester asked about cohorts and feeding groups. The aim is to identify animals which are most likely to have been exposed to the risk of infection and to slaughter and destroy them. The basis of that approach is that feed containing meat and bonemeal has been the main and perhaps the only source of BSE infection for cattle. Scientific evidence suggests that most cattle were infected by eating such feed when they were less than six months old. The scheme is accordingly targeted on animals which are likely to have been exposed when they were young to the same risk infection from solid feed as confirmed BSE cases. A group of animals born on the same farm during a particular period is referred to as a cohort. That is not necessarily all the animals born in the same year. It will depend on calving patterns and feeding history.
We recognise, as does the State Veterinary Service, that management patterns vary on different farms and the risk of infection by feed may straddle two cohort years, or be restricted to only a part of one cohort year. Therefore we hope that through sensible investigation by the SVS and sensible access to farmers' records, we shall be able to reflect those sensitivities.
The noble Lord, Lord Grantchester, can be reassured that we have developed the cull proposals in conjunction with the European Commission and the Standing Veterinary Committee. We are confident that they are familiar with the approach that we are adopting to the SVC.
My noble friend Lord Stanley asked what would be the case where farm records did not exist. There are standard procedures for dealing with such circumstances. Enforcement authorities and the SVS currently check farm records, and should advise farmers of any inconsistencies and take the appropriate action. Farmers have been obliged to keep these records since 15th October 1990, and they should have been visited by the SVS or the enforcement authorities since then. I reassure my noble friend Lord Stanley that extra staff have been taken on and trained in order to cope with the selective cull.
I turn to payments and compensation. I shall deal first with the matters of quota and premia raised by the noble Lord, Lord Carter. An exemption has been granted to those affected by the cull to lease dairy quota after 31st December 1996. Producers affected by the selective cull will be able to lease out unused permanently held quota provided that they registered

1459
with the intervention board by 31st December. That lease cannot be initiated until the slaughter has taken place.
To turn to the beef special premium and suckler cow premium, we have approached the European Commission about the position of animals slaughtered compulsorily during the scheme's retention periods. We hope to advise further on that point in the near future.
I reassure my noble friend Lord Stanley that we have agreed a target with the intervention board that payments should be made within 21 days of the date of slaughter or the completion of the farmer's registration with the board, whichever is the later. Moreover, payments will be made electronically, straight into a farmer's bank account, rather than using the system that is part of the over-30-months scheme, whereby payments are sent first to a third party before being sent on to the farmer. In any event, we shall closely monitor the achievement of the 21-day target.
We understand completely the sensitivities and concerns which the detailed compensation and top-up arrangements have provoked. They were discussed in detail with farming interests. We believe that our proposals represent a fair balance for both the farmer and the taxpayer. I hope that that will bring some pleasure to my noble friends Lord Marlesford and Lord Peyton.
I will give a very quick outline of the arrangements. The compensation per animal is not capped in any way whatever. I stress that point to the noble Lords, Lord Carter and Lord Mackie, who suggested that capping might extend to the compensation. It does not. In the case of male animals, market value will be paid whatever that market value is; and for female stock, compensation will be either at market value or 90 per cent. of replacement value, whichever is higher. I stress that there is no capping on that.
The cap relates to top-up. For herds which lose more than 10 per cent. of their productive animals a top-up payment over and above the compensation will also be available in recognition of the dislocation that may be caused until herds are properly re-established. The top-up, for which both suckler and dairy herds may qualify, is capped at £250 per animal. However, the compensation for that animal is not capped. It is important to stress that difference.
I also assure the noble Lord, Lord Grantchester, that the top-up will be cumulative. It will be recalculated if further animals are taken from a herd at a later date; for instance, if the maternal transmission study suggests that additional animals should be taken. So there will be a recalculation and a reapplication, and further payments, if triggered, will be made to the farmer.
A number of noble Lords dealt with the definition of herd size. I stress that we are entirely sympathetic to the range of opinion that has emerged from the farming industry and others as to how this issue might be approached. We are also very sympathetic to the impact on closed herds. We understand the difficulties. That is why compensation will be one and a half times the normal top-up rate.
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The definition of herd size has generated some debate. I stress that we reflected carefully on the representations made. We should look at the productive potential of animals in the herd over the relatively short period of the cull. The top-up was designed to reflect to some degree the dislocation to a business arising from the loss of a significant number of animals over and above the compensation.
A period of adjustment, while replacements are integrated into the calving and milking pattern of the herd is understandable. However, it would be impractical and time-consuming to seek to measure the exact period and detail of each adjustment and any associated costs for each and every business. Therefore we have to use sensible guidelines which can act as a proxy measure. I do not intend to go into the exact detail of the guidelines today, but they will be made available to all farmers. I shall, if pressed, be happy to explain them to others at an alternative time.
Lord Mackie of Benshie: My Lords, as I understand it, the Minister has sympathy for the point of view that we expressed—namely, that the herd number should be on the traditional basis—but he does not intend to do anything about it.
The Earl of Lindsay: My Lords, I do have sympathy. Let me explain the logic and rationale. Perhaps I may cite the example of why, for top-up purposes, in-calf heifers should not be excluded from the definition of a herd. Let us take two farms, Farm A and Farm B, with similar-sized herds, both of which are due to lose a similar number of animals through the selective cull. The herd at Farm A has just calved and has 20 newly calved heifers when officials visit. Farm B has heifers which are due to calve in a couple of weeks. In those two cases, where all the circumstances are identical save for calving dates, which are about two weeks apart, different treatment in relation to top-ups is arbitrary and illogical. That is what would happen if one excluded in-calf heifers. We have therefore included a logic and an equity through incorporating in-calf heifers. Noble Lords may wish to consider this point when reading Hansard before approaching either myself or MAFF to seek further details.
I stress that the compensation package overall is more generous than for other diseases. The top-up is not intended to cover consequential losses entirely: compensation is designed to cover the value of the animal based on the formulae that we have agreed. The top-up is simply a contribution to dislocation.
I shall deal quickly with the point about tax. A booklet on taxation matters will be sent to all beef and dairy farmers who are affected. It will therefore be possible for each and every farmer to take up issues with the Inland Revenue such as how in-calf heifers are dealt with on the basis of the information provided by the booklet.
I hope that I have explained some of the principal points raised by noble Lords. I hope that the House will feel able to agree the selective cull. This has been a useful opportunity both to remind the House of the

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essential reason for the selective cull and to answer some of the practical points raised by the noble Lord, Lord Carter, and others.
4.37 p.m.
Lord Carter: My Lords, I am extremely grateful to all noble Lords who took part in the debate. I shall be extremely brief in replying. I must apologise for forgetting to declare an interest at the outset. I am a director of a farming company with dairy cows. We have had BSE in the herd, but fortunately it looks as though we shall not be affected by the selective slaughter scheme.
The Minister is absolutely right: we shall have to read Hansard to determine the exact meaning of his remarks in relation to top-up compensation and the reason for including in-calf heifers. As I listened to him, I had the feeling that the explanation would have been easier to understand in the original Sanskrit.
To return to the point about recovery of the market, we should not become over-excited. It is perfectly true that sales of cuts, roasts and prime beef are back to 90 per cent. or more. There is still a reduction in the consumption of processed products; and exports are non-existent. Overall, the total for the beef market is still down, as compared to the total before BSE, by some 30 to 35 per cent. I received those figures from the MLC only last week. The overall market, which is the one that concerns us, is still considerably down.
One matter that did not emerge from the discussion may be of interest to your Lordships—indeed I was surprised when I discovered it. Of the 1 million animals that have already been slaughtered under the over-30-months rule, it seems, if I am correct, that fewer than 4 per cent. have been incinerated. So somewhere there are 960,000 carcases in cold storage. Let me pick up the point made by the Minister about remarks made about the ban at the beginning of the crisis. If the German Minister of Health had gone on German television and said that he was prepared to consider the slaughter of the whole of the German beef or dairy herd, I wonder whether the British consumer would have been queuing up at the supermarket to buy German beef.
The Minister kept referring to new scientific evidence. Let us be clear that no scientist has yet required the slaughter of a single animal for scientific reasons. From the beginning scientists made clear that they understood why the Government wished to introduce a slaughter scheme to restore consumer confidence. But no scientist has asked for the slaughter of a single animal. The new scientific evidence, of which the Minister made so much, was a new statistical forecast of the likely effect of different rates of slaughter. As we know, that will only reduce the headline rate of BSE over the next few years. It does not do anything towards helping the eradication of the disease.
I must take up a final point with the Minister. I understand entirely the backlog of slaughtering with the over-30-months scheme. It would not have been possible to slaughter the animals, if the Government had introduced the selective slaughter scheme last autumn,
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or indeed last summer as they said they would. But the suggestions that I made were not an irrelevance. The animals would have been on the farm. There would have been restrictions, but the fanner would still have been able to milk them. He would still have had the income from the milk. He would also have been able to plan and would have known how many heifers he needed and how many he was going to lose. He would have received the compensation either when the animal left the farm on the over-30-months scheme or indeed when the selective slaughter scheme was eventually introduced. I do not feel that the Minister answered that point.
As I said at the beginning, this has been a sad day. We hope that it is the end of the beginning of this awful crisis. I beg leave to withdraw the Motion, and I shall not move the second Motion standing in my name.
Motion, by leave, withdrawn.

Potato Industry Development Council Order 1997
4.42 p.m.
Lord Lucas Lord Lucas rose to move, That the draft order laid before the House on 13th January be approved [9th Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move that this draft order be agreed to.
This order provides for the establishment of a potato industry development council to take forward some of the work of the Potato Marketing Board. A year ago, we debated the order which led to 30th June 1997 becoming the date when the potato marketing scheme would be revoked.
As required under Section 27(1) of the 1993 Agriculture Act, the Potato Marketing Board has applied to the agriculture Ministers for approval of a scheme to transfer its property, rights and liabilities to a successor body: a development council. This followed a growers' poll and our own consultations, which both showed overwhelming support for such a body.
The proposed functions for the council are listed in Schedule 1 to the order and can be summarised as commissioning or assisting research and development; the collection and dissemination of statistical information; generic promotion and the development of exports; and setting basic quality standards for raw potatoes.
The council will comprise 16 members including the chairman and one other who must be independent of the potato industry. Nine members will represent the interest of growers, including at least one seed potato specialist; one will represent employees in the industry and the remaining four will represent the industry beyond the farm gate, including at least one with knowledge of the marketing or distribution of potatoes.
The council will be required to keep a public register, in two parts, of producers who grow one hectare or more of potatoes and first purchasers of 100 tonnes or more of potatoes. The dual register reflects the dual funding

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system that has been agreed upon by the joint committee of the Potato Marketing Board, whose members represent all sectors of the industry and consumers.
While a single levy might seem to be more efficient, there was significant opposition to it from growers and from processors. Growers in particular argued that a single levy point would undermine the concept of a body able to act for the industry as a whole. And the dual system does have the advantage of giving the council access to much better information on the industry. We feel that Article 9 of the order deals as effectively as possible with the practical difficulties that the dual system might have presented.
The order provides for a ceiling of £40 per hectare for the growers' levy and 25 pence per tonne at the first point of sale. We have set the ceilings higher than the anticipated actual charges to save the need for early amending legislation.
With this order we draw to an end the cycle that started with the passing of the Agriculture Act 1993. I have pleasure in commending it to the House.
Moved, That the draft order laid before the House on 13th January be approved [9th Report from the Joint Committee].—(Lord Lucas.)
4.47 p.m.
Baroness Nicol: My Lords, my interest in this order arises from the fact that I am a vice-chairman of the all-party Retail Group. In that capacity, I have become aware of some of the concerns within the retail industry. There are in fact two main areas of concern. The first is the levy to which the Minister referred. As he said, the Potato Marketing Board worked with a single levy on growers based on the acreage of potatoes grown. That levy was passed up the chain as part of the cost. It was a system that worked very well, I am told.
The proposed introduction of a levy at the first point of sale as well as a levy on acreage, in the opinion of the British Retail Consortium, will inevitably introduce loopholes and opportunities for avoidance, due to the large number of merchants, merchant growers, agents and other operatives selling potatoes within the industry. They believe that the new system also will be expensive to enforce and very difficult to operate.
Therefore, I must ask the Minister whether it would not be better to fund the new council through the tried and tested method of the single levy on acreage, as we did before. I do not feel that he gave a very convincing explanation of why the second charge has been introduced and I should like to hear more about it. Will not the double charge have the effect of inflating the cost, at the end of the day, to the consumer or indeed the processor?
The second area of concern is the membership of the proposed industry development council itself, a body set up to:
"increase efficiency and productivity and improve and develop the service that the industry renders the community".
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No one could argue with those aims. But the composition of the council is taken directly from the Industrial Organisation and Development Act 1947-50 years ago—and does not reflect the needs of the present-day industry.
Retailers understand what consumers want and aim to fulfil that demand by close co-operation with growers. The partnership approach which has developed over recent years works well for the farmers, who grow to the specifications of the retailers in relation to varieties as well as to other specifications. Surely the structure of the new development council should reflect that partnership. Does the Minister appreciate that there is a new relationship which should be recognised in the council, or has the formula for the new one just been taken off the shelf as part of the old 1947 model? That is not appropriate for 1997.
I do not know what consultations the Minister had with the retailing industry, but will he undertake to look again at this matter before the draft order is approved?
Lord Stanley of Alderley: My Lords, before the noble Baroness sits down I wonder whether I may ask a question. I think I must have misunderstood her. Did she suggest that the retail trade should shoulder none of the charges for the development council?
Baroness Nicol: My Lords, the proposal as it stands in this order is complicated. It can indeed be open to abuse and we have managed very well without it so far. I should like to know from the Minister why it is needed.
4.50 p.m.
Lord Stanley of Alderley: My Lords, I love the noble Baroness smiling at me. She was in fact saying no, the retail trade should pay nothing towards the council. She does it very charmingly, but it goes without saying that I think she is totally wrong.
I support the order, not least because I am, with my son, a potato producer. I supported the noble Lord, Lord Carter, when the whole question of dismantling the PMB was discussed and voted on during the passage of the Agriculture Act 1993 and the necessary affirmative order moved by my noble friend Lord Lucas in 1996. Now, four years later, I repeat my plea.
It was accepted by my noble friends on the Front Bench in both cases that the development council will be frustrated in what it hopes to achieve if the present unlevel playing field continues, with all other European Union countries having the ability to give surreptitious aid to their producers. It is essential in order to ensure the future of our industry that fair competition goes hand in hand with the development board.
I remind noble Lords that any form of support or quota was taken away from British growers in the 1993 Act, but not so—I repeat—for our continental competitors. As an aside, I should perhaps say that the 1996 potato crop came to a staggering £500 million less than the 1995 crop. We do not need any more "bumps", as my noble friend Lord Lucas said in 1996, caused by the national governments of our continental neighbours being able to support their own producers.

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What action will the Government take to ensure, as they promised in 1993 and 1996, a light-weight European potato scheme with as level a playing field as possible? If, as it seems, we are incapable of bringing any sense to the workings of the common agricultural policy, will the Government promise to undertake an investigation into the state of competition in the potato market, including state aids, and make that report public, in particular to Parliament?
In 1973 I was persuaded to vote to join the European Union; I believed it would encourage a common market. Sadly, it appears that I was wrong and it has become an uncommon muddle. The potato market has the potential of being a perfect example.
4.52 p.m.
Lord Lyell: My Lords, perhaps my noble friend the Minister can clarify one point for me. Article 9, paragraph (6), states:
"Where two or more persons jointly carry on business".
I presume that refers to people acting under paragraphs (3) and (4). I had in mind a fairly large farm or family who are both growers and also acting as "first purchasers" under this order. Either today or later perhaps my noble friend can give me some guidance on what paragraph (6) means, especially the last phrase, "shall … be treated as constituting a single person".
4.53 p.m.
The Earl of Balfour: My Lords, perhaps I may ask one question of my noble friend in connection with this Potato Industry Development Council Order. Although the constitution is set out under Article 4, I am concerned in respect of the ordinary consumer.
Many people, when they go to a shop to buy potatoes, want to know what is the best potato for boiling, making chips, roasting or baking, as the case may be. As the noble Baroness, Lady Nicol, said, we are dealing with retailers. My problem is that most supermarkets regard the potato as just that—a potato. They cannot give advice as to what kind it is. I am fond of potatoes and like eating them. But quite often the only place I can obtain information about them is from the little farm shops which can tell me—I do not put them in any order of preference—whether I should buy Golden Wonder, Maris Piper or Pentland Squire. Those shops are the only places I can obtain the information.
I do not see anything in the order which gives the encouragement and help that the ordinary purchasers—all of us or our wives—need to strengthen an extremely important industry and one that I should like to see flourishing.
4.55 p.m.
Lord Mackie of Benshie: My Lords, I join the list of people speaking in the gap. My name was meant to be included.
I suppose one must welcome the order, but the fact is that throughout Britain our potato farmers are suffering the worst year that they have had for a long time and they are regretting the demise of the Potato Marketing
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Board. As the noble Lord, Lord Stanley of Alderley, said, unless we have some reasonable guarantee of a level playing field with the Continent, without help the industry will have to operate in a manner which, even if farmers are super-efficient, is not likely to make them prosperous under the present conditions.
Can the Minister tell me how much money the maximum of 25p a tonne would raise? It does not appear to me to be a lot. If one does all that is required, £40 per hectare, plus 25p a tonne, is not a great deal of money. One is expected to promote our export markets and conduct research into the growing and handling of potatoes and, as the noble Baroness, Lady Nicol, said, one has to reassure the public that potatoes are healthy and good to eat. All that takes a great deal of money. I do not believe there is a ready answer. But it is important at the present time to reassure the public that our methods are healthy; that we do not leave residues and cause problems with chemicals and all the things the environmentalists constantly, and rightly, complain about. If the marketing board is to do the research and to provide an explanation, it will need a lot of money. I should like to hear what the Minister has to say about that.
4.57 p.m.
Lord Carter: My Lords, I thank the Minister for explaining the order so clearly. In this debate we may have a little less excitement than we had in the previous debate this afternoon.
From these Benches we generally welcomed the order in the debates on the 1993 Act. I made it clear on behalf of my colleagues that if the PMB was to be wound up, we would support a potato industry development council to fulfil the important functions of research and development, of collecting statistics, of generic promotion, of developing exports and of guaranteeing the basic quality standards.
In relation to promotion, I was pleased to see in the first schedule to the order that paragraph 3 promotes,
"the production and marketing of standard products";
and paragraph 8 undertakes
"arrangements for better acquainting the public in the United Kingdom with the goods and services supplied by the industry and methods of using them".
In discussions on previous development council orders we had problems with "promotion". It seems now that the Government are happy, under the 1947 Act, that promotion can be included.
When the order refers to "generic" promotion, can the PIDC, under European regulations, use its funds to promote the British potato or can it only promote potatoes as a whole? Can we isolate the British potato for generic promotion?
At the risk of upsetting my noble friend Lady Nicol, I have long supported the concept of development councils in agriculture. Agriculture is divided into small units; development work is for the benefit of all farmers and therefore all should pay. The only way to do that is through some form of compulsory levy.

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Perhaps I may say in passing that it is interesting to compare the attitude of this Government with that of the previous Administration led by the noble Baroness, Lady Thatcher. We had a number of attempts to try to get development councils. She saw them as just another quango and compulsory levies as just another tax. How things change!
I wish to make a final point about the potato regime itself and take up an issue raised by the noble Lord, Lord Stanley. We support, as do the Government, the principle of a lightweight potato regime in Europe, which is also supported by the Commission. It would be our wish to secure such a regime. But if we are not able to get the agreement of other member states, it will not happen. We should be clear about that. That will not surprise the Government, as they have been in exactly that situation with BSE for the past 10 months.
I wish to make two small points of detail. How will the development council know that a producer's hectarage has increased? Will it have to rely entirely on the producer informing the PIDC? There is a scheme in Article 8(4), but it is not entirely clear how the PIDC will know that the hectarage has increased. Can the Minister make absolutely clear what is to happen to the assets of the PMB? Does he have any information as to their likely size? What are they likely to amount to? Do the assets include the PMB research station? I saw in the farming press only this week that a consortium involving ADAS, the Scottish agricultural colleges and the Cambridge University Research Association is involved on the research farm owned by the PMB. It would be interesting to know how that will fit in with the work of the development council.
I conclude by repeating what I said when we debated the Agriculture Act 1987. I said that if the PMB had to be wound up it was essential that the development council should be in place to continue so many of the important functions of the old PMB. We therefore support the order and wish the new development council well.
Baroness Nicol: My Lords, before my noble friend sits down, I wish to make it clear that I am not opposed to the establishment or to the functions of the council but to the funding and composition of it.
5.2 p.m.
Lord Lucas: My Lords, I am delighted to reply to this short debate in which the proposals put forward by the Government have received such a general welcome, if slightly qualified in some quarters. Perhaps I may deal with the points that were raised in the order in which they were raised.
The noble Baroness, Lady Nicol, raised some of the concerns of the British Retail Consortium. The House and the noble Baroness must understand that the proposals have been arrived at after consultation with all sides of the industry. As she will have learnt from my noble friend and indeed from her noble friend, there are a variety of views on how the funds should be raised and how the council should be made up. Nonetheless,
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agreement has been reached on the proposals before us today. They may be something of a camel; they may be a racehorse. We shall have to wait and see how they perform over the next few years.
If there turn out to be problems, there will be opportunities to bring forward amending legislation once everyone involved has agreed that things need to be changed. We have done the best we can, and the industry has done the best it can, to produce these proposals. I hope that the British Retail Consortium will feel able to live with them and that it will not go ahead with its proposal to play dog in the manger and not put forward someone for the council. That would be sad.
We recognise that retailers are at last starting to play a constructive role as regards British agriculture and British horticulture. For many years, as I am sure my noble friend and others will agree, they did not. Indeed, they seemed to be set against it and seemed to be trying to find ways of tripping it up. I think that is changing. I hope that if the consortium agrees to take part in the council it will find it constructive. In the end, what matters to potato producers is getting the best market for their produce. The retailers are a very important part of that and must to a large extent have an identity of interests.
I do not think we are looking at a council which will turn out to be producer dominated in that way. Nine producers are to be chosen by the Government. They are not being elected by some coterie of producers. I would expect them to have a wide variety of views. If the retailers and those in other parts of the industry were to put forward their views to the producers, it would take an exceptionally bad argument not to win over one of the producers to their cause and thereby take away the producers' majority on the council.
Perhaps I may turn to the subject raised by my noble friend Lord Stanley of Alderley. We are and have been fighting for a lightweight potato regime. The Irish presidency tabled revised proposals based on the fruit and vegetable regime which were discussed at the Agriculture Council of 18th November. The revised proposals did not, as the House knows, command the support of the majority of member states. We hope that in the long run we will achieve agreement on this. There are some signs that some member states are moving towards our proposal. However, as the noble Lord, Lord Carter, recognised, we stand in the middle between a group of states to the south of us which wants a heavyweight regime, and a group of states broadly to the north of us which wants no regime at all. It is a very fine line. If we go jumping around too much we might fall off on the wrong side of it. A period of quiet and slow diplomacy will repay our efforts in the end. So far as any cheating or unfair state aids are concerned, if anyone can bring those to our notice with enough evidence to go on, we shall pursue them, and pursue them vigorously.
My noble friend also raised the question of whether we would investigate the state of the European potato market. I shall draw that request to the attention of my colleagues and will write to my noble friend. However, I am not aware of any such proposals. I shall also write

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to my noble friend Lord Lyell. The wording of the order provides for a partnership or company to be levied once rather than there being a levy on each partner to avoid in any way duplicating levy collection. However, perhaps I should look at Hansard again and make sure that that answer fully covers what my noble friend was asking.
My noble friend Lord Balfour asked for information on the use of each variety of potato and what they were best for—what was best for frying, boiling and all the other uses of the potato. That comes back to what the noble Baroness, Lady Nicol, was saying. There is a role for retailers to play in this, a role which, as regards potatoes and perhaps some other similar produce, they have not played to date. A good deal more information would be useful, and if that worked back into better varieties of potato being available with more information from retailers so that consumers knew how to use them, that would be extremely good and would be helpful for the potato industry as a whole.
The noble Lord, Lord Mackie, asked how much the levy would raise. If the levy was set at £35 a hectare and 20p a tonne, which is where we think it will start out at, it would raise £6.3 million in total, with £1 million of that coming from the first point of sale. The noble Lord might well argue that that is not enough money for everything the council might want to do. That is something it will have to establish in practice. However, as I am sure the noble Lord knows, there is a balance to be drawn between the wish of the industry to be levied and its wish to spend money. It is a balance familiar to any Chancellor of the Exchequer. Indeed, if, after the next election, Mr. Gordon Brown, the colleague of the noble Lord, Lord Carter, would like to apply for the job of chairman, he might be well qualified for it.
Lord Carter: My Lords, if the noble Lord has a job to tell the difference between a camel and a horse, I do not think we should take his projections about the election too seriously.
Lord Lucas: My Lords, the noble Lord, Lord Carter, drew attention to an interesting side line on our situation within Europe. The French can, of course, promote French potatoes in Britain and we can promote British potatoes in France. However, we cannot promote British potatoes as such within the UK. The marketing campaigns undertaken by the council can be timed to coincide with the British new potato harvest or with some particular new variety which has been planted somewhere. We can act, as I am sure the French will act, in promoting our own potatoes, but we must not act so as to act against the interests of our Community colleagues and try to exclude them from our market. There is a subtle balance to be drawn. I am sure the council will draw it wisely.
The assets of the Potato Marketing Board will transfer to the Potato Industry Development Council. It is not yet clear exactly what they will be and what they will comprise. Dealing with them will be a matter for the potato council. I am sure that the noble Lord will be kept informed as matters progress.
The need to audit the acreage returns from producers is evident. The council will be helped in that by having information from the payers of the first-purchaser levy
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who will have information about who is supplying them with potatoes. They will be able to work with that information to produce an effective audit—nothing is ever perfect—of the acreage returns.
As the noble Lord said, a consortium of Scottish agricultural colleges, otherwise known as SAC/ADAS, and the Cambridge University Farm, have expressed interest in managing the Sutton Bridge experimental unit. The decision on that will be for the British Potato Council. We shall not be seeking to interfere with it. I hope that answers the questions that have been raised today.
Baroness Carnegy of Lour: My Lords, before the Minister sits down and for the comfort of the noble Baroness, Lady Nicol, can he confirm that I am right in believing that of the 16 members of the council, nine will be people representing the interests of producers? They will pay for 80 per cent. of the cost of the council so fair is fair in that respect. That may comfort the noble Baroness.
Lord Lucas: My Lords, at this point we believe that it is fair that the producers have what is in effect a bare majority on the council. Much will depend on how the members of the council are selected as regards their individual qualities. The noble Baroness should look forward with optimism to us finding a range of people to sit on the council who will not act in a pig-headed and stupid way and go against the interests of the people who, after all, are their largest customers. I believe that they will be seeking ways to work with the retailer. I hope and expect that the fears of the noble Baroness and of the British Retail Consortium will prove to be unfounded.
On Question, Motion agreed to.

Transfer of Crofting Estates (Scotland) Bill [H.L.]
5.12 p.m.
Report received.
Clause 1 [Disposal of crofting property]:
Lord Sewel Lord Sewel moved Amendment No. 1:
Page 1, line 25, at end insert—
("() Any disposal of property under this Act shall only include normal maintenance burdens and obligations, and shall exclude major infrastructure in and related to the crofting community affected by the disposal.").
The noble Lord said: My Lords, in moving this amendment, I preface my remarks by saying that I believe that the procedure that we have adopted in considering this Bill has been wholly beneficial. We had the advantage of the Select Committee's visit to Inverness where we took a great deal of valuable, informed and detailed evidence. We also had the opportunity of visiting Skye, where we were able to see many of the particular problems and to have illustrated to us many of the concerns facing crofters in the north-west of Scotland.
I wish to stress that we have also had the opportunity of having a very constructive Committee stage in the Moses Room. Putting it all together, for at least some Members of the Select Committee it has been an educative experience. We reach the Report stage where really no great issues of principle and no major matters of policy divide us. Indeed, having read the Hansard report of the Committee stage proceedings, I believe that many of us are happy to accept many of the policy clarifications that the noble Earl was able to give then.
However, there still remains a difference in approach. It is fair to say that the Government are intent on keeping the Bill relatively undefined in a number of areas in order to maintain flexibility. Flexibility is a good thing, but there is a risk, which is that because of the lack of clarity and certainty, those who may wish to proceed and to take advantage of the measures contained in the Bill will somehow be deterred. They will not have sufficient information to know where they stand at the initial stage. That is an omission.
Through virtually all the amendments tabled today we seek to add a degree of certainty and clarity to the Bill. We do not seek to change in any way the direction of the Bill or the main policy underpinning it. But there is an argument for a greater degree of precision. That is particularly the case with Amendment No. 1, which deals with the problem of burdens. In a number of cases, the burdens that particularly fall on crofting estates are of significance. The noble Earl the Minister indicated Benbecula, where there is a major drainage scheme. In other crofting estates there are responsibilities for major roads and bridges.
Clearly, if these burdens are transferred then at some time in the future, following something like a flood or a landslip, the crofting trust that has been established in all goodwill on the basis of viability at that time, will find itself faced with an intolerable burden, which will drive the trust out of viability. It is our proposition that it ought to be made clear from the outset that the burdens to be transferred should only be the normal ones of maintenance that one would expect in keeping up the property and that the exceptional and major burdens relating to infrastructure provision should not transfer at the time.
I recognise that the Minister at Committee stage in the Moses Room indicated that that was likely government policy. If that is the case, there would be great merit in trying to make that clear in the Bill itself so that this quite significant worry and concern is removed from those who wish to take advantage of its provisions. In trying to put into the Bill virtually the words that the Minister himself used at Committee stage, I hope that we shall get that degree of certainty. I hope that the Minister will be able to respond positively to this amendment. I beg to move.
The Earl of Mar and Kellie: My Lords, I agree entirely with the noble Lord, Lord Sewel, about the arrangements for the scrutiny of this Bill. I believe that the Select Committee visiting Skye, Inverness and the procedure in the Moses Room were particularly helpful.
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As regards the amendment, we have to make certain that we are talking about public assets rather than estate infrastructure. I believe that we can see that division. Therefore, we are probably talking about tracks and bridges, drains and fences as being estate infrastructure and the possibility of public roads and bridges have somehow or other crept on to the estate, but which have not yet been adopted by the local authority.
I certainly approve of the philosophy involved in the purpose of the amendment. Perhaps the words "normal", "major" and "crofting community" are still slightly undefined. I do not believe that that matters because it certainly explains the approach that should be taken in the negotiations between a group of crofters seeking to take over their estate and the negotiating team from the Scottish Office. It is probably just as well that there is imprecision in words like "normal maintenance", "major infrastructure" and "crofting community". I agree with this amendment and hope that it will commend itself to the noble Earl.
The Earl of Balfour: My Lords, I speak to this amendment as an ordinary person who looks after a fairly small estate in Scotland where the drainage was put in probably 200 years ago. The best way to go about this would be to insert into the Bill a provision to allow the new owners of the land to be eligible for a grant. Perhaps I may give your Lordships one example. If one replaces lead water pipes from the mains to the first tap in the house—pipes which are starting to leak because of their age—at present one is eligible for a 75 per cent. grant. Such a grant is important and applies whether or not the house is privately owned or rented. On average, such work costs about £1,000 per house. Most of us can afford to spend £250 but simply do not have the money to spend £1,000.
The Earl of Lindsay: My Lords, like the noble Earl, Lord Mar and Kellie, I should like to associate myself with the remarks made by the noble Lord, Lord Sewel, about the advantages derived from the procedure we have adopted with this Bill.
The noble Lord also suggested that despite great proximity on many of these issues, there was perhaps some difference of approach between us in that the Government are seeking to keep the face of the Bill non-prescriptive in terms of exactly how the transactions may progress. We see that as producing the necessary flexibility. However, the noble Lord fears that that may deter applicants from coming forward.
I acknowledge that the issue needs to be pondered carefully, but we have thought this through and we have a greater fear that if we pre-empt and fetter (by cluttering the face of the Bill with prescription) there is a danger that that inflexibility may deter crofting townships and crofters from coming forward. Therefore, I understand exactly the point which the noble Lord explored but, as I have said, we have thought about this carefully. We realise that clarity and some confidence about what is likely to be the result of the Bill are useful in encouraging people to come forward, but I hope that the assurances that I have been able to give to date in Committee and again today on Report will make clear

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the policy that would underlie the Government's position in any transaction between the Secretary of State and the crofting townships. I remind the House that the Scottish Office and the Secretary of State are willing sellers. The Government have introduced this initiative because they want to see the transfer of townships into crofting trusts.
To pick up on a point made by the noble Lord, Lord Sewel, we are also determined that any such transfer should be to a viable successor body. We see no merit whatsoever in a transfer to a body which either immediately or within a fairly short timeframe might lack viability.
This amendment seeks to ensure that only normal maintenance burdens and responsibilities are transferred to crofting trusts and that the Secretary of State retains any responsibility he has for wider community assets. Noble Lords will recall that we discussed this at some length in Committee. I am grateful for all the contributions made in Committee and again today by the noble Earl, Lord Mar and Kellie, and my noble friend Lord Balfour. I made it clear then that, although it would be appropriate for crofting trusts to take on the normal maintenance and repair responsibilities that go with ownership of an estate, the Government would retain any responsibility that they have for maintaining assets which have a wider community purpose. I am very happy to reiterate and underline that reassurance again today.
I appreciate that in proposing the amendment the noble Lord is simply trying to reflect that commitment on the face of the Bill. He said that he took some inspiration from my words in Committee. I understand the reasons behind the amendment and I stress that in the minds of some there is a fear that other governments may not be as sympathetic as this one to the transfer of the Secretary of State's estate to townships.
Nevertheless, I suggest that the amendment is both unnecessary and conceivably dangerous. The whole purpose of the Bill is to provide a flexible vehicle to allow for the transfer of the Secretary of State's crofting estates to crofting trusts. Noble Lords opposite have tried on a number of occasions to chip away at that by proposing amendments which would have the effect of constraining the Secretary of State or the trust. In other words, they would potentially constrain that flexibility.
I understand the motives—and they are the best of motives—but we feel that that is unnecessary. The disposal will be agreed between the parties. It will not be imposed on anyone. We have made it clear that the disposal would take place only if the crofting township or the crofting trust involved actually wanted and approved the terms of the transfer. The negotiations would be freely entered into by the crofting trust.
I think the amendment is potentially dangerous because we simply do not know what legal interpretation might be put on the key terms in the amendment, "normal maintenance and burdens and obligations", and, "major infrastructure in and related to the crofting community", in the future. We might find, for example, that because of the way the terms were interpreted, the Government were required to transfer some burden which they would have
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otherwise retained and that this decision was critical to the viability of the trust. I know what the noble Lord has in mind, but if the amendment were to become enshrined in legislation, those words would be looked at closely and we would no longer have the ability to explore every single possibility with the prospective trusts.
We should keep the Bill as flexible as possible. The House has my assurance on the general approach of the Government to this matter. I remain convinced that the best way forward is for each estate to be considered separately in the light of those principles. I hope that with that reassurance and explanation the noble Lord will feel able to withdraw his amendment.
Lord Sewel: My Lords, I thank the Minister for his reply. He has gone most of the way to satisfying the concerns felt on this issue not only by noble Lords on these Benches but by all who served on the Select Committee. The noble Earl has spelt out the terms under which the Government would seek to exercise the disposal, with particular reference to the burdens. Given those assurances, I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sewel Lord Sewel moved Amendment No. 2:
Page 1, line 25, at end insert—
("() In any disposal of property under this Act no value shall be attributed to the land.").
The noble Lord said: My Lords, in moving Amendment No. 2, I should like to speak also to Amendment No. 3 which is grouped with it. Together they seek to define the terms under which the disposal of both the land and the rights appertaining to that land should be transferred. Their objective is to ensure that the transfer of both the land and any rights takes place basically on a no value, no cost basis; and that the trust when set up enjoys without cost the full benefit of the land and any rights associated with it.
The Minister has, with credit, frequently indicated that the intention of the Government is that any property is transferred on the basis that the viability of the trusts set up is assured. The difficulty is that viability can be a very narrowly drawn concept. I suppose that if expenditure is 20s a year and income is 19s 6d that is viability. I am sorry; that is the opposite of viability. If expenditure is 19s 6d a year and income is £1 that is viability. That slip makes the point that the judgment as to whether or not something is viable is finely balanced. This may put too great a pressure on trusts if they are to flourish. We seek to ensure a basis of transfer that leads to a situation where trusts do not struggle to survive but flourish. To secure that, we want the transfer to take place on a no cost no value basis.
I accept the point made by the Minister in Committee that there is a distinction between the west coast crofts which predominantly have common grazings and east coast crofts which are effectively small farms. It is arguable that the basis of transfer may be different in those two situations. However, if one is to have a general approach surely it must be one that enables the

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crofting trusts to have the best opportunity of success and everything enables them to flourish. Amendments Nos. 2 and 3 seek to ensure that.
The danger of "viability" is that it can be a very closely and narrowly defined concept. If the trust has the good fortune to have land on which there are rights—the main ones are mineral rights—let it have those rights and exploit them for the local benefit. One is not talking about enormous sums of money. For example, it was made clear that currently the total income from the Secretary of State's entire crofting estate from mineral rights was £17,000. Why do we not have the generosity to say that in order for local potential gains to accrue those rights should be transferred free of charge to the trusts that are set up?
5.30 p.m.
The Earl of Mar and Kellie: My Lords, this amendment sets off in the right direction. I believe that the key word is "land". The crofters deserve the right to this land because they created it as agricultural land. When we went to Skye we visited the North Talisker estate. Before it was purchased by the Board of Agriculture for Scotland in 1926 it had been a sheep farm. In 1883 the value of that sheep farm was £1,575 a year. I suggest that that exceeds the rent that is currently taken from the 70 crofters on that land. I am very much in favour of the transfer of the land which effectively has been created. It is possible that on some estates there are jetties, fish-processing plants, car parks or even helipads. Perhaps those kinds of infrastructure need to be sold and cannot just be regarded as part of the land, in the sense that there will have been substantial investment by the landlord rather than the tenants who will have brought the land under control.
Referring to Amendment No. 3, I note that, although the words
"at no costs to the transferee"
sound impressive, earlier in the provision there is reference to
"may agree with the body acquiring the property"
which perpetuates the philosophy adopted in the first amendment.
The Earl of Lindsay: My Lords, as with the first amendment, I do not believe there is very much between us on Amendment No. 2. Perhaps the difference lies in the packaging rather than the destination that all noble Lords involved in this Bill seek. Amendment No. 2 moved by the noble Lord, Lord Sewel, would require the Secretary of State to transfer the lands in his crofting estates free of charge. Amendment No. 3 would require that any associated mineral, sporting or other rights should also be transferred free of charge. We discussed both of these propositions at some length in Committee. Nonetheless, it may assist if I reiterate the Government's position. The noble Lord, Lord Sewel, stressed our objective of achieving viable trusts. I prefer his second definition of viability to his first. The first smacks of Labour Party mathematics but the second is something to which the Government can certainly sign up.
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The Government expect that the vast majority of land on the Secretary of State's estate will be transferred free of charge. This is in line with the commitment made by my right honourable friend the Secretary of State that the Government are willing to consider a transfer at no consideration where this is necessary to ensure the viability of a trust. I agree with the noble Lord, Lord Sewel, that the judgment of viability can be a fine science, but we would encourage any prospective crofting trust to seek as much advice as it believes it ought to seek in order to have confidence to go ahead with any purchase or the receipt of any transfer. We hope that the best advice will be available to them and that they will not seek to jump to any conclusions without help. Nevertheless, there will be exceptions where free transfer is either not necessary or is not in the public interest.
During the debate in Committee my noble friend Lord Gray quite properly reminded us that public money had been used to support crofting and that the public interest should be taken into account and could not be abandoned. I also emphasise the public interest in these circumstances. Given land values in the Highlands and Islands which reflect differences in land quality, I believe it is much more likely that we will look for some consideration for those estates that comprise individual crofts without common grazings in the eastern Highlands. At the moment the crofters on these estates can buy all of their land under the existing right to buy provisions based on the statutory formula of 15 times the annual rental value. As I said in Committee, it would be wrong for the provisions of the Bill to be used to allow crofters to circumvent the existing right to buy. It would also be unfair to those crofters who had already bought and to those tenants buying farms on lowland estates who had to make some payment to buy their land.
I acknowledge that the noble Lord, Lord Sewel, accepted in Committee that we had a genuine point in anticipating that proposed transfers could legitimately and equitably distinguish between, on the one hand, west coast estates with common grazings and lowland values and, on the other hand, certain east coast estates with no common grazings and higher land values.
The proposed amendments would not, however, allow us to take this distinction into account or indeed other factors which might exceptionally suggest that the public interest should and could be taken into account. This would only be relevant, however, where any consideration being made for the value of the land did not threaten the viability of the future of the new crofting trust. In other words, any consideration has to be affordable to that new trust. It would be fair not only to the crofters concerned but to the public.
Amendment No. 3 deals with the rights attaching to the land. Since sporting rights run with the land, we are, for the most part, concerned here with mineral rights. We do not, in principle, want to retain mineral rights where the Secretary of State is transferring land to a trust. Indeed, an overriding intention to do so on our part would be contrary to the spirit of the Secretary of

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State's crofting initiative. Nor can we disregard any public interest. To do that would be contrary to a fundamental duty of government.
As with my response to Amendment No. 2, what we would seek would be flexibility and fairness to reconcile the specific circumstances with the respective interests of a crofting trust and the public interest. Each case would need to be looked at by both parties on its merits, but if trusts wish to acquire mineral rights, which we would welcome, then the public interest would normally require that a valuation be agreed and a charge negotiated.
The Secretary of State holds mineral rights over some 27 of his 53 crofting estates. As the noble Lord, Lord Sewel, has reminded us, the total annual income arising from these rights is currently in the region of just £17,000. In many cases, therefore, the appropriate charge for the freehold transfer of mineral rights would indeed be very modest.
However, as the noble Lord, Lord Macaulay, has reminded us in the past, with mineral rights there is always the potential for substantial or excessive windfall gains, and we need to consider such an eventuality with very great care. There might therefore be cases where only a modest charge would be appropriate, but it should be linked to a clawback provision which protected the public interest in the event of a substantial or excessive windfall gain. In addition, and again depending upon the circumstances, it might not be unfair to the public interest if any such clawbacks were time-limited. This sets out our presumption that mineral rights would, wherever possible, be included in a transfer of assets to a new crofting trust.
I have also described the flexibility that would be a feature of any such transfer so that we are fair not only to crofters and their circumstances and aspirations, but also to the taxpayer, who underwrote the purchase of those rights many decades ago and who has invested considerable sums in the maintenance of the estates ever since.
Suppose, however, that a prospective crofting trust was not, initially at any rate, able or willing to assume the relevant mineral rights. In those circumstances it would be wrong to seek to compel trusts, which is what would happen with this amendment.
Once again, we are determined that there be sufficient flexibility so that, without abandoning the public interest, the presumption can be that the crofting trust will normally be the principal beneficiary of the income arising. Therefore, to use the words of the noble Lord, Lord Sewel, I agree, let them exploit those rights for local benefit. I alluded to that possibility in Committee. The trusts, as surface proprietor, would be able to benefit from income while the department retained the mineral rights. Whatever the arrangements which are agreed, they must be fair to both parties, the trust and the public, whose money was used to acquire the estates and to support them over the past decades.
I trust I have explained the Government's position. The mandatory free transfer of land and related assets regardless of the circumstances would be wrong in principle and it would be in danger of creating
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anomalies and loopholes in practice. We have, nevertheless, made it absolutely clear that, through the flexibility that this Bill provides, our intention is to be as generous and supportive as possible to the future crofting trusts without riding roughshod and indefensibly over the legitimate interests of the taxpayer.
I hope that the noble Lord finds reassurance in the explanation I have given and is able to withdraw his amendment.
5.45 p.m.
Lord Sewel: My Lords, again I thank the Minister for his comments. I am particularly grateful that the noble Earl, in speaking on behalf of the Government, appears to be converted to the idea of a windfall tax. It is something to remark upon.
On the basis of what the Minister has said, I am content to withdraw the amendment, but I hope that, in approaching the individual negotiations, where there is an element of doubt the benefit of doubt will be given to the crofting trust and that the Government—any government—will act with a degree of generosity which will at least underpin the potential for the success of the trusts once they are created. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Clause 2 [Restrictions on disposal]:
Lord Sewel Lord Sewel moved Amendment No. 4:
Page 2, line 19, after ("community") insert ("and local community development").
The noble Lord said: My Lords, this group of amendments seeks to build into the consultative process which the Crofters Commission will undertake the concept of local community development. That is singularly appropriate because the objective of the Bill must be to strengthen community development in sparsely populated areas of Scotland, which are nearly as sparsely populated as this House.
When we discussed this in Committee the point was made that indeed the Crofters Commission could, if they thought it appropriate, take into account local community development and the way in which a potential trust would add to the achievement of local community development. However, in fact, there is a case for the Bill to be much stronger because the whole purpose of local community development is so central to the concept in the first place.
It would be remiss if the Bill did not actually specify the need for local community development and the extent to which a transfer would enhance the potential and possibility of local community development, if that was somehow left to one side or left to the possibility that the Crofters Commission, in undertaking their consultations, did not take that into account.
I see no objection as to why, in setting up the consultations, in reaching a view on which to advise the Secretary of State, the Crofters Commission should not take this central issue on board. It is a central issue; it is the way in which these trusts can in fact

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make a significant contribution—I hope that they do make a significant contribution—to the future economic and social well-being of the Highlands and Islands of Scotland. Indeed, that type of approach sits very well with the Government's own rural White Paper, and I would have thought that the emphasis that the inclusion of these words in the Bill would give to the value to be placed on encouraging local community development is wholly beneficial. I do not believe that it should be left as something that the Crofters Commission could or may take into account. They should be required to take it into account as perhaps the most important single factor in deciding the basis of their advice to the Secretary of State. I beg to move.
The Earl of Mar and Kellie: My Lords, with regard to one of these amendments, I have to say that at the present moment local community development is not an activity with which the Crofters Commission is required to deal. Indeed, it is probably not legally entitled to do it. It strikes me that it would probably be treading on the toes of Highlands and Islands Enterprise, the local enterprise companies and possibly even on the toes of the local authority.
This is social and economic activity which the Crofters Commission ought to be doing, and I believe that the commission would like to start taking this approach to its work.
It is important to recognise that crofters now typically gain 10 per cent. of their income from crofting and 90 per cent. from what are quaintly known in crofting legislation as their auxiliary occupations. The move from subsistence agriculture to crofting becoming a population holding measure is a good one. It is important to encourage people to go to the remoter areas to make a life for themselves using repayable loans and the spare time activities which crofting constitutes. I suspect that we are looking at something which the Irish have solved by having a Department of the Gaeltacht to handle such problems. I commend the amendment to the Minister.
Baroness Carnegy of Lour: My Lords, before my noble friend replies, I was unable to take part in the Committee stage because I was listening to a debate in the Chamber. I was not on the Select Committee, but I have been listening to the discussions with great interest. Will my noble friend indicate whether the Government are against crofting trusts becoming entrepreneurial and doing good things on their crofts? I was a little dismayed by the discussion about minerals. I imagine that the Bill as it stands does not prevent crofters exploiting minerals. They might discover barites on the land, or something like that. I understand that the Government do not want to put that on the face of the Bill, but surely the whole idea is not to keep crofters where they are and to prevent them developing their crofts in any way they want; the idea is to put the crofts into the crofters' hands for the good of the crofts, the crofters and the Highlands of Scotland.
Although I shall understand if my noble friend does not want to tie things down too much by putting them on the face of the Bill, it would be interesting to hear
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from him—perhaps I should know—whether there is anything wrong with crofters becoming entrepreneurial and not just maintaining the status quo.
The Earl of Lindsay: My Lords, I am grateful to my noble friend for her intervention. She has articulated the objectives behind the Bill as well as anyone has done to date. We want the Bill to enable crofters to take a greater stake in their own futures, shape their own destinies, to be as entrepreneurial as they want and to develop the social, cultural, economic and environmental aspects of their communities. The hope of my right honourable friend the Secretary of State is that the transfer of the land and any other assets associated with that transfer will provide a springboard for those crofting communities to take hold of the direction in which those communities subsequently go. I have explained at great length that we are seeking to keep the face of the Bill as uncluttered as possible.
The Secretary of State has brought forward the Bill to encourage crofters to take on the management of their own estates. Crofters can progress as freely as possible. Any reservations that my noble friend might have are entirely misplaced. We are seeking to give crofters control.
The amendment encapsulates a sentiment with which we have a great deal of sympathy. If noble Lords look at Clause 2 they will see phrases such as:
"crofting interests in the property …the promotion of the interests of persons residing on such property … the general interests of the crofting community in the district … the views of crofters in that district; and any other matter which they consider to be relevant".
The concept of local community development lies at the heart of the Bill. I emphasised in Committee the important part that community development will play in the realities that will stem from the Bill becoming law. The Bill's drafting makes the amendments unnecessary. They could conceivably be restrictive.
I shall deal with the first point. The Bill already allows the Crofters Commission to have regard to community development, both when it considers the general interests of the crofting community and with regard to any other matter which it considers to be relevant. I drew attention to the current drafting because I cannot conceive that the Crofters Commission would not address a potential for local community development when it goes through the various duties that the Bill imposes upon it.
The noble Earl, Lord Mar and Kellie, suggested that with the existence of Highlands and Islands Enterprise and the local enterprise companies, the Crofters Commission might feel constrained in addressing local community development, especially if it is economic. That is not the case. Within the duties defined by the Bill, the Crofters Commission will be advising the Secretary of State on the single transfer of a particular holding to a crofting trust. I do not anticipate any difficulty with that duty and the duties of the enterprise network.
There is also the risk that the amendments would have an unfortunate restrictive effect. I acknowledge that that is not intended by the noble Lord, Lord Sewel. It is possible that some communities will seek to establish

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crofting trusts to allow them to maintain, as nearly as possible, their current situation. In those or similar conditions we would not wish the commission to see itself as being under any statutory duty to recommend against such proposals just because they were inadequately concerned with community development, however that might be interpreted.
We consider that a possibility. It is not one which we would like to see become a reality. The term "local community" may be uncertain. The local community would include more than just the residents on the property to be disposed of. That is the purpose of Clause 2(2). It is quite proper that the commission should have regard to the development of the wider community, but such development which goes beyond the land and members of a crofting trust cannot be of such importance that the commission should be required to give it preferential attention. That is why Clause 2 is structured as it is, with subsection (1) giving preference to the interests of those residing on the property while subsection (2) takes a broader look.
The Bill will allow the commission to give due regard to local community development, whether that development be economic or cultural, whether it involves an increasing population or improves circumstances for an existing population. I understand the sentiment behind the amendment but we see difficulties with the drafting proposed by the noble Lord, Lord Sewel.
Lord Sewel: My Lords, I again thank the Minister. I am more disappointed in his response on this occasion than on previous occasions. If on the one hand the Minister believes it to be inconceivable that the Crofters Commission should not take into account matters of local community development, I see no argument against requiring it, and making it clear that it should take into account the local community development effect of the transfer and the setting up of a trust.
The argument that it could be potentially restrictive is a non-starter. The amendment seeks merely to require the Crofters Commission to take this into account among a number of other factors. Having taken it into account in the particular circumstances which the noble Earl indicated, it may well seek to advise the Secretary of State that in a particular case, the local community development factor should not be dominant. That would be fair enough. But in reaching its view, it is essential that the local community development effect of a transfer should be something which it should at least be required to think about, consider and reach a view upon. As I say, I am disappointed that the Minister cannot go further on this particular issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
6 p.m.
Lord Sewel Lord Sewel moved Amendment No. 6:
Page 2. line 22. at end insert—
("() Any subsequent conveyance from a transferee to a new owner of property disposed of under subsection (2) above shall require the consent of the Commission.").
The noble Lord said: My Lords, Amendment No. 6 returns to a difficult issue which took up a great deal of our time, thoughts and energies in Inverness; namely, the problem of on-selling. Perhaps I may explain my anxiety. A transfer takes place and I accept what the Minister has said that it takes place on a basis of generosity and viability and a healthy trust is established.
The difficulty then comes with what happens next or what potentially could happen next. The danger that is seen by at least some of those involved actively in the crofting community is that the intentions of the Bill could be undermined if there is a danger of significant on-selling of the land which formed part of the original transfer.
In many cases, it may be thought that that is not a very real threat. But there are some examples. I shall not use the expression "white settlers" because I prefer to use the phrase "heavy housing development pressures". In some parts of the Highlands, particularly outside the presently established towns and villages, it is clear that there is a very heavy demand for housing plots and developments.
There is a danger involved here. There are indications that that danger is becoming a reality, albeit on a relatively small scale at the moment. As I understand it, in the case of one of the already established trusts—Assynt—in order to achieve the income to maintain its current activities, it has sold some of the capital assets; namely, the land. Over a period of time, the whole basis forward of the trusts could be eroded significantly if there is that incremental selling on of the land which formed the basis of the whole development.
The Minister in his comments quite rightly drew attention to the role of the Scottish Land Court. It is fair for him to do so. In placing this amendment before the House, we are seeking to give him an opportunity to underline the degree of control and guarantee which the Scottish Land Court will be able to exercise to ensure that the erosion of the viability of the trusts which have been established is not put into jeopardy. I beg to move.
The Earl of Lindsay: My Lords, I am grateful to the noble Lord, Lord Sewel, for giving me an important opportunity to restate an assurance on this vital matter.
The amendment proposes an insertion into Clause 2(2) which deals with the matters to which the Crofters Commission should have regard when advising the Secretary of State in relation to a proposed transfer of land from himself to a crofting trust. I believe that it was intended to introduce an amendment which would require a crofting trust which wished to sell or otherwise dispose of any of the land transferred to it by the Secretary of State to obtain the consent of the commission.
However, the issue which the noble Lord, Lord Sewel, raises is in relation to selling on. We have never stated that crofting estates are free from threats, pressures or an erosion of the current patterns by which their lives are guided. However, as I explained, we believe that there are sufficient safeguards to protect crofting land.

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Land in crofting tenure is protected by the Crofters (Scotland) Act 1993 which requires any landlord wishing to take land out of crofting tenure, which is known as "resumption" to obtain the approval of the Scottish Land Court. Before authorising the resumption, the Land Court must be satisfied that the landlord wishes to resume the land for some reasonable purpose in relation to the,
"good of the croft or of the estate or of the public interest".
In addition, "reasonable purpose" is also further defined and may include, among other things, the building of dwellings, schools, halls or community centres.
I hope that is the assurance which the noble Lord seeks. It is an important assurance which I am happy to give and I am glad that it should go on the record. We could not agree to the imposition of an additional or unnecessary hurdle on those crofting trusts which have assumed land that originated on the Secretary of State's estate, unlike other crofting landlords. We see the discrimination that would create. In a sense, it would create also a separate class of crofting landlord. That would be unjust and unnecessary. However, I am happy to repeat the safeguards which are very important and which the noble Lord, Lord Sewel, suggested should be repeated for the record, and they exist in the 1993 Act.
The Earl of Mar and Kellie: My Lords, before the noble Earl sits down, perhaps I may ask whether he agrees that it would be a good idea for the Crofters Commission to scrutinise an incoming new estate owner in the same way that somebody who has purchased his croft has then to apply to become the crofter of it?
The Earl of Lindsay: My Lords, the point that I should make to the noble Earl is that if land was being resumed—in other words, taken out of crofting for a development purpose—then the Scottish Land Court must be satisfied with that resumption; that it is being done for a reasonable purpose; and that the benefits will flow to the crofters, the local community or the public interest.
If the ownership of the crofting land changes hands, that crofting land remains as crofting land and remains within the protection and security which exists to look after all crofting land in successive pieces of legislation. Therefore, a change of ownership should not increase the threat which might be posed to land which remains in crofting.
Lord Sewel: My Lords, I thank the Minister again for his comments. I take heart from the fact that the noble Earl spelt out yet again the view that he takes and the assurance that he gives as regards the role of the Scottish Land Court in that regard. However, it is possible that only practice and experience will provide us with the evidence. I have a nagging suspicion that there is a problem here to which we may have to return subsequently, once we see how the operation of the scheme actually beds down in reality. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Rights of pre-emption]:
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, before calling Amendment No. 7, I should point out to the House that if the amendment were to be agreed to I shall not be able to call Amendment No. 8 owing to pre-emption. As it is being debated at the same time, the same applies to Amendment No. 9 which pre-empts Amendment No. 10.
The Earl of Lindsay The Earl of Lindsay moved Amendment No. 7:
Page 3, line 1, leave out ("six weeks") and insert ("four months").
The noble Earl said: My Lords, in moving the above amendment, I shall speak also to Amendment No. 9. The amendments will extend the period allowed to claimants for compensation in respect of loss of rights of pre-emption from six weeks to four months. I am grateful to various Members of the Committee who queried the original drafting of the Bill on this point, and especially to the noble and learned Lord, Lord Jauncey of Tullichettle, and the noble Lady, Lady Saltoun of Abernethy. I agreed to consider the matter further and I now propose that claimants for compensation should be allowed four months.
I would reiterate that the period allowed for the process does not in any way delay the transfer of the Secretary of State's crofting estates to crofting trusts. Indeed, it is only when a transfer has actually taken place that the process of seeking any compensation that might be due for the loss of pre-emptive rights is triggered in the first place.
I should also remind the House that the procedure for dealing with claims once they have been lodged is a very fair one for claimants. Where claimants fail to reach agreement with the Secretary of State, they will have a right of appeal to the Scottish Land Court. Proceedings in the land court are straightforward and inexpensive but the court has the power, where it deems it appropriate, to award costs. That should reassure possible claimants and those organisations which might represent their interests. Claims will be dealt with fairly and efficiently.
I feel sure that noble Lords will accept that the Government's proposal will allow adequate time to lodge a claim, wherever the claimant may be resident. Amendment No. 9 is consequential upon Amendment No. 7. I beg to move.
Lady Saltoun of Abernethy: My Lords, the noble Earl did indeed promise in Committee to produce amendments to extend the six weeks to a longer period. I tabled my amendment only about five minutes before the Minister tabled his. I did so to enable us to talk again about the matter in the event of the Minister not bringing forward such amendments. As it is, I tabled my amendments and asked for a six-month period in the hope that I might achieve three, like a Persian carpet seller. However, I have got more than I even dared hope for. I am most grateful to the noble Earl and shall not, therefore, be moving my amendments.
The Earl of Mar and Kellie: My Lords, I do not mean to oppose these amendments but I am still not convinced that we need any time limit for pre-emptors to show up and claim their extinguished right. As the noble Earl said, the pre-emptors' permission does not in any sense get in the way of a successful transfer between the Scottish Office and a group of crofters.
The Earl of Lindsay: My Lords, I am grateful for the welcome given by the noble Lady, Lady Saltoun, to my amendments. I can assure the noble Earl, Lord Mar and Kellie, that we would not seek to impose a time limit unless there was a very good reason for so doing. If there was no time limit and there was a possibility that there might be more than one claimant to pre-emptive rights, it would be impossible to reach a conclusion of negotiations in that, from the Secretary of State's point of view, there might be a need to wait and see whether any other siblings or collateral branches came forward with perhaps a stronger right in law. We must, therefore, impose a time limit to conclude the process. By doing so, we will actually deliver any compensation which might be payable to the just recipient.
On Question, amendment agreed to.
[Amendment No. 8 not moved.]
The Earl of Lindsay The Earl of Lindsay moved Amendment No. 9: Page 3, line 6, leave out ("six weeks") and insert ("four months").
On Question, amendment agreed to.
[Amendment No. 10 not moved.]

Independent Qualified Conveyancers (Scotland) Regulations 1997
6.15 p.m.
The Lord Advocate (Lord Mackay of Drumadoon)The Lord Advocate (Lord Mackay of Drumadoon) rose to move, That the draft regulations laid before the House on 13th January be approved [9th Report from the Joint Committee].
The noble and learned Lord said: My Lords, in moving the above regulations I shall, with the leave of the House, speak also to the Executry Practitioners (Scotland) Regulations 1997 which follow on. Both sets of draft regulations were laid before the House on 13th January this year. They relate to the new professions of qualified conveyancer and executry practitioner for Scotland which were established by the
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Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. Both these new professions are intended to increase competition among legal service providers and to enhance consumer choice.
Independent qualified conveyancers will be able to offer all conveyancing services—some of which are at present reserved to solicitors—and executry practitioners will be able to offer the Scottish equivalent of probate services. Members of both professions will be regulated by the Scottish Conveyancing and Executry Services Board, which was revived last year after a period of suspension caused by the state of the housing market in Scotland and difficulties which have been experienced in arranging affordable cover for practitioners to cover indemnity insurance and compensation arrangements.
I am pleased to inform the House that the board has been able to arrange a professional indemnity insurance master policy at a premium comparable to that paid by solicitors in Scotland; and a compensation fund is now in place which will provide protection for the customer against fraud or dishonesty. In the period before contributions from practitioners into the fund have built up sufficiently, it will be backed by insurance and a relatively small government guarantee.
It is anticipated that in the early years the number of practitioners participating under the procedures laid out in the regulations will be small. However, there are a number of students currently taking the qualifications offered by the University of Abertay and Glasgow Caledonian University, both of which have been accredited by the Scottish Conveyancing and Executry Services Board. A number of students have already qualified and embarked upon their practical training. I understand that those who have completed their courses are finding training available to them in what is now a very competitive market. Courses are also in prospect at two other universities and part-time training opportunities are available.
The draft regulations before the House today were first issued in draft form for the purposes of consultation in December 1995. This was a major consultation exercise, with over 160 copies of the consultation document being issued and over 40 substantive responses received. In the event, those responses were very helpful to the Government and allowed our thinking on the draft regulations to develop. The regulations also benefited from the advice of the Director General of Fair Trading whom my right honourable friend the Secretary of State for Scotland is required to consult.
Following on from the consultation exercise, a new draft was prepared and a second consultation exercise took place in September last year. The latter produced no new significant points, but gave rise to further discussions between the Law Society of Scotland and the Government to resolve one or two minor points of concern. I am happy to say that that was achieved.
I do not think it is necessary to go through the detail of either these or the following regulations. I am happy to assure the House that they will regulate both these new professions to the highest possible professional standards. On that basis I commend them to the House. I beg to move.
Moved, That the draft regulations laid before the House on 13th January be approved [9th Report from the Joint Committee].—{Lord Mackay of Drumadoon.)
Lord Macaulay of Bragar: My Lords, the noble and learned Lord the Lord Advocate has given a clear exposition of these two important sets of regulations. I was pleased to hear the news about the major insurance policy and the compensation fund. One can only hope that neither of those will be called upon too often once the practitioners begin their work.
Both sets of regulations are welcomed by this side of your Lordships' House. After consultation and adjustment they were given a fair wind in another place. The detail and comprehensive composition of the regulations is such as to allay reservations about the operation of these two bodies in relation to conveyancing and executry practice. It goes without saying, once one reads the detail of these two sets of regulations, that a great deal of hard work and thought has gone into their preparation. I am sure your Lordships' House would wish to put on record our thanks to all those involved in producing the final regulations which are now before us.
Only time will tell how efficient and effective these regulations will be in regulating the operations of these two bodies in serving the public and individual interest. The regulations are clear and easily understood. None of the practitioners who contravene the regulations will have much of an excuse if he says he could not understand the terminology of the regulations. We hope that they will be a valuable addition as regards the protection of the public and the individual. As I said earlier, this side of the House welcomes both sets of regulations.
On Question, Motion agreed to.

Executry Practitioners (Scotland) Regulations 1997
Lord Mackay of Drumadoon: My Lords, I have already spoken to these regulations. I beg to move.
Moved, That the draft regulations laid before the House on 13th January be approved [9th Report from the Joint Committee].—(Lord Mackay of Drumadoon.)
On Question, Motion agreed to.

Dignity at Work Bill [H.L.]
6.22 p.m.
Report received.

Sundays (Dancing and Licensing) Bill [H.L.]
6.23 p.m.
Viscount Astor: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Viscount Astor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Murton of Lindisfame) in the Chair.]
Clause 1 [Music and dancing on Sundays]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 1:
Page 1, leave out lines 9 and 10.
The noble Baroness said: In moving Amendment No. 1, I wish to speak also to Amendment No. 3 and to the Question that Clause 2 stand part of the Bill. I believe that the noble Lord, Lord Jenkin of Roding, and I are attempting in our different ways to skin the same cat. That "cat" is the protection of residents' interests who may be affected by the operation of the establishments which are to be deregulated by this Bill.
The context of these amendments is a little different to that at Second Reading. Since then there has been an announcement by the Government, by way of a Written Answer, that there is to be a review of licensing hours, and in particular licensing procedures. As one who has made a rather inadequate attempt to grapple with licensing provisions in the current legislation, I shall certainly welcome some clarification of the complex provisions which we have to tackle. That review having been announced—prompted, according to the Government, by a substantial response to consultation on the extension of normal licensing hours from 11 p.m. to midnight—I am prompted to ask the Government whether they have considered postponing this deregulation in order to consider it in the context of that review? I am sure the Government have considered that, and I look forward to the Minister's comments on it. The licences are not identical but music and dancing licences are probably not a great deal of use in a commercial sense without a drinking licence.
As I have said, these amendments seek to protect residents who may suffer disturbance. I raised this point at Second Reading when I mentioned Kensington and Chelsea. The noble Viscount Lord Astor said:
"That was an issue when this matter came up in relation to deregulation. The debate has moved on since then".—[Official Report, 15/1/97; col. 269.]
I accept the debate has moved on with regard to the consultation of those who may be affected by deregulation but not as regards the substantive issue. A number of Members of the Committee will have received the letter that I received from residents of one block in that borough. I believe their words would strike a chord with people who live near to clubs, discotheques and other such places in other parts of the country, particularly in city centres and no doubt most of all in London, although not exclusively so. The description in

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the letter is vivid and it is worth repeating. I shall read a short extract to the Committee. The letter states that when premises are:
"open for dancing and drinking until the early hours local residents who live nearby are disturbed by noise from patrons arriving and departing (especially the latter) due to shouting, car doors banging, car radios playing, squealing of taxi brakes etc. … In addition the patrons of such establishments, who often do not have the well being of residents at heart"—
one can imagine that is not their first priority—
"park in residents' parking bays, on zig-zag white lines, on double yellow lines, in residents' driveways, on pavements etc. Obstruction to passing traffic also occurs. This is not fanciful exaggeration—it actually does happen as surveys we have made show. Why do we as residents carry out such surveys?".
This is the thrust of my amendment. The letter continues:
"We do so because the Council's Licensing Sub-Committee and the Magistrate's Liquor Licensing Courts are naturally cautious of accepting uncorroborated information. So we know what we are talking about".
What is difficult is to control the operation of these establishments, or perhaps more accurately the behaviour of the people who attend them. The establishments themselves cannot be held directly responsible for people behaving in an unneighbourly fashion when leaving the premises. It is the difficulty of enforcement that has led me to raise this matter again at Committee stage.
I would be the first to accept that the wording of my proposed amendments, which deal with special hours certificates, is quite possibly technically deficient and certainly may not go as far as I would like in terms of covering the issue. However, I think they at least provide a vehicle for raising a number of questions. I hope that either the noble Viscount or the Minister can respond to those questions.
Who is to take the lead in preparing licensing applications for the justices to consider? Who is expected to carry the principal responsibility for monitoring the introduction of the new Sunday licensing arrangements? What monitoring arrangements do the Government expect to be in place? What monitoring do the Government expect of the relationship between the liquor licence and the entertainments licence? The music and dancing licence is of no great commercial value without the liquor licence. What arrangements will there be for applicants to appeal against conditions placed on them, or against the refusal of a licence? Finally, do the Government intend to produce any form of guidance to local authorities and the police on these issues? At present the police are in the stronger position as regards the revocation of licences.
My amendments enable local authorities to have a role in the granting of licences and conditions surrounding licences in order to protect residents either before applications are granted or as a result of experience. I beg to move.
6.30 p.m.
Lord Jenkin of Roding: I am happy that the debate on the Question that Clause 2 stand part is grouped with the amendment which the noble Baroness moved. I shall
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not repeat the points she made. She put forward a strong case expressing the grave reservations of residents not only of Kensington and Chelsea but of a number of other areas about what will happen to their Sunday nights and early into Monday mornings if the provisions of the Bill go forward without amendment.
Members of the Committee will remember that the matter was exhaustively discussed when an attempt was made to introduce the provision under the delegated legislation powers. The measure was the subject of much evidence and comment by the Delegated Powers Scrutiny Committee under the chairmanship of my noble friend Lord Alexander of Weedon. I do not believe that the concerns then expressed have been properly addressed.
In 1995 the Delegated Powers Scrutiny Committee considered the proposal was designed to have the same effect as this Bill. The committee received much evidence, including some from the Royal Borough of Kensington and Chelsea. But it was not confined to London; the committee quoted evidence from Bolsover. It is a national and not just a London problem.
The Royal Borough of Kensington and Chelsea vigorously opposed any extension of licensing for restaurants and night clubs on Sunday nights in order to protect its residents from late night disturbance. The promoters, those who support the Bill, thought that perhaps the council was making an unnecessary fuss. They expressed astonishment when told that within the Royal Borough of Kensington and Chelsea no less than 96 such establishments are currently licensed, most of which can be expected to apply for the licences for Sunday dancing and drinking. Many of these establishments are in the heart of quiet residential areas. In quoting from the letter she received, the noble Baroness vividly described the effect of the situation on residents.
The Delegated Powers Scrutiny Committee considered whether any protection for residents would be removed. The committee concluded that there should be explicit reference to the licensing justices' discretion to make special provisions for Sundays. It found the proposal unsatisfactory because it removed necessary protection for residents who at present are free from disturbance on Sunday nights.
Paragraph 54 of the fifteenth report from the Delegated Powers Scrutiny Committee states:
"There can be no doubt that an extension of the permitted hours for public dancing and drinking on Sundays will have an adverse effect on residents. The Royal Borough of Kensington and Chelsea told us 'it will be the last straw for residents, particularly residents living very close to commercial premises. It is different if you are in Scarborough and all the premises are on the front. When residential accommodation is intermixed with commercial, then there is going to be a conflict'."
The position could not be spelt out more clearly. The report continues that,
"the odds are stacked heavily against residents",
when dealing with nuisance arising from such establishments.

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At paragraph 57 the report states:
"The Committee considers that, while the issues of dancing and late night drinking have to be considered separately"—
I shall come to that issue in a moment—
"there is a cumulative effect on local residents which cannot be overlooked. This will be particularly true in those areas where residential accommodation is mixed in with licensed premises".
I do not believe that those who seek this measure of deregulation have yet taken on board the serious situation as regards dance halls and clubs which are close to residential establishments.
The noble Baroness may be right in saying that a permit for dancing is not of much use without a licence for the consumption of alcohol. The notice to strike out Clause 2 applies only to the alcohol licensing provisions. I am indebted to the British Entertainment and Discotheque Association Limited for a letter which points out, as perhaps one should have known, that a public entertainment licence granted by a local authority is renewable annually. Therefore there is an opportunity every year for residents to make their views known forcefully to the local authority in the hope that a licence will not be renewed. The letter states, I think a little inaccurately, that,
"Similar considerations apply to liquor licences: licensing justices have very wide discretion on granting, renewing or revoking these licences, and may attach whatever conditions they see fit. These licences must be renewed every three years".
Therefore the opportunity for residents to make a fuss arises only every three years.
When these points were raised at Second Reading, my noble friend on the Front Bench indicated that it is open to residents to raise their anxieties at any time. But they should not have to do so. It takes a great deal of organisation, pressure, and repeated representations to the police, local authorities, licensing magistrates and anyone who may have an influence, before licensing justices will be persuaded to revoke or modify a licence they have given. I do not believe that Parliament should impose that obligation on local residents. Parliament may well have the power to insert conditions which will bring those issues to the attention of the licensing magistrates at the time when they award the licence.
I have studied carefully the noble Baroness's amendment; she has not claimed too much for it. I am not sure that her provision is the right answer. I am not clear what the right answer is. That is why I have given notice to oppose Clause 2 rather than putting down an amendment. We have a few days before Report stage of the Bill. I have indicated to my noble friend Lord Astor and my noble friend on the Front Bench that I do not propose to divide the Committee today on Clause 2. However, I shall require to be satisfied at Report stage that proper provision has been made to protect residents in the circumstances which the Bill sets out.
I am a strong supporter of deregulation for Sundays. I do not quarrel with dancing; perhaps dancing without drinking would not get far. But a combination of dancing and drinking on the one quiet night of the week, going on after midnight and perhaps up until 2 a.m., is intolerable. Under the Bill, that will be permitted and
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the licensing justices are given no indication that it should be strictly controlled. I have every sympathy with those who feel that this should not be allowed.
Lord McIntosh of Haringey: I suppose I should declare a minor potential interest in this issue. I live in a street which the noble Lord, Lord Jenkin, knows very well. It faces a playing field which has a clubhouse. On occasions, though not very often, late-night discotheques take place and go on until four o'clock in the morning. That tends to happen on a Saturday night, not on Sunday. Since the clubhouse is being rebuilt, the use could possibly be extended to Sunday nights if that is requested. That is the extent of my interest.
Like the noble Lord, Lord Jenkin, I am very sympathetic to the idea of deregulation and to the idea that there is no difference in this respect between Sunday and any other day. Having said that, I am also puzzled by the conflicting evidence put forward. The noble Baroness, Lady Hamwee, read out part of a letter, which I also received, from the Consort House Residents Association. I am puzzled by the difficulty that association has and the assurances given by the noble Viscount, Lord Astor, in his very courteous letter to me about the Bill following Second Reading in which he refers to the protection that exists. He refers to the powers of local authorities in respect of entertainments licensing and the powers that apply to licensing justices with respect to liquor licences.
If those powers work, why do those people have so much difficulty? It may well be that dancing on Sundays is a very special case on which to be raising a more general problem. But if that is the case, ought we not to consider the more general problem before we proceed, without amendment, to making this otherwise necessary change?
Baroness Gardner of Parkes: I understand that our discussion now combines the Question, opposed by the noble Lord, Lord Jenkin, that Clause 2 stand part and Amendment No. 1 tabled by the noble Baroness, Lady Hamwee. I shall therefore proceed on that basis.
When I represented Enfield on the Greater London Council, there was an absolutely unruly late-night music and dancing venue in my constituency. Licences were granted centrally from County Hall. Each year, and year after year, Enfield residents came in a busload to oppose renewal of the licence because their lives were hell. They never succeeded because the other side had very brilliant QCs who put up a marvellous case. It was only when the liquor licence was withdrawn as a result of the number of knifings and dangerous incidents that had taken place on the premises that the dancing became less attractive. Therefore I support the comment made by the noble Baroness, Lady Hamwee, that if there is no liquor licence there will not be large numbers of people who are terribly keen to be there (unless drugs have replaced alcohol) dancing all night for nothing. Certainly in commercial terms it was the loss of the liquor licence that made the venue non-viable. Before that, people came there from all over London.
In our previous debate on this matter, there was a great deal of talk about revocation or refusal to renew. In the days when licences were granted by the GLC,

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there was always great difficulty over the first issue of licensing permission. The other side was always able to say that, until a club was there, it could not be said to be harmful. So everything was granted in the first instance. Then the poor people suffering those terrible inconveniences had to fight, literally for years. In the case I referred to, as I said, the liquor licence was eventually lost and that dealt with the matter.
It is not just a question of premises. As a result of the Noise Act, which I introduced in this House, we can now deal with noisy premises if they are too bad. It is a question of street noise—people slamming car doors in the middle of the night, revving up engines, particularly if they have a motor bike or car without the correct muffler. Those people are never caught. Having woken you up, they are gone; and there you are, suffering a sleepless night.
With my medical hat on, I would say that one of the greatest causes of accidents at work is over-tiredness. Sunday night is the night before people start their working week. For that reason, putting aside entirely whether or not we introduce regulation, I consider Sunday to be rather different to other days. I like the fact that large stores close at six o'clock. I should not like the thought that something else started up after that.
Camden council explained this matter to me. We had arguments about whether or not shops in King's Cross should be able to stay open all night. A measure passed by both Houses means that they can stay open all night, and Camden residents are suffering as a result. We have to be very careful when throwing out all the regulations and protections which are desirable from the point of view of residents.
In the case I referred to in Enfield the premises were in a residential street and affected between 20 and 50 residences immediately adjoining them. But in other, more densely built-up areas in the centre of London many more people live in very close proximity. The effects would be even more adverse.
I have a letter from the executive director of the British Entertainment and Discotheque Association Ltd. (BEDA). He said that he enclosed a valuable counsel's opinion on a particular matter. Unfortunately that opinion was not enclosed and I am unable to respond to the arguments put forward.
At Second Reading my noble friend Lord Courtown said in winding up that he felt the debate had moved on. He went on to say that he now thought that there was fair agreement between local authorities and the Government on this issue. I do not know where he gets that idea. The local authorities that have approached me are certainly not saying that they are in agreement over this issue at all.
The noble Lord, Lord Jenkin, says that those seeking the permissions have perhaps not taken on board people's concerns. My experience in this field is that they do not care about other people's concerns. They have only the vested interest in setting up such businesses. For those who live near to them it is impossible to say how many years it will be before the nuisance beside them can be stopped.
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Local residents are faced with the fact that they are small voices and usually merely individuals, even when they protest in a group. As I said, a whole busload of residents opposed the licence in the case I mentioned. The skilful arguments advanced by expert QCs for the leisure industry can be very convincing. For us to pass this measure would be a very bad thing. I add my voice to those who are opposed to it, and to Clause 2 in particular.
Viscount Brentford: I too, wish to express concern about nuisance being caused and to express my gratitude for the amendments tabled so that the matter can be discussed.
Last week I had a very friendly meeting with officials of BEDA. They did not entirely convince me of the value of it; however, it was a very friendly and courteous time and the meeting was very informative. For instance, one problem that has clarified itself for me this afternoon, and which I discussed with them, is that two different approaches arise in relation to clubs that open. One relates to those situated in residential areas and the other to those situated in out-of-town shopping areas where there are no residents, or in inner cities, which are purely commercial enterprises, again with no residents living nearby. Like other speakers, I would have no problem from a nuisance point of view with clubs being open in areas where there are no residents. All our discussion has been on the basis of clubs opening in areas where there are residents. Many are situated in residential areas, although I am told by the officials that the large ones opening nowadays are nearly always in areas which are free from residents. But that does not help the large number—many hundreds—which are situated today in residential areas. Therefore, I asked them and they agreed to consider whether there was any way of trying to distinguish in this Bill between those clubs which are situated in residential areas from those which are not. If there were a way to clarify that, it seems to me that it would rule out many of the problems and we could allow only those to be opened on Sundays which were not in residential areas. But that is a problem for the future and not for this afternoon.
On Second Reading the noble Baroness, Lady Hamwee, pointed to the fact that there are officials around who consider the protection offered by local authorities and justices to be inadequate. Certainly, that came out very clearly in a letter from the Consort House Residents Association, saying just that. It adds also—I should like to comment on it—that the powers are insufficient nowadays for them on weekdays. Therefore they question why these powers would be effective on Sundays. To back up my noble friend's remarks, they ask why those who go to work on Mondays should be denied their one quiet night of the week. The loss of their one and only quiet night of the week, to be lost for ever, is to me a very telling argument.
Therefore, I feel that the protection offered by the law at present is inadequate. I very much hope that we can in some way tighten it up for the sake of the poor, suffering residents who now will lose their one night of peace in the week.
Lord Wilberforce: I too declare an interest as a resident in the Borough of Kensington, an even more minor interest than that of the noble Lord, Lord McIntosh, because we do not front a playing field and so far, I am happy to say, there is no place of entertainment existing in our street. To that extent I am disinterested. But, like other noble Lords, I am entirely in favour of leaving the borough, as all other boroughs, an attractive place for people to come to and in which to amuse themselves.
The principle of the Bill is not in dispute. Everybody wants people to have liberty of action. One can see the logicality of not making a distinction between dancing and other activities which have been liberalised.
The noble Lord, Lord Jenkin of Roding, quoted very strong passages from the committee report chaired by the noble Lord, Lord Alexander of Weedon, and its very strong conclusion based on the evidence that the proposal is unsatisfactory because it removes a necessary protection for residents. Perhaps in addition I may quote from paragraph 59, which he did not read out. It says:
"The point was made to us that opportunities for residents to make representations with regard to licence applications and renewals are generally unsatisfactory".
Then it refers to a number of questions which were put on to two pages of the evidence. It did not come to a conclusion on that point because it was not within the committee's remit.
Nevertheless the point was made and obviously it impressed the committee. It has been very clearly underlined by what has just been said by the noble Baroness, Lady Gardner of Parkes: in fact, even in busloads, the local residents have very little opportunity to stand up against the big guns which can be mounted by the interests involved.
I do not want to say any more other than that I am entirely in support of what was said by the noble Lord, Lord Jenkin of Roding, and other speakers. I hope very much that the Government in the later stages of the Bill see fit to allow to be introduced some greater protection for residents than is at present found in the Bill.
The Earl of Courtown: Before speaking to the amendments let me say that I believe I have the feeling of the Committee on them at this stage. But I point out that a number of noble Lords on all sides of the Chamber were very concerned when they saw these amendments to the Bill coming forward.
The effect of Amendment No. 1 would be to retain the existing exception from Sunday observance under Section 88 of the Licensing Act 1988 which allows liquor sales at dance events which begin on Saturday night and continue into the early hours of Sunday morning. However, the first part of Clause 1 of the Bill, which is not affected by the amendment, would disapply the whole of the 1780 Act restrictions on music and dancing. Section 88 would therefore no longer be needed. The noble Baroness's amendment would retain a redundant provision and I hope she will, therefore, agree to withdraw it.
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As my noble friend Lord Jenkin of Roding explained, his amendment would prohibit the sale of alcohol beyond the normal licensing hours of 10.30 p.m. at commercial dances on Sundays. I understand the concerns of all noble Lords about possible disturbance to residents. However, I should point out that the licensing laws already contain considerable protections for residents against nuisance from late night drinking. It is unfortunate that I did not receive the letter which obviously has been received by many noble Lords on all sides of the Chamber. Extensions cannot run beyond the time which the local authority has laid down for music and dancing to finish. So the local authority does hold the whip hand. If it decides that dancing can run beyond 10.30 p.m., the licensing justices have to consider an application for an extended liquor licence. Extensions are entirely at their discretion and cannot run beyond 2 a.m., or 3 a.m. in parts of London. Moreover, should any problems arise, the courts have the power to revoke the extension.
The Bill would do no more than allow dance organisers to apply to the courts for extended licensing hours on Sundays. The courts would have the same discretion over whether to grant an application, and if so on what terms, as they have for other nights of the week. They would also have the same power to revoke an extension if problems occurred.
In short, the following protections are in place: very wide discretion on initial grant of liquor licences; equally wide discretion on renewal—every three years; and licences can be revoked on application by anyone—police, local authority or individual. There is also wide discretion on grant of special hours certificate, also revokable where noise and nuisance take place; wide discretion on grant of public entertainment licence; and a public entertainment licence has to be renewed every year and can also be revoked where its conditions are broken.
Many noble Lords will know that Sunday already enjoys special considerations under licensing law. For example, the normal licensing hours on Sundays are shorter than on other days of the week. My noble friend Lord Jenkin of Roding mentioned the treatment of applications for Sundays. The Government's understanding, based on counsel's opinion, is that the courts would also be able to take account of the special nature of Sundays when considering applications for extended hours.
The Committee will wish to bear in mind that many dances would not be commercially viable if extended liquor licensing hours were not possible. This would, therefore, be far from a technical amendment; it would seriously weaken the Bill as a whole.
Turning to Amendment No. 3, I understand the intention behind this amendment, which would allow the police and local authorities to protect residents from any disturbance which might arise from the sale and consumption of dance clubs operating late on a Sunday night. However, I do not believe that the amendment is necessary. The courts are already able to limit an extension to the normal licensing hours where disturbance is caused to residents. This can take place

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either on the initial grant of the extension or subsequently. Those powers would apply to Sundays as they do to the rest of the week.
Local authorities can further influence the length of the extension through limitations on the premises' entertainments licence: as I mentioned earlier, extensions cannot run beyond the time which the local authority has laid down for music and dancing to finish.
The noble Baroness, Lady Hamwee, asked about a review of licensing legislation. That review relates entirely to the proposals to extend normal permitted licensing hours on Friday and Saturday nights. Therefore, it does not have any direct relationship with the provisions of the Bill. The noble Baroness also asked me about arrangements for monitoring Sunday dancing. The Home Office will keep the effect of the Bill, if it becomes law, under close review.
The Government will want to ensure that the arrangements work well and provide the necessary protection for residents. That will include the relationships between the liquor and entertainment licensing regimes and the effectiveness of the appeal mechanisms, which will vary from the rest of the week. The prime responsibility for monitoring arrangements locally rests with the local licensing authorities.
My noble friend Lord Jenkin mentioned the representations made by residents. The principle behind liquor and entertainment licensing generally is that there should be maximum freedom for people to spend their leisure time, including freedom to conduct legitimate business, consistent with the avoidance of noise and nuisance to others. It is for the licensing authorities to assess all those factors before deciding whether or not to grant a licence over which they have a wide discretion.
T understand the reasons behind the amendment. However, I hope the noble Baroness will agree that the power to limit the hours during which alcohol may be sold at late night dances is already well provided for by the Bill and that she will therefore agree to withdraw the amendment.
7 p.m.
Viscount Astor: My noble friend the Minister answered on behalf of the Government. Perhaps I may try to address some of the concerns of my noble friend and the noble Baroness on behalf of the promoters of the Bill.
I understand that there are 1,800 night clubs in this country. I am not sure how many are in Scotland and therefore currently open on Sundays but, according to my noble friend Lord Jenkin of Roding, 5 per cent. are in Kensington and Chelsea: that is a large amount.
My noble friend gave some extremely cogent examples as to why licences should not be granted. He gave some good examples of why night clubs disturb residents. I agree with him entirely. But that is not the point. The point the Committee should be addressing is whether the fact that some of those night clubs were opened when perhaps the licensing authorities should reassess the conditions of their opening should prevent other night clubs which wish to open on Sundays, where there are no strenuous objections from residents and
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where the licensing authorities and justices recognise that there is a reason for them opening, from applying for a licence.
We must remember that, if the Bill becomes law, no late-night clubs will be able automatically to open on Sundays. They will have to go through the licensing system of public entertainment licences and special hours certificates. The question one must ask—raised by the noble Lord, Lord McIntosh of Haringey—is whether the current powers adequately protect the residents. I believe that on the whole they do, though I accept that there may be examples where they do not. I am sure that those licensing authorities will look carefully at that when the licences come up for renewal.
One point made by my noble friend and other Members of the Committee was whether local residents will be satisfactorily protected. How can they successfully fight? How can they hold their corner and show that in some cases certain places should not be open on a Sunday because they are in an area where they may disturb residents? Licensing arrangements are subject to local decisions. The licensing authority, if it wished, could refuse to grant a licence or apply specific rules as to closing time in recognition of the special nature of Sunday.
Perhaps I may offer some optimism to my noble friend. He kindly said that he would not be pressing his Motion this evening but would certainly want to have discussions before Report Stage. Perhaps he will withdraw his Motion so that we can think further on the issues he raised and discuss them with him. There may be a possibility of looking at whether the protection from the possible effects of a Sunday opening are adequate. There may be a way whereby the club could apply for its licence but the burden of proof would lie on the industry to show that there would be no detrimental effects on the local area, as opposed to that burden being on the local residents. That may be an area we can look at between now and Report stage.
Lord Jenkin of Roding: My noble friend has shown that he recognises the strength of feeling expressed both outside the Chamber and in Committee this evening. The suggestions he offered towards the end of his speech are suggestions that will be followed up. He suggested that one protection that might operate is through the moving of the burden of proof. Following the phrase used by my noble friend on the Front Bench, perhaps we can also write into the Bill an obligation that the licensing justices or magistrates, as the case may be, should have regard to the special nature of Sunday evening when considering the extension of a licence into the late hours.
A combination of those two measures of protection would go a long way to meet the case made so powerfully by the noble Baroness, Lady Hamwee, and others this evening. I shall certainly respond to my noble friend's invitation that we should talk about this matter and do so quickly. But I do so against the background that, if the promoters are not prepared to write into the

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Bill something to give the residents protection, then they risk losing Clause 2 altogether. At Report stage I shall not hesitate to divide the Chamber.
Baroness Gardner of Parkes: As this is Committee stage, perhaps I may come back on one point that I do not feel has been dealt with adequately. I want to emphasise again that the real difficulty is in the first application for the licence. That is when whoever is granting the licence is not in a position to substantiate residents' objections. The residents have to suffer the nuisance before they can convince anyone that it exists. By that time there has usually been a large expenditure on the premises in order, for instance, to satisfy people that the premises comply with fire and safety regulations. The money that has been put into the building is used as a further argument against the residents as to why the licence should not be taken away; that is, because one is taking away people's livelihoods.
There should be something in the Bill which provides that, if people are going to go ahead and open these night clubs in areas which are not suitable and where residents will eventually succeed in their opposition, there will be no fear of moral blackmail simply because money has been spent in setting up the system.
Viscount Astor: Perhaps I may respond briefly to my noble friend. I do not see the scenario of a night club buying premises and opening up just to operate on a Sunday. We are talking about night clubs in the industry that wish to extend their business to Sundays. As a result, the licensing authorities and the justices will have a comprehensive knowledge of those night clubs, existing licensing conditions and whether complaints have been made against them. Therefore it is not exactly as my noble friend pointed out; but I take the general thrust of the point she made.
Baroness Gardner of Parkes: I thank my noble friend for that reply; there is a lot of sense in it. The only point I would make is that it is still a factor if one is setting up a new club to operate seven days a week rather than six.
Viscount Brentford: Perhaps I may briefly emphasise the two points made by my noble friend Lord Jenkin. We should examine the possibility of including both those measures in the legislation. I strongly endorse his two points.
Baroness Hamwee: The proposals made by the noble Viscount are extremely welcome. I shall be happy to be a part of any consideration on how to take the matter forward. I share with most, if not all Members of the Committee this evening, a wish to see deregulation as wide as it reasonably can be but in a proper context.
I believe the noble Lord, Lord McIntosh of Haringey, put his finger on the nub of the issue, which was taken up by other Members of the Committee. The issue is much wider than simply what is right for Sundays. The examples quoted tonight come out of experiences
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throughout the week. I was sorry to hear the Minister say that the review is with regard to Friday and Saturdays night only, as I had read the Answer to the Written Question. The Question was about the review of Friday and Saturday nights. The Answer seemed to broaden the matter and accept that there are problems through all seven days. It is the way the procedures work rather than the night of the week that is at issue.
What this seems to boil down to is the converse of what we so often say. We normally say, "If it ain't broke, don't fix it". Here we have identified that it is "broke", or at least limping along not very well. A lot needs fixing, and more than what we can address in the context of the Bill.
Finally, before I withdraw my amendment, as I recognise it is less than perfect, I asked a number of detailed questions. I wonder whether the Minister will be good enough to write to me following today's debate. I see that he has agreed to do so. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 2:
After Clause 2, insert the following new clause—
RIGHTS OF WORKERS AS REGARDS SUNDAY WORKING
(". Schedule (Rights of workers as regards Sunday working) to this Act shall have effect").
The noble Baroness said: In moving this amendment, I wish to speak also to Amendment No. 4, which is not identified as such on the Marshalled List but is the new schedule proposed after Clause 3.
The issues addressed in the amendment concern the protection of employees in the industry. I too had an extremely helpful meeting with the British Entertainment and Discotheque Association. I told the association that I would not be able to resist quoting from the code of conduct which it has drawn up. In quoting it, and teasing the association a little about it, I accept entirely the good faith with which it has been done. However, the Committee may enjoy, as I did, the notion that compensation to be awarded by an arbitrator under the code in certain circumstances will be such an amount as is "just equitable". The Committee may feel that quite often compensation is awarded which is only just equitable.
The code has been accepted by many in the industry. I understand that the association represents some 69 per cent. of the industry based on employment and turnover. Though there is a code of practice which that 69 per cent. will apply, what about the other 31 per cent.? What about the protection of the minority—those people who will not be entirely happy to be faced with the prospect of working on Sunday? I accept what the association has told me that many of the staff who work in clubs will welcome the flexibility of being able to work on different nights of the week. However, a question has not been answered: why is there not statutory protection for those—it may be a few—who work within the industry? Should existing

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employees not have the right to say no to Sunday work? What is the position for new employees who want to opt out of Sunday work? Where is the protection for those who may be dismissed for refusing to work on a Sunday? Should they not have the right not to suffer detriment—for instance, losing out on promotion—because they opt out of Sunday work?
I have based the amendments entirely on the Sunday Trading Act, which seemed to be the easiest way of writing a rather long schedule into the Bill. I have shamelessly plagiarised that Act. Although the concerns may in terms of numbers be more limited than when we were discussing the rights of people who work in the retail trade, I am nevertheless concerned that the staff in question should not be ignored or sidelined because they are a smaller group and because there is a code of conduct which, as it is not statutory, cannot have the same effect. I beg to move.
7.15 p.m.
Lord McIntosh of Haringey: I have a later draft of the code of conduct than the noble Baroness. My copy says "just and equitable" in the circumstances, so I think the association has picked up on her teasing. It goes on to say:
"The award shall be capped at limits set by the British Entertainment and Discotheque Association but presently the maximum shall be £8,000".
I am not sure that we would get away with that in legislation—capping the compensation at any amount. It could set the amount at a much lower figure if it wanted to in the future. All of this goes to show not that the intentions of the association are suspect but that it is a rather amateurish piece of drafting. It is much better to do as the noble Baroness has done and seek to use the provisions of the Sunday Trading Act and extend them to this legislation. That is what Parliament agreed for all other forms of Sunday trading. There really cannot be any good justification for behaving differently and in a voluntary way for this form of deregulation.
Viscount Brentford: I wish to support what has been said and in doing so thank my noble friend Lord Astor for kindly sending me a copy of the code of conduct. I believe that the statutory basis is right and proper. I accept that it is better than nothing, but I do not hold out very much hope for it being thoroughly effective in the light of the Sunday trading examples that have come to my attention.
I accept also that we are in a very different position here as opposed to Sunday trading. While I was almost persuaded that the whole Bill is excellent when my noble friend Lord Astor said in his Second Reading speech that up to 3,000 new jobs would arise from it, I now understand from the association that what that means is that there will be an addition of up to 3,000 in the pool of people for these evening jobs. They are mostly students or people who already have a daytime job. So the Bill does not improve the unemployment scene as much as I had originally anticipated. Therefore, the problems of employment are very much smaller than they were in the Sunday trading situation.
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There are many good points in the code of conduct. I hope that many aspects of it will continue to be operative even if we accept the amendments, as I trust we will. Other points not included in the Sunday trading employment clauses would be helpful in this situation. Presumably the code of conduct would not be binding on all those other clubs, as the noble Baroness said. BEDA told me that it has 730 members out of the 1800 clubs. Therefore, it represents a large number of clubs.
I have already made the point to BEDA that I should like to see the arbitration procedure, which it has admirably planned to be informal, permit the employee to bring a friend with him or her. A diffident employee might stand very little chance in negotiations against an experienced club manager. On the whole, I support the amendments.
The Earl of Courtown: I was particularly pleased to hear support for the Bill at Second Reading and I was particularly pleased to hear support for its deregulatory purpose, notably from the noble Baroness, Lady Hamwee, and the noble Lord, Lord Mclntosh of Haringey.
As I made clear at Second Reading, the Government strongly support my noble friend's Bill, as currently drafted. I must say, however, that it would clearly be unfortunate to extend regulation in these circumstances on the back of a deregulation Bill. It would be unfortunate and indeed wrong where such an extension is wholly unnecessary and inappropriate, as I believe to be the case here. That would be wholly contrary to the deregulatory purpose of the Bill.
Perhaps I may explain the Government's objections to this amendment in more detail. The proposed amendment is unnecessary because the British Entertainment and Discotheque Association has prepared a comprehensive code of conduct for Sunday employment. I understand that my noble friend has provided copies to Members of the Committee. In my view the code offers as much as anyone could expect and makes very clear the industry's commitment to giving employees a real choice about Sunday working.
The draft code includes proposals to enable employees to opt out of Sunday working, giving no more than one day's notice of their intentions; the offer of independent arbitration in the event of disputes; and proposals for re-employment or compensation where arbitration upholds complaints. Members of the Committee will understand these as the essential elements of a meaningful code of practice about Sunday working.
The Government believe that voluntary arrangements—provided they work to the satisfaction of both parties—are far preferable to cluttering up the statute book with regulations. Arrangements agreed in the industry concerned are more flexible, and can adapt to the particular needs and circumstances of the parties. These benefits are particularly evident in the case before us.
Furthermore, in recognition of the circumstances of the industry, the code requires only one day's notice from staff of their intention to opt out of working on

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Sundays. This is in contrast to the statutory provisions under the noble Baroness's amendment which would require a full three months' notice. The Bill's provisions very much reflect the reality: employees in the industry on the whole tend to be part-time and often do not intend to pursue a long-term career working in dancing establishments. Turnover is high, and in many cases the individual might even have moved on before the three months' notice had expired. Employees in the entertainment industry generally are accustomed to working on Sundays. When we consider the type of work they will be doing we can see why. In general, work in discos and nightclubs will be the type of work which is already common on Sundays—waiting, serving behind the bar and so on. I can see no justification in legislating special provisions for employees who happen to work in a nightclub rather than a local restaurant or pub.
I put it to the Committee that what this Bill offers is better than imposing rigid and complex statutory requirements on an industry which, after full consultation with its employees and others with expertise in this area, has agreed to abide by appropriate and beneficial voluntary arrangements attuned to the needs of the industry itself. These are reasonable proposals and we believe that they provide a sound basis for resolving any differences that may occur between employers and employees. The industry association has made it clear that it intends to make the proposed code an effective option in practice, and I understand that it is confident that these voluntary arrangements will rarely be called into use. It expects no difficulty at all in obtaining volunteers to work on Sundays. There is likely to be no question of coercion, and no need for it.
I suggest to the Committee that it is clear that legislation is unnecessary and that very satisfactory arrangements can be made without any interference by Parliament. In the light of this, I hope that the noble Baroness will agree that statutory regulation is unhelpful here, and will withdraw her amendments.
Viscount Astor: The noble Lord, Lord McIntosh of Haringey, asked why there was no statutory protection, which is the thrust of the noble Baroness's amendment. If I heard him right, I believe he said that Parliament agreed that all other types of Sunday trading workers would be protected. If I remember the Sunday Trading Act correctly, it was shopworkers and betting shop workers who were protected, and that was all. If one looks at other types of workers in many industries, they receive no protection at all. The protection was for a limited and small number of people, relating largely to shopworkers.
When one considers similar industries, including restaurants, bars, clubs, amusement parks, cinemas, theatres, zoos, circuses and any other form of entertainment that one can imagine, there is no statutory protection for those industries, which are all open on Sundays. That is the fundamental reason why it has not been thought right to extend protection on a Sunday into this new area.
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The noble Lord, Lord Mclntosh, also said that the code was an amateurish piece of drafting. I have sat on the Front Bench when he has told me that about Government legislation on many occasions. So what is new? I am sure that the code has defects, but I can assure the noble Lord that the code will be looked at very carefully. We shall try to get it right.
My noble friend Lord Brentford said that the 3,000 jobs would not necessarily all be new ones, but that some would be part-time. That is the case, but part-time jobs are as important as full-time ones in our economy. One of the Government's great successes has been the ability to create part-time jobs, which have very often led to full-time jobs and enabled people to get out of the unemployment or poverty trap. Part-time jobs are very important.
I come back to the reason for the code. The industry has sought to produce a code which is fair and strict. It will help employees. I accept the point from the noble Lord, Lord Mclntosh, about £8,000. Perhaps we shall look at that. Opening on Sundays will open up a great deal of deregulation for employees because now some of them can never take a Saturday off. If this Bill becomes an Act, perhaps they will be able to do so and work on Sunday instead.
I come back to the fundamental point that I wish to make to the noble Baroness. The reason there is no statutory protection is that the Sunday Trading Act gave it to shopworkers. Other industries similar to this one, such as restaurants and pubs—there are a huge number and many thousands more than there are of nightclubs in this country—do not have protection. There is no similar protection in Scotland where nightclubs have been open for more than 20 years. There does not seem to be a problem and, by and large, they seem to work well.
Baroness Hamwee: I thank the Minister and the noble Viscount for those comments. Perhaps I may bring the Committee back to the issue. This amendment is not about those people who are prepared to do the same job on Sunday as they do on other nights of the week. It is not in dispute that there may be many who work in discotheques and clubs who would be perfectly happy to have the opportunity of working on Sunday and who may prefer to do so, and perhaps swap for another night.
This amendment is not about protecting such people, but those who feel that their security of employment is threatened if they step out of line on the issue. That is why I tabled these amendments. We are largely agreed on the value of deregulation, but I believe that regulation has a very valuable place in protecting people who are in that position.
I do not regard it as an adequate argument that a code can do what legislation does. As often as possible I am happy to write Parliament out of a job, but I do not believe that that is a very good argument. However, I take the point that many others who work on Sundays do not have this protection. Parliament has seen fit to give protection to those working in the retail sector. I accept that these workers are members

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of another group who have the prospect of working on Sunday. On that basis I am prepared to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Viscount Allenby of Megiddo): Before calling Amendment No. 3, I point out to the Committee that there is a typing error. The "Licensing Act 1994" should read "Licensing Act 1964".
[Amendment No. 3 not moved.]
Clause 3 agreed to.
[Amendment No. 4 not moved.]
House resumed: Bill reported without amendment.

Police (Insurance of Voluntary Assistants) Bill
7.30 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that this Bill be now read a second time.
I must first declare an interest in that this Bill relates to insurance and I am a member of Lloyd's.
This Bill is a modest measure to remedy a gap in the law. But it will be of considerable significance to those men and women who give up their time to help the police.
The Bill is designed to give police authorities in England and Wales the power to hold personal accident insurance cover for members of the public who voluntarily assist the police. Local authorities already have similar powers. The power was also available to the old county police authorities when they were committees of county councils, before the reforms introduced by the Police and Magistrates' Courts Act 1994 created the new free-standing police authorities. The decision not to treat the new police authorities like local authorities so that they could hold personal accident insurance for civilian volunteers has been an unfortunate oversight. It is not clear why this arose. The Bill is intended to put all police authorities in England and Wales on the same footing, by giving them this power, in line with local authorities.
Civilians who voluntarily assist the police make an important contribution to the community. In many instances, the police could not manage without their valuable help. We have all read in our papers and seen on our television screens the rescue of people from our mountains and hills. In these dangerous circumstances, voluntary rescue teams, who are trained mountaineers and who know their areas well, assist the police to undertake a search and rescue. They are not paid for what they do. But they may be injured during the course of a rescue or search. Injuries may be due to the dangers inherent in a rescue rather than any negligence on the part of the volunteer or the police.
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In 1996 the Select Committee on Scottish Affairs in another place looked into the mountain rescue services in Scotland. At paragraph 23 of its report of June last year it concluded that:
"the current system of co-operation between volunteer teams, the police and the military provides a service, at little cost to the public purse, that would be hard to improve. Regulation of mountaineering and hill walking, or compulsory insurance for participants, would not enhance the current system or make it cheaper, and would probably have a detrimental effect due to the loss of voluntary mountain rescue teams. The costs of mountain rescue are far outweighed by the economic and social benefits derived from these services".
I entirely agree with the sentiments expressed by the Select committee on Scottish Affairs. Voluntary mountain rescue teams provide an invaluable service to the community. I also know that the Government share the view of the committee because in his response to the report published in October last year, my right honourable friend the Secretary of State for Scotland said:
"I note with interest the overall conclusion of the Committee in paragraph 23 of the report which is very much in line with the Government's views on how mountain rescue services should be provided".
Mountain rescue is one of the most visible types of voluntary support from the public. It is one we all know about, but many perhaps do not realise that it is the police who co-ordinate the rescue and call on the support of rescue teams. Mountain rescue teams are the most obvious group to need personal accident insurance cover. But they are not alone. Voluntary assistants help the police in other capacities. For example, with the rescue of potholers, and large-scale searches for a missing person. Some of our rural police stations have their inquiry desks staffed by volunteers. Police authorities also appoint lay visitors. Lay visitors are unpaid volunteers who observe, comment and report on the conditions in which people are detained at police stations. The nature of the duties performed by such volunteers brings them into regular contact with those visiting police stations or being held in custody. Of necessity, there is a risk that such volunteers will face the possibility of assault and injury.
As it is the police service which calls upon the help of such volunteers, it is only right that the police should be able to arrange the provision of personal accident insurance cover for their voluntary assistants. Insurance cover gives both volunteers and police authorities peace of mind at a minimal cost—around an average of £6,000 per year for each police authority, should each authority choose to hold such insurance cover. That is cheap at the price compared with a potential payout to members of mountain rescue teams of anything up to £150,000 if no insurance cover is provided.
I turn briefly to explain the Bill clause by clause. Clause 1 seeks to provide the necessary powers to the police authorities and is straightforward. Clause 1 amends Section 146A(lA)(a) of the Local Government Act 1972 so that outside London the new free-standing police authorities are treated for the purposes of the 1972 Act as local authorities so that they can hold personal accident insurance policies for voluntary

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assistants who may be injured while assisting the police. For the purposes of the Bill, voluntary assistants do not include special constables, as subsection (3) of Clause 1 makes clear.
The exclusion of members of the special constabulary from the provisions of this Bill is quite deliberate. Special constables are appointed for a police area and are under the command of senior police officers. They have the powers of a constable. The other voluntary assistants do not. A special constable's conditions of service are therefore significantly different. This is recognised by provision in police regulations for police authorities to provide compensation to special constables who may be injured while on duty. That is not to say that we should be complacent about the need to ensure that police regulations treat special constables fairly. A recent Home Office report on the special constabulary in England and Wales commented on the inadequacy of the level of compensation currently available for special constables, and recommended changes. I understand from Home Office Ministers that they are actively considering changes to police regulations which would improve the level of compensation that can be paid to special constables. Therefore, as special constables are catered for by separate provisions and are in a quite different category to the other voluntary assistants, they have been excluded from the provisions of this Bill.
I turn now to Clause 2 which relates to the Metropolitan Police. As your Lordships know, the police authority for the Metropolitan Police is the Home Secretary. The provisions of the Local Government Act 1972 do not extend to that police force. Specific provision is required so that the Commissioner and the Receiver of the Metropolitan Police district have the same powers as the other chief officers and police authorities in England and Wales in relation to holding personal accident insurance for voluntary assistants. Clause 2 will, therefore, provide to the Metropolitan Police the same powers that will be enjoyed by the other police authorities in England and Wales by virtue of this Bill.
Clause 3 makes a consequential change to Part I of Schedule 2 of the Insurance Companies Act 1982 in relation to insurance of voluntary assistants in the Metropolitan Police. The relevant class of insurance is set out in Section 140(l)(b) of the 1972 Act—namely, that Class 1 for accident insurance in Part I of Schedule 2 of the Insurance Companies Act 1982 will apply to police authorities by the provisions of this Bill. This clause provides for accident insurance as applied by the 1982 Act and Section 140 of the Local Government Act 1972 to extend to the Metropolitan Police.
Finally, we turn to Clause 4. The Bill will extend to England and Wales only. This Bill does not need to extend to Scotland or Northern Ireland. The Scottish Office has confirmed that it considers the Scottish police authorities have adequate powers to take out personal accident insurance cover for volunteers. The Association of Chief Police Officers (Scotland) and the Convention of Scottish Local Authorities concur with this view.
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The position in Northern Ireland is unique. Insurance provisions need to be different there because of the troubled situation that sadly still exists. As your Lordships may know, much of the insurance costs in the Province are picked up by Government. It is not therefore appropriate for the provisions of this Bill to extend to Northern Ireland.
Voluntary assistants play an increasingly important role in supporting our police service. By undertaking these potentially dangerous tasks they leave themselves vulnerable to injury. I hope that your Lordships will agree that the powers this Bill seeks to provide to police authorities will help to nurture the concept of volunteering so that our police service will continue to get the support from the public that it fully deserves. I commend this Bill to your Lordships.
Moved, That the Bill be now read a second time.—{Lord Brabazon of Tara.)
Lord McIntosh of Haringey: My Lords, the House will be aware that we do not take a party view on Private Members' Bills. This Bill seems to us to be entirely uncontroversial. The only controversy is as to why the Police and Magistrates' Courts Act 1994 was so badly drafted that it left this gap in the law, but one can expect anything of this Government.
7.41 p.m.
The Earl of Courtown: My Lords, I congratulate my noble friend Lord Brabazon of Tara on introducing this Bill to the House. As my right honourable friend the Home Secretary has said, we have the best police service in the world. The Government are committed to providing the police with the resources to enable them to combat and prevent crime, but the police cannot do it all on their own. They need the support, and in some cases the assistance, of the communities they serve. Equally, those men and women who give up their spare time to assist the police should have some protection against accident or injury.
The Bill comes before your Lordships at a very opportune time. In recent weeks there have been reports in police journals and in regional television in the north of England about the need for the police to provide personal accident insurance cover for mountain rescue teams who are called out by the police. Winter is of course the time of year when the work of the mountain rescue teams comes to the fore. It is therefore most appropriate that the question of personal accident insurance for these teams of volunteers who help the police has come before the House at this time. My noble friend has described very eloquently why this Bill is needed. It was unfortunate that the Police and Magistrates' Courts Act 1994 overlooked the need to provide the new free standing police authorities with the power to hold personal accident insurance for voluntary assistants. It will not come as a surprise to your Lordships that when Parliament considers major new legislation some minor oversights occur.
The police do an excellent job in tackling crime and creating safer towns and cities. There are over 127,000 police officers in England and Wales. Civilian

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support staff are also an important element of our police service today. There are now nearly 53,000 civilians employed by the police service. In addition to civilian employees there is a growing body of volunteer civilians working with our police. There are about 20,000 special constables who have offered to help police their communities for no payment other than expenses and allowances. This help is invaluable not only in increasing the number of bobbies on the beat but in forging a stronger partnership between the police and the public. There are also mountain rescue teams, lay visitors and other volunteers who help to keep rural police stations open by staffing inquiry desks. We do not know how many voluntary assistants there are outside the special constabulary. But if I tell you that one mountain rescue team in Cumbria has more than 120 members and that the number of lay visitors runs well into the hundreds it gives an impression of the numbers of volunteers involved.
This Bill quite correctly deals with those volunteers not covered by specific provisions elsewhere. That is why my noble friend's Bill correctly excludes the largest single group of volunteers, the special constabulary. I can confirm that the Government are actively considering improvements to the compensation paid to special constables by means of secondary legislation. The Government will be bringing forward proposals to amend police regulations in due course. There is therefore no need for special constables to be covered by the provisions of this Bill. As it is the police who call on the help of civilian volunteers, it is absolutely right that the police service should be able to offer those volunteers the comfort and knowledge of the protection of personal accident insurance cover. It is not a large price to pay. As my noble friend says, on average the cost to each police authority would be around £6,000 a year—an insignificant cost to the police service.
The Bill that my noble friend has introduced is a straightforward measure that will amend Section 146A(1A)(a) of the Local Government Act 1972 so that police authorities in England and Wales are treated as local authorities for the purpose of holding personal accident insurance for volunteers. As the Metropolitan Police are not covered by the 1972 Act because the Home Secretary is the police authority, this Bill will put the Metropolitan Police on the same footing as other police forces in England and Wales. The Metropolitan Police are keen that they should be able to hold personal accident insurance cover for voluntary assistants, particularly lay visitors to police stations.
I am sure that the measures set out in this Bill will be welcomed by the Association of Chief Police Officers and the Committee of Local Police Authorities. There is also cross-party support for this small but important measure. It is right that the police authorities in England and Wales should have the appropriate powers so that they can hold personal accident insurance cover for their voluntary assistants. This Bill will give police forces in England and Wales the same powers as those already available to the police in Scotland. The Government give their full support to this Bill. I commend it to your Lordships.
7.45 p.m.
Lord Brabazon of Tara: My Lords, I am grateful to the noble Lord, Lord Mclntosh, for most of his words of support.
Lord Mclntosh of Haringey: Both words!
Lord Brabazon of Tara: My Lords, I am grateful for his support for the Bill. I take issue with his criticism of the Government. When referring to the mistake in the Police and Magistrates' Courts Act he said that anything could be expected of the present Government. I point out that it is the duty of the Opposition to scrutinise all legislation. Obviously, on that occasion they failed in that duty. That is why we have had to introduce this Bill today. I am also grateful for the words of my noble friend. I beg to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Pharmacists (Fitness to Practise) Bill
7.46 p.m.
Baroness Gardner of Parkes: My Lords, I beg to move that this Bill be now read a second time. I am pleased to sponsor this Bill brought from another place, where it was so ably dealt with by Sir Michael Shersby.
Pharmacy is a profession in which I have taken an interest for many years. As chairman of the Royal Free Hospital NHS Trust, I am very familiar with the excellent work that is done by pharmacists in the hospital service. I also know many community pharmacists. I am a great supporter of the valuable service which an effective community pharmacist provides to his local population. As a member of another healthcare profession, I am acutely aware in that capacity that all of us as prescribers or patients depend on the pharmacist to do his job carefully and accurately. (Throughout my speech whenever I refer to "his" I also include "hers".) Dispensing the wrong medicine to a patient can have very serious consequences. Errors in labelling or the giving of the wrong advice about how and when to take medicine, or whether it is safe to drive or to drink alcohol with the medicine, can also be crucial to the safe and effective care of the patient.
When one thinks about it, it is easy to appreciate that a pharmacist suffering from an illness that affects his ability to perform his critical tasks may need to refrain from practice or to practise only under conditions that ensure that any risk to the public is minimised. Of course, in many cases the pharmacist will take responsible action to deal with his health problem. He will stop work or restrict his work while he recovers. There are occasions when that does not happen. The Royal Pharmaceutical Society of Great Britain, which is the professional body for pharmacy, currently has no powers to act in the few cases where the competence of pharmacists is affected by physical or mental ill health or drink or drug-related illness and they do not voluntarily cease to practise. The society wishes to have

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these powers. This Bill seeks to create a new mechanism to enable the society to protect the public in these circumstances.
The most acute problems that have been brought to the attention of the society by colleagues, family or patients concern pharmacists who apparently have been suffering from mental illness but have been unable or unwilling to acknowledge any health problem. In addition to mental health problems, physical conditions can affect competence. For example, a pharmacist who suffers from poorly controlled diabetes which affects concentration can as a result make dispensing errors.
This Bill provides for a new committee of the society to be set up—a health committee—to hear cases where it appears that a pharmacist may not be fit to practise. I believe that the cases will be few in number, but the House will recognise the importance of having procedures to deal with these cases. It is essential that any action necessary to protect the public from error occurs as soon as possible and, whenever possible, before any harm occurs.
The Royal Pharmaceutical Society is under a duty to maintain a register of pharmaceutical chemists, and no person may act as a pharmacist in Great Britain unless his name is in the register. The health committee will therefore have jurisdiction over all registered pharmacists in Great Britain. Northern Ireland has its own pharmacy legislation and its own professional body, the Pharmaceutical Society of Northern Ireland, and that is why the Bill does not extend to the Province.
The profession of pharmacy in Great Britain is governed by the Pharmacy Act 1954. The Act establishes a disciplinary committee, the statutory committee, which has power to remove pharmacists from the register of pharmaceutical chemists, but only following a conviction or serious misconduct. The statutory committee has no jurisdiction in the case of a pharmacist before he has done wrong. For the society to be aware of a problem but not be able to act until the pharmacist has committed an offence is clearly unsatisfactory.
While commenting on this, I wish to pay regard to the excellent work that the husband of Baroness Flather has done as chairman of that committee over many years. She is here; I thought it would be a pity if she was not here, but as she will no doubt speak later, I will reply on that point then.
Health care professions which are governed by more recent legislation, including the medical, dental and nursing professions, have procedures in their governing statutes for dealing with ill health among their members. This Bill will do the same for pharmacy.
It may reassure Members of the House to learn that the society has in recent years established voluntary and benevolent schemes to help pharmacists suffering from ill health or stress. These will continue. Where a pharmacist who is too ill to practise recognises this and voluntarily ceases to practise while he recovers his health, there will be no need for the procedures provided in the Bill to take place.
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I hope I can explain briefly what this Bill will achieve. First, it will establish a committee of the Royal Pharmaceutical Society of Great Britain to consider allegations against pharmacists of unfitness to practise due to ill health. A case will be heard by a tribunal including a medically qualified chairman and a pharmacist. Allegations of unfitness brought to the attention of the council of the society will be investigated and where there appears to be substance to the allegation they will be referred to the health committee for hearing. In cases of urgency it will be possible for a case to be heard speedily, possibly even within a week.
The committee, if it decides that the pharmacist's fitness to practise is affected by ill health, will either make a conditions of practice order or a suspension order. A conditions of practice order may include any conditions which the health committee thinks necessary. Where it is essential to protect the public by suspending the pharmacist's right to practise, the committee will make a suspension order. The committee will specify the duration of the order, but the Bill provides that no order can be made for a period of more than three years, and the committee may review an order at any time. It may, on review, vary or revoke an order or substitute another order if it believes that is what is needed. Procedures for investigating allegations and for hearings and appeals will be specified in regulations.
I will not attempt to explain in full the detailed structure of the procedures established in the Schedule to the Bill, but I would like to draw to your Lordships' attention just three more important points.
First, rights of appeal to an independent appeal body are provided as a right to any pharmacist who is the subject of an order made under the Bill's provisions, and the pharmacist will also have the right at intervals to have the order made in respect of him reviewed.
Secondly, in cases where the health committee considers it essential in the public interest to do so, it may, having heard the case, order the immediate suspension of the pharmacist; in other circumstances the pharmacist will have a period within which to appeal before the decision takes effect, and if he does appeal then (except in the case where interim suspension is ordered) the operation of any order made by the committee will await the outcome of the appeal.
Thirdly, the health committee is under a duty to ensure that any order it makes is the minimum necessary to protect members of the public.
I hope your Lordships will have no difficulty in accepting this Bill and I commend it to the House.
Moved, That the Bill be read a second time.—(Baroness Gardner of Parkes.)
7.55 p.m.
Baroness Flather: My Lords, I rise to say a few words on this excellent Bill. My interest has already been declared to some extent by my noble friend Lady Gardner. My husband has served as the chairman of the statutory committee for seven years and therefore what I am about to say really reflects his views. I put these views to your Lordships because my husband is

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concerned that there are a few points which might cause difficulties later on, and it is probably much better for them to be looked at at this stage.
Unfortunately, there was not an opportunity for him to be consulted; whether that was due to the pressure of time or whether it just went by the by, I do not know; but he was not consulted as to the contents of the Bill and he is someone who has been asking for such a committee to be established throughout the time that he has served as the chairman of the statutory committee.
As your Lordships may imagine, he has been under great difficulty when faced by situations where there is danger to the public and he has had no alternative but to suspend the pharmacist under the heading of misconduct. Clearly, it has been grossly unfair to the pharmacist to be suspended under that heading when he or she has been suffering from health problems or an addiction of some kind. My husband is therefore absolutely delighted that the matter will now be handled properly and it will be much fairer to the pharmacist.
Some of the points that he has asked me to make to your Lordships are as follows. He feels that a pharmacist ought to be informed under new Section 13B(6) of the Pharmacy Act what steps are being taken to obtain information about him, as it is likely that it could be through a competitor and it would be much better if the pharmacist were informed; it would be much fairer.
In new Section 13C(2) of the Act the words "well-founded" are used, but a standard of proof should be stated and it should be at least on the balance of probabilities. He suggests that, after Section 13C(2)(b), the power to impose conditions which must be complied with before any review of the order is made under Section 13D should be added so that other conditions can be made, such as that the pharmacist keeps in touch with pharmaceutical practice; that he attends for medical treatment for example; that he remains drug free for one year, two years, and so on; or that he produces a medical report on any subsequent review about his condition. That would let the pharmacist know very clearly what was required of him.
As my noble friend has stated, the suspension cannot be for longer than three years. At the present time in the GMC the normal practice is to call in a case some months before the end of the three-year term, unless, of course, there has been reason to withdraw the order earlier, and then to review it to see whether the doctor would be fit to come back into practice after the three years. If there were a further three-year suspension in the case of a pharmacist or doctor, it would be difficult for that professional to return to practice without further qualifications. It is important that that point is clarified.
Under new Section 13G(3) hearsay evidence is excluded. My husband suggests that tribunals normally admit hearsay. It should be left to the legal assessor to decide what is admissible and what is not; or one might have to have the butcher, the baker and the candlestick maker in court to say what happened to them when they went to obtain their prescriptions. That is the current practice of the GMC and the GDC.
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Under Schedule 1B, paragraph 2, at least one, and preferably two, members of the committee should be lay members. Safety of the public is one of the criteria. The GMC and the GDC have that. It gives the public more confidence in the body's impartiality. In the procedure contained in paragraph 4(1), my husband suggests that at least one of the members should be a lay member.
The appeals tribunal panel excludes members of the statutory committee. My husband feels that those are the members who have had the most experience of evaluating evidence. He does not understand why the provision is stated in that way. If a case which starts out as a misconduct case turns out to be a health matter when the evidence is heard, it cannot be sent to the health committee. Equally if a case which has been heard by the health committee turns out to be a case of misconduct, it cannot be sent to the statutory committee. Those powers exist for the GMC and the GDC.
Most of the points that have been made are based on GMC and GDC practice rather than that of the osteopaths, which is probably the model for the Bill. Finally, in the next Session I hope to table a Private Member's Bill to give the statutory committee the power to order interim suspension in line with this Bill. For the protection of the public, it is essential—in some cases at least—that the pharmacist should not be allowed to continue practising for at least a further three months.
8.3 p.m.
Lord Hacking: My Lords, I intervene briefly, and apologise for not having heard the opening words of my noble friend Lady Gardner of Parkes. I ask for her confirmation that there are provisions allowing for suspension of a professional person on the grounds of unfitness to practise for doctors, dentists, and veterinary surgeons. I receive acknowledgement of that from my noble friend.
It would be helpful to know how far that list extends in relation to health services. It may not occur to your Lordships—I noticed a distinguished Member of your Lordships' House who is a chartered accountant sitting on the steps of the Throne—that lawyers or chartered accountants are in the business of looking after the health of the nation, but these provisions do not exist for lawyers or chartered accountants, who can continue to practise when unfit to do so owing to health problems.
8.4 p.m.
Lord Rea: My Lords, we on these Benches welcome the Bill. The only question I have to ask is: why was it not before both Houses a long time ago? I thought that we were aware of all the ramifications and implications of the Bill, but the noble Baroness, Lady Flather, came up with some useful details, obviously emanating from an expert source. I hope that the Minister will be able to answer her noble friend to her satisfaction.
Apart from protecting the public, one of the good things about the Bill is that it will result—perhaps under a certain amount of duress—in sick pharmacists obtaining the treatment which they would probably not have done before when they were denying or unaware of the fact that they were ill.

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The noble Baroness, Lady Gardner, said that the Bill had been ably conducted through another place. However, when I looked at Hansard of another place for 17th January, when the Bill came before that place, nothing was said about it except that it was presented, read a second time, went through the Report stage, Third Reading and was passed. Not one word went into Hansard about the Bill's contents. Two cheers for democracy, I say on that one, and in this case three cheers for your Lordships' House, because we have debated the Bill as it should be debated, and it is now on the public record. We have no objection to the Bill, and I hope that it goes through all its stages quickly now that we have aired the various points. I hope that the Minister will be able to satisfy her noble friend about the detailed points that she raised.
8.7 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, I am grateful to my noble friend Lady Gardner for bringing the Bill before your Lordships' House and explaining its contents so clearly. Her experience of the health service, both as a former practitioner and now as one of the most influential trust chairmen in the country, is extensive and her knowledge prodigious. Her fitness to propose the Bill is beyond question.
As my noble friend has said, pharmacists practising in the community and in hospitals play a crucial role in promoting health, and in delivering care. As a profession they have been progressive in taking pharmacy forward. The Royal Society has sought to involve the profession through its document Pharmacy In a New Age, which has resulted in some clear and positive initiatives. It is committed to improving the accessibility and availability of pharmacy services, guaranteeing high standards in the profession, and to ensuring that all pharmacists participate in continuing professional development.
When it comes to dispensing medicines, pharmacists are the experts. Dispensing requires a high level of accuracy—supplying the wrong drug or failing to notice a dose that is too high can be fatal. For general health and medication in particular, patients frequently seek the advice of their pharmacist who may suggest appropriate self-medication.
Increasingly, doctors and pharmacists work closely together. Both in hospital and in the community they have sought to compile agreed formularies and thereby promote effective prescribing patterns and value for money. The pilot schemes for nurse-prescribing have also shown how nurses appreciate the knowledge and advice of community pharmacists, and we welcome these approaches which use all the skills within primary care.
The Government have made clear in their proposals for the NHS and in particular in the National Health Service (Primary Care) Bill (which noble Lords will only be too well aware has just completed its passage through your Lordships' House) their intention to employ pharmacy skills more flexibly and to make the
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most of new opportunities. Among other things, the Bill enables pharmacists to provide services such as advice to residential and nursing homes situated in a neighbouring health authority.
Last year, we ran some successful pilot projects which showed how pharmacists can help GPs improve the quality and cost-effectiveness of prescribing. Those ideas are now being adopted right across the country. This year we are running pilot studies into the value of repeat dispensing; supporting patients with compliance problems; and "pharmaceutical care packages" which involve in-depth assessment of patients' needs, carrying out a review of their medication and monitoring their progress.
These roles will build on the services which many pharmacists are already undertaking, such as domiciliary visits to help patients manage their medicines properly or advising residential homes on the storage and administration of medicines.
So the pharmacists' contribution is an essential element in the totality of healthcare; but we know it can be a stressful job and on occasions pharmacists can feel professionally isolated. It is in all our interests that they should be both physically and mentally well, and when this is not the case, it is right that there is a formal system for remedial action. That is the purpose of the Bill.
As my noble friend has said, other professions have provision for health committees with powers to deal with these situations. Doctors, dentists and nurses have health committees quite separate from their disciplinary bodies. In recent years your Lordships have supported Private Members' Bills making statutory provision for the regulation of chiropractors and osteopaths. Both these Acts include provision for separate committees to deal with practitioners who are unfit to practise due to ill-health. Last month the General Osteopathic Council formally came into being; and only last week I announced the designate membership of the first General Chiropractic Council.
The Royal Pharmaceutical Society is anxious that it should have similar powers so that it can deal with the cases which arise. Every profession will include members who, sadly, become ill and the need to protect patients is paramount. That is what this Bill seeks to do. As my noble friend has said, the procedures established by the Bill provide arrangements for the investigation of allegations and the consideration of cases. This should ensure that the health committee will impose only the minimum restrictions necessary to protect the public.
I am very pleased that my noble friends Lady Flather and Lord Hacking support the Bill. Indeed, I thank both my noble friends and the noble Lord, Lord Rea, for making a number of telling points which I am sure my noble friend Lady Gardner will address as appropriate. As it is a Private Member's Bill, it is right that she should do that. The Government strongly support the Bill and commend it to your Lordships.
8.12 p.m.
Baroness Gardner of Parkes: My Lords, I thank the noble Lords who have taken part in the debate. In introducing the Bill, I paid tribute to Mr. Flather for his work over seven years and I said that I thought my noble friend Lady Flather was not in the Chamber. Having listened to her speech, perhaps it would have been better if she had not been in the Chamber!
My noble friend pointed out many material improvements which could be made to the Bill. I accept the points that she has made. However, this is a Private Member's Bill and in order for the Bill to become law, it cannot be amended in any way in this House. If it were amended, it would have no hope of achieving Royal Assent. I understand that all these Bills must go through in a matter of minutes in the other place.
The noble Lord, Lord Rea, pointed out that there was no debate on the Bill when it was introduced in the other place and I understand that when it returns there, there is even less time available. Therefore, we must either have the Bill as it is or no Bill at all. That is a very difficult decision. It is true that faults have been pointed out. However, I believe that the Bill still answers a need and I believe that it is appropriate that it should become law.
I take a number of points which my noble friend made; for example, that hearsay is usually admissible in tribunals. That is absolutely true and is an interesting point.
I am pleased that my noble friend's husband is asking for this committee to be established and that he appreciates the difficulty of health cases. I understand that in the past my noble friend's husband will have had to deal with the sort of cases to which she referred under the heading of misconduct when really they were health cases. I am sure that he has handled those matters very sensitively and well, but that has not been an easy process. Therefore, it is important that there should be the change to a health committee and I am glad to hear that my noble friend's husband supports that.
The point was raised as regards what investigations should be carried out. I believe that the pharmaceutical committee should have the right to inform someone of what investigations it is carrying out, if it wishes to do so. That might be something that the Royal Pharmaceutical Society could look at, to see whether there would be any greater fairness if that could be done. That society is a highly reputable body which would want to do whatever was best.
It is probably deliberate in the Bill that disciplinary committee members cannot serve on the health committee. I believe that there is a deliberate separation of discipline from health matters. I do not believe that that is in the Bill by accident. The Bill has been drafted deliberately in that way. However, as I said, because it is a Private Member's Bill we cannot alter it in this House if we wish it to become law. I thank my noble friend Lady Flather for the issues which she has brought before the House. I hope that she will explain to her husband that we are in a procedural difficulty in relation to this matter and we wish to ensure that at least some powers exist.
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I support strongly the point she made that there should be a Bill to give interim suspension orders to the disciplinary committee. That leads me to the point made by my noble friend Lord Hacking that dentists and doctors have that power. I was involved in that legislation, which was brought forward about a year ago. I understand that those provisions are working quite well. My noble friend asked me about veterinary surgeons and I am afraid that I do not know anything at all about them. I do not know whether they come into the accountants' and solicitors' category or that of doctors and dentists. Therefore, I am unable to help him on that. But I know that we have dealt with interim powers of suspension for doctors and dentists. There is a need for the disciplinary committee to have those powers. My noble friend Lady Flather and I have discussed that point often in general conversation. It has been recognised only in recent years how important it is to give immediate teeth to the professional bodies so that they can protect the public.
I hope that your Lordships will give this Bill a Second Reading and I thank all noble Lords who have taken part in the debate.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Local Government (Gaelic Names) (Scotland) Bill
8.18 p.m.
Lord Gray: My Lords, I beg to move that this Bill be now read a second time. The Bill has government support and has come about principally as a result of representations made by the Western Isles Council and was introduced by the honourable Member for Renfrew, West and Inverclyde, Thomas Graham.
The Bill is designed to enable any Scottish local authority which wishes to do so to use the Gaelic language for the statutory name of its council. That option is not available presently because, although the Local Government (Scotland) 1973 permits a council to choose or change its name, Section 2 of the Local Government etc. (Scotland) Act 1994 stipulates that in addition to the word or words descriptive of its area, a council's statutory name must include the word "council".
While that provided for consistency of terminology, it has also prevented the adoption of a statutory name in Gaelic in any area where there is a strong local wish for that. That seems most unfair and compares unfavourably with the position in Wales, where bilingual names are required by law.
While there is no widespread wish in Scotland to require all councils to have Gaelic names, it is fitting that it should be possible to use the local language traditionally spoken. Western Isles Council, in whose area 68 per cent. of the population are Gaelic speaking, has long campaigned legally to call itself Comhairle Nan Eilean, which it already does informally.

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My council at home is Argyll and Bute. It uses the Gaelic language selectively and in some localities. I imagine, however, that it is less likely to change to Comhairle Earraghaidheal Agus Bod than Highland Council is legally to adopt Comhairle Na Gaidhealtachd, which it already uses bilingually in non-statutory contexts.
The meat of this Bill is in Clause 1, which amends existing legislation so that, with the Gaelic "Comhairle" in place of the English "council", a council may "by a resolution" opt for a Gaelic name. Under the terms of the 1973 Act such a resolution requires two thirds of a council to vote at a specially convened meeting, which is only appropriate for a matter of such importance.
For the avoidance of doubt, subsection 1(B) of Clause 1 provides that a council which has chosen a Gaelic name may subsequently, "change it back into English", however preposterous that notion may seem.
This Bill corrects an anomaly and gives recognition to the culture and tradition of our people. I commend the Bill to your Lordships.
Moved, That the Bill be now read a second time.—{Lord Gray.)
8.22 p.m.
The Earl of Mar and Kellie: My Lords, I certainly welcome the Bill and congratulate the noble Lord, Lord Gray, on the thorough and complete way that he introduced it. The noble Lord lives in Taynuilt and I have a brother who lives in the manse of Kilmelford, so Argyll matters are brought to my attention. Local authorities are very dear to the heart of Scottish people. They are proud of their achievements and resent assaults upon them. I am very proud of the achievements of Clackmannanshire Council and I shall speak about it later. There is dismay at the putting of personal consumption before service provision, especially in education. I cite the rise in class sizes in that respect. They were supposed to be safeguarded by the Union Treaty.
I turn now to the Gaelic language. I welcome its resurgence, and especially the funds which have become available for Gaelic television. I notice that it has become necessary to put English sub-titles into Gaelic television programmes because of the amount of the latter. I welcome that fact. I believe that it is important for us to have a bilingual approach at all times. I say that because the English language is the lingua franca; for example, I understand that aircraft are landed all over the world with the use of the English language. I am in favour of the use of local languages, but I also believe it most important that standard English should be taught wherever possible.
I was interested to read in today's Scotsman that a "Gael" is to be defined as someone who has Gaelic as his or her first language and that it does not refer to where a person lives. I also notice that we already have the bilingual approach in transport; indeed ScotRail has been busy putting all the names of stations on the line
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out to Kyle of Lochalsh into Gaelic. I noticed that while taking part in the Special Select Committee on the crofting Bill. It is a boon for the road sign industry and is also being introduced unofficially into local government. I recognise that this is also happening in Wales and Ireland. However, in neither Wales nor Ireland do people bother to translate B&B into Welsh or into Gaelic, nor do they bother much with commercial signs for tourists.
The Bill recognises the reality of the situation—and this is where my Gaelic accent will be even worse that than of the noble Lord, Lord Gray, which I thought was most impressive, despite what he said to me beforehand. Clearly the Western Isles Council would very much like to be called Comhairle Nan Eilean. Already the Highland Council has taken a subtitle of Comhairle Na Ghaidlealtacd. It strikes me that the subtitle approach is a rather good one. I shall not attempt to repeat the name that the Argyll and Bute Council has adopted as its subtitle. In fact, I am wondering whether the subtitle names are covered by the Bill. Perhaps the Bill is about the headline titles and only the Western Isles Council really wants to change its name.
However, the Bill makes it appropriate for all local authorities to use Gaelic which of course was much more widespread. My own dynamic local authority could change its name to Comhairle Na Clackmannan which would be a curious mixture of Gaelic and Pictish. Most of the names in Clackmannanshire are of course of Pictish origin. Indeed, I cite Alloa, Tillicoultry and Tullibody.
Of course there are other foundation languages in Scotland and perhaps we ought to be considering a Bill which would allow their use. Here I cite Doric, Lallans, Pictish, Norse and other Celtic languages. The unfortunate thing about using Doric is that we would end up with places having councils with the slightly uneducated sounding equivalent of, say, "Aberdeenshire cooncil" which might not come over terribly well.
In the case of Orkney and Shetland the word "Ting" could easily be used. Examples of this lie in Dingwall, Rosshire and Tingwall in the Isle of Man. When reading the report of the Napier Commission in preparation for the crofting Bill, I noted the imposition by default of the Scottish feudal system onto the Norse udal tenure system which was the result of the islands being a dowry for the marriage of Alexander III to the Princess of Denmark. It seems to me that, in compensation, we perhaps ought to allow the Orkney and Shetland councils to adopt the words "Ting", although I realise that we would probably need another Bill to do so.
Finally, I very much welcome the Bill. It recognises the culture and linguistic tradition of Scotland. It is perhaps symbolic rather than substantial but it is not unlike the welcome return of the Stone of Destiny. The Bill does honour to the position of Scottish local authorities. I wish it well.
8.30 p.m.
Lord Macaulay of Bragar: My Lords, like the noble Earl, Lord Mar and Kellie, I congratulate the noble Lord, Lord Gray, on introducing this small piece of

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legislation. Nevertheless, it may be a small step along the road to having the Gaelic language properly incorporated in the culture of Scotland.
I speak at fairly short notice. I was not aware that the Bill has Government support. I was not aware either—until the noble Lord, Lord Gray, indicated this—that the impetus for the Bill came from the Western Isles Council. I am not sure that I agree entirely with the interpretation of the legislation as explained by the noble Lord, Lord Gray, but no doubt that can be looked at rather more closely at the Committee stage.
I refer to the 1973 and 1994 Acts. I believe that the 1973 Act allowed names to be changed, but there is no mention of the language in which the name must appear. Therefore, on one view, one could use any language one chose to change a name. Legislation may be completely unnecessary in that regard. This is an interesting Bill. There is some degree of jocularity as regards the Bill in your Lordships' House. Noble Lords ask who is speaking on the Gaelic Bill, for example. However, the matter is much more serious than that. I hope that is not an attitude which any Member of your Lordships' House would take towards any other community in the United Kingdom. There is a flourishing Gaelic community both in terms of language and economic development which deserves all the support it can be given by the Government.
If this Bill is enacted, I hope it may herald a better understanding and greater consideration of the Gaelic language and culture, and of the people in the Highlands and in the Lowlands who speak Gaelic. At the moment it is not an official language. Various efforts have been made to print leaflets on welfare rights and other matters in Gaelic. However, as far as I am aware, none has yet been produced. If they have been produced, they must be of a minimal quantity. However, when I walked into a post office recently, I counted leaflets printed in some eight different languages, most of which were completely unintelligible to me. There was no sign of a document in Gaelic.
The Western Isles Council, Comhairle Nan Eilean, is to be congratulated on the stand it has taken. It alone reached the decision to call itself Comhairle Nan Eilean rather than wait for any legislation before doing so. If my memory serves me correctly, its coat of arms bears the legend of the county council in Gaelic. Jobs are advertised in Gaelic in the Western Isles. One can even obtain a bank book in Gaelic in the Western Isles from a bank which I shall not name in case I am accused of promoting one bank against another. The bank book will contain the name of the bank and one's own name printed in Gaelic. The only item which I believe is not printed in Gaelic is the amount one owes the bank. That may be another example of the single currency rule applying throughout the United Kingdom. However, I am not quite sure about that.
The Western Isles Council, on behalf of its own people, has sought to recognise its people's identity. There is no reason why other councils should not now change their name and ask the Government, or whoever is concerned, to declare the translation of the name of the council into Gaelic as illegal. The Gaelic name
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of the Western Isles Council has been in existence for a considerable time. As far as I am aware, no one has tried to tell the council it cannot do that.
I refer to the question of costs in the Bill. The Explanatory and Financial Memorandum states,
"The Bill will not result in any additional burdens on business".
However, if a council changes its name from an English name to a Gaelic name, there may be a burden on the council, as notepaper and other items have to be changed. However, the Welsh have taken this step. There is a strong Welsh lobby within the Palace of Westminster. I refer to the Welsh language Bill. The Irish have their own language. They found a simple solution to this question. When I was in Ireland before the troubles started, I found that the street names appeared both in English and Irish. The Irish found a solution without resorting to any statutory measure; namely, they took a black paint brush, painted out the English names and left the Irish names. That was not of much help to the tourist industry at that time except for people who intended to lose themselves in Ireland until properly directed to wherever they wanted to go.
Like the previous two speakers, the noble Lord, Lord Gray, and the noble Earl, Lord Mar and Kellie, I welcome this Bill on behalf of this side of the House as a starting point to greater achievements and recognition of the Gaelic language not only in the Highlands but throughout Scotland, and indeed throughout the United Kingdom.
8.36 p.m.
The Earl of Lindsay: My Lords, I join the noble Earl and the noble Lord, Lord Macaulay, in congratulating my noble friend and kinsman Lord Gray on presenting this Bill to the House and on his fine speech. I also congratulate him on the expertise with which he incorporated Gaelic into the proceedings.
The Government support this measure. It will, in effect, allow councils to change their name into Gaelic if they have a strong wish to do so. A change of name would still require a resolution of the council, with two-thirds of the members having voted on it. That was well explained by my noble friend. This measure has the support of the Western Isles Council in whose area Gaelic is routinely spoken.
The Bill supplements the Government's commitment to supporting the Gaelic language and culture. We have taken a number of major initiatives in recent years; for example, the creation of the Gaelic Television Fund, now known as the Gaelic Broadcasting Fund, which the noble Earl, Lord Mar and Kellie, has welcomed, and the adoption of further new measures to maintain and strengthen the development of Gaelic education. These initiatives clearly demonstrate that commitment.
Such measures, among others, are doing much to enable the Gaelic community in Scotland to meet its aspirations for the development of the language. The financial resources which we have allocated to support the language have risen from the £61,000 which we inherited in 1979 to well over £11 million in the current financial year. We are planning to spend a further £300,000 on Gaelic in the coming financial year.

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We welcome the contribution which this Bill makes to the promotion of the Gaelic language and Gaelic culture. I am delighted that noble Lords on other Benches have also welcomed it. The noble Earl, Lord Mar and Kellie, queried whether sub-titles of councils would be affected by this Bill. The Bill is about the headline title. However, councils will wish to use a sub-title in the other language of their area, where appropriate.
I join the noble Earl in welcoming the extent to which, in the public sector especially in the Gaelic speaking areas of Scotland, increasing use is being made by other organisations of the Gaelic language. I inform noble Lords that my arts and cultural heritage division at the Scottish Office, which has direct contact with the Gaelic community, has bilingual headed notepaper and makes use of bilingual signs in the offices. In addition, the agricultural training that my department organises in Gaelic-speaking areas provides documentation in both English and Gaelic. We are determined that the efforts which are being made by others—the noble Earl mentioned ScotRail—is reflected by efforts that we are making.
The noble Lord, Lord Macaulay, suggested that the use by the Western Isles of its Gaelic name at present could be illegal. That is not the case. It is used only unofficially. On official documents the name is still the Western Isles Council. Anyone who has received correspondence from the Western Isles Council will see that alongside the name it includes the Gaelic name. The Explanatory and Financial Memorandum to the Bill describes the implications for public expenditure as minimal. I believe that to be correct. The noble Lord, Lord Macaulay, was uncertain about, for instance, stationery costs. The Western Isles Council is an example of a council which already prints in both languages on its paper. We stand by the assertion on the Title page of the Bill that public expenditure implications should be minimal.
The noble Lord also wondered whether the legislation was necessary. It is necessary, otherwise councils would be called the name of the area in Gaelic or, as the noble Earl suggested, in Pictish or Doric. It would then be obliged to use the word "council" rather than "cooncil".
It is an important Bill. I am delighted that my noble friend Lord Gray has introduced it so expertly. I wish it well.
8.41 p.m.
Lord Gray: My Lords, I thank everyone who has taken part in discussions on the Bill. I thank my noble kinsman the Minister for his kind remarks.
I was pleased that the noble Earl, Lord Mar and Kellie, nodded in the direction of British Rail, which has contributed to the promotion of the Gaelic language with its renaming. He seemed to suggest that we might soon discuss a Bill to allow councils to have Pictish, Doric or
1524
even perhaps Norse names. Nonetheless, despite those slight worries, it was pleasant to have a welcome from the Liberal Benches.
I am glad that the noble Lord, Lord Macaulay of Bragar, did not criticise my Gaelic pronunciation. I was a little disappointed that he suggested that any of us spoke in this Chamber except in serious vein. It was inevitable that we should have a laugh with one another about whether our Gaelic was from Argyll, Western Isles, Inverness or Clackmannan. His question concerning the 1973 Act has been answered by my noble kinsman the Minister. However, without referring to any authority, I am fairly certain that, unless provided otherwise, in terms of legislation passed in this Parliament a name would have to be in English unless the contrary were stated. I do not think that there is a problem but I shall consider the matter and be ready for any argument that may come forward. I doubt that a Committee stage matter arises on that point.
The noble Lord commented about expense. I do not think that we need to worry too much. As my noble kinsman the Minister pointed out, and the noble Lord, Lord Macaulay, acknowledged, bilingual names are in place at present. The substantial point as regards the Bill is that in future in deeds, official documents, and so on, a council which chooses a Gaelic name will be able to use that name. At present in such official context, the body is restricted to the English name. The Highland Council and Western Isles areas have logos which combine the two names.
I do not think that I can usefully say more beyond endorsing a general welcome for the encouragement of Gaelic and the contribution that Her Majesty's Government are making towards that. I note that in the Highland Council area and Argyll and Bute slightly more children in percentage terms between the ages of three and 14 speak Gaelic than in the next age group. That is encouraging.
A Dhaoin-vaisle, I translate that—"my Lords"—since the Companion to the Standing Orders requires me not to address your Lordships in Gaelic, I again commend the Bill to your Lordships' House and trust that it will be given a Second Reading.
Lord Macaulay of Bragar: My Lords, before the noble Lord sits down, perhaps I may make clear that I was in no way being critical of the promoters of the Bill, the noble Lord, Lord Gray, the noble Earl, Lord Mar and Kellie, nor the Government. I regard the Bill as an important step in strengthening the status of Gaelic in Scotland. I am sorry if the noble Lord perhaps misheard or misinterpreted what I said. I look forward to further Bills making the language even stronger.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at fourteen minutes before nine o'clock.

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