Sitting of 2 July 1997

Preamble
The House met at half-past Nine o'clock

PRAYERS
[MADAM SPEAKER in the Chair]
9.35 am
Mr. Paul Tyler: On a point of order, Madam Speaker. I seek your advice and guidance. On page 167 of "Erskine May", the author writes:
"In the Commons no place is allotted to any Member: but by custom the front bench, on the right hand of the chair, called the Treasury bench or government front bench, is appropriated for the members of the administration. The front bench on the opposite side, though other Members occasionally sit there, is reserved by convention for the leading members of the Opposition. It is not uncommon for senior Members, who art constantly in the habit of attending in one place, to be allowed to occupy it as a matter of courtesy."
I draw three matters to your attention, Madam Speaker. First, two weeks ago hon. Members from the Conservative Opposition placed green cards on the Opposition Front Bench and attended Prayers in preparation for Scottish questions. I drew the matter to your attention, and hoped that, as I had done so, you would accept that a precedent had been established and green cards could be placed on that Bench.
Secondly, there is nothing either in "Erskine May" or in any Standing Order that I have been able to obtain that allocates any other Bench behind the Opposition Front Bench to any particular Member from any particular party.
Thirdly, accepting that there seemed to be no precedent to prevent us from doing so, my colleagues and I put green cards on a number of spaces in preparation for this afternoon's Budget debate. My colleagues came here this morning to pray in those places, expecting that that would establish their position for the business of the House today.
I seek your guidance, Madam Speaker. It is not my intention to cause difficulty today—[Laughter.]. I simply want to establish that this Parliament is in one respect different from the previous Parliament, and, indeed, from any recent Parliament, in that there is a substantial large block of Members from a third party.
With the help of the Library I looked up the records, and found that when that was last the case, in the 1920s and 1930s, the leader of the then Liberal party spoke regularly from the Front Bench. I ask your guidance, Madam Speaker, as to how the will of the electorate as expressed at the general election can be properly reflected in places in the House.
Mr. Peter Bottomley: Further to that point of order, Madam Speaker. May I ask you to reflect on two things? First, the matter is one which hon. Members ought to be able to sort out without involving the Chair—as on the occasion several weeks ago, when I placed a green card in the place at present occupied by the
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hon. Member for Bath (Mr. Foster). The Liberal Democrat Chief Whip rang me and explained what had happened before, so I did not use the card and did not provoke an incident.
Secondly, there are occasions when an hon. Member comes to the House with a prayer card, to take a place which is later used by a senior member of his party, a matter which I hope can pass without comment. We must move on, and the Liberal Democrats should not do again what they have tried to do today.
Mr. Tony Baldry: Further to that point of order, Madam Speaker. The hon. Member for North Cornwall (Mr. Tyler) has been slightly disingenuous in his description of what happened today, and there are matters that touch directly on your authority. Having been in the Chamber since before 9 o'clock, I can describe what happened. My hon. Friend the Member for Worthing, West (Mr. Bottomley) is right that we should be able to sort out these matters, but that is not the case. The Serjeant at Arms and your Secretary came into the Chamber—making it clear that they were doing so on your instructions—and told senior Liberal Democrat Members that what the Members were seeking to do was unacceptable, as the Benches above the Gangway were reserved for members of the official Opposition, while those below the Gangway were a free for all for anyone.
Given that the Serjeant at Arms made clear to senior Liberal Democrat Members what your ruling was, it is a gross discourtesy, not to the House but to you, that five Liberal Democrats have sought to assert themselves on the Opposition Front Bench. I hope that the House will understand that the Liberal Democrat Members could have been in no doubt about your ruling. It is clear that senior Liberal Democrat Members either have not sought to assert control over junior Members or have deliberately flouted what you said.
Mr. Dale Campbell-Savours: Further to that point of order, Madam Speaker. I have been in this House for 18 years, and the system of prayer cards is an abuse of our procedures, which should be brought to an end. The reality is that many hon. Members come into the Chamber allegedly to pray, but, in fact, all they are doing is booking their seat for the day. We all know that that is true and we should stop it. I ask you to set in train an inquiry into how that matter can finally be resolved. If I want a seat in this House, I will come in and take it. If a prayer card is on the seat that I have selected, I will remove it in the event that the Member has not turned up to pray.
What happens is an abuse and I appeal to you to bring this silly practice to an end immediately.
Mr. Menzies Campbell: Further to that point of order, Madam Speaker. I seek your guidance in respect of the proper construction to be placed on the passage in "Erskine May" to which my hon. Friend the Member for North Cornwall (Mr. Tyler) referred. You will be aware that the passage refers to the fact that the Opposition Front Bench
"is reserved by convention for the leading members of the Opposition."
Am I correct in saying that the convention has force only so long as it is universally recognised within the House, and that if it fails to continue to have universal

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recognition, its effect as a convention is diminished? Am I also correct in saying that if an hon. Member breaches Standing Orders, the Chair has the opportunity, the right and the obligation to exercise certain disciplinary powers? If there is a breach of convention, am I correct in saying that those powers are not available to the Chair?
Mr. William Cash: Further to that point of order, Madam Speaker. In respect of the convention described by the hon. Member for North Cornwall (Mr. Tyler), the critical issue is that it is defined by reference to the reason for the rule. The reason for the rule is, undoubtedly, to allow the proper conduct of business in this place. The official Opposition sit where they always do to deal properly with the business of the House. In that context, the Liberal Democrat Members are out of order, as the business of the House cannot be conducted if they remain in their place.
Mr. Nicholas Winterton: Further to that point of order, Madam Speaker. Unless I misheard him, the hon. Member for North Cornwall (Mr. Tyler) said that, from time to time, the Opposition Front Bench could be occupied by senior Members of this House. I am looking at Liberal Democrat Members, and in no circumstances could any of them be described as a senior Member of this House. Am I right that the success of Parliament and this House of Commons—and of this Chamber in particular—is based upon convention, tradition, precedent—
Mr. Michael Colvin: Trust.
Mr. Winterton: My hon. Friend is right. Is it not time that tradition, trust and precedent—which have led to the success of this House and made it the envy of the world—were implemented and honoured again?
Mr. Donald Anderson: Further to that point of order, Madam Speaker. I hesitate to intervene in a war on the Opposition Benches, but it does not really matter where a person sits for Prayers, because the Lord is no respecter of persons. However, it does matter for the convenience of the House. Therefore, it is proper for the official Opposition to sit in the appropriate seats. Equally, with a degree of good will on all sides, Benches should be reserved for the enhanced numbers of Liberal Democrat Members, and those Benches should properly be those above the Gangway. With a degree of good will on all sides—and without bothering you, Madam Speaker—the House can surely reach a decision.
Mr. Alex Salmond: Further to that point of order, Madam Speaker. As you know, I am a
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very tolerant person, but it seems to me that common sense would dictate that we have either reserved seats or a free for all. I do not mind which it is, but it must be one or the other. We cannot have seats reserved for some and a free for all for others.
Mr. Julian Brazier: Further to that point of order, Madam Speaker. I am not sure whether Prayers have made us any better tempered. I wish to refer to the Dispatch Boxes. I have not been a Member for as long as some of the earlier speakers, but I understand that the Dispatch Boxes play a special role in the life of the House. It is traditional for Ministers to speak from one Dispatch Box and for the Leader of the Opposition, or his nominated subordinates, to speak from the other. Would it not be inconvenient for the House if the Leader of the Opposition and his immediate subordinates had to put prayer cards in each day to have access to the Opposition Dispatch Box?
Madam Speaker: Have hon. Members finished with their points of order? Good.
It is custom and practice that the Opposition Front Bench is reserved for the official Opposition, and I shall see that that is maintained. It is also custom and practice that the area below the Gangway is for the minority parties. I shall look at all the points of order that have been put to me this morning, but I have never known grown-up people to behave—[Interruption.] I want my voice to be recorded. I have never known grown-up people to behave in such a crass and childish manner. I think that it is time that Members of this House grew up. If they do not, I shall want to see the leaders of the Conservative and Liberal Democrat parties very soon.
I hope that those Members now on the Opposition Front Bench who are not members of the official Opposition will do me the courtesy of removing themselves right now while I am on my feet. [HON. MEMBERS: "Hear, hear."]
I am taking no further points of order. We have business in this House, and I hope that hon. Members will resolve this in the next hour and behave in a more adult fashion. I am ashamed of this morning's proceedings.
Mr. Phil Willis: On a point of order, Madam Speaker.
Madam Speaker: Is it on another matter?
Mr. Willis: No.
Madam Speaker: No, it cannot be on the same matter. I have made my ruling.

Small Retail Shops
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
9.47 am
Mr. Archy Kirkwood: May I take the House back to the less contentious issue of high street shops? I am grateful to the Minister for Small Firms, Trade and Industry for coming to the House to spend some time on these important matters. The issue may not be highly charged politically—and I do not want to make a highly charged party political speech of any kind—but it is important, early in the new Parliament, to recognise that there are problems facing small family retail businesses, particularly in the high street, throughout the United Kingdom. It is also an appropriate day to raise the matter, because the Budget may have significant ramifications and consequences for small retail businesses. The Minister has time to nip across the street before lunch and insert the odd paragraph in the Chancellor's speech. The importance of the financial or economic context in which small retail businesses must survive should be recognised.
At the time of the election, going around my constituency in south-east Scotland, I was struck by the number of people who were concerned about the blight that they felt was beginning to affect some high streets. They spoke of the acute need for support for the built environment throughout the nation. When I made further inquiries, I was surprised to find that that feeling existed not just in south-east Scotland, but throughout the country.
The Government said in their election manifesto that they were anxious to give small businesses a major role, and I hope that the Minister will recognise that retail shops are an important part of the small business sector. I am not talking about rural or village shops, or post offices; their needs were addressed in the previous Parliament. Nor am I thinking of shops in small towns. In the previous Parliament, the Select Committee on Trade and Industry produced a valuable report on larger conurbations; we await the Government's response, which I hope will be positive and will give succour to small retail shops. I am more concerned about small communities—market towns such as eight or nine in my constituency, including Hawick, Kelso and Jedburgh—containing between 5,000 and 15,000 people. The economic centre of such a community is its high street, where historically—for centuries, in many instances—the retail sector has existed.
Those high streets are the backbone of the local community, functioning as a social meeting place as well as providing retail goods. People need a place where they can meet and exchange news, views and gossip. Social intercourse is as important to the local community as the business that is done in the high street. In my constituency, there is a real danger of blight in such areas. Blight is a pretty drastic word, but the situation is now serious.
Once the problem had been drawn to my attention, I took note of what had happened in the recent past. One of the difficulties that bedevil the Government relates to the collection of statistics about, for instance, turnover and closures. There are some statistics—small newsagents
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have been monitored carefully by their trade association, and the community pharmacy campaign has been investigating individual sectors—but I suspect that the Government will find it hard to establish the way in which the trends are developing and the problem is building up.
There is anecdotal evidence, however. Anyone who wanders along the high streets of the United Kingdom will see that the atmosphere of diversity, wealth and colour is not what it was. Most premises are occupied either by banks and other financial institutions or by off-licences, which are doing very well. I know that the Government are concerned about that. There is an increasing number of charity shops, which is also causing concern.
The reasons for what is happening are many, varied and complicated. As I said at the outset, the Budget is an important part of the equation: the economic climate is a vital aspect. In my area, there are signs that things are beginning to pick up. Long may that continue, and I hope that the Government will use this afternoon's Budget statement as an opportunity to promote such developments.
Sociological factors are also having a dramatic effect on the high streets. Increased mobility enables people to travel further in order to shop and I fear that the situation will get worse before it gets better. Competition from supermarkets has also had an effect. In some market towns, there is a supermarket at one end of the high street—serving a useful function, it must be said—and an open market with a car park at the other end, functioning at the weekends. Twin pressures are exerted by the organised power of big commercial businesses such as Sainsbury, and competition from market traders and stallholders. Those pressures may have been underestimated in the past. Transport policy is another problem. The difficulty of convenient parking on the high streets is a major disincentive: in the past, people were much more willing to walk to and from shopping centres.
One of the main reasons why some high streets have suffered so much is that, because of financial constraints, local authorities have found it difficult to organise strategies to enhance local areas and underpin the high street environment. I hope that, if it achieves nothing else, this debate will lead to the recognition that not just central Government but local authorities have a vital role to play. I hope that the Government will acknowledge that. I also hope that central Government and local authorities will consider the effect of non-domestic and water and sewerage rates on the economic viability of some small family businesses.
I know that it will not be easy, but it would be a real step forward if a tax system could be established for the small retail sector that was more directly related to profitability. At present, if some of the small family businesses in the high streets of my town were required to pay rates on the basis of what they had earned at the end of the year, they would be receiving handouts from the local authority. Some are on the very margins of profitability. The issue is not simple and it is not new, but this Parliament should give it urgent attention.
Local authorities have an important function in setting the rules for planning and development. The previous Secretary of State for the Environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer), is a man with whom I have little in common, but he did some sensible work—perhaps too late—in trying to redress the

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balance between town centres and out-of-town supermarket development. The physical environment is extremely important for our high streets.
Tourism is an extremely and increasingly important industry and is promoted by a positive high street environment. Tourists look forward to being able to take advantage of a pleasant and interesting high street; those in south-east Scotland are not finding what they expect. We ignore at our peril the impact on the tourist industry of letting our market town centres fall into too much decay.
Corner shops and high street shops are increasingly a soft target for crime. The plate-glass window is an inviting target on Friday nights when people have drunk too much and are showing youthful exuberance, to put the kindest possible construction on it. The insurance companies have begun to put enormous premiums on replacing those windows, some of which are curved and extremely expensive. That knocks the stuffing out of family businesses that have to replace glass at great cost three, four or half a dozen times a year and to pay increased premiums. That is dispiriting, debilitating and demoralising.
In the middle term, the next 10 or 15 years, we face the prospect of additional pressure from electronic shopping. Information technology is moving on and we have electronic banking. The President of the United States was properly encouraging people to think about global marketing for small companies, and there may be some advantages in that, although I do not see how the sale of children's shoes in the high street could gain much benefit from access to the Internet.
None of those points will be new to the Minister, but they are worth putting on the record. The problems are getting worse and putting increasing pressure, day by day and month by month, on people trying to earn a living as retailers in small market towns.
My constituents are concerned about charity shops. I understand the emotional reaction, as people are worried that their high streets and market squares are being taken over by those shops and feel instinctively that they are responsible for the degradation. That analysis is superficial and wrong, because charity shops have a valuable role to play.
My generation and that of my parents and grandparents had more extended families and a hand-me-down system of recycling children's clothes, and five or 10 years ago some local charity shops were offering a valuable service in replacing that system, but things have moved on a long way since then and major national charities with big merchandising departments now take advantage of rate relief and the empty spaces in our high streets. Of course, we all support the causes for which they raise money, and I recognise, because they tell me so with monotonous regularity, that they are also under great pressure because of the national lottery.
The extent to which charity shops are filling gaps in high streets is beginning to be a matter for concern. The Government should examine carefully some of the rate exemption rules and whether they are being observed as punctiliously as they should be. I have no evidence for it, but my constituents feel that charity shops are taking unfair advantage of some of the exemptions.
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Charity shops have an indirect impact on the downward spiral in high streets because they can afford rents that would fall if they were not there; in their absence, the owners of empty shops would be prepared to consider rent reductions to a level at which a bona fide small family business would be viable. They are unwittingly distorting free market processes.
We do not want to be antipathetic to charities and we want to keep the best of what they provide in our high streets, but we must recognise that there are now too many of them and that they have an indirect collective effect on the economies of our high streets.
I accept that it is not easy for the Government to have a hands-on, direct impact and transform the situation overnight—there are many underlying causes of the problem and the background is complex—but will the Minister acknowledge that there is a difficulty? I am sure that she does not need any extra tasks, but I hope that she will commit herself to a serious examination of the problems and lend a listening ear to those in the sector.
One of the problems that bedevil the sector is the fact that it does not have a united voice and an overarching view; it does not have access to the public relations machine of Sainsbury and other supermarket chains. The Federation of Small Businesses does valuable work, but it finds it difficult to bring together the many strands of the sector to give it the authority that it would like.
Will the Minister explain how the Government intend to deal with the cross-departmental nature of the problem? She is not in control of crime or local government, so the House would be grateful if she could explain how the different departmental perspectives can be brought to bear on the problem. On Budget day, we do not need to be told again that there are difficulties with money, but a little pump priming could go a long way.
A cross-departmental task force would give us some confidence that the Government are serious about dealing with the situation, although I know that they are reviewing much of the legislation, and one would expect nothing different from a new Administration, after 18 or 19 years of government by another party.
Although others have tried before her, will the Minister consider the problem of how non-domestic rates are unrelated to profitability? We have precious little time to find a solution to that, if we are to make some positive improvements to the lot of small retail businesses. The Minister should consider the use of local partnerships, probably spearheaded by local authorities, which could be pump-primed. That would enhance the built environment. Local enterprise companies also have a role to play in encouraging small projects to renew the built environment of high streets.
It is a hard but important task. I hope that the Government will commit themselves to studying the matter seriously during the current Parliament. They should work with those who represent the needs of small businesses in high streets to make some progress. I know that my hon. Friends and I will be constantly at the Government's shoulder to put pressure on them at every opportunity, so that the problem can be addressed robustly and effectively in the years to come.
10.10 am
Mr. Frank Roy: Thank you, Mr. Deputy Speaker, for allowing me to speak in this important debate, which has great relevance to the people

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of Motherwell and Wishaw. I agree with much that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said: there is a need for a coherent policy for town centre regeneration.
The need for a coherent policy to encourage small retail shops is abundantly clear, especially in the main street of Wishaw. The retailers of Wishaw have been left to pick up the crumbs left from years of industrial decline and falling disposable incomes. At the same time, they have had to face the problems of spiralling overheads and a dwindling customer base.
The debate also allows me to make my maiden speech in the mother of Parliaments. I have the great honour to be elected as the first locally born and bred Labour party Member for the constituency of Motherwell and Wishaw. To be able to represent the community in which one has been brought up and where one lives is a great honour and it is a source of great pride not just to me, but to my family, friends and neighbours.
I should like to acknowledge the members of the Motherwell and Wishaw constituency Labour party who worked tirelessly for my election. I should also like to thank the voters of Motherwell and Wishaw who gave me and my party their trust on 1 May. I look forward very much to working on their behalf in the years to come.
The man whose footsteps I follow, Dr. Jeremy Bray, is not only my predecessor but a close family friend. I was his parliamentary election agent in the general election campaigns of 1987 and 1992. I am sure that all hon. Members would like to join me in wishing Jeremy and his wife, Elizabeth, a long, happy and healthy retirement.
Jeremy Bray was born in Hong Kong in 1930. He enjoyed a truly global education, which started at Eastnor village school in Herefordshire. He then attended Clefoo missionary school, China; Aberystwyth grammar school; Kingswood school, Bath; Jesus college, Cambridge and, finally, the illustrious Harvard university. He was a journalist, economist, mathematician and author.
Jeremy first entered Parliament as the Member for Middlesbrough, West in 1962. In 1965, he led the campaign against cigarette advertising. It seems that it has taken some of us nearly 32 years to catch up with Jeremy's advanced thinking.
My predecessor enjoyed various stints as Parliamentary Secretary—in the Ministry of Power in 1966 and in the Ministry of Technology in 1967, a post which he held until his resignation in 1969. He lost his seat for Middlesbrough in the 1970 general election, but re-entered Parliament as the Member for Motherwell and Wishaw in October 1974. Later, the constituency was renamed Motherwell, South. He was reappointed Labour's science and technology spokesman in 1989 and held that post until 1992.
To me, Jeremy Bray's finest performance in the Chamber was in April 1990 when, still recuperating from a life-saving heart bypass operation, he determinedly turned up to speak in defence of his constituency steelworks at Ravenscraig. Those works and its 10,000 steelworkers ultimately suffered from what they described as a death by a thousand cuts. To his great credit, Jeremy fought against every cut along the way. I had the honour and privilege to be Jeremy's parliamentary election agent and I now have the even greater honour of being his successor.
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Until recently, Motherwell and Wishaw was at the heart of industrial Scotland. Indeed, to many we were the heart of it. The area played an integral part in a proud industrial heritage. That heritage gave conception to the famous steelworks of Lanarkshire, Dalzell, Clyde Alloy and Ravenscraig. They all played a crucial part in the manufacturing sector of Scottish life but, today, after years of dereliction, only Dalzell remains in operation.
The steelworks had a fiercely proud and efficient work force who prided themselves on their steel-making expertise. Indeed, as a Ravenscraig steelworker for 14 years, I hope that in my new parliamentary career I am able to find the same level of friendship, honesty, professionalism and dedication among my fellow parliamentarians as I did among my fellow steelworkers at Ravenscraig.
When those same steelworkers were about to retire or be made redundant, they used to say, "Listen son. You can take the man out of the steelworks but you can't take the steelworks out of the man." How right they were.
Motherwell and Wishaw, and Lanarkshire as a whole, might have lost the steelworks, but we have not lost our steel determination to rebuild our communities and create a new dynamic base for the manufacturing service sectors that will become the new heartbeat of our resurrection from industrial decay and decimation. Our small retail shops have a major part to play in that resurrection.
The regeneration of Motherwell and Wishaw, and of Lanarkshire, has already started. Inward investors realise the potential of an area where workers have shown their ability to adapt to modern technology and work practices. The area, which is at the heart of west central Scotland, is rich in skilled labour and modern purpose-built units and has a first-class infrastructure. It is an area in which people look after their neighbours and recognise the importance of family ties. They genuinely want to create a better life style for their children and their children's children.
Motherwell and Wishaw is made up of two towns with their own distinctive areas. Forgewood, Jerviston, Flemington and Muirhouse are among those in Motherwell and Craigneuk, Netherton, Coltness and Pather are among those in Wishaw. The constituency is also home to the old mining communities of Cambusnethan, Waterloo, Overtown, Carfin and New Stevenston on its outer edges.
As hon. Members have probably gathered, Motherwell and Wishaw is not an area of leafy country villages and rolling meadows, but it is a constituency with a heart and with feeling. It has a steel determination to rebuild itself for the new century and the new millennium. As a new Labour Member with a new Labour Government, I very much look forward to playing my part in its resurrection.
10.18 am
Mr. Colin Breed: I congratulate the hon. Member for Motherwell and Wishaw (Mr. Roy) on his maiden speech. His comments about Ravenscraig will have struck a great resonance in many of Cornwall's tin miners, who suffered at the same time—it was not that long ago. I remember our feelings of solidarity with that part of the country although, of course, we were a long way away from it.
Small family retail shops have been the mainstay of shopping centres for decades and have provided jobs that contributed directly and indirectly to the local economy.

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Until recently, a number of small shops in my constituency took produce from local suppliers up and down the Tamar valley, where small horticultural operations provided them with fresh fruit and vegetables, but the rapid decline of the small shops and the prosperity of our town centres has knocked out many small horticultural operations and so caused even more job losses. The combination of high rents, the foolish introduction a few years ago of so-called upward only rent reviews, the imposition of the uniform business rate and the extraordinary growth of out-of-town supermarkets even in very rural areas have all contributed to the loss of small retail concerns from our high streets.
The latest competition, as my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) mentioned, comes from charity shops. I am certainly not against charities trading in the high street. In many respects, they provide a useful service to the community, but their enormous growth in recent years has had some detrimental effect. They have affected some towns in Cornwall, where they have put out of business long-standing second-hand shops and shops that traded in used furniture. They are helped by their ability to use voluntary labour and to receive business rate relief. They sometimes pay higher rents, but they can also pay lower rents because of the value of covenants on leases. Many landlords greatly value the opportunity of leasing premises to a national charity rather than to a small family firm that may be considered vulnerable. All that makes for uneven competition.
Many local councils try to raise additional income—using one of the few means possible—from their car parks. As local councils' responsibility for the rates of retail operations has been removed, they have raised car parking charges. Perhaps they have had slightly less interest in the health and prosperity of the main street because of the operation of the uniform business rate. Not unnaturally, more shoppers choose to avail themselves of free parking in out-of-town centres, being unwilling to pay ever-increasing car parking charges in our towns.
Sales by small retailers have declined considerably over the past 10 years with the rise in out-of-town retailing, and more and more in-town units are being left empty.
Mr. David Heath: I agree with my hon. Friend about the effect of the uniform business rate on smaller towns. Does he agree that a significant problem for market towns in constituencies such as ours is that they fall between the assistance that is available from the Rural Development Commission, rural development area status and so on, and the urban programmes that apply to larger towns? While that does not fall within the responsibility of the Minister, she may wish to make that point to her colleagues. Our market towns are suffering from competition from larger conurbations.
Mr. Breed: I agree with my hon. Friend. That is one of the many issues that need to be addressed in a comprehensive review.
The situation in the high street has been made worse recently by the amalgamation of building societies, some of which have moved from the high street, and the
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reduction of the number bank branches. Often, such units are harder for ordinary retailers to occupy. They stand empty, gathering dirt and dust and creating blight on the high street. Town centre planning policies must take account of those new developments, which affect almost every high street in every town. They are changing the shopping scene and the way in which we use our high streets.
I hope that the Government will urgently consider ways to support the remaining small retailers. They have a distinct function, particularly in respect of competition. They are fighting a difficult battle, but if there is not to be a further drift to what would be almost a monopoly for the large supermarket retailers, which now have some 60 to 70 per cent. of all retail sales, some provision needs to be made for small retailing units in our high streets.
The former Government recognised the problems of small village post office stores. Many grateful post office storekeepers in my constituency were very pleased. Although it came rather late in the day and was rather modest, that initiative addressed the problems. Virtually the same problems are hitting our high streets. Some towns are considering the use of town centre managers to co-ordinate the activities of retailers in the high street by bringing them together to market themselves more forcefully to local consumers to provide some measure of competition for large out-of-town retailers, but they need additional assistance. If the retailing centres that form a valuable part of our smaller towns are not to decline further and family businesses are not to continue to close, they need support.
10.26 am
The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): This has been an important and interesting debate. I congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on having chosen the topic. I thought that the debate would range far and wide, and it did, but it focused on some real concerns. Many issues were raised and much of what the hon. Gentleman said chimed with what was said by other hon. Members. I hope to be able to respond as fully as possible. The headline topic for this debate is small retail shops. The feelings expressed by many hon. Members show how socially essential we believe small independent retailers can be.
We had the privilege of hearing the excellent maiden speech of my hon. Friend the Member for Motherwell and Wishaw (Mr. Roy). He paid a sincere and well-deserved tribute to his predecessor, who is a friend of us all. I have no doubt that what he said about his constituency, his pride at having been born and brought up there and his great feeling for the area will mean that over the years he will be a fine and able representative and make an outstanding contribution to the work of the House. We also heard a good contribution from the hon. Member for South-East Cornwall (Mr. Breed), who echoed some of the concerns that have been mentioned.
The contribution of this vital sector is important. Small retail shops provide the variety, choice, vitality and diversity that consumers desire. It is that vitality, diversity and convenience which the public—the people we represent—miss so much when those shops disappear. I shall explain later how the new Government are determined to improve matters by forging an effective partnership with all sectors of business in this country.

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I shall first put the United Kingdom's retail sector into context. Retailing is vital to our economy. Sales of about £160 billion mean that it accounts for almost one quarter of gross domestic product expenditure. Retailing gives direct employment to almost 2.5 million people, with many others providing services to support that activity. The retail sector also accounts for more than 30 per cent. of the UK's commercial property portfolio. Those are impressive statistics.
Mr. Kirkwood: It is helpful to place the sector in context and show its importance and value, but is the Minister satisfied that the statistics available to her are disaggregated to the extent that she can identify what is happening in the high street? The statistics are important and powerful, but I suspect that the vast majority of that value is generated by much bigger businesses than some of those on which we are focusing this morning.
Mrs. Roche: It is interesting that those independent outlets contribute about 25 per cent. of the figure—they play a significant part.
Today's debate has provided us with an opportunity to acknowledge the significant part that small retailers play in our day-to-day lives. Many people enjoy having the daily newspaper delivered through their front doors, although I suspect that hon. Members' enjoyment depends on what the daily newspaper has to say. Unlike the independent newsagent, however, we do not have to get up at 4 or 5 o'clock in the morning to organise deliveries. At the other end of the day, when people drop in at their local convenience store to buy essential items that they need, they may meet a shop owner who has already been working for more than 12 hours. It is a hard, competitive and difficult life. As the hon. Member for Roxburgh and Berwickshire and others have said, competition from larger supermarkets and other retailers has made business even tougher.
The hon. Members for Roxburgh and Berwickshire and for South-East Cornwall mentioned the problem of crime, which is a real problem for many of our small retailers. The Forum of Private Business, one of our small business organisations, has done a great deal of valuable work on this subject, which is a matter of concern. There clearly needs to be close co-operation between the police, local authorities and the business community to ensure that our town centres are as safe as possible. I know that when my right hon. Friend the Home Secretary introduces the crime and disorder Bill in the near future he will have those considerations very much in mind.
The reasons why retail competition is so strong are as many and varied as the topics in today's debate. Changing life styles and expectations, differing family circumstances, new product ranges and consumer services, the growth of supermarkets and other large stores, have all combined to produce a dynamic sector. If one stands still in retailing, as in any business undertaking, one loses ground.
Mr. Andrew Stunell: The Minister spoke about crime, a subject which causes as much concern in small shopping centres as in large town centres. The outgoing Administration made grants available through the Home Office for closed circuit television in many centres. Does the Minister agree that that programme should be developed and extended in future? There is plenty of scope for partnership between
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local authorities, retailing organisations and local traders groups, but financial prompting is often needed. Perhaps the Government will see their way to providing it.
Mrs. Roche: In opposition, we always supported closed circuit television, which can be very useful. In the Wood Green shopping area in my constituency, we are about to install closed circuit television after an enormously successful pilot project. A possible assault on a police officer was prevented and a missing child was returned to its parents. I agree that close co-operation between all the major players is necessary and I will bring the hon. Gentleman's remarks to the attention of my right hon. Friend the Home Secretary.
While considering the good things that the sector has to offer, we must acknowledge that there has been a substantial reduction in the number of retail businesses in the past 10 years. Almost 50,000 retail businesses have disappeared in that time, the vast majority of which have been single shops. While some of those businesses may have been taken over by larger retailers, the hon. Member for Roxburgh and Berwickshire graphically described, through the example of Hawick, what many hon. Members will also know from their constituency mailbags and surgeries—that a large number of those small retail businesses have been forced to close. That has brought severe hardship to the shop owners and their families, as well as in many cases the loss of lifetime savings and even retirement nest eggs. The policies of the previous Administration have certainly contributed to the pain suffered by independent retailers.
I do not intend to dwell at length on the failures of the previous Administration, but I feel that I must comment on the approach taken to planning policy, an important subject which the hon. Member for Roxburgh and Berwickshire outlined. The latter part of the 1980s saw a virtual free for all on retail planning which led directly to the disappearance of high street diversity and a reduction in consumer choice. I acknowledge that two attempts were made in this decade to reimpose tighter retail planning guidelines and that the sequential test for new retail shopping developments, together with impact assessments, now provides local planning authorities with a much sounder base against which to judge planning applications.
As my ministerial colleagues have made clear, we do not propose to review the English retail planning guidelines at present, although we are concerned to see them applied firmly and consistently and to monitor their effectiveness. However, the review of the Scottish retail planning guidelines which started in March is continuing.
Those stricter guidelines were too late, however, to save many small independent retailers. It was a classic case of leaving the stable door open for too long. While I accept that consumers have welcomed some of the new out-of-town developments, the consequences of the then Government's planning guidelines for small high street retailers cannot be over-estimated. There are too many examples of shopping centres and high streets closing. People do not go to areas where there are boarded up shops, and a vicious circle is created. People do not want to go to shops in those areas, so the shops close and crime proliferates. We all have experience of that as constituency Members of Parliament.
What do the new Government want to do? First, we have made it abundantly clear that we regard small firms as vital to the success of an enterprise economy.

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A healthy, vibrant small business sector creates wealth and employment and generates new ideas and products—small retailers fall within that category. We are determined to deliver the right conditions so that small retailers and other small businesses can thrive and grow.
The Government are firmly committed to making Britain a prosperous and competitive nation. Last month, my right hon. Friend the President of the Board of Trade outlined the Department's agenda to achieve that. It is a programme to forge a real and effective partnership with business. The "Competitiveness UK" agenda comprises a number of different elements and I assure hon. Members that the role of small and medium-sized enterprises, especially small retailers, will be part of that agenda.
Unified business rates have been mentioned today and there is no doubt that the system is widely disliked and perceived as being unfair. That message came out loud and clear at the "Your Business Matters" conference set up by the previous Government. It also emerged from the report undertaken by the Institute of Directors, which brought together some of the comments made during that consultation process. The small retail sector has certainly had to bear the burden of that system.
We are committed to carrying out a full consultation with the business community about returning to a locally set rate. One of the advantages of localising the system is that it gives a locus for the major partners—local authority, police and business community—to get together on many issues, such as closed circuit television, cleaning up town centres or other exciting initiatives in the high street. Where the local authority, police and business community—especially the small retail sector—all work together, the effect in terms of delivering an enhanced service cannot be underestimated and we strongly support such collective efforts.
Several hon. Members mentioned the growth of charity shops—an issue which is frequently raised by the retail sector. Our debate has been a well-balanced one and it has been acknowledged that the alternative to the presence of charity shops would probably be vacant premises, boarded-up shop windows and a generally rundown appearance. However, I also understand the strength of feeling among small retailers who regard charity shops as unfair competition.
This is a sensitive issue and Parliament has previously recognised the importance of charity shops to the fund-raising efforts of charities. In the United Kingdom, we are proud of the generous support that so many people give to various charities. Specific legislation allows, in certain circumstances, a partial and discretionary relief on rates. Charity shops are, of course, a valuable source of revenue for the charities concerned and I am sure that we have all seen reports of how charities' funds have dropped dramatically recently. Charity shops often enjoy the benefits of being staffed by volunteers and of reduced rentals for the property.
I can only say that we have no plans at present to change the current overall position on charity shops, but we will keep in close contact with hon. Members on both sides of the House who wish to raise these issues and with the business community in general and the small retailers sector in particular.
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I have already touched on town centre improvements. Combinations that bring together local authorities, police, business, chambers of commerce and other organisations help town centres to grow and prosper.
We will also work within Europe to ensure that British views are heard and respected. We will shortly complete the Government's response to the EU Green Paper on commerce, which was published late last year. Cross-departmental work was mentioned and I assure the House that, in co-ordinating the Government's response, we are ensuring that such work and consultation take place.
We shall also be seeking other ways to help the UK retail sector where resources permit. I was very pleased that among the recent announcements of winning bids in the sector challenge was a successful bid from the Booksellers Association. The Booksellers Association project is based around improving members' competitiveness by creating an Internet site which delivers information both to members and to the public. The association has a broad membership of which some 2,000 are single site shops and a key objective of the project is to ensure that those small retailers add value to their businesses by helping them to compete more strongly.
We are also considering a proposal for support for a project aimed specifically at small grocery shops. The project will aim to increase the awareness of the benefits of using modern technology in those shops. I am sure many hon. Members will wish to join me in paying tribute to the small grocery shops which, in many towns, are the cornerstones of their communities and, moreover, are now run by members from our ethnic minority communities. They make a great contribution not only to the commercial viability of our towns and villages, but to the social fabric of our lives. Pensioners and other people who may not have ready access to a car find such shops extremely helpful.
New technology has been mentioned and I believe that it can play a significant part in the lives of small retailers. I recently visited a well-established, family-run business in my constituency and went behind the scenes to see how everything was baked fresh on the premises. New technology is playing its part in that business.
Mr. David Heath: Has the Minister's Department considered the potential of lottery terminals which, for better or worse, are in many shops nowadays? They are an underused information technology connection which could provide a much wider shop floor to isolated or small shops. Is that something her Department has considered?
Mrs. Roche: No, but I was about to say that in our manifesto and in the documents on the small firms sector that we produced in the run-up to the general election we discussed our ideas for what we called the enterprise zone, whereby small and medium-sized enterprises could be put on-line with a dedicated site on the Internet. In that way, small businesses would have access to information that might be of great use to them. If the hon. Gentleman will write to me on that subject, I shall be only too pleased to consider his comments and bring them to the attention of my right hon. Friend the Secretary of State for National Heritage. Plans for the enterprise zone are under way and the hon. Gentleman may find the proposals of great interest when they are launched.
The Government are also pushing forward with help for small retailers in respect of training. Advice and support are, of course, available to all firms through

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training and enterprise councils—local enterprise companies in Scotland—and business links. Small firms may receive assistance to improve their in-house capacity to train or to work towards the investors in people standard. We certainly want to see more initiatives to help the independent owner-manager, because in the past owner-managers have been somewhat left out of some of the training initiatives. As the Minister responsible for small firms, I am concerned to ensure that we do not forget the training and skills that owner-managers wish to acquire as their businesses grow and prosper and they want to move forward.
A number of projects are already examining the needs of small retailers. Five projects involving groups of small retailers, under the skills challenge, are nearing completion. Meanwhile, a management development project currently under way in Lincoln aims to design and deliver a retail management development programme for owner-managers of small retail outlets. The programme also involves branch managers of larger retail organisations in Lincoln and the surrounding areas. The programme draws on sector standards and aims to improve the competence of the participants, thereby helping them to improve the performance and competitiveness of their stores. I welcome such projects. There is much to be gained in retailing and other aspects of business life from small and large firms working together for their mutual advantage.
We have had a very good debate today, although it is difficult to do full justice to the importance of the independent retail sector in such a short time. I nevertheless thank the hon. Member for Roxburgh and Berwickshire for bringing the subject to the House today; I also thank other hon. Members for their positive contributions.
I hope that I have shown that the Government are already taking action to help small retail shops and are determined to push on by tackling other areas such as business rates. That will involve many Departments working together in the type of co-operative initiative for which the hon. Gentleman has called. We shall make sure that that co-operation is enhanced; our response to the EU Green Paper on commerce gives us the context in which to do that.
There is clearly a great deal of interest in the House in this subject. We will certainly give it the full attention that it deserves. Our small shops are vital to life in the United Kingdom, and they deserve our support—and the support of constituency Members of Parliament at local level. I can assure the House that the Government will give these shops all the encouragement that they need to enable them to succeed: they deserve no less.
10.51 am
Sitting suspended.
11 am
On resuming—
Mr. Peter Lilley: On a point of order, Mr. Deputy Speaker. May I draw to your attention a very serious matter relating to the deliberate release of information about the contents of the Budget to journalists before the Budget has been delivered to the House? Can you confirm that the last time that a Labour
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Chancellor deliberately released contents of the Budget that he was about to deliver in the House he subsequently felt honour bound to resign as Chancellor of the Exchequer?
Earlier today, I was contacted by journalists who told me that they had received explicit confirmation from the Treasury that the Budget would, among other things, include the abolition of tax relief on private medical care for the half a million elderly people in this country who provide for themselves. There is, I think, no precedent for the Treasury giving such advance briefing on such matters, and in today's Financial Times there is a statement that, following market stories about the possible abolition of advance corporation tax credit,
"A senior member of the government said: 'The markets are bonkers … we are pressing ahead.
This is, of course, an extremely market-sensitive matter, as well as a matter affecting the authority of the House. Can you confirm that when, in the past, the contents of Budgets have been leaked by those who have not been authorised to do so, there have been police investigations of the matter? Would it not be appropriate in this case that you or Madam Speaker authorise an investigation, establish who is the
"senior member of the Government"
who has been leaking matters to the press on highly price-sensitive issues, have them brought to the House and have the details of your investigation brought to the House, so that we may know why the Treasury is now behaving in such an extraordinary fashion for which there is no satisfactory precedent?
Mr. William Cash: Further to that point of order, Mr. Deputy Speaker. On the occasion in 1947 when something similar occurred—leading to the resignation of Sir Hugh Dalton—subsequent to the matter being raised in the House a Select Committee on the Budget Disclosure was set up. As things develop today, as the information becomes clearer, would you not accept that that course should be followed and that the matter should be thoroughly investigated, because this is not only a matter which affects the markets but a great contempt of the House?
Mr. Denis MacShane: Further to that point of order, Mr. Deputy Speaker. You may recall that in September 1996 it was widely leaked in the press that profit-related pay would be phased out in the November Budget—which did happen—allowing a large number of companies to set up PRP scams before the Budget. No disciplinary action was taken against the Ministers responsible and no investigation was undertaken by the House or by the Treasury. This is synthetic froth; the House should get on to the debate.
Mr. Deputy Speaker (Sir Alan Haselhurst): First of all, it is not the responsibility of the Chair to rule on matters which occurred in the past. As to the present matter, it seems to me that it is a Government matter and not one on which the Chair can rule as to what has happened. Ministers will have heard what has been said and doubtless there will be opportunities, today or subsequently, for further comment on the matter.
Hon. Members: Now.
Sir Patrick Cormack: On a point of order, Mr. Deputy Speaker. You will be presiding over

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the Budget statement this afternoon and in your capacity as Chairman of Ways and Means you must surely be deeply disturbed by what has been said by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley). May I ask you to suspend the sitting to make investigations and then to report back to the House as to whether you are satisfied that the Budget has been leaked? If it has, it is a situation wholly without precedent because, despite what my hon. Friend the Member for Stone (Mr. Cash) correctly said about the late Dr. Dalton, the circumstances in that case were very different.
Mr. Deputy Speaker: I do not believe that this is a matter on which the Chair can rule. If the alleged leak has taken place, it is a matter for the Government to pursue; it is for the Chair to determine that the Budget statement will still be delivered in the normal way.
Mr. Lilley: Further to that point of order, Mr. Deputy Speaker. I entirely accept that this is a matter relating to the Government, in that the Government are the culprits, but the point made by my hon. Friend the Member for Stafford—
Sir Patrick Cormack: Stone.
Mr. Lilley: I am sorry. The point made by my hon. Friend the Member for Stone (Mr. Cash) was that on previous occasions such things have been dealt with as a matter for the House and investigated by a Select Committee of the House. Surely it would be appropriate to consider whether we should take similar procedures on
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this occasion to investigate the deplorable insult to the House and the dangerous treatment of the markets by the Government.
Mr. Dale Campbell-Savours: Further to that point of order, Mr. Deputy Speaker. What is the position? No allegation has been made by a member of the Opposition that the Chancellor of the Exchequer leaked the Budget. That has not been alleged. What has been alleged is that some minor official in the Treasury may have made a statement that was subsequently commented on by a member—possibly—of the Government to a journalist. In other words, we have a series of hearsay statements which the Opposition are seeking to turn into a major scandal. They will fail.
Mr. Michael Fabricant: Further to that point of order, Mr. Deputy Speaker. The hon. Gentleman may be unaware that the Financial Times states:
"A senior member of the government said".
It was not an official. As you will know, Mr. Deputy Speaker,
"A senior member of the government"
is the code for the Chancellor himself.
Mr. Deputy Speaker: This is not an matter that can be debated at this moment. There is a subject for debate before the House at present. I do not believe that it is for the Chair to rule as to whether subsequent action is taken. Any decision which might or might not be justified for the purposes of investigation by a Select Committee or any other means would not be determined by the Chair.
Obviously, there will be other opportunities for such a matter to be raised if it is justified, but I can see no point in these proceedings continuing further at this time. We must move on to the debate.

Exchange Rate
11.7 am
Mr. Austin Mitchell: I was delighted to see the full attendance by Opposition Members for the debate; I thought that, after 20 years of maintaining an overvalued exchange rate, they had actually come along en masse to testify to their conversion to a belief in competitive exchange rates. Now that they are leaving the Chamber because they cannot face hearing the catalogue of their failures, I am a little disappointed, especially because this is an extremely important subject—potentially more important than this afternoon's Budget statement in its effects on the British economy. I am delighted, therefore, to have the opportunity to draw attention to it in this debate.
We are facing an unprecedented increase in the pound sterling exchange rate—in other words, in the competitive price of our exports on export markets—which has taken us back to the levels that we were at when we were in the exchange rate mechanism. The pound is now at a five-year high. That is the prelude, in my view—in my fears—to an industrial blood letting of the type that the two previous highs, in the early 1980s and the early 1990s, produced in British manufacturing.
The exchange rate has the potential to undermine anything that the Chancellor does. Unless British industry has the prospect of competitiveness—in other words, of generating profits—we shall not get the investment that we want in our economy. Unless there is a prospect of demand for industry's product, we cannot generate new jobs and put people back to work.
The exchange rate rise threatens both profitability—and therefore investment—and employment. The facts are stark. In the year to April 1997, the pound rose by 17 per cent. against the ecu, by 22 per cent. against the deutschmark, by 7.6 per cent. against the dollar—which is rising itself—and by 26 per cent. against the yen. Those are the currencies of our competitors.
This morning, The Guardian says that the pound is 26 per cent. higher against the deutschmark and the franc than it was last August. Those are horrifying figures. That direct loss of competitiveness comes at the end of a long period in which the pound has been overvalued. Indeed, it is a long period in which our relative export unit cost—the measure of our prices against those of our competitors for manufactured goods—has risen.
John Mills has calculated for me that, from 1973 to 1997, the loss of competitiveness on relative export unit costs was between 40 and 50 per cent. It is difficult to have a more precise calculation because the bases keep changing but an increase of 40 to 50 per cent. in the price of our manufactured exports is disastrous for competitiveness. What would happen to Sainsbury if it faced such price rises on its shelves when Asda or Tesco did not? Sainsbury would quickly close, which is the effect of that sustained rise on the British economy.
What can British industry do? Although it can cut costs, fire workers or stop research and development and other measures that contribute to its long-term survival, it can do none of those on a scale adequate to compensate for the increase in its prices which the exchange rate has forced on it against its will and its judgment—a force outside its control. That rise in prices threatens it with disaster.
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People tell me that exports are doing well. So what? Firms continue to export without profit just to retain their share of the market because they know that once they are out of the market, they cannot get back in. That has been the history of British failure for 20 years, so companies naturally try to keep their exports going without a profit by holding their prices against the rise in the currency. That, however, is a finite process—it cannot continue for a sustained period. People said that trees had survived the drought, only to find that they suddenly collapsed because they had been rotting from the inside.
The main threat from the rise in the exchange rate is to manufacturing, because that is our front line. Manufacturing generates 60 per cent. of our exports. It is an extremely competitive market, which is becoming ever tougher and more competitive as the industrial power of the young dragons of the far east grows. Price is crucial in manufacturing exports because they must be sold at a price that generates a profit sufficient for companies to invest, stay in the game and expand. Unless their exports grow, they are dead in today's competitive world. And unless we can sell exports at a price that allows all that, manufacturing companies' long-term prospects are disastrous. They must run at full capacity and use that capacity to keep down their unit costs. As exports suffer, capacity usage declines and unit costs rise.
All that does not happen immediately, but early warnings are already appearing in company reports. I have been poring over company reports, profitability forecasts and warnings issued by companies, which show that companies are cutting investment, transferring production overseas and slimming down their work force. Profitability is now falling rapidly in crucial sectors, such as building materials; textiles; food manufacturing, which is a problem for Grimsby; pharmaceuticals; the tourism and leisure industry; and in oil.
British Steel has supplied a briefing to Members of Parliament warning of the consequences in dire terms for British Steel and all the firms who use its products if the exchange rate rise continues. It says:
"Britain's loss of competitiveness will also damage the UK's attractiveness to inward investment.
Sterling's overvaluation will have an increasingly negative effect on UK manufacturing industry exports.
The surge in sterling's value against the German DM (and other ERM currencies) is already adversely affecting the competitiveness of the UK economy."
ICI has issued warnings along the same lines and is sensibly transferring production overseas. Stirling Tubes in Walsall, Pilkington, the British Tourist Authority, Vero and Halma—new technology companies have fantastic names—have all issued warnings. I notice that they are all quicker to warn of the adverse consequences under a Labour Government. Under a Tory Government, they might have kept quiet for longer. I hope that the Government will respond to the warnings, but those companies are certainly quicker to cry pain under Labour whereas under the Tories they tended to grit their teeth and suffer. They do not do that now because they know what the consequences will be, and those will inevitably occur after a time lag. First, there will be cuts in research and development and in what is necessary to keep up with the field; secondly, investment and in everything necessary for survival will be cut; thirdly, jobs will then be cut and unit costs will go up. Eventually, the firm will go under.

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The tragedy is that we have seen it all before. Each time, we have had the same comfortable reassurances that we are getting now. We are assured that we can weather the problem and that British industry is competitive, lean and mean because it is dynamic. That is rubbish. The consequences for British manufacturing are the same now as they were in the two previous bouts of overvaluation. It is simply a truism to say that British industry is competitive at this exchange rate. By definition, any firm that still exports is competitive at this exchange rate. The problem is whether it generates sufficient profit to continue. In reality, it does not. Companies cannot learn to live with such a high exchange rate; they can simply learn to die with it.
The laws of economics and of elasticity and demand will not be suspended for new Labour, just as they were not suspended for the Tories. Exactly the same will happen now. The symptoms, the overvaluation and the warnings are the same as in 1979–82, when the Thatcher Government generated a massive overvaluation, and in 1989–92, when we belonged to the exchange rate mechanism. The collapse of the ERM afforded us some relief and made us competitive again—without disastrous inflationary consequences.
People say that if the pound comes down, we shall face inflation. That was disproved by the ERM experience. The same will now happen with consequences for manufacturing and for our balance of payments. The reverse J-curve effect occurs here. Just as with a devaluation, things get worse before they get better as the J-curve effect makes the balance of payments adverse initially before improving it enormously. With an overvaluation, therefore, it is the other way round and the reverse J-curve effect makes the balance of payments better before making it worse long term. Those balance of payments consequences will occur next year, when the balance of payments deficit will rise. The public sector deficit will also rise because workers will have been fired and will pay less taxes, and expenditure on benefits will also rise. Moreover, the public sector borrowing requirement will rise as a consequence of the decline in manufacturing.
We must tackle the central question: "Why is that happening?" This country has always been predisposed to an overvalued exchange rate because in our economy finance is strong while manufacturing is comparatively weak. The manufacturing industry is less listened to by the Government and has less influence on the counsels of the nation than the finance industry, which sits at the centre of our economy with its glorious City dinners attended by Chancellors and thinks that it speaks for the nation. Its interests lie in high interest rates—that is what the finance industry lives by. The interests of finance are in an overvalued exchange rate, because that allows it to acquire assets and to manipulate money around the world. Those are not the interests of manufacturing. Finance has always been too strong and too much heeded in our economy.
Mr. Bill O'Brien: On my hon. Friend's point about causes, will he comment on the fact that £30 billion is being injected into the economy by building
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societies acquiring plc status and paying people bonuses with their own money? Does my colleague think that that has a bearing on the heating of the economy?
Mr. Mitchell: My hon. Friend is right. I shall deal with that later. It is ludicrous that £30 billion of purchasing power is allowed into the economy. Even if people do not spend the money that they get from the shares, they still feel more confident. They feel that they have more money, so they spend more. That will produce a rise in interest rates. The Bank will warn of inflation, demand, and the threat of overheating, interest rates will go up and the consequence of that will fall on manufacturing—on the jobs of the people who are spending the money. It is one of the stupidities of our economic policy that that goes on. I agree with my hon. Friend.
The last two overvaluations were the prelude—or the consequence, because they occurred under the Tory Government—of wilful stupidity. That still exists because the Bank still influences our economic policy, but the stupidity was mainly that of the Government. In the first great Thatcher deflation, which was associated with enormous overvaluation, which in turn was the instrument of that deflation, the psychology was that British industry is like an English public school boy—it must be made vigorous, healthy, good and virtuous by exposure to punishment in the form of cold showers and frequent beatings. Manufacturing was subjected to such treatment, and 1.8 million jobs were lost as a consequence of that overvaluation.
The second overvaluation was caused by the Government's infatuation with the exchange rate mechanism. That lost us almost a million jobs in manufacturing, and about 1.5 million jobs altogether.
Now there is a little less wilful stupidity. The Government have changed, but we face the EMU mess. It cannot be described as anything else, much as my hon. Friend the Member for Rotherham (Mr. MacShane) would like to rush in and support it. There is uncertainty about whether ERM will go ahead, which is causing instability in the markets. The growing fear is that there will be a soft euro, which is bringing more money to the United Kingdom to push up our exchange rate.
Europe's problems are causing problems for us because they have the effect of raising our exchange rate. That will continue, because Europe will not clear up the mess quickly. It is staggering to see how elites are trying to force down the throats of electorates a monetary union that they do not want and whose consequences they know will be severe for them.
We will get no relief from Europe, which will go on causing us problems. The second cause of our problems is the fact that our interest rates are high—astonishingly high in real terms. I have a table from the Treasury. I believe that parts of it are wrong, but the Treasury figures show that real interest rates in 1996, adjusted for inflation, were 2 per cent. They are, of course, higher now because interest rates have gone up. In the 1970s, they were 0.75 per cent. or 0.5 per cent.—that was in 1977, for example. In some years, we had negative real interest rates. Now they are at a record high level.
The result is that money is coming to this country. The Swiss exchange rate is rising, but the Swiss are not paying interest on the money coming into Switzerland. We are paying generous interest rates, which attract more money to Britain.

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Like a self-trussed turkey voting for Christmas, we have delivered ourselves to markets, by the decision to hand interest rates over to the Bank of England and, having given up the monetary weapon, by our commitment not to use the fiscal weapon by increasing tax rates. That is perfectly acceptable to markets, confidence grows and people come in to invest in sterling and push our exchange rates up.
It was curious to give control of interest rates to the Bank of England at any time, but it was daft when interest rates have such an effect on the exchange rate by which we live and on the basis of which our exports succeed or fail in world markets; and it was crazy to do so at a time when the pound was going up anyway. That concession of interest rates pushed them up further because the Bank's thinking is, "When in doubt, raise interest rates." Its highest wisdom is to put up interest rates. It always thinks that the economy is overheating. Any glimmer of growth, and the Bank of England is howling that the economy is overheating. Three per cent. growth is pathetic by any standard for rebuilding our manufacturing base and generating jobs and well-being for the people, but the Bank is panicking. The financial committee warns of overheating and says that it is terrible.
The Bank always thinks of manufacturing industry as greedy workers and greedy shop stewards demanding more money if the economy expands. The real pressures for inflation come from the financial community and the City—as my hon. Friend the Member for Normanton (Mr. O'Brien) said, by pumping out money from demutualisation, which is in its interest—and from high pay in the City and lax credit. Most of the economic revival in the UK is due to an increase in the money supply produced by credit being poured out by the financial institutions.
The Bank blames manufacturing and, instead of dealing with the causes—the financial community itself and its methods of operation—it clobbers manufacturing with high interest rates and an overvalued exchange rate to make it suffer for the sins of others. That is a marvellous way of running an economy, but it is disastrous for any country whose economic base, like ours, is not wide enough and needs to be expanded. The asset inflation generated by finance, and not wages, is the only true cause of the current inflation.
The Bank of England is fighting inflation long after it is dead. That is necrophilia. Inflation is no longer a threat. It is in a glass case somewhere in south-east Asia. The enhanced competition of those economies, plus the breaking of wage inflation and the power of labour in the UK, which has been a tragedy in many respects, means that inflation is dead, yet the Bank of England is still clobbering manufacturing industry, which it sees as the cause of inflation. That is crazy economics.
Mr. Denis MacShane: Can my hon. Friend guide us by explaining why our inflation rate is none the less still significantly higher than that of the United States and most of our European partners, including those growing more strongly than we are? If wage-led inflation is dead, why is the anger over fat-cat pay feeding down into the labour market? We are seeing serious claims for 5, 6, 7 and 8 per cent. pay rises this year in many sectors.
Mr. Mitchell: I hope that my hon. Friend does not identify with the Clobber the workers theory of
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economics, which the Bank of England propagates. I hope that he will say something about information such as that published by British Steel, which affects his constituency vitally.
Our difference in inflation is marginal. The experience of the past few years both in the United States and the United Kingdom is that a fall in the exchange rate does not generate the inflationary consequences that were widely feared. For practical purposes, inflation is dead. To put it at the centre of economic policy, when the real problem is insufficient jobs, insufficient growth and a weak industrial base, is to live in the past and to fail. Whenever we get an expansion in the UK, we kill it.
Mr. Dale Campbell-Savours: I have been following my hon. Friend's logic closely and I agree with much of it, although not with his general position on these matters. If he argues that interest rates are at the core of high exchange rates, what does he suggest is the best way to manipulate interest rates down? Can he give us his agenda?
Mr. Mitchell: I am grateful that my hon. Friend is following my argument—with enthusiasm and joy, I hope, as it affects his part of the world as well as mine. I shall deal with the matter shortly. I did not say that interest rates were the only cause of high exchange rates. I said that turmoil in Europe was one of the major causes, as well as the strength of finance and the prevailing orthodoxy in economic management, which is attractive to speculators in this country. All those are part of the equation and must be taken into account.
I was arguing that the first response was to clobber manufacturing, and that raising interest rates was one of the instruments by which that was done. However, we live by manufacturing. It provides most of world trade and is the basis for most of our trade deficit. Do we in Britain never learn? We are heading the same way as we were before two previous disastrous blood lettings, at a time when we need to widen our industrial base and develop new industries. Manufacturing has been through 20 years of slimming down and overvaluation and it is suffering from anorexia instead of having a lean, mean, "Let's get at the markets" mentality. The position will be made worse by the battle against inflation that dominated the late 1970s and the 1980s. Overvaluation as a means of fighting inflation will have the same consequences now as it did then.
I do not want those consequences to occur under a Labour Government. If we are not going to redistribute wealth and increase taxes—and it is right not to increase taxes—we can generate the extra public spending that we need only through economic growth achieved through getting people back into work. How can we achieve that when overvaluation is leading us into the economic trap that I have just described? We cannot narrow the tax base any more by such blood letting without disastrous consequences for Labour's programme as well as for borrowing and without producing exactly the circumstances that lead inevitably to more cuts and more deflation in the public sector. People will then say that the public sector is too big to be supported by the shrinking industrial base.
We are following the economics of folly. The Government cannot afford to be locked into a downward spiral with a shrinking industrial base and more

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unemployment justifying more cuts in the public sector. We must expand our industrial base by remedying its two basic problems. First, we must remedy the deficiency of demand for what the British economy can produce at full capacity. Secondly, we must offer the prospect of profitability. British manufacturing is just not profitable enough. We have to make it more profitable by generating demand. We should reduce the exchange rate and let the economy move into export-let growth.
Supply-side measures will not produce those improvements. I am all in favour of supply-side measures such as upgrading skills and training, but supply does not generate its own demand. Governments generate demand, not supply. We need extra demand and a sustained prospect of competitiveness.
A lot of rubbish is talked about economic and monetary union. It has been said that unless we commit ourselves to monetary union, inward investment will no longer come to Britain. There are fears that we will be excluded from Europe. That is total nonsense. Foreign investors want not stability, but a competitive base from which to export. We can provide them with that only if we have a competitive exchange rate on a long-term basis. That would guarantee that if companies set up here they would be able to produce and export profitably in Britain and sell at a profit internally and overseas.
We already have problems because we do not have a competitive exchange rate and we have to offer foreign investors bribes to come here. For example, Nissan was offered £28 million more regional development money in Sunderland than we could offer in Humberside. So Nissan went to Sunderland. The same applies to Toyota, Jaguar, to Ford—to develop a new model and a new engine—and to BMW. All those companies were bribed with taxpayers' money to come to Britain or to stay here because the exchange rate was not sufficiently competitive to lure or to keep them here. As a result of our obsession with an overvalued exchange rate, the taxpayer has to pay out more to keep firms here and to keep Britain attractive to inward investment.
We should also bear in mind the fact that much of our so-called inward investment involves the retained profits of overseas firms that have already invested here. In terms of attracting new overseas investment, France has a better record than we do. Retained profits represent a large component of inward investment into Britain. However, those retained profits will not remain here if exchange rates remain high. The money will be invested overseas. That is what Imperial Chemical Industries and other big British firms are doing. Ford is sourcing more from Europe. Those are the symptoms of extended overvaluation and if it continues, Britain will no longer be attractive to inward investment. We will not be sufficiently competitive to justify foreign investors coming here rather than somewhere else.
The message is clear. The prospect of sustained overvaluation may be one reason why Toyota has been hesitating about making a second investment into Britain. We have the pound down and make the exchange rate competitive to allow exports to fall in price or to generate more profit for investment in Britain and to use the existing capacity to make imports dear.
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We should use the price mechanism, which is now our only weapon for changing our competitive position, to reduce our labour costs through a cheaper exchange rate. It will be claimed that raw material prices will also rise and, of course, they will, but our role is surely to add more value to our imports and to export them at a higher price. That higher price is set by a competitive exchange rate.
If the elasticity of demand for imports and exports together is more than 1, we get direct and immediate benefits from a more competitive exchange rate—from devaluation. The elasticity of demand for British imports and exports is somewhat lower than that of our competitors. In Britain the figure is 1.51, in Japan it is 2.35 and in Germany it is 1.81. It is above the crucial balance figure of 1.
Devaluation will work. Indeed, it is the only way to expand our exports and to stop the continuing and remorseless fall in Britain's share of world trade. That is still going on and we have to turn it round. So how do we do it? I hope and believe that it is not beyond the wit of the Government to address a major problem. It has to be tackled. We might say that it is not as bad as people think, but those words would be spoken in the wind in six months' or a year's time when the consequences come through. We have to act now whatever comforting words are said.
We must move towards long-term competitiveness. Why does not my right hon. Friend the Chancellor use his mouth as a weapon and talk down the exchange rate? If he is committed to long-term competitiveness and announces that commitment, there will be an effect on the exchange rate.
Mr. Campbell-Savours: Is not the inevitable consequence of my hon. Friend's arguments that in the end he will become a passionate supporter of the single currency as we could well have the opportunity of locking ourselves in at a sensible rate? In that case, speeches such as that by my hon. Friend would be unnecessary in future.
Mr. Mitchell: I should have expected that. Fortunately, I have five pages of rejoinders to my hon. Friend as I knew he would be here this morning. However, the simple answer to him is spherical objects. There is no possibility that we will be able to lock ourselves into the single currency at a competitive exchange rate. We shall have to lock in at the market rate and, if it is the current market rate, it will be as disastrous as it was last time. My hon. Friend and I both know that.
In any case, my hon. Friend is trying to raise a divisive red herring in the Labour party. He knows that we are not going in in the first round and the decision will not be taken until after the next general election, so why is he trying to stir trouble in an ideological fashion in the middle of my speech? My hon. Friend is trying to hold me up as I approach the conclusion of my speech.
Mr. Andrew Love:My hon. Friend has said that today's debate is about the consequences of a high exchange rate, although he has spoken about the means of reducing it. We should be debating the means today. My hon. Friend referred to market rates, conditions of deregulation and markets. How would he propose to manage the exchange rate down to a level that he would consider to be competitive?
Mr. Mitchell: I am grateful to my hon. Friend for taking me back to the main thread of my speech—and, indeed, bringing me to a conclusion.

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First, we have to use the influence of my right hon. Friend the Chancellor's opinion and announce that our rates are uncompetitive and that the Government's objective is long-term competitiveness through the exchange rate. If my right hon. Friend says that, it will shift the perspective of the markets and bring down the exchange rate.
Secondly, it is silly to be dumping huge quantities of money on the market through demutualisations—some 30 billion quid, with another £16 million to come from further demutualisations. There should be a moratorium on demutualisation.
Thirdly, we must get interest rates down. The Bank of England must be made aware of the problems it is causing. It appears to be wholly unconcerned about the exchange rate. Perhaps it is because it does not suffer the consequences—indeed, the financial community reaps the benefit through an ability to invest overseas and to manipulate money around the world. It is manufacturing that suffers the consequences.
I would like my right hon. Friend the Chancellor to take everything back under his control. A Chancellor must have power over both monetary policy and fiscal policy. He cannot run the economy without both weapons—he needs a two-gun holster. If my right hon. Friend does not take back control—and as we have not yet passed legislation, he could still intervene in these matters—the Bank of England must be pressured and persuaded to reduce interest rates.
We also need to control credit. Why not require deposits with the Bank of England, varied and charged interest or not, according to the lending policy of the institution making the deposit? We should control credit in the economy. It is silly to allow people to pour credit on to the market—it is the money supply that is causing the consumer boom and making everybody panic. If we do not control credit, the Chancellor's only recourse is a lax economic policy. He could not fund the debt. He could get ways and means advances from the Bank of England and not pay interest on them, but that would be viewed as irresponsible economics. It would be a blow to confidence. However, that is the only alternative to effective control of credit and a policy of lower interest rates, which would bring down the pound with a sure and certain touch. The alternative is a long anorexia and another industrial winddown, which we cannot afford.
The real devaluation necessary, based on the competitiveness figures, is in the region of 35 per cent.—shock, horror. In fact, the American dollar has gone down 40 per cent. since the over-valuation of the mid-1980s, without any disastrous consequences. Indeed, there has been a direct benefit to American manufacturing and the American economy. I am not saying that we should devalue by 35 per cent. at once; we should work to get the pound down over a long period. We should make that a central objective of policy so that the markets will know what we are doing and react accordingly.
We cannot treat the pound like a phallic symbol, so that the whole country—and especially the media—are proud when it is hard and filled with post-imperial tristesse as soon as it softens. That is not what the pound is about—it is a market-clearing mechanism and it has to float. It has suffered from 20 years of over-valuation. We need 20 years of competitiveness to get back into the manufacturing game and for Labour to achieve its
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policies. Therefore, we should simply announce that the pound is over-valued and that Labour believes in a competitive exchange rate. What is a competitive exchange rate? It is the rate at which we can balance our trade in conditions of stable growth and full employment.
11.43 am
Mr. Nicholas Winterton: I congratulate the hon. Member for Great Grimsby (Mr. Mitchell) not only on obtaining this Adjournment debate, but on his choice of subject. He knows that I agree with a great deal of what he said. By saying that, I am not sure whether I am doing his reputation and prospects any harm or putting the kibosh on my own.
I declare my interest as I am the chairman of the Manufacturing and Construction Industries Alliance, which was launched within the Palace of Westminster—with the support of all political parties—to move the interests of construction and manufacturing up the public, political and parliamentary agenda.
I am glad to take this opportunity today to support the hon. Gentleman in his arguments, although I intend to concentrate primarily on the subject of interest rates, which have a dramatic influence on exchange rates, which in turn are damaging British manufacturing.
I shall begin with construction because it is a barometer of the overall success of our economy and it generates such demand in its own right—demand for building materials, fixtures, fittings, carpets, curtains, steel, brick, concrete, cement, furniture, electrical goods and decorating materials. It is a driving force for many parts of industry, including retail and, of course, manufacturing industry.
I am sure that I shall take all hon. Members with me when I say that the manufacturing sector is important because it is the only non-inflationary source of sustainable economic growth in this country or in any other. That is why, when I saw that manufacturing industry was part of the debate, I immediately took an interest. I am delighted to be making a contribution.
As the hon. Gentleman said, we are a trading nation. Despite the importance of the service sector and invisible trade—especially in the financial sector—we need to export manufactured goods to survive and to have a stable, progressive, successful economy. From the hon. Gentleman's argument and philosophy, I am convinced that that is also his objective. That is why I strongly support what he said.
The two important sectors of manufacturing and construction are linked not only by their comparative importance, but by the way that they have borne the brunt of the recent economic recession. The hon. Gentleman described what has happened as blood letting. Those two sectors have been seriously and adversely affected by the blunt way in which successive Governments, Conservative and Labour—and, indeed, the Governor of the Bank of England—have used interest rates as the sole panacea for all economic problems.
It is obvious to anyone who has been involved in industry, especially those who need to export their products, that high interest rates raise the level of exchange rates. If the level of exchange rates is raised, Britain will become less competitive. The current high level of interest rates has forced up the value of sterling

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and brought about the debate this morning. That high level has created an almost insurmountable barrier to many of our exporters. It has placed a dampening hand on the first emerging breaths of confidence in the construction sector, whether it be business and commercial construction or domestic construction.
To take up the hon. Gentleman's remarks—and I entirely endorse his position—the use of interest rates is too blunt. It is too insensitive a tool to be deployed responsibly to manage our sophisticated economy. It is far too powerful a tool to have been passed into the largely unaccountable and undemocratically answerable hands of the Governor of the Bank of England, whose ideological purism and dogma-driven lust will lead him to maintain rates at higher levels than can be justified. It will leave us in an uncompetitive position compared with other countries in Europe and in other parts of the world.
The hon. Member for Great Grimsby referred at some length to the European Union, and some interventions related to Europe. The majority of our trade is done outside the European Union. [Interruption.] Indeed, it is. The Confederation of British Industry and others put out a lot of misleading statistics, but I assure the hon. Member for Rotherham (Mr. MacShane), who is shaking his head, that the majority of our trade is done outside the European Union, so what goes on there is of only partial interest to us.
We have a robust and healthy economy. I say that as an opposition Member: like many of my hon. Friends, I have been in the Opposition before, although for the past 18 years I have, from time to time, sat somewhat uncomfortably on the Government Benches. Our healthy and robust economy is due, at least in part, to the policies of the previous Conservative Government. It is a fact that the ogre of inflation, if not dead, is certainly firmly under control. Spiralling inflation, such as we saw under both Labour and Conservative Governments, was a product of historical, social, political and economic conditions, which no longer apply: that is, if we are to begin to believe even one word of what the new Government tell us about abandoning their bad old ways.
If the new Chancellor of the Exchequer is committed to prudent management of the economy—dare I say, following the prudent management of the Conservative Government—why must interest rates remain so unnaturally high? The hon. Member for Great Grimsby, in his interesting speech, said that interest rates in this country are abnormally and unnecessarily high. Why must British business face high interest charges when it seeks to borrow to invest in new plant and machinery and in the development of new products, which are vital if we are to remain competitive and forceful in international world markets? Why must the British service and commercial sectors face unnaturally high property prices? Why must home owners, whose support new Labour is pledged to nurture, face unnaturally high mortgage costs? We may hear some further unfortunate and bad news this afternoon.
Handing the control of interest rates to Eddie George at the Bank of England was an irresponsible and reckless folly, for which our economy may yet pay an extremely high price. The House should be able to debate that policy in considerably more detail in the near future.
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High interest rates and their inevitable impact on exchange rates impose burdens, without which companies would be able to compete more effectively and become more profitable, and thus pay more taxes. The Government receive more in tax from business when there is a rise in economic growth. Without those burdens, more jobs would be created and the burdens on our social security system would be reduced. The Government would benefit, because they would get people back to work, which is one of their major objectives, for which I commend them. Putting people back in work, particularly when they are currently unemployed, would reduce the substantial social security benefit bill.
I want to send a clear message to the Chancellor of the Exchequer, who will deliver his first Budget later today. We would all be better off if he reduced interest rates, if not today, at least in the near future, because that would have an immediate impact on exchange rates.
It is a tragedy that the British economy might be hit by a double whammy: the higher interest rates that we are already experiencing and, sadly, the higher taxes that are imminent. The hon. Gentleman's message was clear. We should give our economy the boost of energy that it needs to maintain its current progress in the right direction. To bring that about, we require a reduction in interest rates, not an increase.
I expect that the comments I am about to make will fall on fertile ground among some Labour Members. We should review capital gains tax, so that unquoted companies are not unfairly penalised. We should review capital allowances, so that businesses are positively encouraged to invest: they could be targeted or capped if necessary. We should invest so that we remain competitive and are able to export, create jobs and generate extra growth in our economy. To that end, fiscal incentives are good.
I shall now say something that will perhaps not fall on such fertile ground. I believe that we should abolish inheritance tax to secure the future of many family firms. It is in family firms that real growth in industry and commerce takes place and where the majority of jobs are created. In many instances, inheritance tax is a disincentive.
We need to hit the housing market like we need a hole in the head. Housing, construction and manufacturing are a driving dynamo of our economy, and we should encourage those sectors. Mr. Eddie George regularly talks of still higher interest rates. Unacceptably high interest rates, reductions in mortgage interest relief at source, which is a small but valued help to families buying their own homes, increases in stamp duty, which is an anomalous tax that I believe should be abolished, and the possible ending of the capital gains exemption for the family home would be retrograde steps and could turn our economy from its positive, encouraging, upward course and put it into a state of stagnation and depression.
We should look to the long term and aim for low interest rates and low exchange rates. That would enable the people and businesses of this country to create genuine wealth, and to contribute meaningfully to the future of our economy and the creation of jobs.
11.57 am
Mr. Denis MacShane: I am grateful to my hon. Friend the Member for Great Grimsby (Mr. Mitchell) for initiating this debate. We have heard

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two remarkable speeches. The contribution of the hon. Member for Macclesfield (Mr. Winterton) contained radical thinking about the importance of manufacturing. His Front-Bench colleagues should listen to him, but, alas, I fear that his remarks will fall on stony ground, because in the past 18 years there has been one long assault on manufacturing.
My hon. Friend knows that in the pantheon of socialist history, thinking has always been a left-wing deviation. I congratulate him on a speech full of ideas and thoughts, some of which were deviant. If I allow an occasional thought to slip into my speech, I hope that my hon. Friends on the Front Bench will take no notice, and will excuse my foray into the world of ideas.
Some contradictions have to be faced. If the high exchange rate is so bad for employment, why is unemployment falling as the pound is rising? If high interest rates are so damaging for British manufacturing exports, why did the high interest rates and the high pound of the early 1980s coincide? The Library has published an excellent document on economic indicators dated 1 July 1997, which shows that the last time that we had a trade surplus in manufactures was in the early 1980s, at the time of high interest rates and a high exchange rate. The situation is complex. I hate that dreadful cliché "multi-faceted", but there are many unintended consequences and the matter is difficult to get right.
I want to make a case in support of my hon. Friend the Member for Great Grimsby for a lower pound, but I want to make a stronger case for a stable pound. We have suffered, not just in the past 18 years, but in the past 30 years, from the incredible yo-yo pound sterling, going up and down. The graph in the excellent document from the Library resembles a map of the deep ocean. It has more peaks and troughs than the Swiss alps. We should aim at a lower and stable rate. I do not regard the exchange rate as a market-clearing mechanism, as my hon. Friend seemed to suggest, which we should leave bouncing happily up and down like one of those ping-pong balls on a column of water at a fun fair.
We have a specific problem in manufacturing. I have a constituency interest, in that British Steel is the major employer in my constituency. It has taken a 50 per cent. hit on profits. Last year, it had profits of £1.1 billion for investment, pay, jobs and dividends; this year, its profits are less than £500 million. A great British success story such as British Steel cannot be asked to plan for the future, to pay fairly, to treat its shareholders well and to invest here and abroad if, from one year to the next, it takes a 50 per cent. hit on its profits. That has happened because British Steel, like many engineering manufacturers, has its products posted in deutschmarks for export to Europe.
Every engineering firm in my constituency is taking that hit on profits and employment. I warn my hon. Friends on the Front Bench with all seriousness that employment in the UK may have peaked. I fear that there will be a time lag before the immense hit that all our manufacturing sectors are taking starts to feed through into workers being laid off.
Not only manufacturing is affected. Many service companies are affected. The boss of a distinguished architectural company not unconnected with the millennium dome reported to me recently that he had had to lay off staff because he was losing orders overseas.
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British tourism will take an immense hit, as will British Airways. It has become much more expensive to come to Britain compared with last year. It is fine for those such as the shadow Chancellor, who has a nice house in Normandy. He will have a lot more to spend on it this summer. But the high pound is damaging the promotion of British tourism and services.
That is true even in the micro economy—the world of conferences. Britain has become a key conference centre for Europe. In the past two or three years, orders for conference packages of interpretation, hotels and so on increased, but we are now losing orders to French or German companies, which can offer products in deutschmarks or French francs that undercut what we can offer posted in English pounds.
So I say to my hon. Friends and to the hon. Member for Macclesfield (Mr. Winterton), who is a doughty champion of manufacturing, that the service industry has also been badly hit by the exchange rate. The creative economy—the film and video economy in which Britain is a world leader—has also taken an immense hit.
I should love to enter into a long debate with my hon. Friend the Member for Great Grimsby about what we can do, but perhaps we should leave that for some other occasion. I want to put forward four simple ideas. First, the Treasury should drop its sublime arrogance. When the pound was high before the ERM debacle, it was the best thing that could have happened to Britain. Remember that? Two years ago, the pound slumped and that was the best thing that could have happened to Britain. Now, the pound is up at DM2.80, and that is the best thing that could happen to Britain.
The Treasury has the memory cells of a mite. It must humble itself and learn from other countries, perhaps from the United States, where for 10 years the dollar has been traded at a highly competitive rate, reflecting a rise in US exports. What lessons can we learn from the United States? Perhaps we can learn from the Netherlands, where unemployment is lower, interest rates are lower and the trading sector is stronger than in the UK. We might learn from Switzerland where, thanks to monetary measures, the value of the Swiss franc against the deutschmark has been reduced, not increased. There, not the invisible hand of the market but the visible hand of the policy makers has been applied.
Secondly—I am sorry to disagree with my hon. Friend the Member for Great Grimsby on this point—we have to maintain a low inflation policy. There are virtues in creating the independent Monetary Policy Committee for the Bank of England. I do not want our Chancellor, or in 20 years' time some Conservative Chancellor, waking up worrying about interest rates every morning of his life. The United States, which probably cleaves to many of the values about which my hon. Friend spoke, has an independent central bank. One could enter into the debate elsewhere. I should like the central bank to be advised by a committee with a more regional and manufacturing outlook, but we can discuss that later.
Thirdly, we must consider the unmentionable—labour market policy. The countries that have kept unemployment, inflation and interest rates low have an active labour market policy that does not allow wage demands to feed through into inflation. It is not clobbering workers; it is the essence of social democracy. Britain's adversarial labour market with one side up and one side

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down has not worked. I advise my hon. Friend the Minister to turn her attention to labour market policy in order to keep a stable exchange rate.
Fiscal measures need to be used seriously, and I am looking forward this afternoon to innovative and imaginative fiscal measures in order to ensure that there are no further increases in interest rates and no further need to increase the pound's strength.
Finally, we come to the question of Europe. We shall not debate that today. I should prefer the British pound to be stable in the—
Mr. Mitchell: In a graveyard.
Mr. MacShane:—in the euro, with the other economies that have a much higher percentage of their economic base located in manufacturing than we do, which requires stability. There is no lead on that at the moment. We are not in a graveyard; we are in a complete vacuum. The Confederation of British Industry has climbed back on to the fence, saying that the euro should be put off for two years, as if it will not happen—do not see the euro; do not hear the euro; pretend it does not exist. That debate will have to resume. In a year or two, when the underlying manufacturing strengths of a low inflation and low interest rate euro are compared with the problems of not cleaning up the mess that we inherited from the Tories, it will come back to haunt us.
Yes, there are policy measures. The pound can be discussed. I do not want to advise my hon. Friends on the Front Bench to talk it down, yet that has worked in other countries. We need a competitive and stable pound with which our investors can invest, our buyers can buy and our sellers can sell, knowing over a long period what its worth will be.
12.8 pm
Mr. Edward Davey: I apologise to the hon. Member for Great Grimsby (Mr. Mitchell) for having missed the first half of his speech.
Mr. Mitchell: What was the rest like?
Mr. Davey: I undertake to read it in Hansard to ensure that I do not miss anything of importance. However, listening to the second half of your speech—I mean, his speech, Mr. Deputy Speaker—made me think that I had heard it before.
The hon. Gentleman came to my college when I was an economics undergraduate. In his speech there, he talked about the overvalued pound and the plight of the manufacturing sector and argued that we definitely needed a devaluation. That was 10 years ago—1987—when the deutschmark was at 3.5 to the pound. That is the hole in the hon. Gentleman's argument: he has been arguing for devaluation almost whatever exchange rate we have had. That would be a continued devaluation.
Mr. Mitchell: I apologise for interrupting the hon. Gentleman again, but that is not true. I have argued consistently for a competitive exchange rate, although
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sometimes that would have been more competitive than at other times. That is not an argument for constant devaluation.
Mr. Davey: With due respect, it seems to me that that was exactly your argument. You talked about going for a competitive pound, but in 1987 you seemed to think that that was lower than—
Mr. Deputy Speaker (Mr. Michael Lord): Order.
Mr. Davey: Mr. Deputy Speaker—
Mr. Deputy Speaker: Order. When I am on my feet, hon. Members must sit. The word "you" is being used again. Can the hon. Gentleman try to remember the right form?
Mr. Davey: I apologise, Mr. Deputy Speaker.
In the speech that the hon. Member for Great Grimsby made to my undergraduate colleagues and me, he said that if we devalued, even from DM3.5 to the pound, we would get a competitive exchange rate. Now, however, he suggests that if we devalue from about DM2.7 we will get a competitive exchange rate. At what level does he believe a competitive exchange rate lies?
I believe that the hon. Gentleman's remedy is a recipe for inflation. He argues that we should slash interest rates and have a lower pound, which would surely stir up inflation. The worst aspect of his proposals is that they would damage manufacturing industry—the sector of the economy that he hopes to help—because the spiralling inflation that his policies would cause would produce short-termism in British industrial investment. Industry would need to consider financial factors all the time instead of the real aspects of its business.
The real issues that face people who run a business are the training of their staff and investment in research and development. If there is spiralling inflation because of ever devaluing exchange rates, they are reduced to financial jiggery-pokery instead of dealing with the real elements of their business success. That is why an independent central bank is a good idea, and a good policy for manufacturing industry. It would set a stable framework for our macro-economic policy and help the Government in their attempts to bear down on inflation over the long term. That would reduce short-termism in the British economy and such a reduction is the one thing that manufacturing industry really needs if it is to invest for the future.
The hon. Member for Great Grimsby seems to have a bizarre understanding of how the exchange markets set exchange rates. He thinks that the Chancellor of the Exchequer has a powerful voice and can suddenly talk down the pound at will. I am sure that past Chancellors would say, "If only." If only they could open their mouths and the exchange rate would go wherever they said.
The idea comes from cloud cuckoo land. There is no way in which the Chancellor could push the sterling exchange rate in any long-term direction just by opening his mouth. Serious macro-economic policies are needed to direct the level of the pound and I am afraid that the hon. Gentleman gave no indication of the policies with which he proposed to direct that level.

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For example, the hon. Gentleman seemed to suggest that we should loosen monetary policy, while giving us no idea what he wanted to do with fiscal policy. That is where the tough questions for setting macro-economic policy lie. If he really wants to reduce the level of the pound he needs to propose a massive tightening of fiscal policy.
In simple terms, that means that we must ask the hon. Gentleman whether he proposes to slash public expenditure or to increase taxes massively. The logic of your argument means that you have to—I am sorry, Mr. Deputy Speaker, I mean the hon. Gentleman has to—answer that question. He failed to do so.
The hon. Gentleman also failed to tell the House what type of exchange rate regime he wanted—a flexible or a fixed regime. I am worried that he seems to have taken no account of the need for stability in our exchange rates. He proposed neither a fixed exchange rate system nor support for the single currency.
Having made those criticisms of the hon. Gentleman's speech—
Mr. Mitchell: A speech I made 10 years ago.
Mr. Davey: The criticisms are still pertinent today, because the hon. Gentleman's arguments have not changed.
None the less, I welcome the debate, because it gives the Minister a chance to state Government policy on exchange rates—or perhaps the Chancellor of the Exchequer will enlighten us on Government exchange rate policy this afternoon in his Budget statement. Until now, we have heard nothing.
The policy seems to be one of benign neglect and we have seen the currency appreciate with no comment by the Treasury. That policy is not sustainable in the long term. We need a clear signal of the Government's attitude to the pound sterling and of their future policy as Britain prepares to move towards the single currency. I hope that, in her reply, the Minister will state clearly the Government's policy on the exchange rate.
12.17 pm
Mr. Tim Boswell: I congratulate the hon. Member for Great Grimsby (Mr. Mitchell) on initiating this interesting debate and all who have played a part in it. I also take the opportunity to welcome the Economic Secretary to the Treasury to her post, the ministerial counterpart of mine. I look forward to debating matters such as these many times with her.
First, I must say from the Opposition Benches, in case there is any doubt—although my hon. Friend the Member for Macclesfield (Mr. Winterton) will have left the House in no doubt—that there is as much sympathy for and interest in manufacturing industry on our side of the House as there is on the Government side. In my election address, directed to a constituency in which engineering is extremely important, I took the trouble to mention the subject, as well as information technology. It is of great importance to us all.
In terms of the analysis offered by the hon. Member for Great Grimsby, some parts of manufacturing industry are undoubtedly feeling the pinch. He cited British Steel as a clear example; I could add agriculture to the others
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that have been given. As everyone will know, agriculture is an industry whose financial arrangements are somewhat distinctive, but the effect of green pound revaluations has much the same, although an indirect, effect.
I pause to make the point that things can vary over time. Certain industries may be able to bear a high exchange rate for a period, but it may cause difficulties in the longer term.
As for the Opposition's approach, first, there is no simple policy of targeting the exchange rate. There have been excursions into that idea in the past—I need not return to them now—but they met with little success.
Secondly, there must be a middle way between the danger of abandoning all approach to fiscal prudence—at times it seemed that that was the hon. Gentleman's argument—and the equal and opposite danger that may be described as neurotic over-caution in the conduct of fiscal and monetary policy.
Thirdly, whatever the exchange rate is at any one time, it can be no cop-out or substitute for the adoption of policies designed to support business success and competitiveness. In that context, I cannot understand why the Government wish to go ahead with the minimum wage or sign the social chapter.
The Government have been left a golden legacy by my right hon. and hon. Friends—a strong economy. It will take a long time for that to dissipate and be lost—but lost it can be, if the wrong policies are adopted. For reasons that have a lot to do with electoral credibility, the Economic Secretary and the Chancellor have invested a great deal of effort in emphasising fiscal prudence. That is fine and good, but the danger is that it may lead to excess zeal and end up damaging the real economy. That is the substance of the argument we heard in the speech from the hon. Member for Great Grimsby.
The cumulative impression being given by the Government suggests a tendency towards this excess zeal. First, we had the remitting of monetary and interest rate policy to the Bank. Now, there is all this talk of an alleged black hole in the finances, based on a changed set of highly pessimistic assumptions about the course of policy. We also have had some heavy briefing—I put it no higher—from the Chancellor about his readiness to put up taxes today. He would do well to remember the example of the first Labour Chancellor, Philip Snowden, and he would be ill-advised to adopt such reactionary policies. The big danger at the moment is that all this self-indulgent talk of retrenchment will build pressures that feed into the existing buoyancy of exchange rates and may create in due course an unwelcome hard landing for the British economy.
12.20 pm
The Economic Secretary to the Treasury (Mrs. Helen Liddell): I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on securing this debate, which takes place on a day when there is considerable interest in the performance of the economy. We have seen on two occasions this morning great posturing from the Opposition on matters unrelated to the substance of this debate, yet when it comes to matters of considerable substance the Opposition Benches are almost empty. An intriguing development is the use of these Adjournment debates to hold the Government to account in relation to policy and then not to leave sufficient time for the Government to explore the policy options.

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We were, as always, treated to an engaging canter through macro-economic policy by my hon. Friend the Member for Great Grimsby, who referred to self-trussed turkeys and the pound as a phallic symbol. We heard from the hon. Member for Macclesfield (Mr. Winterton) about the dogma-driven lust of the Governor of the Bank of England. These were unusual phrases to be used in a debate on this subject.
Many interesting points have been raised; some I can agree with, but a considerable number I cannot. Not the least of those was the comment made by the hon. Member for Macclesfield that inflation is dead, a point made also by my hon. Friend the Member for Great Grimsby. For ordinary people, inflation is a significant element in how they control and plan their lives, and gaining control of inflation is of considerable significance.
The remark by the hon. Member for Kingston and Surbiton (Mr. Davey) that he had heard a number of the points made in this debate before was correct, as this debate on the nature of the exchange rate and its relationship with the overall performance of the economy has been going on for more than 20 years. With respect to my hon. Friend the Member for Great Grimsby—whom I admire greatly—there was a touch of deja vu in my mind in relation to some of his remarks on devaluation.
I take this opportunity to welcome the hon. Member for Daventry (Mr. Boswell) to his responsibilities. I look forward to engaging him in debate in the years ahead. The Government have inherited an economy that has repeatedly gone through periods of boom and bust, with too little long-term stability. Our record of economic stability is one of the worst in the G7 and, since 1979, the United Kingdom has experienced the two deepest and longest recessions since the war.
As my hon. Friend the Member for Great Grimsby pointed out, our inflation performance has been poor also. Over the last full international economic cycle, from 1982 to 1993, the UK's inflation rate was higher than any other G7 country apart from Italy. Short-term interest rates are higher than in most other major industrialised countries and long-term interest rates—as my hon. Friend pointed out—have been well above the average for the major G7 industrial economies. That record reveals the lack of credibility of the previous Government's ability to meet their inflation targets, and it is why my right hon. Friend the Chancellor has made clear that the commitment of this Government is to secure long-term stability and, from that, economic growth.
Changes have been made in monetary policy to enable the country to secure the basis of sound finances and the criteria for setting the level of inflation. We are taking politics out of the matter, so that businesses—manufacturing businesses in particular—are in a position to plan ahead to secure economic growth.
The Government share the anxieties about the exchange rate, but there are no short-term fixes—despite what my hon. Friend the Member for Great Grimsby suggested. There is a need for a stable and competitive exchange rate, consistent with the Government's objective of price stability. That is one of the main reasons why we are committed to creating an environment of macro-economic stability. Low inflation and sound public finances are necessary conditions for sustained exchange rate stability
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and are sensible objectives in their own right for the management of the economy. Monetary policy has to be guided by the long-term needs of the economy and not just by short-term political considerations. In putting monetary policy into that long-term framework, we believe we are in a position to create the climate for growth and competitiveness.
The subject of this debate was not just exchange rates, but raising long-term growth and competitiveness. I disagreed with my hon. Friend the Member for Great Grimsby on the price mechanism, which he said was the only way to secure competitiveness. Securing competitiveness is much more complex than that and the Government have acted to put in place mechanisms to secure long-term competitiveness.
The appointment of my noble Friend Lord Simon as Minister for Trade and Competitiveness in Europe underlines the Government's commitment to taking forward growth and competitiveness. Lord Simon will play a leading role in completing the single market and will call for firm action to be taken against illegal state aid, which distorts the operation of markets and the criteria for long-term growth. He is also chairing the interdepartmental ministerial group on competitiveness and the single market, on which I serve as the representative of Her Majesty's Treasury. It will consider how to improve EU competitiveness as an effective means of improving the performance of United Kingdom firms in world markets, thus creating sustainable jobs and greater prosperity.
I accept what the hon. Member for Macclesfield said about improving export performance, particularly in relation to manufacturing, but we must not forget the other aspects of the economy which require good export performance. The Government are establishing a new export forum to revive the United Kingdom's export performance. One critical element in that is improving the skills and training of the work force, so that it becomes internationally competitive. That underpins many of the announcements made by my right hon. Friends in the two months since the Government were elected.
We are investigating ways to improve the advice and support available to small and medium-sized businesses that need to be brought much more into the export market—the background from which I come. I know only too well that it is important to provide the right economic conditions in which investors can make decisions with greater certainty to allow companies to plan for the future. The announcements made by the Government since our election underpin our commitment to invest in infrastructure, technology and people as the keys to future economic success. In addition to the economic criteria determined by monetary and fiscal policy, they are critical elements in ensuring this country's growth and competitiveness.
In the next few hours, we will hear from my right hon. Friend the Chancellor about his plans for the future of the economy. I think that I can say without in any way prejudging his comments that he is committed to ensuring that the British economy is put on a sound footing for the future so that we can achieve economic growth and competitiveness into the next century. That will enable all our people to benefit and will enable us and our industry to play a part in world markets.

M20 (Noise Reduction)
12.29 pm
Sir John Stanley: On 12 December last year, I initiated an Adjournment debate about the problem of the ever-mounting noise on the M20 between junctions 3 and 5. I make no apology for returning to the subject six months later. I do so because we have a new Government, and whether they choose to follow or to change the policies adopted by their predecessor is a matter of profound importance to my constituents. The Minister will note that I have broadened the ambit of the debate to cover the area between junctions 2 and 5; I will explain why later.
No doubt the Minister will have familiarised herself with the background of the issues that I shall raise. As she will know, the M20 is the primary route through Kent to the continent, and, by virtue of its geographical position, the primary route from the whole of Britain to the continent. At junction 3, which is in my constituency, two branches of the national motorway system meet. The branch from the north, the M20, carries traffic from London, traffic through the Dartford tunnel and traffic from the north and east of London to the channel tunnel. The other branch, represented by the M26 spur of the M25, carries traffic from the south and west of the country to the continent.
It was inescapable that that section of the motorway would be densely used, especially after the opening of the channel tunnel. Those living along the section of the M20 between Wrotham and Aylesford—following the boundary changes, Aylesford is now in the constituency of the hon. Member for Chatham and Aylesford—are suffering from the noise and environmental disruption.
Inevitably, the initial projections of the volume of traffic that would be carried on that section of the M20 were substantial underestimates. The section between junctions 3 and 5 was opened to traffic in December 1971, having been built with three lanes in each direction. Less than 20 years later, in 1989, the then Secretary of State for Transport, Mr. Paul Channon, announced in his White Paper "Roads for Prosperity" that the section would be widened to four lanes in each direction. That announcement set in train what I can only describe as probably the single most botched piece of motorway planning since the start of the motorway programme.
First, the announcement was made with no indication of how the widening would be carried out and what new land would or would not be required. As a result, the homes of 2,000 or 3,000 people living near that section of the motorway were blighted, which made them either unsaleable or saleable only at sacrificial prices.
Secondly, the Department of Transport had to spend some £30 million of taxpayers' money on the purchase of some 300 houses under statutory blight procedures. It transpired, however, that the purchase of virtually all those houses had been unnecessary, as the most desirable way of widening the section involved using the existing curtilage of the motorway, and no additional land would be required. Effectively, £30 million of taxpayers' money had gone down the drain. I made a formal complaint about the waste of money to the then Comptroller and Auditor General, who strongly criticised the Department of Transport's handling of the scheme.
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The final instalment of this sorry saga came just seven and a half years after the original announcement of the widening scheme. In November last year, the then Secretary of State for Transport, my right hon. Friend the Member for North-West Hampshire (Sir G. Young), announced that the scheme was to be abandoned. Quite apart from the fact that further millions of pounds that had been spent on design, consultation and planning went down the drain, the announcement was another sad example of the extraordinary mishandling of the scheme.
For my constituents, the widening arrangements had had one potentially redeeming feature. Built into them was the adoption of substantial noise abatement measures, such as noise barriers and new earth contours. Under the last Government's policy, however, because the road had been opened after 17 October 1969, the abandoning of the widening scheme meant the automatic abandoning of all the noise mitigation measures. My constituents are living alongside the main road artery between Britain and the continent, and the Highways Agency forecasts that, even without any widening, traffic on the road will at least double over the next 20 years.
Let me put two specific policy issues to the Minister. The first relates to the Government's policy on noise barriers, and the second to road surfaces. The last Government's policy on noise barriers was set out by the then Minister for Railways and Roads, John Watts, when he replied to my debate on 12 December. He said:
"the Department is required to provide noise mitigation in circumstance where we act as a developer by building a new road or substantially altering an existing one. We are not obliged to do so to deal with noise levels resulting from increased use of an existing unaltered road. I made it clear in answer to a parliamentary question earlier today that we have, in exceptional circumstances and where funds have been available, exercised a discretionary policy for providing noise barriers on roads last improved before 17 October 1969, but that policy is not applicable in respect of this section of road, which opened to traffic in 1971.—[Official Report, 12 December 1996; Vol. 287, c. 512.]
He went on to confirm that the cut-off date was not statutory but a matter of policy, which means that if the Minister is so minded she can change it without further legislation.
I tabled a parliamentary question to the Secretary of State to find out whether the present policy would continue or whether he would provide noise barriers on the M20 between junctions 3 and 5. The Minister replied:
"It is not possible to justify the expenditure of public funds on providing noise barriers along this section of the M20, as this would mainly be of benefit to people who either bought property in the vicinity of the M20 in full knowledge of the noise from traffic, or were compensated for the loss of value of their property when the road was first built, in anticipation of the growth of traffic on it.—[Official Report, 25 June 1997; Vol. 296, c. 520.]
Will the Minister reconsider that policy, which appears to be—I hope that I am wrong—an endorsement of the previous Government's policy?
There is an extremely compelling case for reviewing the policy. The Minister's statement that the expenditure could not be justified is strange, in that only a few months previously, until November last year, the Department of Transport found no difficulty in justifying the use of public funds for the construction of noise barriers and other noise abatement measures along that section of the motorway. I accept that that was done in the context of the widening scheme, but I do not believe that the

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Minister would argue that, merely because the widening scheme has been abandoned, there will be a considerable reduction in the noise disturbance.
The Highways Agency's figures show that, even without the widening scheme, the traffic on that section of the M20 will double. There is no evidence to suggest that there will be any material diminution of the volume of traffic using it, simply because the widening will not proceed. The cut-off date of 17 October 1969 for the discretionary policy of constructing barriers on existing roads looks increasingly anachronistic. Surely policy should be determined not by some past cut-off date, almost 30 years distant, but by the present environmental realities.
The present policy is based on the Department effectively disowning any environmental responsibility for what happens on existing roads. The Department is effectively saying that any intensification of existing use, creating increased noise and environmental disturbance, is not its responsibility and that it washes its hands of it. That position is not taken by those who operate airports in this country, and it would certainly not be allowed to be taken by companies in the private sector.
I recently had complaints about a company operating a sawmill in my constituency and I regularly get complaints about quarries. We do not allow private sector companies to say that, because they have planning consent, they can carry on intensifying use and creating more and more noise disturbance at ever-higher decibel levels for any number of hours in the day. We bring to bear on them the planning authority, public health legislation and the Health and Safety Executive. The Department cannot continue to operate a policy under which it simply walks away from the environmental consequences flowing from intensification of use of existing roads.
In the previous debate that I secured, I asked the then Minister for Railways and Roads, Mr. John Watts, whether he could consider whether the new road surfaces being tested by his Department could be applied to the section of the M20 about which I am concerned. I have deliberately extended the geographical ambit of this debate to cover the area from junctions 2 to 5, because on the section between junctions 2 and 3, heavy lorry traffic makes considerable noise as it goes past the village of Wrotham and up the steep gradient of the north downs to the top of Wrotham hill.
As recorded at column 514 on 12 December 1996, the then Minister replied relatively positively to my request for the motorway to be used for testing new road surfaces. When I tabled a question to the present Secretary of State asking him whether that section of the M20 could be used to test the quieter road surfaces being developed by the Department, the Minister replied:
"When the M20 between junctions 3 and 5 needs attention as part of planned maintenance, the possibility of using it to test novel forms of quieter road surface developed by the industry will be considered."—[Official Report, 25 June 1997; Vol. 296, c. 520.]
Will the Minister extend her consideration of using the quieter road surfaces to junctions 2 to 5, for the reasons that I have explained? Will she, either in her reply or by letter, as the matter may require some research, give me the fullest possible information about when the Department plans to carry out resurfacing on that section
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of the M20? Perhaps she may say more firmly than in her written answer that the Department intends to make every possible effort to use quieter surfaces.
The issue is deeply significant for my constituents and those of the hon. Member for Chatham and Aylesford. I strongly believe that it will not be sustainable for the Department simply to walk away from the environmental consequences of the intensification of use of existing motorways. I am told that the Department of Transport in the Netherlands has as a policy objective the planned resurfacing of main roads, specifically, to try to reduce noise disturbance, and that it applies that policy on existing roads. I earnestly hope that a similar policy objective will be adopted by the Department in this country.
12.48 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I congratulate the right hon. Member for Tonbridge and Malling (Sir J. Stanley) on securing this debate so early in the life of this Parliament. He has been a tireless advocate for his constituents in the matter and I welcome his raising it in the House, because it gives me the opportunity to explain more fully how the legislation dealing with the adverse effects of roads on the environment works.
There is no doubt that traffic noise is an exceedingly contentious issue, not least when defining what is a serious nuisance, because the perception of noise may vary from person to person and from place to place.
I recognise that people living near the M20 feel that they suffer the adverse effects of the traffic without receiving much benefit from the motorway. I must point out, however, that it plays a vital role in giving access to the single European market. The right hon. Gentleman detailed the precise importance of that stretch of our national road network; I believe that the effect of that access on our trade has benefited the nation. The efficient distribution of goods and other services brought about by that direct link to the continental motorway network has had a dramatic effect on society. Although we have had arguments to the contrary from the right hon. Gentleman, most of those effects have been essentially beneficial.
The right hon. Gentleman argued that the discretionary powers provided by the Highways Act 1980 to mitigate the adverse effect of roads on their surroundings have not been used to their fullest extent. It is important to understand the basis of the legislation and the principles of equity and consistency which underpin the way in which discretion has been exercised.
The fundamental principle originally established under the Land Compensation Act 1973 is that a public body that carries out development under statutory powers should provide compensation for the indirect effects of that development on adjacent land interests.
In addition to providing for financial compensation, that Act also gave the Secretary of State for Transport the power to make regulations imposing a duty or conferring a power on responsible authorities to insulate buildings against noise caused, or expected to be caused, by the works associated with road construction or improvement. That power was implemented in the Noise Insulation Regulations 1973. Further provisions contained in the Land Compensation Act included the power for

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responsible authorities to carry out additional measures to mitigate against the adverse effects of the construction, improvement, existence or use of the public works.
The provision for compensation was limited to public works completed on or after 17 October 1969. The same operative date was contained in the Noise Insulation Regulations 1973. It was not considered appropriate to specify a retrospective date limiting the power to provide other mitigation measures, because it was intended to cover deserving cases in which properties were affected by roads that had been completed before the specified date, which limited the exercise of the other powers.
It took several years for retrospective cases to be dealt with under the Noise Insulation Regulations. It was not until 1979, under the previous Labour Government, that the power to provide other forms of mitigation was activated. It was made clear at that time that the policy of providing noise barriers alongside existing highways was restricted to roads opened prior to 17 October 1969.
In each case, the decision to provide a noise barrier was subject to the requirement that that would provide a significant degree of relief to a substantial number of properties. It also had to be feasible to erect a barrier within the existing highway boundary as there was no provision for acquiring extra land.
Subsequently, the power to provide measures to mitigate the adverse effects of highway construction was included in the Highways Act 1980. In applying that power to new road construction, it was extended to include a power to acquire additional land on which to construct such measures. That has allowed a much wider view to be taken of mitigating environmental impacts, but the effectiveness of mitigation has always been measured against the number of properties that would otherwise need to be insulated under the Noise Insulation Regulations.
That power has been exercised only in very particular circumstances to provide an additional noise barrier alongside roads built since 17 October 1969. For example, additional noise barriers were placed on the A27 Havant-Chichester route, which was opened in 1988. That was possible because the Noise Insulation Regulations had been revised in that year and specifically provided an allowance for differences between road surfaces. The change meant that a significant number of properties became eligible for statutory noise insulation and it was considered appropriate to provide additional noise barriers instead.
In other cases, barriers have been erected after the road was opened only when the cost has been met by a third party. That has usually been as a consequence of a planning condition attached to residential development. Noise barriers have been provided at the expense of the developer to protect properties, which would otherwise not have been permitted.
This is quite a complicated matter and I have described the provisions of the legislation at some length. In summary, the exercise of discretion to provide noise barriers relates to roads built or improved after October 1969—where a developer or other interested party is prepared to cover all costs—and roads that have not been improved since October 1969 where it can be shown that barriers would provide a significant benefit to a sufficient number of properties suffering unduly from traffic noise.
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I understand the argument presented by the right hon. Gentleman that the effects of increased traffic on the section of the M20 to which he referred make his constituents a special case. I am sure that he would acknowledge, however, that there are many sites around the country that are similarly affected by increased traffic noise, both from motorways and within towns.
To consider all those deserving cases equitably would involve substantial costs, even within the existing legislation. There is the issue of whether the public purse should provide benefits in kind to owners of property who either bought at a price reflecting its location relative to the motorway or received compensation when the motorway was first built, to offset the anticipated effect on the value of the property.
When a trunk road is planned to be constructed or improved, an assessment of its environmental impacts and the potential benefits of various types of mitigation takes into account the volume of traffic expected to be using it 15 years after the scheme is first open to the public. I acknowledge that one of the most important concerns discussed at the public inquiry into the proposals to widen the M20 between junctions 3 and 5 was the impact of traffic noise on the surrounding area.
I am aware that the inspector strongly supported the use of porous asphalt, as well as the proposed noise barriers, to reduce the adverse effects. But those measures were discussed in relation to the longer-term effect of the widening proposals.
The right hon. Gentleman was scathing in his criticism of the proposals to widen the M20 and their subsequent withdrawal. However, the draft statutory orders for the acquisition of a small amount of land, mainly needed to provide for additional mitigation measures, were not confirmed. That allowed the local planning authority the freedom to permit development on the land, and released previously blighted properties back on to the market.
I understand the intense disappointment that the right hon. Gentleman's constituents must have felt having been offered some prospect of relief by those widening proposals from the apparently inexorable increase in noise from traffic on the section of the M20 between junctions 3 and 5.
I have to say that the purpose of the mitigation then on offer was essentially to offset the anticipated effect of the widening. However, the assessment of noise impacts arising from the proposals used the updated method of assessing noise levels, which takes account of the type of road surface. It is likely that the original concrete surface and the subsequent surface dressing would probably not have been as quiet as they now can be with the use of modern construction methods.
The right hon. Gentleman referred to the seemingly inexorable increase in road traffic. The Government are committed to developing an integrated transport policy, and the upward trend in traffic growth will be re-examined. For the moment, I must ask the right hon. Gentleman to be patient until the appropriate maintenance programme for that section of the M20 is decided. I have taken careful note of his question and I will certainly ask my officials to respond to it as speedily as possible.
I can assure the right hon. Gentleman that due consideration will be given to noise when the time comes to renew the surface. The technology involved is moving very rapidly and, when the time comes, whatever firm of

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surfacing is provided should noticeably reduce traffic noise. The resurfacing of the M20 will be determined when an engineering assessment of the existing surface has been done. It is planned for this year and I repeat that I will ask my officials to respond as quickly as possible to the matter.
I referred earlier to the inspector's belief that porous asphalt could have helped in resurfacing. However, the extra costs for that are no more justifiable than those of noise barriers. It is many times more expensive to put down than other forms of surface and involves extra costs if used on existing roads because drainage arrangements have to be modified. It is more expensive to maintain the surface free of ice in winter—
Mr. Deputy Speaker (Mr. Michael Lord): Order.

Dyfed Powys Health Authority
1 pm
Mr. Denzil Davies: Dyfed Powys health authority may seem an esoteric subject, but it does not to my constituents. It is a matter of keen concern to them, to others in the Dyfed Powys area and to me.
Health authorities buy medical services from hospitals—in the case of Llanelli, from the Prince Philip hospital and one or two smaller ones. If Dyfed Powys health authority goes bankrupt or runs out of money, the hospital services provided for my constituents will deteriorate. I thank my hon. Friend the Member for Bridgend (Mr. Griffiths) for meeting a delegation of hon. Members from the old Dyfed area some time ago. This debate should not be taken as a criticism of that meeting, which was very helpful. However, time has moved on and the situation is changing.
Dyfed Powys health authority resulted from a merger, under the previous Government, of Dyfed health authority and Powys health authority. The area covered by the Dyfed health authority had three acute hospitals and a small number of community hospitals, as they are described. The Powys area had no acute hospitals and a large number of community hospitals. To a city banker experienced in merger negotiations, that situation would have been ideal. One complemented the other: Dyfed provided the acute hospitals of which Powys had none, and Powys provided the community hospitals of which Dyfed had only a few. Real life is not like that, certainly not in the health service.
The new authority inherited many problems, most of them, I am sorry to say, from Powys. It has tried to resolve them. It made various suggestions some time ago to resolve them by closing many community hospitals—
Mr. Richard Livsey: Will the right hon. Gentleman give way?
Mr. Davies: Not at the moment.
The authority also proposed the reduction of services. Those proposals met with universal condemnation and were thrown out. Poor Dyfed Powys health authority is again trying to resolve the matter. In the autumn, it will no doubt advance other proposals. As far I can see, its proposals will aim to improve the financial situation. They will not be for the purpose of improving the health service. The corollary or obverse of improving the health authority's financial situation will be a deterioration of the health services provided for Llanelli and the other constituencies affected. There is not much use in looking at the matter from the point of view of trying to resolve the financial problems in that way.
I do not want to criticise anyone. I do not want to criticise Dyfed Powys health authority because it inherited difficult problems. I am not criticising my hon. Friend the Minister, who has also inherited a horrible situation, but I have several questions. I shall understand if he cannot answer them now. This is an Adjournment debate and, if he is not in a position to answer them, he will no doubt write to clarify matters.
I understand that health authorities make up accounts, although I am not sure in what form, or whether they are audited by outside, independent accountants. Has my

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hon. Friend the Minister received the 1996–97 accounts, if they exist, of the Dyfed Powys health authority? Are they properly audited? Who drew them up? Do they set out what one would normally expect to find in accounts—borrowings, assets, loans, liabilities, expenditures, and everything else that people would wish and need to know? When they appear—if they have appeared, fine—could he please place them in the Library for us to try to fathom? I know that it is a long way from mid-Wales or Llanelli, but at least the accounts should be open for inspection so that we can then ask questions about them. Are the accounts in a form that an accountant would not feel disgraced to sign?
My second question relates to debts. I do not understand the structure of health authorities. I tabled a question to my hon. Friend the Minister, which he properly answered quickly. Again, I make no criticism. Perhaps I was naive, but I asked what were the borrowings of the Dyfed Powys health authority from the Welsh Office. The answer that I got was approximately £2.5 million. That surprised me a little because various figures have been bandied around: deficits of £6 million and £7 million. I wondered whether I had missed something. Was it a very carefully drafted answer? I am sure that the £2.5 million figure is correct, but can my hon. Friend say whether there are other borrowings, loans, brokerages or whatever other words can be used to dress up debt? Has Dyfed Powys health authority borrowed secretly from somewhere such as the Drover's bank in Llangammarch Wells? Who knows whether there are liabilities to building societies in small mid-Wales villages? May we be told how much the health authority really owes? I am told that it has money somewhere that should be going to GP fundholders and that it borrows a bit, then pays it back again.
Mr. Livsey: The right hon. Gentleman is making a powerful case about the finances of Dyfed Powys health authority. Does he agree that it is strange that, last October, it said that it would have a deficit of £9 million over the next five years; that in January it said that it would be £11 million over the next five years; and that, in meetings in my constituency in March, it said that, if compound interest were added, it would have a deficit of £38 million over the next five years?
Mr. Davies: We should leave compound interest to the Chancellor of the Exchequer, but I agree. I am as baffled as the hon. Gentleman, and that is one reason for this debate. Again, I do not expect my hon. Friend the Minister to be able to answer fully, but I hope that we can get some figures for the so-called deficit.
What is a deficit? I suppose that a deficit means spending more than is being earned. I do not how to apply that concept to such an organisation. From where does the money come? Does it come out of the dreaded public sector borrowing requirement? That would be terrible. I take it that the £2.5 million comes out of the dreaded PSBR, but what about all the other deficits? Are they added to the wretched borrowing requirement? We should like to be told the answer so that we can assess the position.
I shall now refer to 1997–98, this financial year; we have already asked for the accounts for the last financial year. I do not know how the health authorities are funded. No doubt, a sum of money is provided for them by the
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Welsh Office. I am told that there is some sort of formula for local authorities that is called the standard spending assessment. It used to be the rate support grant, but names get changed, although the reality does not.
How much money has the Dyfed Powys health authority received—or will it receive—from the Welsh Office for the next 12 months from this April to next April? We need to know how much it will be so that we know how much it is being paid. Is the figure plucked out of the air? At the meeting with my hon. Friend the Minister, he mentioned a long equation, which no doubt ends in nought—such equations for economists usually end in zero; I do not know why. Could my hon. Friend the Minister send me a letter explaining how the algebraic equation is arrived at? How is the figure arrived at? It is an important question because the spending figure is important. It tells us the amount that can be spent on buying services from the Prince Philip hospital in Llanelli and from other hospitals. I do not expect to be told the equation now, but we need to know it so that we can work out—or be told—exactly how much money is allocated for this year. What will the deficit be for this year? Apparently, there will be one. Is the deficit rolled on every year until the Welsh Office has to provide a loan?
The Llanelli-Dinefwr hospital trust operates the main hospital in my constituency, the Prince Philip hospital, and other hospitals, but there is still no negotiated contract. I raised that issue with my hon. Friend the Minister and he made some helpful comments. I am told that there is no negotiated contract between those hospitals and the health authority.
We have the extraordinary situation whereby a public body—the health authority—pays what it can. It is as though I went into Tesco in Llanelli, took a trolley full of food to the till and said that I could afford only £5 and the shop could possibly have the rest later. When will the contract be signed? If a contract is not signed on satisfactory terms, the Llanelli-Dinefwr hospital trust will run up debts. As the Minister knows, that trust runs a tight ship—it has never been in debt and it balances its books—but I am told that, if the situation continues, by the end of this financial year the trust could be in debt to the tune of at least £1.5 million.
In reply to another question, which is not relevant to this debate, my hon. Friend the Minister said that Morriston hospital was now in debt to the tune of £16.5 million. I do not want that to happen to my hospital trust. It would not be fair if it had to pile up debts that were not of its own making and then had to do something in future to try to reduce those debts. Could that contract be negotiated fast so that the trust does not run up a debt like the one that has been run up by Dyfed Powys health authority?
There is no solution to the problem to be found in measures to reduce the bureaucracy of the Dyfed Powys health authority. It is always possible to find savings in a bureaucracy, but that will not solve the problem. The difficulties should not be solved by cutting services. I am sure that my hon. Friend the Minister would agree that the problem should not be solved in that way. I am sure that he will also agree that we should not come up with a plan to solve financial problems by cutting services. We are not looking to improve hospital services in Llanelli, merely for them to be at least maintained. If the financial plans are put into operation, health services will deteriorate. People who voted for us and for my hon.

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Friend the Minister at the last election did not vote for a deterioration in existing services—within realistic boundaries, they want improvements.
Ultimately, the only solution to the problem comes from money from the Welsh Office. That money must be used to wipe out the debts and place the health authority on a proper basis to ensure decent hospital services. I understand that now, a few hours before the Budget, is not the best time to talk about money, but there is plenty of it about. As a former Treasury Minister, I find it difficult to say that—it sticks in my gullet—but there is plenty of money. Even the City and the Confederation of British Industry want to increase taxes.
What is my right hon. Friend the Chancellor going to do with those taxes? I know that he is a Scotsman, but I hope that he will not put the money into a tin trunk under his bed. Everyone wants increased taxes and everyone wants the Government to have more money. Some of that money should be used for these purposes; I know that it is not easy, but there is no shortage of money at the moment. It is a question whether we have the will to use that money to sort out the problem which, although not of my hon. Friend the Minister's making, nevertheless exists. The problem can be solved only with money, not by the deterioration of hospital services in my constituency.
1.15 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths): I congratulate my right hon. Friend the Member for Llanelli (Mr. Davies) on securing this important debate so soon in the life of the Parliament. I am grateful to him for bringing this issue to the attention of the House. The publicity that has surrounded the difficult financial position in Dyfed Powys health authority has aroused considerable strength of feeling locally and I welcome the opportunity to debate the matter in this forum.
Before we go into the detail, it is important that I explain something of the background to the position that we have inherited. Back in the early 1990s, as part of the market reforms, the previous Government decided that funding for health care should be population based—health authorities should receive money to meet the health needs of the residents living in the authority area. Money would follow the patient so that, no matter where treatment occurred, the health authority would still have to pay. Under that policy, the capitation formula used to distribute resources provided by Parliament showed that, if the total amount of cash were allocated solely according to population rather than on the old service basis, some authorities were not getting enough cash while others were receiving too much. Dyfed Powys was one of the authorities that was receiving too much.
To enable a more equitable distribution, a weighted capitation formula was introduced and the move to it was phased over five years. Funding by a weighted capitation approach seeks to take account of the need for health services in a population by adjusting the crude population share according to various factors. Those are chosen to show the relative demand for health services and include, for example, the relative death rate and the proportion of elderly people. I am quite sure that my right hon. Friend
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can be given information on how that formula works. This financial year is the last year of transition to that arrangement.
As a result of that readjustment to the existing capitation formula, over the past four years, the allocation for Dyfed Powys health authority has risen by only 19 per cent. compared to growth across Wales of 23 per cent. Nevertheless, the formula and the arrangements for its phased introduction were designed to provide time for the service to plan and were agreed with the NHS in Wales. While I expect that the process was manageable, it would have posed some difficult choices for the authorities involved.
Mr. Lembit Öpik: Does the Minister agree that, even with a transition time, the provision in rural areas will not become any cheaper? We have therefore compounded the problem—the net income per capita is coming down, but the problems of increasing elderly provision are rising. That is why so many of our residents in Powys have been concerned about the future of the cottage hospitals which seem to be under threat for the very reason that the Minister was giving.
Mr. Griffiths: As services for the elderly are increasing, the capitation formula will be of some help. Like the hon. Gentleman, I am concerned about the future of the health service, not only in rural areas, but in industrial areas. Although the formula has been accepted by the NHS in Wales as a robust means of distributing resources, my officials have convened a working group consisting of a wide range of NHS interests in order to review the methodology. I believe that that is necessary for a number of reasons.
Since the formula was introduced, there have been developments in the approach to determining health need; health authorities in Wales have been reorganised; and new sources of information on the health status of the population have become available—for example, the Welsh health survey. We must consider, together with the service, whether any of those developments should influence our approach. It is my intention to ensure that the distribution of resources between health authorities in Wales is done in the most effective and efficient way, but, clearly, these are early days and we cannot predict the outcome of the review or its effect on any particular health authority.
That is for the future. I shall now answer one or two of my right hon. Friend's questions.
Mr. Cynog Dafis: When it is reviewed, the formula must take account of rurality in relation to the provision of hospital services.
Mr. Griffiths: There is an element for that in the current formula, but there may be a need to consider whether its weighting should be increased. That is one of the matters that the review group will consider.
This year, Dyfed Powys received £265 million for hospital, community and family health services, including £257 million that is available for the authority's discretionary expenditure—that is, to purchase health services according to local priorities. The sum represents an increase in funding of 2.6 per cent. over 1996–97, which in cash terms means that the authority received an

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additional £6 million. As well as funding for hospital, community and family health services, almost £10 million was allocated to the authority for cash-limited general medical services—£600,000 more than in the previous year, or an increase of more than 6 per cent.
Of course, the move to weighted capitation funding has not been made any easier by the decision to reorganise health authorities. The new authority was created on 1 April 1996 and its unaudited accounts for its first year show a deficit of £1.9 million, adding to its inherited deficit of over £3 million. I assure my right hon. Friend the Member for Llanelli that such accounts do get properly audited and that he will be able to receive a copy of them. In addition, I cannot envisage any difficulty in placing a copy in the House in Commons Library.
In income and expenditure terms, the authority is obviously spending more money than it receives from the Welsh Office and, as I told my right hon. Friend when we met recently to discuss the matter, I have been asked to provide additional resources to help overcome that situation. In considering that, it should be recognised that, in allocating resources to authorities, the Welsh Office does not routinely keep cash in reserve at the centre. Consequently, we expect authorities to live within the resources allocated to them. Despite that, we try to be flexible and, in 1995–96, the Welsh Office provided a loan of £810,000 to the former Powys health authority, and, in 1996–97, provided the new Dyfed Powys authority with a further loan of £1.7 million. Therefore, as my right hon. Friend rightly said, the Welsh Office is now owed £2.51 million.
The authority has asked fir a further loan in the current year totalling well over £5 million. That is a considerable sum and, although it helps with cash liquidity to pay bills in the short term, it masks a much more serious underlying problem about the ability of the authority to maintain its existing level of commitments in future years. Cash injections in the form of repayable loans may have a part to play in managing the short term, but I would be unwilling to countenance their use as a substitute for addressing the underlying resource problem. Moreover, I am sure that, as a former Treasury Minister, my right hon. Friend would agree that, before I can reach a decision, it is essential that the authority produces a plan to demonstrate how it will get back to a balanced position. That is awaited, but, in the meantime, officials are giving the matter careful consideration and I hope to announce a decision this month.
From all of that, it is clear that the current contracting round with the authorities' main providers in the area is going to be very difficult and I can understand the frustration of all the trust chief executives. Representatives of the Llanelli trust have impressed on me their frustration—indeed, the small delegation from that trust which accompanied my right hon. Friend gave me a clear picture of the situation. I understand that, until contracts are agreed, temporary arrangements have been put in place to ensure that patient services—which must be the prime consideration—are not disrupted and trusts have a cash flow.
As I mentioned earlier, the provision of cash loans is not the only answer and neither can we add more money permanently to the allocation. That would create an imbalance in the move to a capitation-based mechanism and cause tensions elsewhere in Wales. The way forward is for the authority to develop a more acceptable strategy
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for the delivery of health care to its resident population than was proposed in the consultation document "Effective Care and Healthy People". That was intended to provide opportunities for residents and others to contribute to the review of health care provision in the area.
As my right hon. Friend will know, after considering the responses to consultation, the authority decided at its board meeting on 3 June that it should work with local interests to produce a revised strategy. A progress report on work towards completion of the revised strategy is to be made to the board in the autumn. It is now for the authority to take the matter forward, although I shall continue to take a keen interest and have asked to be kept closely informed of developments.
Of course it is not simply a matter for the health authority. The trusts in the area do need to play their part and, although I understand the difficulties they face, they must realise that resources are severely stretched. They will need to ensure that their organisations operate as efficiently and as effectively as they can. That will often mean careful consideration of the management of the capital estate, much of which is old, poorly maintained and in many cases not suited to modern health care techniques. Some estate rationalisation might therefore be necessary.
The Powys trust is developing proposals with the private sector for the rationalisation of patient and support services currently provided by Bronllys and Mid-Wales hospitals. That will enable the old establishment at Talgarth to be closed. Hospital services at Newtown will also be redeveloped in a new hospital to complement the services envisaged at Bronllys. The total cost of the two new developments is almost £19 million and negotiations are currently under way with the private sector to develop those schemes. The estate rationalisation flowing from the projects is likely to result in cost savings that will go some way to alleviate the financial problems of the authority.
In my right hon. Friend's constituency, the Llanelli trust is currently working with the Pembrokeshire and Derwen trusts in the development of proposals for elderly people that will incorporate alterations to Mynydd Mawr, Tumble and Bryntirion hospitals, and also for the reprovision of in-patient psychiatric services from St David's hospital, Carmarthen and Bryntirion hospital, Llanelli on to the Prince Philip hospital site. Those proposals will also allow some site rationalisation that may result in cost savings to the authority.
I was also interested in the plans that the Llanelli trust has in mind for an integrated model of care delivery in the Llanelli-Dinefwr area. As I explained to the chairman and chief executive of the trust when I met them with my right hon. Friend, the proposals need to he properly costed; nevertheless, it is encouraging that the trust and local GPs are working together. The GPs will need further to develop their thinking and perhaps consider producing clear, costed proposals for consideration as one of the locality commissioning pilots which I announced last Thursday.
From the Government's point of view, I think it important to recognise that the position that we inherited cannot be dealt with overnight. There will be situations like the one in Dyfed Powys when there is a need for everyone to pull together to ensure that patient services are not affected; that will entail co-operation and compromise locally.

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My right hon. Friend will know that I have already suspended the eighth wave of GP fundholding. That will release £1.9 million, to be used to reduce cancer waiting lists and for developments in primary care. I announced a wide-ranging review of the number and shape of NHS trusts in Wales, and it will get under way soon. We are also issuing a White Paper in the autumn to abolish the internal market—
Mr. Deputy Speaker (Mr. Michael Lord): Order.

Public Bodies (Food Purchasing)
1.30 pm
Mr. Ieuan Wyn Jones: I welcome the opportunity to debate this important subject. I thank the Minister in advance for responding to this debate and to the previous one. I know that he is having a heavy day in the Chamber; I am sure that when he eventually returns to Gwydyr house he will insist on being served a good lunch of Welsh lamb or Welsh beef—a decent recompense for his hard day's work in the Chamber.
There is a crisis facing the livestock sector in Wales. I informed the Minister's office that I would concentrate today on the crisis in the beef sector, especially in Wales—although I understand that the issue is also important in the other countries of Britain.
I need not remind the House of the crisis that the industry has faced for the past 15 months. The difficulties that followed the announcement by the then Secretary of State for Health on 20 March last year have been severe for the industry. That statement will be etched on the memory of farmers for a long time to come. I shall not recount the events since then in any detail—merely say that I have attended more mass meetings of farmers who are worried about the crisis than I have at any time in the past 20 years or so.
Most farmers were under the impression that once the over-30-months scheme was nearing a conclusion the crisis would probably be over. They thought that confidence and prices would start to recover, but things are worse now than they were at the height of the crisis. Prices in the marketplace are lower and farmers are losing a considerable amount of money on the cattle that they sell for slaughter. Such losses cannot be sustained for much longer. Interest rates have been historically low, but there are signs that they will rise in the next 12 months, thus adding to the pressure on farm incomes.
I accept that the fall in beef prices is due to a combination of factors. First, there is the revaluation of the green pound and the failure of the previous Government to ask for European Union money to alleviate the consequences. I hope that the new Government will make positive moves to rectify that. Secondly, there is the importation of beef from EU and third countries—beef that does not meet the high hygiene standards in the UK imposed as a result of the BSE crisis. Thirdly, the market has yet to recover the full confidence that it enjoyed before the BSE crisis erupted.
Mr. Lembit Öpik: Does the hon. Gentleman agree that British and Welsh beef is now the safest that can be bought anywhere in the world?
Mr. Jones: That is a good point. I shall reiterate it to the Government with some force before the end of this short debate.
The decision by the current Government to cut compensation for beef farmers entering the over-30-months scheme has caused considerable resentment in the industry. The Government need to recognise—whether we like it or not—that the compensation price affects the market price. The great danger that many farmers perceive is that the cut in the one will affect the other—the market price will fall even lower.

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I acknowledge the considerable cost to the Exchequer resulting from the BSE crisis and I know that that cost has been revised upwards in recent days, but I hope that the Minister will recognise the importance of agriculture to the rural economy. We need to underpin that economy; anything that affects beef producers is bound to have a deleterious effect on the rural economy.
Farmers recently received a significant boost when McDonald's said that it would reintroduce British beef to its fast food outlets. That showed that confidence is returning to the industry. It is thus all the more surprising that many public bodies in Wales and the rest of the United Kingdom buy the vast bulk of their beef from abroad. When I looked into it, I was astounded by the scale of this purchasing problem.
I have a letter from the chief executive of the Naval Bases and Supply Agency stating that the task of procuring food for the armed forces is contracted to the Navy, Army and Air Force Institute. I am told that some British beef is purchased, but that
"the Armed Forces' requirement is mainly for frozen products and the majority of beef joints are sourced on cost grounds, from Brazil, Uruguay, Argentina, New Zealand and Australia."
So none of this frozen beef is bought in Wales or anywhere else in the UK.
I have also inquired about the purchasing policy of health trusts in Wales. Many of them are located in prime beef-producing areas. My office was able to contact eight trusts; of those that could supply me with information, none had a policy that ensured that local beef was purchased as a matter of course—although some local beef was used. They all said that they now had to ensure value for money. The trusts that gave me information included the Bridgend and District NHS trust, the Carmarthen and District NHS trust, the Clwydian Community Care NHS trust, the Derwen NHS trust, and the Glan Clwyd District General Hospital trust. Some of them did not even know where their meat came from.
I understand that most, if not all, of the trusts in Wales receive their supplies under standard contracts negotiated by Welsh Health Supplies, which is a business unit of the Welsh Health Common Services Authority, or WHCSA. The NHS in Wales ceased purchasing carcase meat some time ago, moving to prejointed frozen cuts. Under the current arrangements, those frozen cuts of beef, lamb and pork come from South America, New Zealand and the home market respectively. That may be good news for Welsh pig farmers, although there are not many of them, but it is very bad news for the vast majority of Welsh farmers who are lamb and beef producers.
The good news, however, is that WHCSA is reviewing the policy and the balance between frozen and fresh meat and asking for more flexibility to be applied to contracts. On behalf of Welsh beef and lamb producers, I ask the Minister to urge the authority to introduce these proposals at an early date.
I have also made some inquiries with local education authorities in Wales about their school menus. The Minister will be aware of the report in the Western Mail in March of this year which stated that most schools in Wales did not serve beef to children. At the time, 13 of 22 LEAs were operating policies that totally or partly excluded locally produced beef from school menus. Of those 13, seven operated a total ban on beef, one gave head teachers discretion to use imported beef and five
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excluded beef from primary schools. My office contacted some of those LEAs and found that, in Cardiff, beef is on the menu only in secondary schools. Even there, there is no policy of buying local beef and LEAs follow what is described as the value-for-money rule.
In Denbighshire, an area noted for quality agricultural produce, beef is banned in primary schools and in secondary schools, where beef is offered and there is a choice, there is no policy to buy local beef. All meat is bought through a purchasing consortium.
In Rhondda Cynon Taff, all the beef used is imported, although I am pleased to say that a review of that policy is taking place.
The purchasing policy of Ynys Môn and Gwynedd county councils specifies the use of locally killed beef in schools.
Needless to say, the farming unions in Wales want the Welsh Office to encourage public bodies not only to purchase beef, but to buy locally produced meat. They and I understand that no one can be forced to buy or eat Welsh meat, but the Government can use their considerable authority to encourage its consumption.
In a letter to me, the Farmers Union of Wales asks that the Government positively discriminate in favour of fresh, home-produced meat, the value and quality of which are second to none. It would also help if the Government advocated the specification of fresh as opposed to frozen products in public body contracts. Such a move would be greatly welcomed.
The NFU has told me that, following the decision by McDonald's Restaurants to obtain local beef, it is renewing its strong invitation to public bodies to source their beef from British supplies.
The industry generally welcomed the stance taken by the Minister of Agriculture, Fisheries and Food when he made it clear that he expected imports from the European Union to meet the standards on the removal of specified bovine material that must be met by British beef and that, if they do not, orders banning imports will be laid before the House. He repeated that warning on the Floor of the House during the recent debate on the common agricultural policy.
Given that that is the Government's position, that—as the hon. Member for Montgomeryshire (Mr. Öpik) said—beef is safer than it has ever been and that we now have stringent hygiene standards, I believe it is right to expect Ministers to encourage its consumption now. It is ironic, is it not, that while statements in the House and elsewhere are made about the nutritional quality of locally produced beef, hospital patients, members of the armed forces and schoolchildren are eating beef from every country under the sun except their own. It is ironic, therefore, that the Government are not bringing pressure to bear on public bodies.
I believe that we are entitled to ask today for a clear statement from the Minister that all contracts entered into by public bodies for the purchase of meat be reviewed so that locally produced meat can be considered. That can be done quite easily by stating that they should consider fresh meat as well as, or instead of, frozen meat. That would give public bodies a clear signal that they should buy local beef.
There are encouraging signs from the WHCSA and local education authorities. I am asking the Minister to give a clear signal to those that are not moving in that

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direction to consider their contract sourcing policy. Will he encourage the local education authorities who still refuse to have beef on their menus to think again?
I feel that a bigger battle lies ahead with the purchasing policy of, for example, the armed forces. I made contact with the Ministry of Defence during the period in office of the previous Government; I have done so again, and there appears to have been no movement on their part. Will the Minister talk to his colleagues in the Ministry of Defence and at least ask them to review the position? The public pronouncements on the value and quality of our beef will ring a little hollow unless those organisations of which the Government have control start to change their purchasing policies.
I know that the Minister will have listened very carefully to my speech today. I hope that he can respond positively.
1.43 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths): I congratulate the hon. Member for Ynys Môn (Mr. Jones) on successfully securing this Adjournment debate. I am pleased to have the chance to respond on the important issues that he has raised. They are near to the heart, mouth and stomachs of consumers, who want safe food, and of producers, who provide it. The issue is one of confidence. I am convinced that confidence is justified.
Let me set out our approach to dealing with the impact that BSE has had on the beef industry—especially confidence in British beef. Throughout the crisis, the Spongiform Encephalopathy Advisory Committee has been a source of independent advice. It has advised on a range of precautionary measures to minimise the risk to human health. Scientists can never guarantee that there is no risk, but SEAC's chairman, Professor John Pattison, is on public record as saying:
"in any common usage of the word, beef is safe to eat".
That is the starting point for the restoration of consumer confidence in beef.
Mr. Barry Jones: The leaders of the NFU in Flintshire were very grateful to my hon. Friend for receiving their recent deputation. The worries continue. The leaders of the National Farmers' Union of Flintshire—Mr. Idris Roberts of Pwll farm in Treuddyn and the farmer who leads the NFU of Flintshire in Carreg y Llech, Mr. Terrig Morgan, also in Treuddyn village, say that they still have considerable worries and urge the Minister and the Government to continue to do everything possible to help their industry.
Mr. Griffiths: I thank my hon. Friend for that intervention. I hope that what I have to say will be helpful and that other continuing negotiations will prove to be helpful.
The hon. Member for Ynys Môn mentioned the announcement made last week by McDonald's Restaurants that it was resuming use of British beef products in its United Kingdom outlets. I am very encouraged that that decision was taken as a direct response to the views of customers, and I believe that, last night, Burger King made a similar announcement.
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In March 1996, directly after the announcement of a possible link between BSE and the new form of CJD, 70 per cent. of people surveyed by McDonald's Restaurants said that they would not buy British beef products. Now, however, there has been a complete reversal. A recent survey showed that 74 per cent. of people wanted McDonald's to sell British beef and it has followed customer preference. I am glad that Burger King has now done the same.
That is clear evidence that consumers' confidence in British beef is returning. Beef consumption as a whole is now only 3 per cent. below pre-crisis levels. In June, sales of beef in Wales were 42 per cent. greater than in the same period in 1996—the highest percentage increase in the United Kingdom.
I turn now to the issue of NHS trusts using British beef. Although NHS trusts are accountable to the Government, it is not our role to dictate what they should or should not do across a wide range of their responsibilities. Into that category falls the source of the beef provided to patients. Decisions about hospital meals are made by local management, in the light of central guidance.
Trusts in Wales as elsewhere, receive guidance on issues such as hygiene and dietary standards and are expected to provide patients with a choice of meals that respects their dietary needs. Information on CJD and BSE has also been sent to trusts, but the use or non-use of British beef has not been stipulated, and is not monitored centrally. However, I can tell the hon. Gentleman that I am receiving anecdotal evidence from trusts that they are reviewing that policy, and I hope that what is said in the Chamber today will give them confidence to make other moves.
The inclusion of beef on the menus of local authority schools is a matter for individual local authorities. They have been advised that there is no reason to withdraw beef from school menus, but they should continue to provide a choice of menu to accommodate different dietary and cultural preferences. I believe that beef can form a part of any well-balanced nutritional diet for our children, and I hope that local education authorities will take that view on board.
Before 20 March 1996, public bodies were under no obligation to restrict their beef supplies to those from Wales—or even from the United Kingdom generally. Indeed, the treaty a Rome prohibits public bodies from discriminating in favour of national interests. Consequently, Governments could not force public bodies to source their beef in Britain, even if they wished to do so. In any event, that should remain a matter for local discretion. Patients in hospitals, and school children and their parents are also consumers. Like McDonald's, trusts and schools that have stopped using British beef will use it again if that is what patients or parents and their children want.
Last summer, under the previous Administration, representations were made to the Ministry of Defence in a bid to reduce the armed forces dependency on imported beef. The MOD was supportive, but maintained that procurement of any goods should be on the basis of best value for money. The MOD purchases a limited amount of beef, but its decision to buy more imported beef is based on market conditions and suitable distribution services, rather than reaction to BSE. Perhaps the British beef industry should therefore speak to the MOD about how it might play a bigger part in supplying it.

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The Government cannot force consumers, whether they be at home, in schools, in hospitals or in the armed forces, to buy and eat British beef.
Our role is to safeguard the public interest and to make sure that the public are aware of the facts so that they can make decisions for themselves. To that end, measures were, and continue to be put, in place to ensure the safety of public health. Cattle suspected of BSE are compulsorily slaughtered and their carcases destroyed. Healthy cattle more than 30 months old may not enter the human food chain—they are slaughtered separately and their remains destroyed.
Milk produced from cows suspected of having BSE may not be used for human consumption, despite the fact that infectivity has not been found in milk. Specified risk materials—the head, brain, spinal cord, tonsils and spleen from cattle over six months, and the thymus and intestines from cattle of any age—may not go into the human food chain.
Those measures are enforced by the Meat Hygiene Service, a Government agency. In addition, the State Veterinary Service makes unannounced audit visits to abattoirs to ensure that the controls are fully enforced.
Mr. Nigel Evans: The Minister says that he will not dictate to public bodies that beef should be on the menu, but will he positively encourage them to put beef back on the menu?
Mr. Griffiths: I hope that my speech will be a signal of encouragement to public bodies in Wales and the rest of the United Kingdom.
The hon. Member for Ynys Môn will also be aware that the Commission last week announced that it would take action against member states, other than the UK, that fail to enforce adequately the ban of meat and bone materials in feed for ruminants. I welcome the recognition that UK controls are now the strictest in Europe.
I also welcome the Commission's publication of rules for removing risk materials from meat produced throughout the European Union. I very much hope that the Agriculture Council adopts that measure in the near future.
Mr. Richard Livsey: Will the Minister assure us that if that is not accepted by the Agriculture Council, he will instruct authorities in Wales not to accept beef products from countries that refuse to follow those guidelines?
Mr. Griffiths: The hon. Member stopped me in my tracks; I was about to consider that very point. I am sure that he knows that the Minister of Agriculture, Fisheries and Food, my right hon. Friend the Member for Copeland (Dr. Cunningham), announced recently that we will apply the same controls to imported meat as we do to our own. This is not a ban on imports—the controls will apply in the United Kingdom—but it will reassure consumers that any beef that they eat here is produced with the same rigorous attention to safety.
We hope that those steps to restore confidence in British beef will be taken on board by the public at large. We know that the final step in restoring full confidence in British beef will be having the export ban lifted.
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We have fulfilled the Florence pre-conditions and we now need recognition of the measures taken and sacrifices made. Lifting the ban will not be easy, particularly in the light of the negotiating failures of the last Administration, but we hope that this Government's constructive and positive approach to the Commission's ruling will pay dividends. We are, at this very moment, exploring with the Commission how we can best move forward.
We shall give a detailed technical response to the points made by the EU's scientific veterinary committee on our certified herd proposals very quickly. We recognise that consumers in all member states will be anxious to have full assurances in line with scientific assessment of the risk. At the same time, we will press for the ban's removal where those assurances can be given.
In addition, in order not only to restore the pre-crisis level of beef sales but to increase them, we need to make consumers more aware of the quality and versatility of the product. That can most effectively be done through efficient marketing and promotion activities. The Government are taking steps to promote beef and beef products.
The hon. Member for Ynys Môn will know that, in Wales, the body charged with undertaking that task on behalf of the Welsh food industry is Welsh Food Promotions Ltd., which is actively supported by the Welsh Office. In the past year, it has sponsored numerous promotional events, including the Welsh beef championships; promoted our beef at food events both at home and abroad; and is working with mainstream retailers to secure contracts for Welsh producers and processors. It also operates schemes such as the farm assured Welsh livestock scheme, with more than 3,000 members, to help give consumers confidence in the quality of Welsh beef.
I hope that Welsh beef farmers will also consider how they might come together, for example in co-operatives, to negotiate with supermarket chains and provide them with a ready supply of good-quality beef.
Mr. Cynog Dafis: Are not animal welfare and environmental sustainability also relevant to the marketing of both Welsh beef and Welsh lamb? Are not extremely high standards of animal welfare maintained in the production of Welsh beef and lamb?
Mr. Griffiths: Yes. The hon. Member makes a worthwhile point. We must bear in mind the fact that both beef and lamb farming have extensive and traditional methods of rearing animals, and people can be reassured of the humane way in which the animals are brought up and cared for.
The measures that the Government and by agencies such as Welsh Food Promotions Ltd. have taken will restore public confidence in beef. Indeed, the evidence shows that that is beginning to happen already. The Government can demonstrate clearly the safety of British beef. Once that has been accepted by our European partners, British beef will once again take its place as a product of the highest quality on international markets.

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The Government are also negotiating with theCommission to create the means by which that can be brought about. In the meantime, we are actively involved in helping the farming and food industries to promote British beef to the consumer as a quality product.
I can only hope that all those involved in purchasing, on behalf of the public, in public organisations such as NHS trusts, local government and Government
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Departments, will take heart from the fact that the Government are confident that British and Welsh beef is a quality product, produced under the most stringent public health and safety conditions, and that all consumers can purchase and eat it with confidence.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  DUCHY OF LANCASTER

    Sub-standard Contract Work
    Mr. Rhodri Morgan: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the conditions relating to sub-standard performance by a private company carrying out work subsequent to market-testing which could lead to termination of its contract. [4927]
    The Parliamentary Secretary, Office of Public Service (Mr. Peter Kilfoyle): Contracts with private companies should set out, among other things, the agreed standards of performance and the action to be taken if those standards are not achieved. Although general guidance is available, the precise conditions in each case will depend on the particular services to be provided and the expectations of the public body issuing the contract.
    Mr. Morgan: I am sure that the Minister is aware that yesterday, Capita completed the first year of its three-year contract running the telephone inquiry service at Companies House in Cardiff. Is he also aware that for much of that first year Capita was operating at below 30 per cent. of the agreed standard of answering the telephone within the first six rings? In the light of that, will he agree to review the contract in its entirety?
    Mr. Kilfoyle: I am sure that my hon. Friend will appreciate that that is primarily a matter for the President of the Board of Trade. I am sure that he will take the matter up with her, and I also undertake to do so.

    Small Businesses
    Mr. Bayley: To ask the Chancellor of the Duchy of Lancaster what measures he has taken to reduce the burden of bureaucracy on small businesses. [4928]
    Mr. Kilfoyle: As promised in our manifesto, we are in the process of appointing a revitalised task force, half of whose members will represent small business. We look forward to working with them to cut red tape and ensure that burdensome new regulations are not imposed on small businesses.
    Mr. Bayley: I welcome the fact that small businesses will be involved in that process. The small business contribution to the Government's welfare-to-work programme will be extremely important. As someone who has set up and run a small business, may I tell my hon. Friend that there should be necessary regulation to protect businesses, staff and customers, but that unnecessary regulation is a headache? Will he spread the message among all his ministerial colleagues to make sure that regulation is fine tuned so that it is imposed only where absolutely necessary?
    Mr. Kilfoyle: I congratulate my hon. Friend, who has a long and proud record of an enlightened approach to government, especially in the local government arena.
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    We have already made many contacts with Ministers cross-departmentally about the virtues of better quality regulation. We will shortly be establishing a cross-departmental "access business" group of Ministers so that we can break down many of the existing barriers for small businesses. We hope to achieve that by means of the most appropriate forms of information technology currently available.

    Open Government
    Mr. Miller: To ask the Chancellor of the Duchy of Lancaster what measures his Department is taking to improve openness in government. [4929]
    The Chancellor of the Duchy of Lancaster (Dr. David Clark): I hope to publish a White Paper on freedom of information before the summer recess.
    Mr. Miller: I am grateful, as I am sure that the entire House will be, for that answer. Will the Bill ensure that quangos are more open and accountable?
    Dr. Clark: My hon. Friend has a long record of trying to promote openness in government. I well recall his successful efforts to ensure that Hansard went on the Internet. He has my assurance that we are determined to make quangos more accountable and open. That will certainly be covered by the Bill. In the meantime, my colleagues and I are keen to encourage the appropriate bodies to take heed of that and to consider ways of making their activities more open to the general public.
    Mr. Forth: Will the right hon. Gentleman extend his support for openness in government to openness with the House? Does he expect to set a personal example in that regard?
    Dr. Clark: Yes.
    Mr. Mackinlay: In his review of open government, will my right hon. Friend contemplate considerably reducing the embargo on public records from 30 years? We should like to scrutinise the records to find out whether, during their negotiations in 1982, the Conservative Government contemplated handing over the Falkland Islands this year. Some openness on the stewardship of government by the Tories in the past 18 years would be most welcome.
    Dr. Clark: We shall certainly look at the possibility of opening up more of the Public Record Office and reducing the 30-year rule. Those matters will be covered in the White Paper.
    Mr. Maclennan: I welcome the information that the Chancellor of the Duchy provided at the beginning of his answer. Does he favour greater openness in respect of the budgetary process so as to open up for responsible fiscal debate the options that the Government are considering? While recognising that certain price-sensitive information cannot be published, does he agree that much of the rigmarole that we have today is fuddy duddy, archaic and unhelpful?
    Dr. Clark: It is my intention that when we introduce a freedom of information Bill we should exclude as little as

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    possible. The issue of advice proffered to Ministers must be weighed up, but I intend to ensure that factual and analytical information is made available as widely and openly as possible.
    Mr. Sutcliffe: My right hon. Friend will know that under the previous Government a fifth of all public spending was in the hands of 70,000 quangocrats. Will he make sure that his review examines the position of the Tory place men and women?
    Dr. Clark: We are currently looking at the position of quangos and I hope to deal with that issue when we produce our White Paper on better government later this year.
    Mr. William Ross: As so much of Northern Ireland is controlled by quangos, the right hon. Gentleman will understand that we have a particular interest in openness in government. Given also the statement yesterday by Mr. Ray Burke, the Foreign Minister of the Irish Republic, that if a parade were forced down the Garvaghy road, there would be
    "serious implications for matters in this island",
    will the right hon. Gentleman undertake to publish all the minutes of meetings of the intergovernmental conference and the secretariat?
    Dr. Clark: I think that we are straying somewhat off the point of the question. We want to try to achieve as much consensus and openness as possible. If the hon. Gentleman and his colleagues would like to discuss their views on the issues of freedom of information, we shall happily listen to them.
    Mrs. Gillian Shephard: In the interests of open government, would the right hon. Gentleman be kind enough to describe to the House the nature of the inquiry into the allegations by the hon. Member for Blaenau Gwent (Mr. Smith) announced by the Prime Minister last Wednesday? By whom was the inquiry conducted? Who was interviewed and by whom?
    Dr. Clark: I very much welcome the right hon. Lady to the Dispatch Box in her new capacity. I hope that her tenure there will be long and happy. Her question is not within my responsibility and she must pursue it through the appropriate channels.

    Food Safety
    Mr. Ben Chapman: To ask the Chancellor of the Duchy of Lancaster how many representations his Department has received on issues relating to food safety. [4930]
    Dr. David Clark: The consultation period on a food safety Act and the James report closed on 20 June. I am delighted to say that, as of yesterday, more than 600 responses had been received. In addition, ministerial colleagues in other Departments and I have met many other organisations representing a wide cross-section of interests, including consumers, retailers and producers.
    Mr. Chapman: I thank my right hon. Friend for that answer. Does he agree that if such consultations had taken
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    place earlier, under the previous Government, we might have avoided many of the expensive difficulties that resulted from their inactivity?
    Dr. Clark: My hon. Friend makes a pertinent and real point. We have campaigned for many years to get a food standards agency. Indeed, I remember advancing that proposal about 10 years ago, but it was met with derision by the then Conservative Government.
    The James report was commissioned by the Labour party. It has been widely recognised as a great step forward and I believe that it will do a great deal to restore public confidence in food in Britain.
    Mr. Soames: Does the right hon. Gentleman agree that the food and farming industries are among the most successful in this country? [Interruption.]
    Madam Speaker: Order. We must have some order in the House. It is difficult to hear hon. Members who are speaking. I want order from now on.
    Mr. Soames: Does the right hon. Gentleman further agree that it is extremely important that any proposed legislation emanating from his review does not overburden those extremely important and successful industries?
    Dr. Clark: I fully accept that the food and farming industries in Britain have a good reputation. However, there have been a number of food incidents and a number of people have died as a result. It may be that some of those incidents could have been avoided if proper regulations had been in place. Certainly, a great deal of Exchequer money could have been saved if we had avoided the food scares and incidents.
    The whole point of a food standards agency is to ensure not only that the British people have confidence in the food that they eat, but that they are able to have access to the best scientific advice on food issues.
    Mr. Lawrie Quinn: To ask the Chancellor of the Duchy of Lancaster what progress has been made in setting up the food standards agency. [4931]
    Dr. David Clark: We have consulted on the report from Professor James. I propose to make a statement before the summer recess, and it will include a summary of the responses. We aim to produce a White Paper in the autumn and will consult further on a draft Bill thereafter.
    Mr. Quinn: I thank my right hon. Friend for his answer. Although I am interested to hear of the progress on the timetable for the setting up of the food standards agency, will my right hon. Friend say something about any interim measures—[Interruption.]
    Madam Speaker: Order. I have just called this House to order. Conversations are far too noisy. I can hear the hon. Gentlemen on the Bench behind the Member who is speaking. Settle down.
    Mr. Quinn: Thank you, Madam Speaker.

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    What interim measures does my right hon. Friend propose before he can set in motion the timetable that he outlined? On behalf of the pensioners in my constituency of Scarborough and Whitby, I can say that we urgently want a food standards agency. We want to know what interim measures are proposed.
    Dr. Clark: My hon. Friend has raised a serious point. Clearly, it will be some time before the food standards agency is established. We have worked together to ensure that a whole raft of proposals will guarantee that food safety is improved as much as possible. My right hon. Friend the Minister of Agriculture, Fisheries and Food has established a food standards and safety group to bring together areas central to food standards and food safety issues within his Department—all, we hope, under one roof and one chain of command. Accordingly, the Department of Health is revising its codes of practice on inspections of premises and on the enforcement of food hazard warnings. I assure the House that we are considering a number of proposals to ensure that interim arrangements are in place to guarantee that we can, with confidence, recommend British food to British people.
    Mr. Hogg: May put it to the Chancellor of the Duchy that if we are to have a food standards agency it is extremely important that a Minister is able to explain its decisions to the House? It would be unacceptable if we failed to have an accountable Minister responsible for its decisions.
    Dr. Clark: Of course that is the case. As the right hon. and learned Gentleman knows, because he spoke on agriculture at the Dispatch Box, there was much disquiet about the Ministry's handling of food issues. We recognise his substantive point: the food standards agency will ultimately be responsible to the House and we believe that that is better achieved through a Minister at the Department of Health.

    Special Advisers
    Mr. Clifton-Brown: To ask the Chancellor of the Duchy of Lancaster what representations he has received about the use of special advisers. [4932]
    Dr. David Clark: We have had very few responses on that issue.
    Mr. Clifton-Brown: Does the fact that the Chancellor of the Duchy and his Administration have felt it necessary to increase the number of special advisers from 38 to 51 reflect the competence of the special advisers or the calibre of the Ministers whom they advise?
    Dr. Clark: Simply neither. We made it clear that we would have two advisers per Cabinet Minister. We also made it clear that we would strengthen the policy unit at No. 10. There are many advantages in having strategic advice available to Ministers. If Conservative Members are not aware of that by now, given their election defeat, they will never learn.
    Sir Patrick Cormack: To whom are the special advisers supposed to give advice? Does their remit extend to giving advice to the press and local councillors, or should they stick to giving advice to Ministers?
    Dr. Clark: It is a pleasure to welcome the hon. Member for South Staffordshire (Sir P. Cormack) to the
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    Dispatch Box. I have known him for many years and am glad to see him take his rightful place. It is clear that the special advisers operate under exactly the same conditions as those under which they operated during the previous Administration, and that they are answerable to Ministers.

    Senior Civil Servants
    Mr. Sheerman: To ask the Chancellor of the Duchy of Lancaster what steps he is proposing to recruit senior civil servants from a broad educational background. [4933]
    Mr. Kilfoyle: The Government will continue to ensure that selection for senior civil service posts is on merit, regardless of educational background. The merit principle applies equally to serving civil servants promoted to the senior civil service and, of course, to those recruited from elsewhere.
    Mr. Sheerman: From my temporary perch on the edge of this Bench, may I ask my right hon. Friend to read the Civil Service Commission annual report? It is worrying that there has been a substantial drop in the number of people from ethnic minorities who have been recruited into the senior civil service, and that only 23 per cent. of those getting into the fast stream are women. Can we be content with the fact that senior civil service recruitment is entirely dominated by Oxbridge? Is it not time that the other hundred decent universities supplied a good share of senior civil servants?
    Mr. Kilfoyle: There is a monitoring process to ensure that ethnic minorities and women are appropriately represented in the senior civil service. The numbers being recruited from Oxbridge fell from 44 per cent. to 36 per cent. in the three years from 1993–94 to 1995–96. The fast stream development programme is designed to ensure that recruitment is from the widest range possible of appropriate higher education institutions and other bodies.
    Mr. Wilkinson: Is it not to the House that policy makers look for a broad educational background, very little, or in some cases almost none at all, but from the civil service Her Majesty's Government have the right to expect impartial advice of the highest quality? Is not the hon. Gentleman right to insist that civil servants should be recruited on merit, particularly in the upper ranks, and that there should be no question of reverse or any other kind of discrimination?
    Mr. Kilfoyle: I am happy to agree with the hon. Gentleman: yes, I am quite right. Criteria are set down to ensure that the highest possible calibre of civil servants are recruited, and that is the Government's aim.

    Citizens Charter
    Mr. Barry Jones: To ask the Chancellor of the Duchy of Lancaster, pursuant to his oral answer to the hon. Member for the City of York (Mr. Bayley) of 4 June, Official Report, columns 378–79, how he proposes to take into account the views of the users of public services in future proposals relating to the citizens charter initiative. [4934]
    Mr. Kilfoyle: We are about to begin a series of visits and forums around the country during which we aim to

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    meet as many users of public services as possible. To back that up, we are considering setting up a panel, among other things, drawn from all walks of life, to inform and guide future proposals on the charter. We shall be announcing the details of this in due course.
    Mr. Jones: How will my hon. Friend consider the needs of those who are elderly and those with disability?
    Mr. Kilfoyle: I am happy to tell my hon. Friend that I shall shortly be meeting a series of forums, including one next week for the elderly, to ascertain their views so that we can ensure that the Government reflect the views of people in all walks of life on the services that they require.

    Food Safety
    Mr. Heppell: To ask the Chancellor of the Duchy of Lancaster what discussions he has had with colleagues on issues relating to food safety. [4935]
    Dr. David Clark: At the request of my right hon. Friend the Prime Minister, I chair the ministerial group on food safety. In this capacity, I co-ordinate departmental considerations of issues arising from the establishment of the food standards agency and other aspects of food safety.
    Mr. Heppell: Can my right hon. Friend confirm what I believe that he was saying earlier—that responsibility for the food standards agency when it is set up will rest with the Secretary of State for Health—and can he tell us how it will report to the House?
    Dr. Clark: It is envisaged that the food standards agency will be a body akin to the Health and Safety Commission which for the past 20 years has served health and safety in Britain very well. At the end of the day, it has been decided that the food standards agency should report to the House through a Department of Health Minister.
    Mr. Paice: I welcome the fact that McDonald's now recognises that British beef is safe, but can the right hon. Gentleman tell the House of any action taken by his Government which means that British beef was any safer last week than it was on 1 May?
    Dr. Clark: It stretches credulity a little for a member of the Conservative party to talk about the safety of British beef. That is the party which was supposed to go ahead with a cull of beef cattle to try to ensure that Britain's beef herd was safe. That is the party which promised that the European ban would be lifted when it was not. The Government will take no lecturing at all on the beef industry from Conservative Members.

    Open Government
    Mr. Ian Bruce: To ask the Chancellor of the Duchy of Lancaster what plans he has to provide public access to information terminals to allow communication with Government. [4937]
    Dr. David Clark: A number of pilot projects using public access terminals have been set up around the
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    country. They provide information on a range of public services and local amenities. As I suspect that the hon. Gentleman knows, the purpose of the pilots is to test consumer acceptance of the terminals as service delivery mechanisms. We intend a number of similar projects to be distributed throughout the country during the coming year.
    Mr. Bruce: I thank the right hon. Gentleman for that answer. Can he tell the House when citizens in my constituency, having heard the Budget speech, will be able to punch in their own details and find out how much money the Labour party intends to take out of their pockets?
    Dr. Clark: The hon. Gentleman will have to wait a little while before even he knows the answer—if that is indeed the answer. In all seriousness, the hon. Gentleman has long taken an interest in the subject of his main question and, like me, he knows the implications and the impact that information technology will have on the delivery of Government information and Government services to individuals. He will be pleased to know that I have made arrangements for right hon. and hon. Members to view some of the access terminals and that a demonstration will be staged from 7 to 11 July in the Upper Waiting Hall.

    Citizens Charter
    Mr. Evans: To ask the Chancellor of the Duchy of Lancaster what recent representations he has received concerning the future of the citizens charter. [4938]
    Mr. Kilfoyle: Two weeks ago, we met representatives from the National Consumer Council to talk about the new Government agenda, of which the charter is one part. We are also in discussion with a number of other interested organisations on the future of the charter programme. We also have the helpful report on the charter published in March by the Public Service Committee, on which the hon. Gentleman served.
    Mr. Evans: As the Minister will know, the citizens charter was introduced by the Conservative Government to ensure that the level of public services was increased and that the taxpayer received a high level of public service. I know that he will not be able to assure the House that the Chancellor of the Exchequer will not introduce new taxes this afternoon—we shall not have to wait long to discover that—but can he assure us that the Labour Government will break the habit of a lifetime and that the British taxpayer will not end up paying more and receiving less?
    Mr. Kilfoyle: One can take the boy out of shopkeeping, but one cannot take shopkeeping out of the boy. That may explain the hon. Gentleman's Poujadist view of what government ought to be about. As he knows, there are 41 national charters, 10,000 local charters and 645 recipients of the chartermark. We want to ensure that the whole movement is reinforced. That takes not money but will—a will that the Labour party has and the Conservative party before 1 May lacked.
    Mr. Connarty: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the effectiveness of the citizens charter. [4939]
    Mr. Kilfoyle: We believe that there is room for improvement, but that there is real potential in the

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    programme, and we intend to release it by involving ordinary people throughout the country in genuine consultation about how we can improve public services.
    Mr. Connarty: I thank my hon. Friend for that answer. Does he accept that there is a real need to replace the previous Government's top-down approach to the citizens charter programme? What plans does my hon. Friend have to involve ordinary members of the public, who are the recipients of the services on a daily basis, in deciding what is an acceptable level of public service?
    Mr. Kilfoyle: One of the ways in which we intend to involve ordinary people is demonstrated by the fact that we are considering setting up a people's panel, to involve many people throughout the country and find out what they expect of services both local and national. We have already mentioned that in the near future we shall be addressing forums of ordinary citizens from all over the country. In addition, we shall undertake trips to meet people in the provinces at various organisations.
    Mr. Rowe: Given that virtually the only citizens in this country who are forced by law to attend a particular place are the children who have to go to school, will the hon. Gentleman consider extending the citizens charter to make it clear that schools are expected to deliver children's ability to read, write and figure?
    Mr. Kilfoyle: The hon. Gentleman will be pleased to know that one of the forums that I shall soon be meeting will consist of young children, the future citizens of this country. Moreover, we have worked in partnership with the Citizenship Foundation to ensure that more than 4,000 schools that wished to do so received a pack relating directly to their interests.

    Open Government
    Mr. Amess: To ask the Chancellor of the Duchy of Lancaster what recent representations he has received about open government. [4940]
    Dr. David Clark: My Department has received representations from more than 60 organisations and individuals, all welcoming the Government's plans for greater openness and a freedom of information Act.
    Mr. Amess: Will the Minister explain to the House how the new Labour Government's professed belief in open government is compatible with the answer given by Ministers when asked a difficult question—that there will be a review?
    Dr. Clark: During today's Question Time, I have not mentioned the word "review".
    Mr. Pike: Will my right hon. Friend confirm that, for the first time for 18 years, we have a Government committed to open and accountable government—the exact opposite of the previous Tory Government?
    Dr. Clark: I am afraid that I could not even attempt to add to the sensible words of my hon. Friend, who is absolutely correct. We now have a Government who
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    believe in openness, transparency and accountability, and we intend to rebuild the trust of the British people in their Government.

  PRIME MINISTER

    Engagements
    Dr. Lynne Jones: To ask the Prime Minister if he will list his official engagements for Wednesday 2 July. [4957]
    The Prime Minister (Mr. Tony Blair): This morning, we had a Cabinet meeting to discuss the Budget. I had meetings with ministerial colleagues and others. In between, I am delighted to say that I was able to watch Mr. Tim Henman win magnificently at tennis.
    Dr. Jones: Does my right hon. Friend agree with the CBI, chambers of commerce, a string of economists and even the Bank of England that tax increases and not rises in interest rates are needed if we are to convert the threatened consumer boom into sustained growth in a productive economy? Would not fair taxation changes in a generally upward direction be welcomed by the public, who want to see more spent on health and education?
    The Prime Minister: My hon. Friend will have to wait for the Chancellor's statement a little later, but she is right to draw attention to the appalling state of the public finances left to us by the previous Government.
    Mr. Hague: Will the Prime Minister tell the House who gave authority to the Treasury press office to confirm certain details of the Budget in advance of its presentation to Parliament?
    The Prime Minister: I have to say to the right hon. Gentleman that, as far as I am aware, all Treasury officials have done is to confirm that we will do what we said we would do before the election. This may be a novel proposition for the Conservative party, but it is not for us.
    Mr. Hague: Is the Prime Minister aware that on top of this morning's disclosure by the Treasury, the Financial Times quotes a senior member of the Government as confirming that changes to dividend tax credits will be included in the Budget—something which was not the previously stated policy of the Labour party and was not in its election manifesto? Is he aware that Hugh Dalton, the Labour Chancellor who resigned over a Budget leak—admittedly, he was old Labour and one could trust him—said that one must always own up? Who will own up for that particular leak? Will the Prime Minister mount an investigation into that leak and, in common with previous practice on Budget leaks, will it be a police investigation?
    The Prime Minister: I have never heard anything quite so absurd as this.
    Mr. Skinner: Hold a referendum.
    The Prime Minister: My hon. Friend is right—why not hold a referendum? I say to the right hon. Gentleman that at least with this Government, the whole of the Budget was not leaked.
    Mr. Hague: It is all very well for the Prime Minister to make light of the leaking of Budget details which affect

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    billions of pounds on the markets and the savings of millions of people. He should mount an investigation into the leak. If he does, will he make a better job of it than last week's investigation into the behaviour of the Secretary of State for Wales? When he gave us his assurance last week that an investigation had been carried out to his satisfaction, did he know that in the course of that investigation the hon. Member for Blaenau Gwent (Mr. Smith), who made the allegations, had not been contacted?
    The Prime Minister: My advice to the right hon. Gentleman is to quit while he is behind. As for his going back to last week's Question Time, I think that he should stop flogging a dead horse.
    Mr. Hague: My advice to the Prime Minister is to answer the question that he is paid to answer. My advice to the Prime Minister is that when there is incompetence in the Treasury, or when Budget details are leaked without authorisation, the buck stops there, with the First Lord of the Treasury.
    Does it not worry the Prime Minister even a little that, after his personal assurances to the House last week, one of his own Members of Parliament said, "What the Prime Minister—I am sad to say—said is wrong"? Does the right hon. Gentleman agree that, if and when these matters are properly investigated—as they should be—the rules of conduct that he so publicly sets for others must apply to the Labour party, the Government and himself?
    The Prime Minister: The right hon. Gentleman will have to wait for my right hon. Friend the Chancellor's statement, which will be made in a moment, but I can give him this assurance. We set out some clear promises in our manifesto, and we will maintain those promises: we will keep them. One of the great differences that people see between the Government and the Opposition is that when we make promises, we keep them.
    Mr. Rammell: In the nine weeks since my election, I have received literally hundreds of letters from my constituents in Harlow about a wide range of issues; but I have yet to receive a single letter demanding a referendum on the outcome of the Amsterdam summit. Does my right hon. Friend agree with me—and, it seems, with the right hon. and learned Member for Rushcliffe (Mr. Clarke)—that there is no need for such referendums, and that they should not take place? [4958]
    The Prime Minister: I thank my hon. Friend. I am rather surprised that the Leader of the Opposition did not raise that as his big point at Prime Minister's Question Time.
    Apparently, the reason why some people say that there should be a referendum is the extension of qualified majority voting. I have looked carefully at both the Single European Act and the Maastricht treaty, and there are vastly greater extensions of qualified majority voting in both. Not one word about a referendum did we ever hear from Conservative Members—but then they are consistent at least in their inconsistency.
    Mr. Tyler: In the light of the outcome of the Aitken affair, can the Prime Minister confirm that he is examining the role of the Cabinet Secretary—and, indeed,
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    the implications for the reputation of the civil service for impartiality—given the invidious role in which the Cabinet Secretary was put, apparently as a result of Government activity? [4959]
    The Prime Minister: I cannot confirm that. What I can tell the hon. Gentleman is that any allegation will be properly investigated. Many of these matters, however, are currently in the hands of the various authorities that should investigate them, and it would not be right for me to comment on them, certainly at this stage.
    Mr. Pickthall: My right hon. Friend will understand the concern of those living in areas bordering the northern parts of the Irish sea about the revelation of the secret dumping of radioactive material in the Beaufort Dyke. I commend the Minister of State, Ministry of Agriculture, Fisheries and Food, my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), for the speed with which he has made the information public, but will my right hon. Friend assure us that such secret dumping is not happening now, and cannot happen in the future? Does he agree that this is a fine example of the need for open government? [4960]
    The Prime Minister: I can confirm that, contrary to assurances that were given in good faith by Conservative and Labour Governments, some radioactive material was, apparently, dumped at Beaufort Dyke in the 1950s. Our understanding and my advice is that it was of an extremely small nature and that it poses no risk either to human health or to the environment. We have received further information, and as it becomes available we will make it public, because we are concerned to ensure that anything that is alleged is brought out into the open so that people can know exactly what happened.
    Sir Sydney Chapman: Can the Prime Minister inform the House as a matter of open government whether the impending so-called anti-sleaze Bill will contain a provision to make it an offence for a Member of Parliament to induce another Member of Parliament to give up his seat in return for a peerage?
    The Prime Minister: I can assure the hon. Gentleman that, in contradistinction to the previous Government, we shall uphold the highest standards in public life.
    Mr. Berry: Will my right hon. Friend acknowledge the warm welcome given by disabled people to the Government's pledge to introduce comprehensive and enforceable civil rights legislation, and not least by the 1,000 or so people who lobbied Parliament yesterday? What action is being taken to implement that manifesto commitment? [4961]
    The Prime Minister: First, I congratulate my hon. Friend on all the work that he has done for disabled people. We are currently considering his Disability Rights Commission Bill. Our discussions with employment Ministers and disability organisations are continuing, and I am sure that they will result in the fulfilment of our manifesto pledge. It is worth pointing out that advances that have been made in the field of disability have always

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    been criticised at the time and have always ended up benefiting the vast majority of people in the country, disabled or not.
    Mr. Ashdown: Earlier, the Prime Minister told us that when he had made promises he would keep them. At the general election, he made two promises: that the Government would cut taxes, and that they would improve public services. Does he believe that he can keep both?
    The Prime Minister: I suggest that the right hon. Gentleman waits for the Budget statement that is about to be made.
    Mr. Ashdown: Let me be more specific: one of the Prime Minister's key pledges—I think that they were called sacred pledges—was to cut class sizes, but the Government are forcing local authorities to continue to sack teachers. How is it possible to cut class sizes and to kick out teachers at the same time?
    The Prime Minister: As the right hon. Gentleman knows, we are committed to cutting class sizes for five, six and seven-year-olds to 30 or fewer. We are committed to that, and we will do it. That is to be funded by phasing out the assisted places scheme. That Bill is on its way through the House of Commons now. We said that we would do that, and we will do it. If we do not, the right hon. Gentleman can come back and tackle us on it.
    Mr. Soley: Following the successful transfer of sovereignty in Hong Kong, does my right hon. Friend agree that we have a genuine opportunity, over the period for which the Anglo-Chinese agreement continues, not only to exercise our rights and duties in respect of the freedoms of the people of Hong Kong but to build a much more productive and positive relationship with the people and Government of China, with a two-way exchange to the benefit of the people of both countries? [4962]
    The Prime Minister: I agree with my hon. Friend. It is important to realise that the basis of a strong and stable relationship with China, which we want, is adherence to the joint declaration. That is the basis of the freedoms of the people in Hong Kong and we will expect it to be adhered to. In particular, it is important to put the elections that should be held within the year in the context of that joint declaration.
    It is also the case that, through the joint liaison group between Britain and China, which will exist up to 2000, and with our continuing commitment for 50 years under the joint declaration, we shall have a continuing interest in Hong Kong. It is in the interests of Britain, China and the people of Hong Kong that we make sure that the joint declaration is kept to strictly—which we will—and that we build upon that a strong and good relationship with China for the future; we will do that, too.
    Sir Peter Tapsell: Does the Prime Minister understand that his attempt to trivialise allegations of a Budget leak can only be damaging to his reputation, especially in view of his many statements that he would aim, as we all hope that he will, for the maintenance of the highest possible standards in public life? Is he aware that the alleged statements by Ministers, which were circulating as
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    rumours throughout the City for the whole of yesterday, resulted in the largest rise in the FTSE index for five years? This is a very serious matter. [Interruption.] Hon. Members opposite are always attacking the fat cats so it is rather extraordinary that they are so much in favour of them now when they are getting their cream from Labour ministerial leaks.
    The Prime Minister: To my certain knowledge, I have sat through 14 Budgets of the previous Conservative Government, and some of my hon. Friends have sat through 18. There is Budget speculation every year. It happens all the time; it happened under the previous Conservative Government and I do not doubt that it will happen for ever. It is simply a matter of the way it goes. As for the leaks about which the Conservative Opposition are complaining today, those are things that we said that we would do in our manifesto and intend doing.
    Mr. Healey: Is the Prime Minister aware that the legacy of the previous Government has left the Rotherham area with the highest unemployment rate of anywhere in the Yorkshire and Humberside region? Nearly one in three of our unemployed are under 25. Will he therefore spell out what guarantees he can offer to the young people of Rotherham and Dearne that their job prospects will improve under the current Government? [4963]
    The Prime Minister: I thank my hon. Friend for that question. No doubt if I mention the windfall tax I will be accused of leaking the Budget, but that measure was set out clearly in our election manifesto. The purpose of it is to give a chance to young people in my hon. Friend's area, my constituency and many other parts of the country who do not have hope and opportunity, or the possibility of getting a job or decent skills. They will get that chance for themselves because it is right that they should have the chance to do well for themselves and on behalf of the country, because the whole country benefits from a fairer, more decent and more civilised society.
    Rev. Martin Smyth: Does the Prime Minister agree with me that threats from the Provisional IRA or loyalist Protestant volunteer forces are neither wanted nor helpful at this time? Does he also agree that there is something wrong when, although civil servants were aware of an aide-memoire response from Sinn Fein, the Secretary of State for Northern Ireland was, apparently, not informed? Surely in open government civil servants should advise Ministers accurately.
    The Prime Minister: I am not entirely sure that I understood one part of the hon. Gentleman's question and forgive me if I did not. I will write to him if there is any misunderstanding.
    The aide-memoire was passed by the Government to Sinn Fein in the circumstances that I explained last week. I entirely agree with the hon. Gentleman about the case against threats or intimidation to the process. We will resist them now, and if the set of circumstances ever comes about in which there are all-inclusive talks, we will resist them then as well. What we want to see is a lasting political settlement, but the only people who have the right to play any part in that are those who are giving up violence, not those who are following it.
    Mr. Jim Cunningham: Does my right hon. Friend agree that when crime is committed in the community we

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    all become victims of it? Can he therefore say what the Government intend to do to protect the victims of crime? [4964]
    The Prime Minister: I can tell my hon. Friend that, tomorrow, the Home Secretary will announce a series of measures that will improve the treatment of victims within our court system. In particular, they will try to deal with the intimidation of victims and witnesses, which is an extremely serious problem. I can assure my hon. Friend that crime is an issue which is raised with us continually and we will act upon it.
    Mr. Wigley: Is the Prime Minister aware that in Wales, and no doubt elsewhere, health trusts and health authorities are teetering on the verge of bankruptcy because of a lack of funds? Because of underfunding by the previous Government, nurses are being sacked; beds are being closed; and commitments on community hospitals are not being fulfilled. Will he give an assurance that his Government will provide adequate resources to ensure that in the coming winter no one goes without a bed in hospital if in need? [4965]
    The Prime Minister: We shall do our very best to ensure that that happens. I have to say two things. First, it is important that any money that we spend on the national health service goes into patient care, which is why we are committed to ending the Conservative internal market and making sure that that money goes to patients rather than bureaucrats and administrators. Secondly, it is extremely important that we take all the steps necessary to make sure that the national health service is available for people on the basis of need, not ability to pay. I assure the hon. Gentleman that those two principles will underwrite everything that we do.
    Ms Hewitt: Does my right hon. Friend agree, without tempting him into any Budget leaks, that millions of families who have been struggling to pay more than 20 tax rises imposed on them by the previous Government will be hoping in this afternoon's Budget for a cut in the rate of VAT on fuel and for a commitment to reduce, and not raise, tax rates for ordinary working families?
    The Prime Minister: I can certainly say, without in any way entering into Budget discussions, that we will adhere to our promises. Those promises include cutting VAT on fuel. When the last Government introduced that it caused enormous distress to ordinary families throughout the country, and especially to pensioners, who ended up bearing the brunt of it.
    Mr. Willetts: Can the Prime Minister confirm that he supports the principle of independent taxation of husband and wife? Would it not be inconceivable to go back to the days when the incomes of husband and wife were taxed jointly? Will he therefore assure the House that nothing in the Government's review of integrating tax and benefits will undermine that principle? [4966]
    The Prime Minister: As I have said to other hon. Members, I am not getting tempted into anything that
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    might happen later this afternoon. We set out our principles on taxation clearly in our manifesto and we will keep to them.
    Mr. Corbett: Can the Prime Minister confirm that his Government attach high importance to giving every possible assistance to helping the two Cypriot communities reach agreement on a federal bi-zonal solution to what has unhappily been known for the past 25 years as the Cyprus problem?
    The Prime Minister: Yes. I can confirm that we remain committed to that. We will have the European Union presidency in the first part of next year. As I said to the House a week ago, we are committed to using the presidency to find the long-term solution to the problem of Cyprus that everyone wishes to see.
    Mr. Rendel: Given that the money from the cancellation of the assisted places scheme cannot become available to the Government for at least another year, and that many local education authorities are already threatening to sack teachers this year—Labour-run Bury, for example, is threatening to sack 167—does the Prime Minister admit that teacher-pupil ratios will continue to get worse and that the number of primary school children in classes of more than 30 will continue to grow for at least another year? [4967]
    The Prime Minister: What I can confirm is that tremendous problems have been left to us. We have to deal with those problems as we can, making progress in the way that we are able to, given the difficulties of public finances and all the rest that we have inherited. In this matter, as in others, people expect us to make progress as we are able. If we had the support of all parties in the House to get through the measures that we need to get rid of the assisted places scheme and put in place the funding of lower class sizes, we would be able to make swifter progress. We will do all that we can consistent with the proper management of the nation's finances. If I may say so, that is the difference between government and opposition.

    Ayrshire (Visit)
    Mr. Donohoe: To ask the Prime Minister when he next expects to visit Ayrshire. [4968]
    The Prime Minister: I have no immediate plans to visit Ayrshire, but I have done so many times in the past and no doubt will do so again.
    Mr. Donohoe: That is a great shame because Ayrshire is such a beautiful county. My right hon. Friend does not know what he is missing. I am sure that we will he able to entice him to the wonderful Ayrshire coast—the Clyde coast—in the not-too-distant future. More seriously, if he were to come he would learn that there is a tremendously high level of drug taking in Ayrshire. Local health board estimates suggest that 30,000 people have at some point taken drugs. Knowing of his commitment before the general election to set up a task force, what progress has been made by him and by my right hon. Friend the Home Secretary?
    The Prime Minister: The proposal that we made during the course of the election to appoint one person—

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    the so-called drugs tsar—to be in charge of all aspects of our policy, will be put into effect shortly. We are concerned to move quickly on the problem, not merely because of the effects that my hon. Friend has mentioned in relation to his constituency and others, but because of the absolute, hard and overwhelming evidence of the link between drug abuse and crime. That is why we are going to introduce measures, not merely to crack down on drug abuse and those taking and peddling drugs, but to tackle some of the underlying causes of crime such as youth unemployment.
    Mr. Alasdair Morgan: My question relates to Ayrshire, particularly the Ayrshire coast and the coast of the south-west of Scotland. Can we expect an early statement on the problems of the munitions in Beaufort Dyke, particularly the revelations about radioactive waste being dumped there?
    The Prime Minister: We have made available such evidence as exists. The reason why the subject is being discussed today at Prime Minister's questions is precisely because when it came to light that, contrary to previous Government assurances, which were made in good faith, radioactive material had been dumped, we disclosed that fact. That is why we are discussing the matter now; if further information comes to light, we shall disclose that. I repeat, because it is important that people should not become unnecessarily alarmed, that the advice that I have been given is that the dumping was of a low level and that there is no risk to human health or the environment. If any further evidence, or anything that may change or mitigate that statement, comes to light, we shall make the information available to the House.

    Engagements
    Mr. McAllion: At the United Nations summit on social development in 1995 it was agreed that each participating Government should draw up a national plan for the eradication of poverty. Is my right hon. Friend aware that the last Tory Government subsequently ratted on that commitment, claiming that such a plan was not needed in this country? Does my right hon. Friend agree that that represents a calculated insult to the many millions of our fellow citizens who live in poverty or on the margins of poverty? Will he put that wrong right by committing this Labour Government to drawing up a national plan within an agreed time scale? [4969]
    The Prime Minister: This Government certainly regard the eradication of poverty as one of their aims and objectives. That is why we want the windfall tax to reduce youth unemployment, why we believe in cutting VAT on fuel and why we are now looking into how the benefits
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    system, particularly the interrelationship between the tax and benefit system, can be improved so that it gives people incentives to get back to work. It is also why we are looking across a range of issues in relation to the welfare state to see how we can make the provision fairer, more effective and more modern.
    Mr. Tom King: Is the Prime Minister aware that he has given the clearest impression to the House today that he does not regard the leaks that have been discussed as very serious? Is he aware that there is prima facie evidence that a number of people have made a substantial amount of money by relying on the stories or attributions that have allegedly come from members of the Government? This is a serious matter as it goes to the heart of the integrity of Government. Has he taken senior advice on this matter, which seems to many of us to be a very serious issue for his Government?
    The Prime Minister: Speculation about what is in the Budget occurs every year to my certain knowledge. [Interruption.] Yes it does. If the right hon. Gentleman wants to go back, as I have done, and check last year's press cuttings from the Conservative Budget he will find that they were all over the place—they involved senior Government sources and other sources. What is happening is merely the usual round of speculation. The Conservative party is tackling this issue because it is afraid of tackling the real issues.
    Mr. Skinner: Is my right hon. Friend aware that as a result of the massive pit closure programme of the past 18 years and, particularly, the past few years, there is not a single pit left in the Derbyshire coalfields—and the same applies to many other coalfields? Will he take into account the fact that there has not been any overheating of the economy in any of those coalfield areas? When he is drawing up plans arising from the Budget or afterwards, will he hear in mind the fact that, whatever improvement takes place generally, some sort of an industrial development plan is needed for those coalfield areas, where poverty and mass unemployment still reign supreme as a result of the past 18 years?
    The Prime Minister: I think that my hon. Friend is absolutely right in what he says. That is why it is important—whatever the general state of economy—that we take specific and targeted measures on unemployment that take account of the fact that, for those areas that have engaged in huge industrial restructuring, there must be specific help for people there. It is also one of the reasons why we are committed to development agencies in the regions that can co-ordinate inward investment and the development of small, medium, starting-up and other businesses coming in to supplant those that have gone. That type of specific, targeted activity is a very important part of our economic and industrial policy.

Budget Statement (Advance Disclosure)
3.30 pm
Mr. Peter Lilley(by private notice): To ask the President of the Council and Leader of the House of Commons if she will move to set up a Select Committee to investigate advance disclosure of the Chancellor of the Exchequer's Budget statement. [Interruption.]
Madam Speaker: Order. I will take no points of order until after the private notice question. I want to hear what the right hon. Gentleman has to say at the Dispatch Box. The House will come to order and hear exchanges. Mr. Lilley.
Mr. Lilley indicated dissent.
Madam Speaker: In that case, we will have silence for Mrs. Taylor.
The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): No, we do not intend to establish such a Committee. There is always speculation at the time of the Budget about its contents, as the right hon. Gentleman, a former junior Treasury Minister, should know. I have seen no evidence that details of the Budget statement have been leaked. If the complaints are that we are sticking to manifesto commitments and election pledges, then, as the Prime Minister made clear, we are happy to confirm that this is the case.
Mr. Lilley: I had rather hoped that the right hon. Lady, recognising that she acts for the whole House rather than for the Government, would take this matter more seriously—certainly more seriously than her right hon. Friend the Prime Minister—act on precedent and set up an inquiry. Does she not recognise that these are matters of the highest importance to the authority of the House and to the integrity of financial markets? That is why a previous Labour Chancellor, who himself disclosed contents of his own Budget before that Budget, was required to resign and the same has happened to other Treasury Ministers.
The right hon. Lady says that this relates to matters that were in the Labour party's manifesto. Neither of the issues disclosed before the Budget today was in the Labour party's manifesto. They are not a matter of speculation, but of disclosure of specific matters which will be in the Budget. If she says that it was a matter of which we all should be aware, why was it that, when the Treasury revealed the details of the plans to abolish in this Budget the tax relief for medical insurance for the elderly, the BBC thought that was news, Ceefax thought that was news and the journalists who phoned me thought that was news? They did not think that it was established policy and, unlike the Treasury which said that it was in the manifesto, they knew that it was not in the Labour party manifesto. It had never been declared as policy and a possible content of this Budget in the House, and I would submit to the right hon. Lady that it should not have been revealed to journalists before it was disclosed in the Budget statement in the House.
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Whatever the right hon. Lady may say about that issue, she will surely agree that the second disclosure, on the front page of the Financial Times today, written by its respected political correspondent, states:
"A senior member of the government said"—
about the plans to abolish dividend tax credits and take billions of pounds out of pension funds—
"the markets are bonkers … we are pressing ahead"
with these plans. That is a clear disclosure of a very price-sensitive matter. Will the right hon. Lady agree that it is necessary to inquire into the fact that there have been share price movements following both disclosures?
Does the right hon. Lady recall that when an official, without authorisation, leaked the contents of the Budget last year, the then shadow Chancellor—now the Chancellor—said:
"I condemn this leak and I think nobody can condone the leak of sensitive Budget matters the day before the Budget. I am sure that a full inquiry is going to be mounted"?
Why is no inquiry to be mounted on this occasion? Why is no Select Committee to be set up, even though one was in the Hugh Dalton case? Does the right hon. Lady agree with the former Labour Prime Minister, Attlee, who said:
"The principle of the inviolability of the Budget is of the highest importance, and the discretion of the Chancellor of the Exchequer must he beyond question"?
Does she agree with Hugh Dalton's reaction when he was urged not to admit that he was the Minister responsible? Does she accept that whichever Treasury Minister briefed The Times and was quoted by the Financial Times must own up and say that he did it? Finally, does she agree that there must be an inquiry to clear up these matters before we can proceed?
Mrs. Taylor: I think that the right hon. Gentleman has confirmed our fears that this is nothing more than a pathetic attempt to disrupt the Budget, because the Opposition are so afraid of the popularity of our manifesto commitments. The right hon. Gentleman really ought to learn the difference between speculation and disclosure. As my right hon. Friend the Prime Minister has said, speculation of the type that appears in the Financial Times today has preceded every other Budget, too.
As for the abolition of tax relief on medical insurance, which the right hon. Gentleman claims has been revealed to the world for the first time today, I remind him and his colleagues that on 25 February 1997 the Conservative party published an attack on Labour's plans which included the words:
"Labour are committed to cutting VAT on fuel to 5 per cent. Labour have said that they will pay for this by abolishing tax relief on medical insurance for pensioners."
I can confirm to the House that the purpose of Budget secrecy is to prevent sensitive material from being leaked, not to prevent manifesto commitments from being kept.
Mr. Robert Sheldon: Budget day would not be—
Hon. Members: Call Kenneth Clarke!
Madam Speaker: Order. A right hon. Gentleman is on his feet.
Mr. Sheldon: Budget day would not be the same if there were not rumours and guesses about the contents of

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the Budget. The only quotation in the Financial Times states that a senior Minister has said, "We are pressing ahead." That is what we are doing—pressing ahead.
Mrs. Taylor: I think that my right hon. Friend will shortly find out that that is the case.
Mr. Paul Tyler: May I add to the quotation that has been read? It also said:
"A senior member of the government said: 'The markets are bonkers"'.
Is that not true, Madam Speaker?
May I make a constructive suggestion? I wonder whether the Leader of the House heard her colleague, the Chancellor of the Duchy of Lancaster, responding to a point made by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) about the advantages of open government in relation to the budgetary process.
If, among Government steps to improve the position, we had more public discussion, before the Budget, of the fiscal options, so that such speculation as took place took account of that discussion and had that as background, and if, as part of the plans for open government, the Government would now give us an undertaking that those strategic options and fiscal opportunities would be discussed in the open, without the Chancellor disappearing into purdah for so many weeks, we would have a much healthier democratic discussion than we do at the moment.
Mrs. Taylor: I really think that we cannot have it both ways. We cannot have complaints that there has not been enough secrecy and, at the same time, complaints that there has been too much.
Mr. Gerald Kaufman: Madam Speaker, this morning you rebuked one of the minority parties for playing childish games. Will you now rebuke another of the minority parties for playing childish games, and point out that that type of childish game, which the electorate are sick of, explains why that party is on the Opposition Benches and why, after the next general election, it will be on the Opposition Benches below the Gangway?
Mr. William Cash: As the Leader of the House has said that this is a matter for speculation, as has the Prime Minister, does she accept that there are strong grounds, as there were in 1947, for a stock exchange investigation to establish whether there is a connection between the soaring market prices yesterday and the allegations that have been made? Will she say whether she thinks that there should be a stock exchange investigation, and would she object if there were one?
Mrs. Taylor: No. I see no reason for one.
Mr. Dale Campbell-Savours: May I say to my right hon. Friend that I have a copy of the Financial Times article, and it is clear that not one single word in that article could be construed as a Budget leak, not even in the wildest possible circumstances of
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imagination? Is not the reality that all we have here is a publicity stunt by the Tories, and that the country will not be fooled?
Mrs. Taylor: My hon. Friend is right. The country will not be fooled, and I think that the country is looking forward to hearing the Chancellor of the Exchequer's Budget statement.
Mr. Bernard Jenkin: Will the right hon. Lady, in the interests of her manifesto commitments in favour of open government and the highest standards in public life, therefore be happy to name the senior member of the Government who is mentioned in the article? Why will she not tell us—or is she ashamed of it?
Mrs. Taylor: The hon. Gentleman is talking about speculation in the newspapers, which takes place on every occasion.
Audrey Wise: Does my right hon. Friend agree that it is by no means unusual for share prices to move on the basis of unfounded rumour? Will she, therefore, agree that this exposes the thinness of the Opposition's likely response to our right hon. Friend's Budget statement when he is finally allowed to make it? Does she share my impatience for us to get on with it?
Mrs. Taylor: Yes.
Mr. Alex Salmond: As I remember it, the Conservatives got quite upset when their Budget statements were delayed in one year or another. Given that many other countries have much fuller discussion and debate in the run-up to the Budget, is there not a case for far more discussion, not less? Should we not demystify the rigmarole and flummery of the Budget, and would that not be more important than the Chancellor's changing his jacket or his Budget box?
Mrs. Taylor: My right hon. Friend the Chancellor has made his priorities clear, which is why he is anxious to make his statement to the House.
Mr. Dennis Skinner: Does my right hon. Friend recall that, only last year, a Budget leak was sent to the Daily Mirror? For some obscure reason that I shall never understand, the Daily Mirror decided not to print it. But The Sun took the story and printed it. I did not hear a single word or a squeak from any Tory Member in support of a Select Committee and, what is more, we did not get a statement about it either.
Mrs. Taylor: My hon. Friend is right. Opposition Members have slipped into opposition mode very easily.
Mr. Douglas Hogg: Does the Leader of the House—[Interruption.]
Madam Speaker: Order.
Mr. Hogg: Does the Leader of the House accept—[Interruption.]
Madam Speaker: Order. The House will come to order and hear the right hon. and learned Gentleman.
Mr. Hogg: Does the Leader of the House accept that the House has a right to know the Government's position?

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Is she saying that there was no leak or that there was a leak, but it does not matter? We are entitled to know. Moreover, does she accept that, in view of the lamentable way in which last week's inquiry into the allegations against the Secretary of State for Wales was conducted, the proper way, in accordance with precedent, is to set up an inquiry under the Tribunals and Inquiries Act 1971?
Mrs. Taylor: The right hon. and learned Gentleman should have been listening to what I said earlier. I said
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that I have seen no evidence that any details of the Budget statement have been leaked. He says that he wants to know what we stand for. We went through the election campaign saying what would be in our first Budget. We shall find out soon to what extent we have kept our word.
Several hon. Members rose—
Madam Speaker: Order. We shall now move on to the Budget.

WAYS AND MEANS

  Budget Statement
  Mr. Deputy Speaker (Sir Alan Haselhurst): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that, at the end of the Chancellor's statement, copies of the Budget resolutions will be available in the Vote Office.
  3.46 pm
  The Chancellor of the Exchequer (Mr. Gordon Brown): The Budget that I lay before the House today represents more than simply an allocation of resources and an accounting of revenues. Behind the numbers and statistics, the central purpose of the Budget is to ensure that Britain is equipped to rise to the challenge of the new and fast-changing global economy—not just a few of us, but every one of us.
  The impact of the global market in goods and services, and of rapidly advancing technology, is now being felt in every home and community in our country. New products, services and opportunities challenge us to change; old skills, jobs and industries have gone and will never return. Yet for our country, the first industrial nation, this new global economy, driven by skills, creativity and adaptability, offers an historic opportunity. The dynamic economies of the future will be those that unlock the talent of all their people, and our nation's creativity, adaptability and belief in hard work and self-improvement—the very qualities that made Britain lead the world in the 18th and 19th centuries—are precisely the qualities that we need to make Britain a strong economic power in the 21st century.
  To achieve that, however, we must address the four weaknesses that have held us back for too long and for too many years: instability; under-investment; unemployment; and waste of talent. In this Budget, I shall address each of those weaknesses in turn, to ensure stability, investment, work and opportunity for all.
  I turn first to stability, because without stability all plans for investment, employment and education founder. In a global economy, long-term investment will come to those countries that demonstrate stability in their monetary and fiscal policies and in their trading relationships, and for Britain that means a commitment to stability in our relationships with Europe.
  In May, the Government established a wholly new framework for monetary stability—open and accountable, based on clearly established rules and discipline, the Government setting the inflation target, and the Bank of England setting interest rates to meet that target. That reform signified our determination to break from the short-termism of the past and to establish long-term confidence. In this Budget, I shall match those measures for long-term monetary stability with measures to promote long-term fiscal stability.
  The Chancellor is first and foremost the guardian of the public finances—the people's money. During the 1990s, however, the national debt has doubled. This year alone, the taxpayer will pay out debt interest payments of £25 billion—more on debt than we spend on schools.
  Public finances must be sustainable over the long term. If they are not, the poor, the elderly and those on fixed incomes who depend most on public services will suffer
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  most. Therefore, as with our approach to monetary policy, so in fiscal policy: we will now establish clear rules, a new discipline, openness and accountability.
  My first rule—the golden rule—ensures that over the economic cycle the Government will borrow only to invest, and that current spending will be met from taxation. My second rule is that, as a proportion of national income, public debt will be held at a prudent and stable level over the economic cycle. To implement those rules, I am announcing today a five-year deficit reduction plan. Those rules and that plan will ensure an historic break from the short-termism and expediency that have characterised the recent fiscal policies of our country.
  As with our monetary policy, our fiscal policy will be all the more credible for being open and accountable. Immediately on coming to office, the Government invited independent scrutiny by the National Audit Office of key assumptions in the public finance forecasts. That independent scrutiny will continue into future Budgets, with further work by the National Audit Office, and with publication, some months in advance of every Budget, of an assessment for open debate in the country of what is happening to the economy and to the people's money.
  My Budget today sets out a forecast for public borrowing this year and next, and for the following three years, projections for the public finances based on different scenarios for the growth of public spending. I can report that in each and every case, our deficit reduction plan ensures that we are on course to meet the two fiscal rules that will guide our approach to the public finances.
  Any Budget seeking to achieve high and stable levels of growth and employment must be guided by the true state of the public finances, and also by a clear assessment of the state of the economy. I now turn to that.
  We have seen a rapid growth of consumer spending of nearly 4 per cent. over the past year. With the prospect of further windfalls from the building societies, consumer spending is likely to remain strong.
  There has been a sharp rise of 7 to 11 per cent. in house prices, with even higher rises in the south-east. The growth of average earnings has accelerated to 4½ per cent. a year. The rate of broad money growth has been around 10 per cent. for a year. Those increases in consumer spending, earnings and money supply are continuing even as industrial production and manufacturing output have been recovering only slowly. It is essential that consumer spending is underpinned by investment and industrial growth.
  Britain cannot afford a recurrence of the all-too-familiar pattern of previous recoveries: accelerating consumer spending and borrowing side by side with skills shortages, capacity constraints, increased imports and rising inflation.
  Already, there are warning signs that the pattern could be repeated. In similar circumstances, some of my predecessors have ignored the signs, while others have deluded themselves into believing that growth, however unbalanced, was evidence of their success. I will not ignore the warning signs and I will not repeat past mistakes.
  The Treasury's assessment is that the output gap is close to zero, and there is a risk that output could already be above trend. In other words, our sustainable rate of

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  growth is too low for growth to continue at its current pace without the risk of more inflation. That is why in May I judged that interest rate increases were necessary, and events since then have confirmed that it was the correct judgment. But against these pressures, we must take into account both the subdued level of producer-price inflation and the current strength of sterling, which, over the past year, has appreciated by 18 per cent. I understand and share the concerns of industry and exporters and will address them.
  As the figures demonstrate, there is now an imbalance between strong growth in the consumer and service sector and weak growth in the manufacturing and exporting sector. Nevertheless, what worries manufacturers even more is that inflation could get out of control and herald a return to the instability of stop-go.
  My goal, therefore, is to ease inflationary pressures without damage to industrial and exporting prospects and to do so in a way that is consistent with our long-term objective of high and stable growth and employment. In this way, we can moderate the upward pressure on interest rates and on the exchange rate as well as further our objective of sustainable public finances.
  I have therefore decided to tighten fiscal policy, as a result of Budget measures including the windfall tax, by £5½ billion this year and £4¾ billion next year and, with the resulting reductions in the deficit, I am able to present an economic forecast putting us back on course for a more balanced and more lasting recovery and for long-term stability in the public finances.
  The forecast is that national income will grow by 3¼ per cent. this year and 2½ per cent. next year before returning to its trend rate.
  Consumer spending, which is expected to increase by 4½ per cent. this year, is forecast to grow more slowly at 4 per cent. next year.
  Business investment, which has failed to meet expectations over the past two years, is forecast to rise strongly this year and next, so increasing investment as a share of our national income.
  Finally, inflation is expected to remain at 2½ per cent. this year, the Government's target, rising slightly to 2¾ per cent. next year as a result of the failure by the previous Government to take early action to control inflation, before returning to 2½ per cent in 1999.
  To achieve long-term stability is to achieve something no Government have done for decades. But stability is a necessary, not a sufficient, condition for the Government's objective of high and stable levels of growth and employment.
  A prudent estimate of the current trend rate of growth is only 2¼ per cent., so raising the long-term growth rate of our economy is our major challenge. That is why the announcements that follow represent a new kind of Budget for higher growth—one whose main priorities are to invest for the long term, particularly in skills, to modernise the welfare state and to maximise opportunity for all—the modern route to economic success.
  While previous Budgets used to be about dividing up today's wealth, this and future Budgets will thus concentrate on laying the foundations for tomorrow's wealth, and it is to far-reaching measures that will raise the quantity and quality of investment that I now turn.
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  Since 1980, the United Kingdom has invested a lower share of national income than most other industrialised countries, and national income per worker has been lower, too. For every £100 invested per worker in the United Kingdom, Germany has invested more than £140, the United States and France around £150, and Japan more than £160 per worker.
  The objective behind our two-year-long corporate tax review—begun in opposition—has been to develop a tax system that encourages personal savings, favours higher levels of investment, rewards long-term investment and is fair to all. Our consultations on capital gains tax will be completed in time for the next Budget.
  Half the adult population of our country hardly saves at all. So, in order to encourage personal savings, the Government will, as promised, introduce from 1999 individual savings accounts, extending the principle of TESSAs and PEPs and continuing to offer favourable tax reliefs for saving. Through the new individual savings account, we intend to encourage the habit of saving among people who have never saved before. I can confirm also that this Budget will not proceed with the previous Government's proposal to phase out tax relief on employee pension contributions.
  This point in the recovery is, however, the right time to make changes in corporation tax to encourage more long-term investment. My changes in monetary policy were designed to help companies make long-term investment decisions with confidence. The changes in corporation tax are directed to the same long-term objective.
  I want the United Kingdom to be the obvious first choice for new investment, so I have decided to cut the main rate of corporation tax by 2 per cent., from 33 per cent. to 31 per cent., the lowest ever rate in the United Kingdom. This means that we shall have the lowest corporation tax rate of any of our major competitors—Germany, France, America or Japan—and we shall have it under a Labour Government. This is a long-term commitment which will increase both inward investment and domestic investment to the benefit of the whole country.
  Too often, British companies have invested too little and too late in the economic cycle. Because I want companies to get the benefit now, the 2 per cent. corporation tax cut will apply from April 1997. This tax cut is the first component of this Budget's investment strategy. The second is a structural reform that will also encourage investment.
  The present system of tax credits encourages companies to pay out dividends rather than reinvest their profits. That cannot be the best way of encouraging investment for the long term, as was acknowledged by the previous Government. Many pension funds are in substantial surplus and at present many companies are enjoying pension holidays, so this is the right time to undertake a long-needed reform. The previous Government cut tax credits paid to funds and companies, so with immediate effect I propose to abolish tax credits paid to pension funds and companies.
  In all the consequential changes I will make, I have been, and I will be, fair. For PEP holders, for individuals who do not pay tax and for charities, tax credits will continue to be paid until April 1999. By that time, the introduction of the individual savings accounts will ensure

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  that individuals have the opportunity to continue to be able to save with tax advantages. So they will continue to have favourable tax incentives to invest in equities. Basic and lower-rate taxpayers do not pay any extra tax on dividends that they receive and that will remain the position, and we shall ensure that higher-rate taxpayers will pay no more than they do now on their dividends.
  Advance corporation tax will continue to be paid by companies on their dividends at the same rate as now. To stop the yield from ACT being eroded by greater use of foreign income dividends, we are ending the foreign income dividends scheme from 6 April 1999. International holding companies will continue to pay dividends out of foreign income without paying advance corporation tax.
  I shall make special provision for charities through public expenditure. Tax credits will be paid to them until April 1999, and after April 1999 the Government will fund a five-year transitional period. So charities will have seven years in total in which to adjust to the change.
  For some time, charities have been pressing for a review of their tax treatment. The Government will now consult widely on how the tax treatment of charities can be made more appropriate to help charities today. Charities, too, will gain, like others, from the longer-term benefit to their shareholdings that higher company investment and profits will bring.
  In future, new jobs are more likely to come from a large number of small businesses than from a small number of large businesses. The route to success is not for the Government to try to pick winners, but to create an environment in which more firms have more chances, by their own efforts, to succeed. That is why I have decided to do more to assist investment in small businesses. I have decided to cut the small companies tax rate by 2 per cent., from 23 per cent. to 21 per cent, and to do so from April 1997.
  In the past, investment incentives were introduced during recessions, when companies are least able to consider new investment. At this point in the economic cycle, an investment incentive should encourage companies considering future investments to bring those investments forward. I have, therefore, decided, with immediate effect, to double for one year the level of first-year capital allowances on plant and machinery for small and medium-sized firms. That will apply to both companies and unincorporated businesses. It means that if a firm invests within the next 12 months, it will be able to set off against tax not a quarter of its investment as hitherto, but a half.
  More than 3½ million businesses will be eligible for that relief. It will be worth £230 million to small and medium-sized businesses next year, and £170 million the year after. It will be largely paid for by reinstating the one year carry-back time for corporate losses, which was temporarily extended to three years during the recession.
  Taken together, the cut in corporation tax and the new investment incentive represent a significant boost for small business investment. Britain now moves forward with one of the most favourable tax regimes for small businesses of any country. This Government will support the small businesses of Britain.
  Britain is increasingly leading the world in those industries that most obviously depend on the skills and talents of their workers, such as communications, design,
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  architecture, fashion, music and film. Our national endowment fund for science, technology and the arts will offer talented young artists and scientists the finance to turn British ideas into successful business ventures. But despite our film industry's outstanding record of creative and critical success, too many British films that could be made in Britain are being made abroad, or not at all.
  The talents of British film makers can and should, wherever possible, be employed to the benefit of the British economy. So, after today, production and acquisition costs on British films with budgets of £15 million or less will qualify for 100 per cent. write-off for tax purposes when the film is completed. That is a three-year measure at a cost of £30 million, and it should boost not only the number of British films, but the British economy by increasing our exports.
  In the new economy, in which capital, inventions and even raw materials are mobile, Britain has only one truly national resource: the talent and potential of its people. Yet in Britain today, one in five of working-age households have no one earning a wage. In place of welfare, there should be work. So today, this Budget is taking the first steps to create the new welfare state for the 21st century.
  The welfare state was and remains a great British achievement. It was set up to provide security for all, and opportunity for all, goals which are as relevant today as in 1945. But for millions out of work or suffering poverty in work, the welfare state today denies rather than provides opportunity. So it is time for the welfare state to put opportunity back into people's hands.
  First, everyone in need of work should have the opportunity to work. Secondly, we must ensure that work pays. Thirdly, everyone who seeks to advance through employment and education must be given the means to advance. So we will create a new ladder of opportunity that will allow the many, by their own efforts, to benefit from opportunities once open only to a few.
  Starting from next year, every young person aged 18 to 25 who is unemployed for more than six months will be offered a first step on the employment ladder. Tomorrow, my right hon. Friend the Secretary of State for Education and Employment will detail the four options, all involving training leading to qualifications—a job with an employer; work with a voluntary organisation; work on the environmental task force; and, for those without basic qualifications, the chance of full-time education or training.
  With those new opportunities for young people come new responsibilities. There will be no fifth option—to stay at home on full benefit. So when they sign on for benefit, they will be signing up for work. Benefits will be cut if young people refuse to take up the opportunities. This new deal for the young is comprehensive, rich in opportunity, linked to the development of skills and has already attracted the support of some of Britain's leading companies.
  I urge every business to play its part in this national crusade to equip this country for the future by taking on young unemployed men and women. I appeal to every voluntary organisation to make a further contribution to the work that they do in the community by taking on a young person. I will make it possible for every Member of the House to act as an ambassador for this venture,

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  encouraging young people in their constituencies, consulting local businesses and bringing them together to play their part in this new deal for young people.
  There are 350,000 adults who have been out of work for two years or longer. So the second component of our welfare-to-work programme will offer employers a £75-a-week subsidy to employ long-term unemployed men and women. Many of those unemployed who lack skills are debarred by the 16-hour rule from obtaining them. For this group—the unskilled—the 16-hour rule will now be relaxed, so that when the long-term unemployed sign on for benefit, they will now sign up for work or training.
  That programme of £3.5 billion—which includes an unallocated reserve of £500 million—will provide money during a full Parliament. It will be the main item funded from the windfall tax on the excess profits of the privatised utilities, the details of which I shall give the House shortly.
  But in this Budget I will address also the needs of two other important groups in our society—lone parents and those in receipt of incapacity and disability benefits who, as a matter of principle, should have the right to work. There are now 1 million lone parents bringing up 2 million children on benefit. Any welfare-to-work programme that seriously tackles poverty in our country must put new employment opportunities in the hands of lone parents. So today I am allocating a total of £200 million from the windfall fund for the most innovative programme that any Government have introduced for advice, training, and day and after-school child care to support lone parents.
  Currently, lone parents receive little encouragement to seek work before their youngest child is 16. Under the programme that I am announcing today, when their youngest child is in the second term of full-time schooling, lone parents will be invited for job search interviews and offered help in finding work that suits their circumstances. On Friday, my right hon. Friend the Secretary of State for Social Security will explain to the House the full details of how that new radical programme will be introduced.
  A generation of parents have waited for the Government to introduce a national child care strategy. From this Budget onwards, child care will no longer be seen as an afterthought or a fringe element of social policies. From now on, it will be seen, as it should be, as an integral part of our economic policy.
  First, we shall increase the supply of child care in our country and make it more accessible. In addition, as part of the new deal for young people, we shall encourage voluntary organisations to take on and train young people and help them into careers as child care assistants.
  We believe that over a five-year period, as many as 50,000 young people can be trained as child care assistants. We shall make child care more affordable as well. From next summer, every lone parent with more than one child, who qualifies for family credit, housing benefit or council tax benefit, will have the first £100 of weekly child care costs disregarded in calculating in-work benefits. Every lone parent on family credit with children 12 years old or younger will be able to receive help.
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  Lottery money will be available for after-school clubs, and as we replace the wasteful and chaotic system of nursery vouchers, we shall be able to offer reliable access to nursery places for every four-year-old in Britain. With those measures, which bring both child care and employment within the reach of many more parents, we have taken the first step towards a national child care strategy for the United Kingdom.
  In 1997, no one in our society who wants to do some work should be excluded from the right to work because of disability or incapacity. So, as a final element of our welfare-to-work strategy, we shall bring forward proposals to help those who are disabled or on incapacity benefit, and who want training or work. To fund that programme and other measures, I have set aside £200 million from the windfall fund.
  Taken together, those comprehensive and ambitious initiatives mean that from now on, no section of society—and no one—should suffer permanent exclusion. For too long, the United Kingdom has been united only in name. From today, ours is a country where everyone has a contribution to make.
  The second principle of the new welfare state is to ensure that work always pays. In May, I established, under the chairmanship of Martin Taylor, a review to consider how we canstreamline and modernise the tax and benefit system to help employment opportunities and work incentives, and to assist in strengthening family life.
  We will introduce a 10p rate of income tax as soon as it is prudent to do so. A 10p tax rate, combined with a cut in benefit tapers, will reduce in-work poverty—as, too, will the minimum wage, which the Government will introduce after advice from the new low pay commission. Set at a sensible level, the minimum wage will not only establish a floor under wages but ensure that in-work benefits act as a genuine top-up for low-paid workers rather than a subsidy for low-paying employers.
  I have therefore also asked Martin Taylor to consider at an early stage the advantages of introducing a new in-work tax credit for low-paid workers. It would draw upon the successful experience of the American earned income tax credit, which helps reduce in-work poverty, and now helps 19 million lower-paid workers in America.
  Conclusions that emerge from this tax benefit review will inform the judgments in my next Budget, which I have decided will be in the spring of 1998.
  The third component of the new welfare state is the establishment of a skills ladder, so that every employee is encouraged to learn skills throughout his or her working life. It is our intention to introduce individual learning accounts, and to increase the staying-on rates at schools and colleges, we shall complete our review of educational finance and maintenance for 16 to 18-year-olds to ensure that resources are used to support those most in need.
  Just as the Open university has, since the 1960s, offered thousands second chances in higher education through television in their homes, the new university for industry that we propose can, from the 1990s onwards, through satellite, cable and interactive technologies, bring lifelong learning direct to millions in their homes as well as workplaces.
  I have therefore allocated from the welfare-to-work budget £5 million to start up the public-private partnership that will fund the university for industry. By those

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  measures, which will create work, make sure that work always pays, and provide recurring opportunities for lifelong learning, the new welfare state will help equip Britain for the modern world.
  A country equipped for the future should also have a modern tax system based on principle. The tax system sends critical signals about the economic activities that a society wishes to promote and deter. Today, I shall start to put those principles into practice by demonstrating our commitment to the environment. As the statement of environmental principles set out by the Financial Secretary to the Treasury, my hon. Friend the Member for Bristol, South (Dawn Primarolo)—published today—shows, we are determined that our tax system and economic policies as a whole encourage the good and discourage the harmful.
  The extraction of aggregates—including stone, sand and gravel—involves significant environmental costs and damage to the landscape, which may go beyond that recognised in the scope and level of the landfill tax. Too little is also being done to discourage water pollution. The environmental case for charges on polluters needs to be examined carefully. After a period of consultation, I will return with any proposals in those two areas in my next Budget.
  Existing taxes, including our excise duties, must also advance the Government's environmental objectives. So to reduce pollution, lorries and buses that meet low emission standards will, from next year, attract a reduction of vehicle excise duty by a maximum of £500. Rises in vehicle excise duty, broadly in line with inflation, will take place from 17 November. In line with the environmental objectives that I have set out, road fuel duties will increase by an extra 1 per cent. every year over and above the annual 5 per cent. real rate of increase established by the previous Government. Petrol will go up by the equivalent of 4p a litre from 6 pm this evening.
  I have also decided to raise the annual rate of increase in tobacco duties. From 1 December this year, these will be increased by an extra 2 per cent. a year—this year by another 5p—above the annual 3 per cent. real rate of increase established by the previous Government. In the normal course of events, the price of a packet of 20 cigarettes would have risen by just over 14p. Under my proposals, the price of a packet will rise on 1 December by 19p.
  Alcohol and tobacco duties demand careful consideration this year, not least because of the impact of fraud, smuggling and cross-border shopping. I have therefore decided to review all alcohol and tobacco duties. While that review is under way, inflation-only rises for alcohol will take effect from January.
  The tax burden avoided by the few falls on the many. In eight weeks of this Government, we have already identified a series of significant tax abuses. I am introducing measures with immediate effect to end tax abuses through avoidance of corporation tax, value added tax and pay-as-you-earn. Changes to insurance premium tax to block an abuse relating to lone-term health insurance will take effect from 1 October. I also propose to modernise the rules governing transfer pricing and controlled foreign companies. The details of those changes will be available at the end of my speech. In total, those initial measures to tackle tax avoidance will bring in a cumulative total of £1.7 billion over four years.
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  A Government committed to the proper funding of public services will not tolerate the avoidance of taxation, and we will be relentless in our war against tax avoidance. I have instructed the Inland Revenue to carry out a wide-ranging review of areas of tax avoidance, with a view to further legislation in future Finance Bills. I have specifically asked the Revenue to consider a general anti-avoidance rule.
  The principle of fairness in taxation will guide all my Budget decisions. I can announce today that at this, the first opportunity, the Government will honour their pledge to cut value-added tax on fuel and power. To help to pay for that, we will withdraw tax relief for private medical insurance for the over-60s. It costs £140 million a year, and it has failed to achieve its original purpose of substantially increasing the take-up of private medical insurance.
  I would like to abolish VAT on fuel, but European rules prevent me from doing so. Therefore, VAT will be cut to the lowest level compatible with European law—5 per cent.—on 1 September, well in advance of winter fuel bills.
  I now come to other taxes. In this Budget, I have no changes to make to income tax at either the basic or the top rate. I will not extend VAT to children's clothes, food, books, newspapers or public transport fares; nor will I, during this Parliament. This is a Government who keep their promises on tax.
  To cut fuel bills further, I intend to make a further tax cut. The gas levy imposed by the previous Government has pushed prices for domestic consumers higher than they would otherwise be, so from next April we are reducing the gas levy to zero. Eighteen and a half million domestic customers will benefit from the change: their gas bills should fall by about 2 per cent. on average. As a result of those two changes—including the reduction in VAT on fuel, and other price cuts—I expect gas prices to fall in real terms by 5½ per cent. this year and 11 per cent. next year, which will mean a fall of £90 in next year's fuel bills compared with last year's.
  Many of the least well-insulated houses in Britain are occupied by older people. No pensioners should be in a position in which, for reasons of finance, they cannot adequately insulate their homes. Today, with our new programme of training and jobs for young people, we are able to expand the national programme of home insulation. Contractors in the home energy efficiency scheme, and voluntary organisations, will be encouraged to take on young people to insulate the homes of pensioners. That will give jobs and skills to our young people; it will help and protect our elderly; it will improve our environment; and it will tackle fuel poverty.
  Poorly insulated housing is but one of the most conspicuous failures of housing policies over the past 20 years. Even more serious is the inadequate provision of low-cost rented accommodation throughout our country. It has led to overcrowding, the costly and wasteful use of bed-and-breakfast accommodation and, in some cases, homelessness.
  The Government have a commitment to decent housing at affordable rents because we believe that overcrowding and homelessness on the scale that we have seen are intolerable in a civilised society. Building and repairing homes will answer a pressing social need and offer opportunities for skilled and productive employment.

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  I can therefore announce the first step in a practical and measured programme to phase the release of capital receipts. Local authorities will have borrowing consents for an additional £900 million—£200 million this year, and £700 million next year—for building new houses and repairing their existing stock. The detailed proposals for England, together with measures specific to Scotland, Wales and Northern Ireland, will be announced by the relevant Secretaries of State in due course.
  For most people, the acquisition of a house is the biggest single investment that they will make. Home owners rightly expect their investment to be protected by sensible policies pursued by Government. I am determined that as a country we never return to the instability, speculation and negative equity that characterised the housing market in the 1980s and 1990s.
  Volatility is damaging both to the housing market and to the economy as a whole, so stability will be central to our policy to help home owners. We must be prepared to take the action necessary to secure it. I will not allow house prices to get out of control and put at risk the sustainability of the recovery. I have therefore decided that it is right to take two measures aimed at stability in the housing market.
  First, I will raise stamp duty from 1 per cent. to 1½ per cent. on property sales above £250,000 and to 2 per cent. for property sales above £500,000. This will take immediate effect after the Budget resolution has been approved by the House.
  Secondly, continuing the reforms begun by the previous Government, who removed mortgage tax relief at the higher rate of 40 per cent. in 1991, and cut it to 15 per cent. by 1995, I propose to reduce mortgage tax relief by a further 5 per cent., from 15 per cent. to 10 per cent., from April 1998.
  The timing of my measure should help to avoid a return to the conditions of the 1980s, when the failure to take early action guaranteed worse problems later on. I believe that these measures will help to secure what we all want: a more balanced recovery.
  Our reform of the welfare state—with the programme to move the unemployed from welfare to work—is funded by a new and one-off windfall tax on the excess profits of the privatised utilities. The tax will apply to companies privatised by flotation and subject to economic regulation under specified Acts of Parliament.
  In determining the details of the tax, I believe that I have struck a fair balance between recognising the position of the utilities today and their undervaluation and under-regulation at the time of privatisation. The windfall tax will be related to the excessively high profits made under the initial regime. A company's tax bill will be based on the difference between the value that was placed on it at privatisation and a more realistic market valuation based on its after-tax profits for up to the first four full accounting years following privatisation.
  In preparing the windfall tax, we looked more broadly at the position of the affected companies. As a result of my earlier announcement, justified on its own merits, to reduce the gas levy to zero, I am satisfied that no company faces an unduly heavy tax burden. The windfall tax will raise some £2.1 billion from the electricity sector, around
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  £1.65 billion from the water sector, and some £1.45 billion from the remaining companies. After taking the reduction in the gas levy into account, which will cost the Government £400 million over the next three years, the net effect of the gas levy and the windfall tax together will raise £4.8 billion. After consulting the regulators, it is my judgment that the tax can be paid without any impact on prices, investment, or the quality of service to customers; or, in my view, on employment.
  In recent weeks, many companies have asked to pay the tax in instalments. I have now agreed that that shall be the case. It will be a one-off tax payable in two instalments. The first instalment will he paid on 1 December 1997, the second a year later. Full details of how the windfall tax will apply and the companies that will pay it will be set out in an Inland Revenue press release, which will available at the conclusion of the statement.
  Based on the fiscal tightening that I have announced today, I can give full details of our five-year deficit reduction plan. That plan is aimed at reducing the structural budget deficit. It is made possible by a long-term commitment on our part to financial discipline. It takes into account the uncertainties and risks involved in the economic cycle and forecasting it. It is underpinned by our comprehensive review of the way in which Government spend their money; and it matches rigour today with a long-term commitment to prudent and sustainable public finances.
  In January this year, I announced that we would adhere for two years to the agreed control totals for public spending. That commitment is reaffirmed today and integral to the Budget statement. I announced that there would be no spending round this year; nor will there be.
  Departments are working within already announced departmental spending totals to reorder spending from low-priority to high-priority areas. I am pleased to report that they are not only identifying waste and inefficiencies in existing spending, but are now redistributing those savings to the long-term priorities of this Government, not the previous one. So the figures that I can now give for my deficit reduction plan exclude windfall tax revenues.
  Borrowing was projected in the previous Budget to be £19¼ billion this year, but it is now set to be £13¼ billion, and borrowing that was projected to be £12¼ billion next year is now set to be £5¼ billion. So our deficit reduction plan ensures that borrowing, which was £22¼ billion last year, is now set to fall to £5½ billion next year.
  Beyond those years, I am publishing a range of projections based on different assumptions for spending. In every case, for the next three years we meet the golden rule—we see debt falling as a proportion of national income and, because of our discipline and measures that we have taken, we go below the borrowing projections of the previous Government. For this year and for the foreseeable future, we are comfortably within the Maastricht criteria for levels of both debt and borrowing.
  Tough and prudent management is our watchword in what will continue to be a thoroughly disciplined approach to the public finances.
  The comprehensive spending review will determine overall priorities for the early decades of the next century. In the case of the national health service, the first stage of our cuts in bureaucracy is being implemented this year.

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  By next spring, the first conclusions from the strategic review of London hospitals will be implemented and we will act to improve the organisation of services, including merging national health service trusts. By dismantling the inefficient internal market, we shall no longer have to spend money promoting competition and servicing innumerable short-term contracts and the administration that goes with them, all at the expense of patient care. That will now change.
  Because we have reinvigorated the private finance initiative, we shall shortly announce a new hospital building programme across the country. We shall also act to recoup in full the cost of treating road traffic accidents from insurance companies. That, like the action that we are taking against prescription fraud, shows our determination to ensure that NHS resources are focused on front-line patient care.
  In normal circumstances, the £5 billion reserve for 1998–99 would be distributed during the annual autumn spending round, with the allocations announced at the time of the November Budget. There is no spending round this autumn, and there will be no Budget until next spring. I propose that the majority of the reserve be retained for contingencies that may arise in the coming year. But now that the long-term changes are under way, I want the NHS also to be able to plan for the year ahead. I want it to do so in the sure knowledge of a prudent and realistic allocation for 1998–99, which will ensure that services are maintained and patient care is secured.
  The long-term plans that we have agreed mean that we are now sure that the money will go where it is needed—direct to patient care. So I have decided to allocate from the reserve to the NHS for 1998–99 a sum of £1.2 billion. This does more than meet our commitment to the people of this country for a real-terms increase in resources. Health spending will now rise by 5 per cent.—2¼ per cent. in real terms—the same as our projection for the trend growth rate of the economy as a whole. The public rightly want to see more money put into the NHS, but they want the money to go directly to patient care. So this money is being granted on the firm agreement that the administrative reforms that we propose for the health service will be fully implemented and that front-line patient care will benefit.
  Education is our country's priority. It holds the key to our future. The Government must be satisfied that resources in education are going direct to learning in our classrooms. My right hon. Friend the Secretary of State for Education and Employment and, Ministers in Scotland, Northern Ireland and Wales, will bring forward proposals so that every school can meet standards for results and discipline. We will ensure that schools and local education authorities meet targets for raising standards in their areas. They must demonstrate that money is being spent on improving the quality of pupils' education. For next year, while we review the future arrangements for local authority finance, capping will remain in place, but I propose to allocate from the reserve for next year, and specifically for use in schools, an additional £1 billion for education. The details will be announced by the Secretaries of State for Education and Employment, for Scotland, for Wales and for Northern Ireland.
  Traditionally, these announcements of revenue and allocations would complete a Budget, but I have one more announcement to make. The windfall tax will finance our
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  measures for employment and training, but there is nothing more important to the training of young people than what happens in our schools. Indeed, many of the problems that our welfare-to-work programme must now address start in our schools. We cannot run a first-rate economy on the basis of second-rate education. Economic success tomorrow will depend on investing in our schools today. But at the present rate of progress, many of our children will be educated for the 21st century in classrooms built in the 19th. Today, 1 million pupils are being educated in classrooms built before the first world war.
  If our schools are to educate for the needs of the 21st-century economy, they must themselves become schools that are fit to learn in and equipped for the 21st century. By encouraging schools to engage in public-private partnerships, any public investment that we make can lever in even more resources to renovate our schools.
  I want schools not just to repair the roofs and the fabric, but to acquire the modern equipment and computers that they need. I have therefore decided to allocate cash from the remaining proceeds of the windfall tax for an immediate programme of capital investment to equip our schools with the infrastructure, technology and the bright modern classrooms that they need.
  My hon. Friend the Paymaster General and Education and Employment Ministers will invite schools to submit plans showing how they propose to upgrade, modernise and become schools fit for the 21st century. The details will be announced in due course. I therefore propose to make available £1.3 billion over the course of this Parliament, representing a capital investment that averages almost £150 for every pupil in this country.
  Taken together with the extra year-to-year expenditure that I have just announced, this Budget allocates £2.3 billion in new resources for our schools. With that increase in educational investment, we are taking the first step towards delivering our manifesto commitment to increase the proportion of national income spent on education. In education, as in every other area, we are honouring our pledges to the British people.
  The measures that I have announced today for stability, for investment, for employment opportunity for all and for education will make Britain better equipped and more ready to face the future with confidence.
  Previous Budgets pursued the short-term interests of the few. This Budget advances the long-term interests of the many. It is a Budget that equips Britain for the future—meeting the people's priorities. It is a people's Budget for Britain's future. I commend it to the House and to the country.

  PROVISIONAL COLLECTION OF TAXES
  Motion made, and Question,
  That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following Motion:—
  Hydrocarbon oil (rates of duties and rebates) (Motion No. 7).— [Mr. Gordon Brown.]
  put forthwith, pursuant to Standing Order No. 51 (Ways and Means motions), and agreed to.
  Mr. Deputy Speaker: I now call on the Chancellor of the Exchequer to move the motion entitled "The windfall tax". It is on that motion that the unified Budget debate will take place today and on succeeding days. The remaining motions will not be put until the end of the Budget debate next week, and they will then be decided without debate.

Budget Resolutions and Economic Situation

  WINDFALL TAX
  Motion made, and Question proposed,
  That provision may be made for imposing a tax on the amount of the windfall from which a company was benefitting on 2nd July 1997 in any case where—

  (a) an undertaking whose privatisation involved the imposition of economic regulation has been privatised by means of a flotation; and

  (b) the profits of the undertaking in the period after the flotation show that the company was benefitting on that date from a windfall from that flotation.—[Mr. Gordon Brown.]

  4.49 pm
  Mr. William Hague: On a personal level, I congratulate the Chancellor on his fortitude in delivering his speech and doing so within the space of one hour with only the assistance of water. I could congratulate him more enthusiastically if all of the contents of the Budget had been delivered to Parliament first, as we discussed earlier today.
  We were told by the Prime Minister and the Leader of the House that what was printed in today's Financial Times had all been speculation. Was it not remarkable that the Chancellor opened his speech by saying that he had a five-year deficit reduction plan and the headline in the Financial Times today was:
  "Budget 'to cut deficit over 5 years?
  It is extraordinary that there was such speculation and that it turned out to be so well founded. It is extraordinary, too, that the speculation referred to the abolition of the dividend tax credit and that is exactly what the Chancellor announced in the course of his Budget speech. They must be remarkable journalists at the Financial Times, who not only dreamt that a senior member of the Government had told them something, but dreamt exactly accurately what that senior member of the Government might have told them.
  It is extraordinary in the view of the Opposition that Government sources revealed those measures in advance. It is to be hoped that the Government will now come to realise that Budget leaks can affect the movements of billions of pounds and the savings of millions of people. They should have a thorough investigation and they should report the results of that investigation to the House.
  The Chancellor also opened his speech by saying that he would be bound by strict rules, which he would adopt for the rest of this Parliament. We could be forgiven for noting that all Labour Governments have started with strict rules with which they were going to bind themselves throughout the Parliament and all have ended up abandoning them.
  There are some things in the Budget that we will certainly welcome: the cut in taxation for small companies is most certainly one of them. There are some things the details of which we will have to consider as our debates on these matters become clear. But one thing about the Budget is very clear. When the Prime Minister said before the election:
  We've no plans to increase tax at all.
  he did not mean a word of it.

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  This is a tax-raising Budget. When the Chancellor says that he is tightening fiscal policy by £5¾ billion, he means that he is introducing a tax-raising Budget; and the changes to advance corporation tax and the changes to MIRAS amount to tax rises that, before the general election, the Labour party denied it would introduce. Not only did the Prime Minister say, on 21 September last year:
  "We've no plans to increase tax at all",
  but, on 2 August, he said:
  "Our proposals do not involve raising taxes … If we have any such proposals we will make them clear before the next election".
  Why were these proposals not made clear before the general election? On 8 January this year, he said that
  "the programme of the Labour party does not imply any tax increases at all".
  If that was true, why have these tax increases been announced today?
  We can be relaxed about some things. Measures such as 2 per cent. on stamp duty for houses worth over half a million pounds will be of concern only to a small number of rich people such as the Prime Minister. Many people can relax about that, but other people will have to pay for the Labour party having broken its election promises in the Budget. The changes to MIRAS will add to insecurity, destroy confidence in the housing market and make people much more wary of buying and selling homes. Those are not my words—they are the words of the Prime Minister a year ago. He said that restrictions to MIRAS would
  "add to insecurity, destroy confidence in the housing market and make people much more wary of buying and selling homes".
  Can he honestly say that he gave the country an accurate idea of what he would do on this subject, if and when he came to power? Labour Members have never been in sympathy with home ownership, and they are clearly not going to start being in sympathy with it today.
  In this Budget, the Government have broken a central election promise, trying to comfort their supporters by saying that there will be a £1.2 billion increase in health service spending. But last year there was a £1.6 billion increase in health service spending.
  As we look at this and future Budgets produced by the Labour Administration, we must always remember that rarely, if ever, have a Government had such cause to be grateful to their predecessors when it comes to the economy. The previous Government, and my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) as Chancellor, left the economy thriving. The Government should note that the man who said that was Lord Healey on "The World at One" this afternoon. Every serious commentator agrees: we have bequeathed to this Government the strongest set of economic circumstances in the lifetime of my generation. We have left them the longest period of sustained low inflation for 50 years, the lowest mortgage rates for 30 years, the lowest taxes of any major European country—although Labour has now begun to increase them—the lowest unemployment of any major European country, the best record on job creation and the highest sustained growth shown by any major European economy.
  Those were not accidents of the economic cycle; they were a direct result of the policies pursued by Conservative Governments—policies obstructed, denigrated and opposed by Labour.
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  The World Economic Forum has described Britain as the envy of continental Europe,
  "with an economy reborn out of sweeping privatisation, deregulation and other structural reforms that is now well poised to compete in the global economy."
  That is the truth about the British economy today, and we shall hold the Government to account for their stewardship of that unrivalled inheritance.
  Central to this Budget, as the Chancellor has made clear, is the so-called windfall tax. In last year's Budget debate, the current Chancellor declared:
  "The windfall tax is not a tax on ordinary families."—[Official Report, 27 November 1996; Vol. 286, c. 366.]
  That would be true if ordinary families did not pay bills for gas, electricity, water or the telephone; if ordinary families did not own shares; or if ordinary families did not invest in pension schemes. If all those things were true, I suppose the right hon. Gentleman would be right.
  The Chancellor has said that the windfall tax will have no impact at all on prices, investment or anything else that he could care to mention. He is looking for a free lunch from the windfall tax, and he will find that it is not available. He should make it clear in this debate that pensioners will be compensated for any increase in their fuel bills. He should make clear whether low-income families will receive an increase in income support to cover their extra costs.
  I know that the Chancellor would like to think that the windfall tax will be paid by businesses, not by individuals, but he is a well-read man. He must have read the standard work on tax, "The British Tax System", which declares:
  "There is no such thing as a tax on firms. The effective incidence of all taxes is ultimately on individuals."
  Surely the Chancellor agrees with that. The author, after all, is Professor John Kay, business guru to the Prime Minister himself.
  The Chancellor would like to think that the windfall tax will be paid by the so-called fat cats, by stripe-shirted speculators in the City. But it will not be. Such people sold up and took their money long ago. It is the current shareholders who will foot the bill. Far from taxing excess profits, the Government are taxing the people unlucky enough to be holding the parcel when the music stops. The Chancellor says that he wants to put fairness back into the tax system, but what is fair about taxing people on a windfall that someone else made in the past?
  Billions of utility shares are held by ordinary men and women through pension funds and insurance policies. Anyone with a pension, anyone with an insurance policy, anyone who is working hard to build up a nest egg for the future, will be hit by the windfall tax. It is a savings tax by another name.
  The Chancellor has claimed that that change has already been discounted by the City. Up to a point it has, but that means that the prospect of billions of pounds of extra tax has already done lasting damage to the shares in which millions of people have invested for the future.
  The Chancellor has made much of the electoral mandate that the Government claim for the windfall tax, but few people can have forgotten the outrage of Labour

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  spokesmen and spin doctors during the general election campaign when we exposed the £1½ billion privatisation black hole in the Labour party's finances, which the right hon. Gentleman now seeks to fill with these taxes.
  There's no black hole for the Labour party".
  said the Chancellor, during the general election campaign: Labour had changed; they would embark on a programme of privatisation. "We'll privatise everything", the Sunday Telegraph was told.
  Where were those measures in today's Budget? Sure enough, as we predicted, some of the tax increases in the Budget have had to be brought out to fill the £1½ billion black hole which, indeed, was there in Labour's plans. The Chancellor may have filled the black hole in his finances, but he has blown a new black hole in the credibility of the Labour party.
  The Chancellor's next tax increase was the change to dividend tax credits—advance corporation tax—on the ground that, if you do something that people do not understand very well, they will not notice it and you will get away with it. But for many people, their pension is the single biggest saving that they will ever build up, and every word that we heard today about advance corporation tax was another hammer blow against pensions and savings—another savings tax from the Government.
  Pensions are one of our great success stories. The United Kingdom has built up more than £650 billion in pension funds—more than those of all the other European Union countries put together. We understand why the Chancellor has gone for ACT. It is one of the most complicated taxes known to man. It is a tax strategy which halves the blame for him, but doubles the pain for everyone else.
  The change means that pension funds will be able to claim less tax back, so their revenue will be lower, their growth will be lower, pensions will be smaller and pensioners will be worse off. Taken together with the damage resulting from the windfall tax, the Budget delivers a double whammy against pensions. The bills for the decisions announced today will be paid by millions of hard-working people, many years down the line. It is a smash and grab raid on pension funds in this country, and it is a cynical betrayal of the millions who have built up pensions and now see them devalued.
  I welcome the Chancellor's assurance about how charities will be affected by the changes to ACT, but how will those changes interact with the new minimum funding requirements for pension funds? What impact will they have on investment? He says that they will help investment, but if businesses are obliged to dip into their funds to top up company pension schemes, they may end up cutting the very investment that the Government want to encourage.
  The Chancellor will regret the measure that he has announced on ACT—his attempt to hide his tax increases today. He is using some of the money produced by it to reduce VAT on fuel, but can he confirm during this debate that his timing of that measure means that the reduction in VAT will feed through into smaller increases in the state pension, so that he can claw back from pensioners some of what he has given away?
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  In the Chancellor's eagerness to announce new taxes, he has confirmed—although, of course, it was confirmed for him by his press office this morning—that tax relief on private health insurance for the over-60s is to be abolished. After the windfall tax and advance corporation tax, that is a savings tax in yet another form, which will affect 600,000 pensioners.
  That is an utterly vindictive way in which to raise extra money for the Treasury. Moreover, it is likely to prove counter productive, because industry estimates suggest that up to 200,000 people could cancel their policies. How will that help a Government trying to meet their commitment to get 100,000 people off the waiting lists?
  The Chancellor also announced his welfare-to-work scheme. We agree with the scheme's objective. Indeed, it is hard to think of a more worthy objective and we shall want to look carefully at the details of some of the proposals. I remind the Chancellor that the last Government had a welfare-to-work programme and it worked: unemployment among the under-25s has fallen by 100,000 a year every year for the past four year—400,000 in the past four years. We did that without a windfall tax, a tax on prices or a tax on pension funds.
  Unemployment in Britain today is among the lowest in the major European economies. That is what a policy of flexible markets and welfare reform has already yielded. We now have a policy of subsidy and, whatever its social benefits, the Chancellor is likely to find that job subsidy schemes often cost more than they save. The reasons are obvious: first, money is spent on people who would get jobs anyway; secondly, money is spent creating jobs that are not created at all but where employers simply destroy the jobs of people who are not eligible for the subsidy; and, thirdly, money is spent creating jobs that turn out to be only temporary. Business men have admitted that they could easily use the scheme to take on the unemployed, employ them for as long as the subsidy lasts and then replace them with another round of subsidised employees.
  The Chancellor is, therefore, likely to find a great deal of disappointment in the scheme that he has put before the House today. If the Labour party believes that reducing the cost of employing people by a £75 a week subsidy will increase the number of jobs, it must accept that increasing the cost of employing people with a minimum wage and a social chapter will destroy jobs.
  Labour's welfare-to-work policy directly contradicts its industrial policy. The Department for Education and Employment will be busy trying to create jobs while the rest of the Government will be busy destroying them. Worse still, their make-work schemes will be temporary and limited to a certain number of jobs, while the minimum wage will be permanent and could affect millions of jobs. As the Deputy Prime Minister once admitted, any silly fool knew that a minimum wage would affect the number of jobs available. From the way in which the Government have gone about their business over the past two months, clearly not every fool knows that it will affect the number of jobs available.
  What is on offer from the Government is temporary job creation but permanent job destruction—not welfare to work but work to welfare. They say that they want to put more people back to work, but they are now departing from the policies that have already put more people back to work in Britain than in the rest of Europe.

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  We welcome some aspects of the Budget. I mentioned the change to the tax rate for small companies. We also welcome the Chancellor's continued use of tax for environmental purposes, although we want to scrutinise the small print carefully. We would prefer to use environmental taxes to provide the right incentives, but to reduce the tax burden elsewhere, as we did recently with the landfill tax, the revenue from which was used to reduce the national insurance rate for employers.
  The Chancellor is using environmental taxes as another vehicle by which to raise the tax burden overall, without producing compensating reductions elsewhere. He calls it a "green Budget", but it is actually still a red Budget which increases taxes on the people of this country.
  The Chancellor has produced a Budget, some aspects of which we welcome, but most aspects of which we shall need to question or oppose. It is a tax-raising Budget which breaks the central promises on which the Labour party fought the last election. It flies in the face of the Prime Minister's assertion that no tax increases would be needed. Boxed in by the Prime Minister's commitment, the Chancellor has had to grub around for tax increases which he hopes nobody will understand or notice. The windfall tax is a gimmick for the short term, whereas we needed measures to serve our recovery for the long term.
  The Budget is full of missed opportunities. What has it done for families who want to save or invest? What has it done for families who want to work hard and keep most of their earnings? What has it done to simplify the tax system, to help pension funds or to ensure that the strongest recovery in decades is long lasting?
  The Chancellor should be warned that the real judgments on the Budget will be passed over the years to come. In future years we will want to know, and the country will want to know, what the Government have done with the best economic inheritance in decades. They had better be ready to be held to account for that.
  Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. May I put it on the record that, earlier today, I contacted my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), the shadow Chancellor of the Exchequer, and told him how much the windfall tax would be. I seek your guidance, Mr. Deputy Speaker, about how I should proceed, knowing that that information was leaked to someone who was an adviser to the electricity industry. It was available to that person before the Budget statement. Clearly, that could give rise to criminal charges. Should I write to Madam Speaker, put the matter in the hands of the police or speak to the Standards and Privileges Committee?
  Mr. Deputy Speaker: Order. That is not a point of order on which the Chair can rule. The hon. Gentleman has been here long enough to know the various avenues open to him to pursue his complaint.
  5.10 pm
  Mr. Paddy Ashdown: The right hon. Member for Richmond, Yorks (Mr. Hague), who leads the Conservative party, is new to his job and has just made what is regarded as the most difficult speech in any political year. However, his speech will not be considered memorable except in one respect: the sheer brass neck
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  of a representative of the Conservative party criticising someone else for raising taxes. That will remain in my mind for a long time.
  I congratulate the Chancellor of the Exchequer on his first Budget statement, which was long and detailed. It contained much with which we agree. The most welcome aspect is his abandonment of the departmental spending limits and ceilings for expenditure, over next year if not this year. We have argued for that for some time. It is worth mentioning that it is easy to spend contingency reserves in that way, which may not be wise in the long term, but we welcome the outcome, although it is offset by some of the Chancellor's decisions about rises in inflation and the consequences of that for the cash-limited budgets of those Departments.
  There are two immediate aims that the Budget must achieve. It must dampen down overheating in the economy and reduce upward pressure on sterling. There are also several longer-term aims: to establish a framework for Britain's economic success, based on sustainable inflation; to invest in education as the key to that success; to incorporate environmental costs into our economy and the pattern of our lives; to begin to attack social and economic exclusion; and to reverse the neglect of key public services, especially health and education, under the Conservatives. Above all, after years of broken promises, this should have been a Budget that began to rebuild people's trust in politics and taxation.
  I believe that, in framing the Budget, the Chancellor probably set out to achieve very similar aims to those that I have just outlined. The question that we must ask is to what extent he has succeeded.
  I shall deal first with trust. When, in last November's Budget, the Conservatives cut income tax by 1p and Labour was not prepared to oppose them, I said:
  "Both … know that it does not matter which of them is in government, the tax cuts that they both agreed today for the sake of the election will have to be put back some time after the election."
  I went on to warn that if that happens,
  "the British electorate will feel that they have been lied to … trust … in politicians will diminish, and again everyone in the House will wonder why the people of this country do not believe a blind thing that we say."—[Official Report, 26 November 1996; Vol. 286, c. 183.]
  It gives me no pleasure to say that in the intervening months, that is exactly what has happened. We all knew then and throughout the election campaign that whoever was in power, this Budget would have to contain measures for fiscal tightening and for taking steam out of an economy that had become dangerously overheated.
  Only the Liberal Democrats were prepared to admit that, then and during the election, and to argue for an economic approach that took money out of the economy and used it for specific, targeted improvements in education and health. The Labour and Conservative parties tried to pretend that we could have both tax cuts and better public services. Today's Budget proves them comprehensively wrong.
  The Budget will mean higher taxes and almost certainly, in the next year at least, worsening public services. The Labour party told us before the election that it wanted to build
  "a new trust on tax with the British people,"
  I agree with that, but it cannot be done by saying one thing before and during an election, and doing exactly the opposite afterwards, even if that is necessary.

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  One cannot rebuild trust by ruling out income tax increases for press headlines, while keeping up one's sleeve hidden taxes that will hit the ordinary taxpayer just as much. One cannot rebuild trust by saying, "Enough is enough" to 22 Tory tax rises, and then adding to them in one's first Budget. We must all learn that unless we, as politicians, can get out of the ridiculous corner into which we have painted ourselves with regard to tax, we will never recreate trust in the political process.
  On the broader issue of economic management and the current state of the economy, we understand the importance of ending the pattern of boom and bust that has so often occurred in Britain. We therefore welcome the Government decision to do what was in our manifesto but not in theirs, and to give the Bank of England greater control over interest rate policy. We are less keen on the Chancellor's decision to weaken the inflation target, which was in Labour's manifesto. Similarly, I welcome the more rule-based approach that the Chancellor outlined today. We have long called for that. That thinking must be followed through in the Budget.
  We warned after the Budget last November that if we did not act to cool the economy then, we would have to do much more to achieve that now. Nothing would be more damaging to our economic recovery than to let the present consumer boom increase inflation, raise interest rates and boost sterling still further. To do that would undermine industry and investment and end, once again, in a return to recession and unemployment.
  At first sight, the Chancellor seems to have ignored that danger, at least in part, and to have decided instead that his first priority is to reduce public borrowing. He has chosen to do so mainly through higher taxes on business. However, as public borrowing is falling quickly in any case, that is the wrong target. Instead of shackling businesses, he should have restrained the consumer, in order to prevent the higher interest rates, higher inflation and less competitive sterling that will surely follow. He had not done nearly enough to restrain consumer spending.
  Mr. John Wilkinson: For all the faults in the Budget—and there are many—it has not increased the taxation on businesses. Clearly, the right hon. Gentleman wrote his speech before he had heard the Budget statement. Reductions in corporation tax for larger companies and smaller one are very welcome, and the doubling of tax relief on capital allowances is noteworthy. It would help the House if members of the Liberal party listened before they spoke.
  Mr. Ashdown: The hon. Gentleman has forgotten such things as advance corporation tax and the windfall tax. He knows that those will have a substantial impact on business. That is the very case that his party has been making for months.
  I understand why the Chancellor has not leant more heavily on the consumer and the ordinary citizen: it is because of his manifesto pledges. In that case, the country will again, I fear, pay a high price for foolish promises made in the heat of an election, which have painted the Government into a corner that they should not be in.
  We warmly welcome some aspects of the Budget, such as the intention to depart from departmental spending limits. However, if one examines the increase in inflation
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  and the deflator to 2.75 per cent. against the cash-limited ceilings that are established, one finds that what sounds like a generous settlement for next year is in fact rather less generous. For instance, we believe that some £300 million of the £1 billion that the Chancellor announced to improve education may be lost through the effects of that increase in inflation. Similarly, we welcome the £100 disregard on child care costs and the home insulation plans that the Chancellor has announced.
  We have long advocated a shift towards green taxes and we welcome Labour's conversion, however late, to that cause. We have always proposed using new environmental taxes to reduce other taxes—such as those on jobs—rather than using them to fill black holes in Government spending. It was extraordinary to hear the Leader of the Opposition complain about that when the Conservative Government used VAT rises on fuel—which they described as green taxes—to fill up the Government's coffers.
  As the Chancellor knows, we have long advocated the phasing out of mortgage interest tax relief, although we have always proposed using the revenue to replace MIRAS with a fairer and more efficient system of housing finance. Unlike the Government, for seven years we have consistently advocated the phasing out of mortgage interest tax relief, although our policy was often attacked by Labour and Conservative Members. The Government, however, attacked the Tories last year and then did the same in this year's Budget.
  We also support measures to help people off benefit and back to work. We set out a comprehensive range of welfare-to-work proposals in our manifesto and again in the alternative Budget that we published yesterday. However, we remain to be convinced by some of the details of the Government's plans. In particular, in concentrating on a relatively small group—those aged between 18 and 24—the Government risk letting down much larger groups of people who are also trapped in welfare dependency. They include single parents and the long-term unemployed of all ages—men and women made redundant in their 40s and 50s who see little chance of getting back into work. It is vital that in black spots where unemployment is concentrated, more is done not just to give the long-term unemployed a temporary training place, but to give businesses long-term support and incentives to create new jobs.
  While we understand and support what the Government are trying to achieve in at long last tackling unemployment and exclusion, we disagree profoundly with their means of funding it—the windfall tax. I regret that the Government cannot raise money by fair, adequate and efficient taxation using the existing system—through income tax. Why do they need to hunt around for other means of raising revenue? The windfall tax is retrospective in its application, arbitrary in its effect and, in the end, I fear that it will be unfair as well.
  We do not support the excess profits earned by some of the utility industries, but, if that is wrong, it should be dealt with through regulation not expropriation. If there are excess profits, they should be returned to consumers in lower prices, better services and greater investment.
  It is not the Government's money; it is the customers' money, and the Government have no right to help themselves retrospectively to other people's money even for the very best of purposes.

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  The Government claim that the windfall tax is a tax on fat cats, but it will be nothing of the sort. It was the most bizarre moment in the Chancellor's otherwise well-constructed and well-delivered speech when he said that the money could be raised without anyone feeling the effect. He claimed to be able to find £4.8 billion in tax without anyone having to pay for it in the long term and that it could be plucked out of thin air. It is impossible to find billions of pounds in tax without millions of ordinary people having to pay the price. Where else will the money come from? It is not the fat cats but the 19 million ordinary people with money in pension funds and the millions of others with savings and endowment policies who will be hit as hard as anyone else.
  The Prime Minister claimed in the House on 21 May that
  "the windfall tax will not harm pensioners at air.—[Official Report, 21 May 1997; Vol. 294, c. 703.]
  That is not true. A windfall tax that raises around £5 billion will cost the average person in a pension fund £79 or £80 a year.
  I cannot put it better than the Institute for Fiscal Studies, which stated:
  "Penalising an arbitrary group of shareholders who own utility shares in the mid-90s on account of windfall gains enjoyed by their predecessors in the 1980s is difficult to reconcile with any principles of equity in taxation".
  The windfall tax is one reason to oppose the Budget, but perhaps the biggest one is its failure to tackle this year's crisis in education and health.
  I am delighted that the Chancellor has found an extra £1.2 billion for the national health service next year. I welcome the fact that pragmatism has replaced dogmatism and the release of the ceilings on next year's expenditure, but what will happen this year? Over the past 18 years, the average rate of growth in health spending has been 3.1 per cent. a year. This year's average planned rate of growth is 0.15 per cent. a year. That represents one twentieth of the average annual increase during the Thatcher years, when the health service was brought to its knees, and an even smaller proportion of the average Tory increase over the past few years, which has brought the NHS to its current crisis.
  Is it the Chancellor's case that by giving the NHS an extra £1.2 billion next year, it will be able to borrow more to help it through this year? If so, next year's NHS budget will be further depleted. It is simply unsustainable, not next year but now. Incidentally, the Chancellor's decision to cancel tax relief on medical insurance will undoubtedly place a greater burden on the NHS.
  We must address the crisis this winter when Labour Members will have considerable arguments with their constituents. Waiting lists are rising now, the number of cancelled operations is increasing and NHS trusts are sliding further into debt at a rate of £1 million a day. The crisis in our wards this winter will almost certainly be worse than in any year under the Conservatives. What will that do to the trust of millions of people who voted Labour at the general election in the belief that they had, in Labour's own words,
  "fourteen days to save the NHS"?
  The same is true in education. I welcome the extra £1.1 billion for next year. During the election campaign, the Prime Minister said:
  "Labour will never put dogma before children's education".
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  Yet that is precisely what is happening as this year the Government stick doggedly and dogmatically to the Conservative's education spending ceilings. That will mean fewer books, less equipment, more teachers sacked and larger classes in the year ahead.
  Under a Labour Government, my county of Somerset will have to sack 90 teachers this year. Labour councils are having to do the same, if not more. The Budget will bring no succour to the parents, teachers, governors or pupils who looked to the new Government to make a difference after years of cuts and neglect. They will be bitterly disappointed.
  The Government are right to say that education is the key to Britain's long-term economic success, but a Budget that claims to be for the long term fails if the Government fail to understand the need for immediate investment in education if they are to preserve an education service for extra investment in future. That failure, more than anything else, makes it necessary for us, however reluctantly, to vote against the Budget.
  We have made it clear that we are determined to be a constructive Opposition. That was why, in an unprecedented move, we supported the Queen's Speech a few weeks ago. We shall continue to give the Government our backing when we agree with them. That will also apply to the measures in the Budget that we support. However, the mandate that we carry into the House from the last election was not just to offer a more constructive style of politics, but to light to protect and improve our schools and hospitals. We were told that the Budget would follow through the Government's manifesto pledges of lower taxes and better public services, but it is a Budget of higher taxes and, at least in the next year, worse public services.
  We are told that the windfall tax is a tax on fat cats, but I fear that it will hit ordinary people with pensions and savings. In some respects, the Budget can be applauded, but in the way that it fails our children's education and the health service on which our families rely, it does not meet the immediate and urgent needs of our country. Most people will be saddened by that and we are, too.
  5.29 pm
  Mr. Stuart Bell: I am grateful for the opportunity to follow the right hon. Member for Yeovil (Mr. Ashdown), the leader of the Liberal Democrats. It is rather sad that he should take the view that, overall, he cannot accept the Budget and will not vote for it, although he was careful to say that there were certain elements in it for which he would vote. He said that the pension funds would pass on the cost of the windfall tax, to the tune of £79 or £80 per individual. He should note the statement by my right hon. Friend the Chancellor that the pension funds are in surplus and that there have been pension holidays. Indeed, he should congratulate my right hon. Friend on his statement that charities will have a different role.
  Mr. Ashdown indicated assent.
  Mr. Bell: I am delighted to note that the right hon. Gentleman has taken that point on board.
  The right hon. Gentleman appears to resent the fact that the Government are committing themselves to fulfilling manifesto pledges. We made those pledges when we were

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  fighting the election and we are now carrying out those pledges. The Budget will equip our country for the future. It delivers on our election promises and our priorities of education and health. I should have thought that the right hon. Gentleman would he pleased—possibly delighted—that we are allocating additional spending of £2.3 billion on schools and £1.2 billion on health, while ensuring that the Government reduce their borrowings.
  The Budget shows that we are on message. We were on message throughout the election campaign and we are on message in fulfilling the commitments that we made during the campaign. We are translating those commitments into action. My right hon. Friend the Chancellor should be given credit for staying on message and for putting forward a positive plan that will reduce our deficits over a five-year period.
  It must be heartening for the markets in seeking stability—in the emphasis that my right hon. Friend has placed on the global marketplace and the global village in which we now all live, and the emphasis on being competitive within that global marketplace—to know that there is a deficit reduction plan that will cut our borrowing to £5.4 billion next year, so that the Government borrow only to invest and not to fund consumption. I should have thought that the whole House could agree on those principles, not just the Leader of the Opposition or the leader of the Liberal Democrats.
  It is difficult—we are all in this boat—to make a Budget speech when we have not seen the Budget. Therefore, I commiserate with both the Leader of the Opposition and the leader of the Liberal Democrats. However, we must look at not only the immediate impact of the Budget as we see it in the House, but the impact on the Bank of England and the financial markets.
  One of my predecessors many years ago, Bob Woof—who is still with us, but no longer the Member of Parliament for Blaydon—used to make his Budget speech based on the previous year's Budget. That was helpful on the first day of the Budget. However, he might have had some difficulty with my right hon. Friend's Budget speech today as it was so refreshing and so very different from the Budget speeches of previous years.
  Another famous Budget saying came from Iain Macleod. He said that the Budget depended not on the reaction on Budget day, but on how it looked in six months' time. In this soundbite age, however, what matters is how the Bank of England and the financial markets react now. The financial markets have been betting that, following the Budget, interest rates would go up and, consequently, that the value of the pound would go up. I believe that, with his swingeing taxes on cigarettes and petrol, my right hon. Friend has sufficiently attacked consumer spending and taken enough money out of the economy to make the Bank of England carefully consider whether it should raise interest rates.
  The financial markets might wish to take into account the fact that if interest rates do not go up, the value of the pound should not go up either. One of the difficulties at this time is that the pound has risen by about 27 per cent. against the deutschmark, by 26 per cent. against the French franc, and by 30 per cent. against the peseta. My right hon. Friend said that it had appreciated by 18 per cent. overall. That has had, and will continue to
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  have, some impact on our exporters, on our industry and, therefore, on those who are employed by industry. That is likely to be a difficulty which we shall face if the value of the pound continues to rise.
  My right hon. Friend said, rightly, that we are within the convergence criteria of the Maastricht treaty. In fact, we shall be one of the few nation states that can meet that criteria. Therefore, the question of a single currency follows on from the Budget today. Do we enter the single currency in the first wave? If we do, when do we lift the opt-out clause? Will it be lifted in the autumn? Certainly, it will have to be lifted by the end of the year. If we do not join the single currency in the first wave, what will the exchange rate be against the new euro? Will we have a floating exchange rate? How will that impact on our exporters, our manufacturers and our industry? Those are the major questions being asked by our exporters. However, a currency that appreciates, as ours has, does bring certain benefits to the economy—for example, it plays a role in reducing inflation.
  I notice that the shadow Chancellor, in a pre-Budget statement, said that interest rates rather than taxes should rise. It is an odd view to take of the economy. This Budget should keep interest rates down. There should not be a substantial rise in interest rates when the Bank of England next meets. Similarly, the Budget should not result in a higher value being placed on the pound.
  As my right hon. Friend the Chancellor said, this is a people's Budget. He has placed emphasis on education, health and getting people into work. He has shifted the emphasis from that in previous Budgets. This is the 14th Budget statement to which I have listened and it is certainly the most refreshing. I like this Budget and I am sure that the people will also like it.
  I want to make one final point on the Budget and place it in the context of George Orwell's "Animal Farm". In that book, the pigs took over the farm, the pigs took over the farmhouse and the pigs ended up in the beds. There must have been a great temptation for the new Ministers to take the red boxes, to take the chauffeur-driven cars—although not limousines—to take the ministerial chairs and to continue where the last Government left off. It was encouraging when my right hon. Friend the Chancellor did not don a white tie and tails to go to Mansion House. He has not used Gladstone's old tattered box for his Budget. He came to the House with a new box and a new Budget speech that will be welcomed by the people, as it will be welcomed by the House. It is a Budget which gives us a fresh start and fresh hope.
  5.38 pm
  Sir Michael Spicer: In straight economic terms, there is no point in the Budget. By common agreement—the Chancellor made that point several times—the British economy is in extraordinarily good shape. We have a high rate of growth, both historically and compared with other countries—3.5 per cent. and projected to go forward at that rate—and a very low inflation rate, again historically and compared with other countries. Presumably, therefore, there is only one point to the Budget—to stamp socialism back on to our economy and into our society—[Interruption.]
  I think that I heard the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) say, "If only that were true" or words to that effect. I assure the

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  hon. Lady that, despite new Labour rhetoric, this is a socialist Budget: it could not have been introduced by a Conservative Government for at least two reasons. First, it is a high tax Budget. I counted six—other hon. Members may have counted more—new tax rises, which is almost a third of the way towards the 22 rises that we were meant to have introduced during our last period of office. The Labour party is on track to catch up and no doubt overtake us on the rate of tax increases.
  Secondly and more particularly, it is a profligate Budget in terms of public spending. As far as I can tell, it spends the entirety of the reserves. We have a £4.5 billion reserve commitment. Far from the Budget filling any black holes or being in the tight grip of an iron Chancellor, it is the reverse. It is a classic, political somersault trick: the rhetoric has been about tight money and improving the Budget deficit, but the Government have spent the entirety of the reserves and have made specific commitments.
  The Budget received great cheers from Labour Members: if I were a socialist, I would cheer a profligate Budget. The only way in which the Government try to match that profligacy is through the windfall tax. I assume that it is a one-off tax, but perhaps we should try to obtain further assurances on that. It is a massive increase in taxation: it is a one-off £4.8 billion tax on the basis of which public spending plans and trends have been developed. Anyone who has had anything to do with government knows that it is the ultimate in profligacy and irresponsibility to put public spending trends in place, as they have been in the Budget, and to back them with a one-off tax. I am sure that that is what the Budget will turn out to be.
  As has been said, the British economy is in extremely good shape at the moment. The Government have inherited an economy that is moving in a strong direction and is the envy of every country in Europe. Every country in Europe thinks that we were mad to change our Government.
  Mr. Desmond Swayne: We were mad.
  Sir Michael Spicer: Of course we were, but we did so and, as a result, we have a socialist Government who have marked out their intention to change course. The tragedy is that, as with all socialist Governments, that course will now be downhill. The Conservative Government built up a strong economy, but it is as clear as night follows day that it will now start to deteriorate. That will not happen immediately, because it is currently moving at a fast pace, and it is difficult to turn around a great economy, but it will happen in the classic way.
  The Government have introduced socialist policies—they will be defined as such very quickly by commentators and by those who invest in this country and whose confidence we need to gain. As with every socialist Government we have had—the good news is that they do not last very long, but the bad news is that we have this one for four or five years—the confidence of people who bring their money to this country and who invest in jobs begins to go.
  There has been much talk of subsidised jobs. My right hon. Friend the Leader of the Opposition made exactly the right point. Job creation comes through people having
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  the confidence to invest their money in this country. That confidence will quickly be sapped as a result of the dogmatic change of direction that we witnessed in the Budget. The precedents of previous socialist regimes will be repeated.
  People who want to put money into this country will start to lose confidence, and that will put pressure on the pound sterling. At the moment, it is exactly the other way round, so there will be a period when the problem will be disguised, but a time will come when the Government will be concerned about pressure on our currency, as Labour Government always are. I cannot put a figure on the time that it will take, but in about 12 or 18 months the Labour Administration will start to panic as pressure is brought to bear and money is taken out of the country. They will scratch their heads and wonder what on earth to do.
  The first thing the Government will do is to try to put up interest rates. The tragedy will be that that rise in interest rates—if it is in 18 months—will coincide with the point in our natural economic cycle at which it would be sensible to bring interest rates down. Because of the growing lack of confidence in our currency and our economy, interest rates will start to rise. The Government will consciously increase them: it happens every time. As a result, the pound will not strengthen. The reason why the pound will be under pressure at that point will have nothing to do with interest rates. We all saw what happened in the last days under the exchange rate mechanism. On that ghastly morning, we increased interest rates to 25 per cent. I think—I cannot remember the figure. [HON. MEMBERS: "Fifteen per cent."] They were raised to 15 per cent., but it had no effect on the value of our currency. Confidence is what counts.
  Mr. Hilton Dawson: Will the hon. Gentleman take note of the comments of the right hon. Member for Yeovil (Mr. Ashdown) and give us his reaction to the cut in corporation tax and the assistance given to firms wanting to invest in jobs and capital development? The clear message from small and medium enterprises in my constituency is, "Give us tax relief to allow us to invest and create jobs."
  Sir Michael Spicer: I shall come on to that point. No one disputes that it is a good idea to lower specific taxes on the industrial sector. Under a Labour Government, in the ghastly, nightmarish scenario that has precedents in history, interest rates are raised. While having no effect on the pound, that will have an impact on unemployment. An emergency Cabinet then meets and discusses the problem that is particularly painful for a Labour Government: not the falling unemployment that we had throughout the previous Conservative Administration, which will no doubt continue while our policies continue to have an effect, but a rise in unemployment.
  A rise in unemployment always happens under a socialist Government as a result of a combination of high interest rates and falling confidence. It affects the economy, and at that point the Government scratch their heads and hold an emergency Cabinet meeting. They say, "We can't go on like this. We shall have to have job schemes." The Budget contains the seeds of such schemes.
  Job schemes are about picking particular industries for particular treatment—in the Budget, the Government have picked the film industry—and supporting them with

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  taxpayers' money, whereas what industry requires is the maintenance of a general level of confidence. Higher taxes and less confidence means that the spiral has begun: that happens under every Labour Administration. Today, the seeds of a totally new philosophy have been planted which will set the country on a downward spiral, as opposed to the strong trend of the past four or five years that the Labour party inherited.
  I suspect that, this time round, when job schemes do not work and confidence is lost, refuge will be sought in joining the single European currency. The Chancellor was happy to say that we shall meet the Maastricht criteria on debt. I have no doubt that, somewhere along the line in the next two or three years, as confidence is lost, interest rates go up, unemployment goes up and job schemes have been tried, refuge will be sought in a single currency. I am glad to say that my right hon. Friend the Leader of the Opposition has given notice that that will be vigorously opposed. For Britain, the single currency means not just economic degradation but political degradation.
  Mr. Geoffrey Clifton-Brown: My hon. Friend has already referred to the exchange rate mechanism debacle. If the scenario that he outlines continues and the pound remains at its present rate or even higher, would we not be risking a repeat of what happened before?
  Sir Michael Spicer: As I am sure my hon. Friend knows, my view is that we should not enter the single currency as a matter of principle. There is no such thing as a right rate for the single currency. The single currency is, by law, for ever, and what is the right rate on day one might be the wrong rate on day two. The whole point about the exchange rate is that it reflects the economic circumstances at any one point. That is the essence of the argument against the single currency. However, the House will not wish me to detain it on that. No doubt, we shall have another opportunity to debate the single currency and Europe, and other wonderful things.
  I simply end by saying that the Budget marks the beginnings of a tragedy for Britain. We are seeing the turning of the tide. The Labour party will no doubt cheer at this profligacy. If I were a member of the Labour party, I would, too. For Labour Members, it is a wonderful socialist Budget, but it is potentially disastrous for Britain. We are seeing the beginnings of a new trend in the way in which we are to be governed. On historical precedents, in two or three years' time, disaster will begin to befall our country. It is a terrible shame because, at last, the country was on the right track economically and other countries envied it. In two or three years' time, all that will be at nought.
  5.51 pm
  Mr. Alan W. Williams: The Budget analysis of the hon. Member for West Worcestershire (Sir M. Spicer) is very different from my own. I want to correct him on two factual points. He said that we would be spending all the continency reserve, but in fact the majority of that £5 billion is, in the Chancellor's words, to be retained. The hon. Gentleman also said that we would be profligate with public
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  expenditure and borrowing, but the public sector borrowing requirement, as revised in today's Budget, will be £13.25 billion this financial year and £5.5 billion next year—down to less than 1 per cent. of gross domestic product.
  If I have one criticism of the Budget, it is that it is far too restrictive or deflationary in its second year. I cannot quite understand why we need a PSBR to be that low. I hope that the Chancellor may have in mind that next year it will allow him some slack for additional public expenditure in the services that desperately need such spending.
  My only other comment is that the hon. Gentleman seemed to anticipate a terrific run on the pound at some stage in the next 12 or 18 months. He was full of the doomsday scenario now that we have a Labour Government with a huge majority. To be honest, I wish that there would be a run on the pound, given its tremendous appreciation in value in the past year—up 26 per cent. against the deutschmark and the French franc. It is dramatically overvalued. The backdrop to today's Budget is the stupendous rise in the Financial Times index yesterday of over 100 points. That does not tally with the kind of scenario that the hon. Gentleman presents.
  Sir Michael Spicer: So that there is no confusion here, I said clearly that, as a result of the previous Government, we now have a strong economy. What I am worried about is that being tossed away in the next two or three years.
  Mr. Williams: I do not think that that will happen, certainly not while it is in the hands of our present Chancellor. He is extremely competent. He has shown great ability in opposition during the past live or seven years in his handling of the various economic groups. The basis that he has laid this afternoon in his Budget speech will see us very well over the next several years.
  The Budget tallies with what we promised the electorate during the election campaign in April. I am particularly delighted with the windfall tax. It was worked out over many years and any complaints that the Opposition or shareholders may have about it have been discounted in share prices over many years. American companies have in no way been dissuaded from coming in and picking up the electricity companies one by one, despite their full knowledge that the windfall tax was coming.
  The windfall tax will raise about £5 billion and is thoroughly justified. The electricity, water and gas industries were sold off at a terrific discount and the profits that they have made at the expense of the ordinary consumer have been a rip off. Anyone who invested £1,000 in those companies on privatisation will have seen their money treble over the years. If anything, the £5 billion is modest in terms of recouping some of the windfall gains made by investors in the privatised industries.
  That money will be magnificently redistributed to the unemployed. It will pull people from welfare into work. It will reach every deprived community in Britain, whether they be in old mining valleys, as in my constituency, or in the regions, in Scotland, the north-east or wherever. The poorest parts will benefit the most because that is where unemployment is highest. Therefore, the social justification of the windfall tax is absolute.

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  I acknowledge that there are tax increases in the Budget. They are necessary because, as the hon. Member for West Worcestershire said, the economy is booming. The curious thing is that the previous Chancellor put in train a pre-election boom, but, because confidence was so low, it took two or three years for the economy to kick off in any kind of way. The pre-election boom, has landed about six months too late for the Conservative party.
  There is far too much money around in that boom and it had to be taken out of the economy. House prices are up 10 or 11 per cent. in the past year and retail sales are up about 7 per cent. The building society pay-outs from demutualisation mean that about £30 billion will be coming into the economy to be spent. With such pressure, it was necessary to take money out of the economy. My hope was that this afternoon's Budget would take about £7 billion out of the economy. As I understand it, about £5 billion is being taken out. That is justified for the sake of the economy's long-term health. It will largely be used to cut borrowing.
  I was pleased that the Chancellor, towards the end of his comments, told us that next year there would be more money for the health service and education—£1.2 billion to patient care, and £1 billion to schools. That £1.2 billion means an additional 3 per cent. for the NHS budget. However, I think that a crisis is coming in the NHS this winter and we may well find that, as we approach November or December, our trusts and health authorities will need some extra money.
  I shall make a few comments about the value of the pound. The massive appreciation in the past year has made it unsustainable at its present level. The pound has risen 26 per cent. against the deutschmark, which means that our goods in Germany are now 26 per cent. more expensive, whereas German and French products in our market are that much cheaper.
  There is a time lag between devaluation or revaluation and the economic effects working through. The pound is now at pre-Black Wednesday values, and it was the devaluation on Black Wednesday and in the following few months that brought recovery in the past two or three years. The converse of that is that if the pound stays at its present value for any sustained period, it will cause us problems two or three years down the line.
  Like my hon. Friend the Member for Middlesbrough (Mr. Bell), I hope that taking out £5.5 billion from the economy today will be enough to stop interest rates rising, and the pound with them.
  Mr. William Ross: Does the hon. Gentleman agree that all that so-called Black Wednesday did was to restore the currency to its true value on the international market?
  Mr. Williams: I think so. That allowed us to cut interest rates dramatically, which is how the recovery got under way. The clear danger now is that, the pound having gone back up to Black Wednesday levels, at something like DM2.90, that cannot be sustained.
  In general, I welcome the measures in the Budget, especially the windfall tax and what that will do to unemployment, as well as the special announcements on health and education. My only criticism is that, looking forward one or two years to a public sector borrowing requirement of only £5.5 billion, I think that our iron
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  Chancellor is proving just a bit too cautious, or too tough, with his money. I hope that, in 12 months' time, he will allow a little more laxity, especially towards our public services.
  6.1 pm
  Mr. Richard Spring: I am grateful to you, Mr. Deputy Speaker, for giving me the opportunity to speak this evening. The Chancellor of the Exchequer talked about his desire for the British economy to be part of the new fast-changing global economy. Nobody could disagree with those sentiments.
  However, the fact is that the Government have been bequeathed a unique dowry—probably never equalled at any time in the history of the 20th century. In contrast to what has happened time and again in previous economic recoveries, we have steady prices, our balance of payments is under control, and we have falling unemployment and a falling public sector borrowing requirement.
  I note, for example, that Barclays Economic Review for the second quarter of 1997 sums up the United Kingdom economy thus:
  "The incoming Labour Government has inherited a very favourable set of economic circumstances, with output growth strengthening steadily since the middle of last year, the unemployment rate below 6 per cent. and the underlying rate of inflation within the target range of 2½ per cent. or less. Even the public finances have been better than expected, with the Public Sector Borrowing Requirement for the last financial year coming in £3.6 billion below the Treasury's November projection."
  We know that the International Monetary Fund, too, has called the performance of the British economy enviable. In the latest Library research paper dated 1 July, the following comment on our Budget outlook appears:
  "The generally favourable set of economic indicators described in this Paper need little further explanation. The economy has continued to grow steadily with continued falls in the level of unemployment and historically low levels of inflation and interest rates.
  The Budget is therefore something of a fundamental irrelevance. It has nothing to do with the good management of the long-term performance of the British economy, because that was already in place. I pay tribute to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who engineered the remarkable economic environment that we now have. It is a precious dowry that the Labour Government are fortunate to have secured from us.
  Despite all the hints that we heard in the past few weeks about budgetary black holes, we know that although the Government searched for one they discovered nothing, even when one changed the projections for economic growth rates. There are no discernible inflationary pressures, such as those that characterised earlier economic recoveries. Before the election, we heard time and again about our so-called economic failure and our inability to reduce the Budget deficit or unemployment. Now, suddenly, we hear about the risk of overheating in the economy.
  I repeat that the Chancellor's Budget has precious little to do with economic management and everything to do with the politics of the Labour party in government. Those of us who are especially interested in the subject of economics must never forget that, in economics, we are dealing with flesh and blood, with human beings and their hopes and aspirations, not with some kind of abstraction.

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  When I look at what has happened in my constituency, as elsewhere, and the dramatic transformation in the lives of so many people who live there, the figures speak for themselves. Five years ago, unemployment in Haverhill was 9.5 per cent. Now, it is 4.3 per cent. and falling. In Newmarket, the rate was 6.7 per cent.; now, it is 3.5 per cent. and falling. In the Bury St. Edmunds travel-to-work area, unemployment has fallen from 5.5 to 2.7 per cent.
  Those falls in unemployment mean job opportunities and the realisation of hopes and aspirations throughout our country for hundreds of thousands of people—in contrast to what has happened in the other major industrial economies of Europe. When we consider the welfare-to-work programme announced by the Chancellor, we must remember that, according to the labour force survey, since autumn 1992 youth unemployment has fallen well beyond the 250,000 figure that the Chancellor mentioned when he first spoke of his desire to reduce unemployment among young people via a windfall tax.
  We must ask ourselves the simple question: why has that happened in the United Kingdom when the performance of other countries has been so poor? What a tragedy for young people under 25 who live in Spain, 42 per cent. of whom are unemployed. In France, 29 per cent. of young people are unemployed, and in Italy, the figure is one in three. Even in Germany, there is a high level of disguised unemployment because of the operation of complex training programmes.
  Moreover, the Budget is moving us closer and closer to the European economic and social model, which blindingly obviously is becoming a manifest failure, unable to deliver the economic performance that would mean jobs and prosperity, and the fulfilment of the hopes and aspirations of young people.
  The other side of the coin of today's Budget includes the real views and policies of the Labour party. There is stakeholding—we heard nothing about that today—there is the introduction of the minimum wage and the signing of the social chapter, and there are new rights for unions. All of those are utterly irrelevant to the operation of a modern high-technology economy.
  Just as many European countries have sought to fudge the criteria for the Maastricht ratification process as we move towards a single currency in continental Europe, so today we saw a fudge in the way in which the reserves were raided to find additional sums for health and education spending. We had a clear foretaste today of Labour's move away from the economic environment that has delivered jobs so successfully in the form of the windfall tax, which clearly discriminates against those companies that have to pay it. The welfare-to-work programme fails fundamentally to address long-term youth unemployment by failing to create enduring opportunities for employment. That is the main criticism of the plan—that, at the end of the day, there is no assurance that those jobs will be secure. All the other component elements of Labour's economic policy will certainly ensure that such opportunities will not be realised over a period of time.
  If we look back to the 1950s and 1960s—when the mainstream of intellectual thinking in the Labour party arose—Governments, trade unions and industry across the
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  continent of Europe were formulating macro-economic policies, and it worked. The national cake grew. In the 1970s, however, we saw the beginning of oil shocks, inflation and the inability of our economy—and those in Europe—to adjust to the new reality of technology. We are seeing a dramatic change in the way our economy and our labour market operate. Labour has totally failed to understand the job creation process or the process of creating the competitive environment which enables jobs and employment to grow.
  In the past 10 years, we have seen massive downsizing in large corporations and businesses across the industrialised world. Industry now organises itself in a different way. For example, Japanese car companies have come to this country with considerable success—they have out-sourced their supplies, raised quality and spread their activities around in a different way from the monoliths which operated 20 or 30 years ago. This process of fragmentation has gone on for some time, and the Government's macro-economic, social and economic model is certainly not fitted for it.
  In my rural constituency, hundreds of people who are living at home are linked to businesses through the Internet, the fax and modern communications. The fragmentation process means that the Government's proposed model for the next few years will result in a failure to adjust to the high-technology modern structures of our economy which have created jobs successfully. In the next two years, things will begin to fail in this country and the Government will start to destroy the job creation process. Of that, I am absolutely confident. The previous Government were successful in keeping corporate taxation low, creating flexible labour markets and ensuring that rights were not given in a way that meant the right to the dole queue. The result was an unparalleled tidal wave of inward investment in this country.
  I welcome the cut in small business corporation tax. In the context of the downsizing in our economy, it is in the smaller and smaller business operations where the jobs of the future will be formed. The small business community feel that it is crucial that their cash flow is improved. Because of exemptions and thresholds, many small businesses do not pay corporation tax at all.
  One thing that was depressingly absent from the comments of the Chancellor was any reference to the real concern of many small businesses about what will happen to business taxes under the new Labour Government. During the general election campaign, we pledged to introduce a rateable value exemption of £1,000 for the purposes of the uniform business rate, which would have had a dramatic impact on the cash flows of small businesses. Instead of which, we have been promised the true horror of local business rate taxes. In the 1980s, this meant Labour-controlled, anti-business local authorities driving up business taxes and driving people into bankruptcy and unemployment. It is a matter of regret that that key area of small business activity was not even alluded to by the Chancellor today.
  Another disappointing element is the cut in private insurance tax relief for medical purposes. Many of my elderly constituents value their access to private medicine, and many say that if abolition takes place, they will cease to take out private health insurance and will become dependent on the national health service. In this country, the percentage of spending in the health service in the private sector is significantly smaller than in virtually any

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  other country in Europe. It is a matter of regret that that is the case when so many collaborative relationships are developing between the private and public parts of the health service.
  Mr. Martin O'Neill: Could the hon. Gentleman advise me as to what I should say to elderly constituents who have worked in textile mills and are in receipt of small pensions on which they have to pay income tax? Why should their income tax subsidise the better-off who can afford the kind of health insurance to which he refers and for which the premiums are large?
  Mr. Spring: I fear that the hon. Gentleman's arithmetic is a little awry. If 200,000 elderly people come off private health insurance and start using the facilities of the health service, it will be an entirely different story. That will increase the tax burden for everybody—including the hon. Gentleman's constituents.
  On green taxes, we must all be aware of the importance of preserving the environment and the legacy that we will pass to our children and grandchildren. It was announced today by the Chancellor that there is to be a substantial increase in fuel taxes, and this will have an impact in rural areas. But the importance of the environment in rural areas cannot be isolated. An increase in fuel taxes, and a roads programme that effectively prevents the proper repair and care of the roads system and potentially denies bypasses around rural villages, will mean that a different kind of environment is affected—our architectural heritage, which will be damaged by heavy traffic. That is a matter of regret and I hope that it will be remedied in due course. If we are to be sensitive about the environment, let us be sensitive about the impact on our architectural heritage of increasing fuel taxes in isolation and about the need for a high environmental quality in rural areas.
  I wish to refer to the reduction of MIRAS. In my view, it would be desirable to consider the possibility of allowing first-time buyers—who need most help in the housing market—to have help directed to them, rather than a general phasing down which excludes that important group. We heard from the Chancellor today of his dedication to home ownership; such a system would be a powerful incentive for young people.
  There is no escape from reality. The reality of this Budget is that, unless we have an economic environment that creates the parameters for the economy to continue to grow, all the best intentions in regard to reducing unemployment will certainly fail. Having listened carefully to what the Chancellor said today, I fear that, as we move inexorably away from the policies that brought about the remarkable economic success story that is the United Kingdom today and towards a European social and economic model—I am thinking of the link with Labour's other policies—that success story will end in tears.
  6.20 pm
  Mr. Jim Murphy: Thank you, Mr. Deputy Speaker, for allowing me to make my maiden speech during the first Budget debate under a Labour Government for nearly two decades. I am delighted to have the opportunity to speak in such an important debate.
  One thing that has struck me about the maiden speeches made so far by hon. Members on both sides of the House is the way in which those hon. Members have made their
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  constituencies sound like the type of place in which I would like to spend my summer recess. Although I do not promise to persuade the House that Eastwood is the tourist capital of the United Kingdom, I hope that I can at least match some of their eloquence and commitment.
  Until 2 am on 2 May, Eastwood was the safest Conservative seat in Scotland, but I am glad to say that that is no longer the case. Eastwood, which I am privileged to represent, is made up of many unique and distinct villages and communities. Eaglesham is the picturesque conservation village, soon to benefit from a bypass. Neilston, Uplawmoor, Busby and Thornliebank are all distinct villages in their own right, with a distinct culture. Giffnock, Netherlee, Stamperland and Newton Mearns are prosperous suburban areas from which many people commute to Glasgow. Barrhead, an industrial town on the outskirts of the constituency, is resilient in bad times, innovative in good times and loyal to Labour throughout, and has a unique sense of local pride.
  Eastwood's sense of community is added to by the number and variety of voluntary and civic organisations that are working determinedly, particularly those that are committed to working with the young, the elderly and the disabled. We are also fortunate to be served by two excellent local newspapers, the Barrhead News and the Eastwood Extra. Hundreds of small businesses in Eastwood employ more than 10,000 local people. They will welcome new Labour's new commitment to a fairer deal and lower taxes for small and medium businesses. Farmers in Eastwood will also welcome the new Government's plans for a clearer policy on agriculture, and their commitment to clearing up the BSE mess.
  Like many of my colleagues, I believe that my constituency is much more than just the towns and villages that make it up. Its greatest asset is its people. Let me mention a few of them. Sir John Montgomerie, Lord of Eaglesham, fought the English at the battle of Otterburn in 1388; I am pleased to say that he was a member of the victorious army of the Earl of Douglas. John Shanks, who formed Shanks and Co. in 1852—it was based in Barrhead—is famous for the invention of the water closet.
  Mr. Rhodri Morgan: That was Mr. Crapper.
  Mr. Murphy: I will not respond to that sedentary intervention.
  John Shanks's enduring contribution to all our lives is such that any hon. Member who visits any public convenience, even in the House of Commons, will be aware of his craftsmanship. Although Eastwood may not be the tourist centre of the United Kingdom, it is, perhaps, the most convenient area in the United Kingdom.
  Other persons of note in Eastwood were the Crum brothers from Thornliebank who set up a printing company. They pre-empted by more than 100 years the current Prime Minister's commitment to the environment and ethical industries. Theirs was one of the first smoke-free factories. They employed a local doctor, and built local housing, schools and recreation facilities. Alexander Crum went on to become a Liberal Member of Parliament in 1880.
  I want to pay tribute to my predecessor Allan Stewart, not simply because it is the customary thing to do but because it is the right thing to do. I often disagreed with

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  Allan Stewart's views, and in the early part of the election campaign we both rehearsed our arguments convincingly. Allan was always strong and strident in expressing his beliefs, regardless of which party they fitted and which arrangements he upset. Hon. Members will know that he has been through a difficult patch recently; I am pleased to say that he has now left hospital, and I am sure that the House will join me in sending best wishes to him and his family, and wishing him a full recovery.
  Another of my predecessors, Robert Nicholl, was the only other Labour Member of Parliament for Eastwood. He was elected in 1922. A little-known fact is that he was the great-uncle of my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), who is present this evening. He had two great passions, for which he became renowned in the House. The first was campaigning for smaller classes in primary schools. In 1923, he spoke in the House in favour of reducing classes to 65 pupils or fewer, which gives some indication of the position at the time. Perhaps we have made some progress since then.
  Robert Nicholl may have failed in his second important contribution. He campaigned in favour of brevity in Members' speeches. Although we have halved the size of primary school classes, I fear that in the intervening 75 years we have doubled the length of Members' speeches, although I have no intention of following that example this evening.
  Robert Nicholl's tenure in Eastwood was short. He lasted only 23 months, and died at the age of 35 a few months after leaving the House. As the first Labour Member of Parliament for Eastwood for nearly three quarters of a century, I hope and expect to remain here a great deal longer than Mr. Nicholl. In that aim, I have an unexpected but welcome ally in the shape of the Scottish Conservative party, whose members, given their antics and divisions, seem intent on keeping me here for some time.
  In the Scottish Conservative party, common sense now seems like a distant relative. Scottish Conservatives seem to believe that they lost the election simply because of the constitutional issue, but that is not the case. The contents of today's Budget bear more compelling testimony to their political impotence in Scotland than any constitutional debate. The Budget statement, to which we listened with great interest, set out an agenda for the 21st century. It is an entirely different type of Budget: a Budget for the many, not the few. At its core is the plan for a windfall levy, providing new opportunities for a new generation.
  Many young people in my constituency, and in constituencies throughout the United Kingdom, have known only a Conservative Government. Eastwood has more young voters than any other constituency in Scotland and, for too long, for too many young people, politics has been a source of problems. As a consequence of the Budget, politics can at last begin to become a source of solutions in those young people's lives.
  There are 25,000 young unemployed Scots, many of them long-term unemployed. Some have never worked in their lives—yet we hear from Conservative Members that we should not introduce a windfall levy to alleviate the problem. Scottish Power has made a profit of £1.9 billion
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  since privatisation. Labour Members believe that we should employ those excess profits to put young people in Scotland back to work.
  My right hon. Friend the Chancellor talked extensively about pensioners and a fairer deal for them. There are more than 14,000 pensioners in Eastwood, and they will welcome his announcement of a reduction in value added tax on fuel. That will bring about real change in their lives.
  The people of Eastwood and of Scotland in general will welcome our core agenda of the people's priorities of health, education and jobs—those were the issues on which I fought the general election campaign—and will be pleased to know that there is to be an extra £200 million for services in Scotland next year. Already, my right hon. Friend the Secretary of State for Scotland has announced that £9 million—additional money to provide additional services and facilities—will go towards Scotland's schools this year.
  I believe that the excitement and energy surrounding this Labour Budget can challenge the creeping cynicism about politics and politicians among many young people and society as a whole; it can reignite enthusiasm and belief in the political process.
  I welcome my right hon. Friend's encouragement to hon. Members of all parties to become champions of welfare to work. I encourage Conservative Members not to let their ideology get in the way of opportunity for young people throughout the country. I have said that some people think that politics are irrelevant and do not matter. If Conservative Members put their ideology before the future of our young people today and in the coming months, it will be they who matter even less.
  6.31 pm
  Mr. Shaun Woodward: I congratulate the hon. Member for Eastwood (Mr. Murphy) on his maiden speech. I feel for you, Mr. Deputy Speaker, as I too am about to engage on that task. I am grateful to you for calling me to speak, but even more grateful to the electors of Witney who gave me the opportunity to do so.
  I am aware that my remarks must be in the spirit and practice of the House in being uncontroversial. I must confess that, looking back on speeches not only by hon. Members in this Parliament but by Labour Members on previous occasions, the definition of uncontroversial seems to be increasingly relaxed.
  I am fortunate to be able to pay tribute to two of my predecessors. Colonel Dodds-Parker is still very much with us, and I am extremely grateful to him for his kindness and encouragement. He was both a distinguished politician and a man of enormous courage and conviction, not least in the way he served his country for special operations during the war.
  It is an especial pleasure for me to pay tribute to Douglas Hurd, who represented Witney for 23 years before standing down at the general election. Lloyd George said:
  "A politician is a person with whose politics you don't agree. If you agree with him, he is a statesman."
  I am sure that no one in the House would have difficulty in recognising my predecessor, now Lord Hurd of Westwell, as a statesman.

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  It is difficult to praise too highly a man who has been a notable servant not only of the House but of the country. Tested in the highest offices—Northern Ireland Secretary, Home Secretary, Foreign Secretary—Douglas Hurd relentlessly demonstrated the skills of a diplomat, reformer and cunning negotiator. To paraphrase some remarks made recently about Colin Cowdrey, he has style and elegance at the crease and humility and concern for others off the field.
  Douglas Hurd's crease has been not only the Dispatch Box but the forum of international negotiation. We are all aware of his humility off the field, and it is a considerable tribute to him that his concern and care for constituency responsibilities have played centre stage throughout his life. At a time when politics and politicians are not always held in the highest regard, he gives renewed definition to the concept of public service. It is not by chance that he has been a mentor to so many in the House.
  Speaking of public service, I want to pay a special tribute to Chris Patten, the former Governor of Hong Kong. His determination to do not what was easy or expedient but what was right has ensured that Britain has discharged its responsibilities to the people of Hong Kong with honour, not obloquy. I am sure that all hon. Members will have been moved by the enormously high regard in which he was clearly held when he left Hong Kong on Monday. If hon. Members are able to offer a fraction of the public service that he has given, we will all be doing extremely well.
  It is a tradition of the House to offer hon. Members a Cook's tour of one's constituency. I will not disappoint, but hon. Members may want to be spared an account of every one of its 82 villages and towns. The town of Witney nestles in the heart of West Oxfordshire. It is a seat marked by history, tradition and commitment to innovation: fitting themes when we consider the implications of today's Budget statement.
  Many hon. Members will be familiar with the towns in my constituency, not least Burford and Woodstock. I trust that many will have visited the area; tourism is one of the most important industries in West Oxfordshire. Indeed, it was from the borough of Woodstock and Burford that the electors of 1640 returned Speaker Lenthall, who was of course a keen defender of the rights of Parliament and would surely have had strong views about the Budget leaks to the press.
  Tradition and evolution, two watchwords of Conservatism, are a way of life in West Oxfordshire. The importance of the rural economy, of farming, and of those who are the stewards of our countryside, is of equal value today as it was when Speaker Lenthall was elected more than 350 years ago. The landscape has evolved as a product of a vital partnership between the land and those who care for it.
  My constituents regard themselves as living in a rural community and are wary of those who would seek to impose on their way of life a set of urban values. It was Disraeli who warned of political parties that:
  "attack the institutions of the country under the name of reform, and make war on the manners and customs of the people of this country under the pretext of progress."
  There is a view that recent moves in the name of progress and reform to prohibit the legitimate pursuit of country sports are not only ill considered but a reflection of those who do not understand why our countryside takes the shape and form that it does.
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  The enormous environmental, economic and employment consequences, about which the Chancellor has had so much to say today, that will, none the less, result from a ban on hunting, concern many in my constituency. I do not hunt, but I have become aware of the role that hunting plays in the life of the people of West Oxfordshire.
  Our hunt keeps bridleways open, maintains hedges and fences, and plants and manages woodland. For example, on one farm alone in the Heythrop hunting country of Oxfordshire, 12 acres of covets and three miles of hedgerows have been established around arable fields. That would not have happened without hunting.
  Those developments have led directly to the development of important new wildlife habitats that enhance and benefit native species. It is hard to predict how the landscape would change under the absence of hunting interests, but the risks are all too clear. Taking risks, many of them not properly calculated, is something that the Government have been prepared to do at every opportunity. I urge them to think hard before taking risks that will destroy our natural heritage.
  Witney is a spirited example of the importance to our economy of innovation and enterprise. It is therefore fitting that I am able to address the House on the day of the Budget. Witney enjoys one of the lowest unemployment records in the country, at about 1½ per cent. It need not have been such a success story, but enterprise and the determination to succeed have led to an extraordinary transformation in the employment prospects for my constituents.
  Amid its idyllic countryside, Witney sports some of the most advanced industries in the United Kingdom today: firms such as Oxford Instruments and Objex Electronics. Business parks abound, and scores of small and medium-sized enterprises are set up every month. It is a legitimate exercise for my constituents to ask what the Budget will do for them.
  I have said that I will try to keep my remarks uncontroversial, but as the Prime Minister said in his maiden speech:
  "You may wonder, Mr. Speaker, why, contrary to tradition, some maiden speeches have been controversial. Perhaps it is pertinent to ask in what sense they can be controversial … What impels us to speak our minds is the sense of urgency."—[Offical Report, 6 July 1983; Vol. 45, c. 315.]
  It is a sense of urgency that impels me to speak. This Government have three modes of procedure. The first is that of precipitate haste, demonstrated by the manner in which operational control of interest rates was gifted to the Bank of England without consultation in the House. The second is that of recurring reference to working parties and reviews. The third mode, as we have seen strikingly illustrated today, is by leaking to the press before coming to the House. It is a shame that the high moral tone adopted by Labour Members in opposition was not carried forward when they moved into government.
  As for the Budget leaks today, if it is proven that they came from Treasury officials, hon. Members will undoubtedly look forward to what action the Government will take. Will they, like Dalton, recognise that they
  "must make full and frank admission"
  of their responsibility—
  "and express … apologies to the House."?
  I fear that they will not.

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  Today's Budget undoubtedly falls into the category of precipitate haste. I do not know whether Labour Members have had the opportunity to read the excellent play by David Hare, "The Absence of War". The would-be Prime Minister tells his spin doctor
  "A politician can only deal with his inheritance. With the situation as it arrives."
  The constituents of Witney are at a loss to understand why the Labour Government need an emergency Budget when, according to just about every economic indicator available, their inheritance demonstrates that in the past 40 years Britain has never had it so good. Unemployment is falling, taxes are down, interest rates are down, mortgage levels are down, and growth rates are being continually revised upwards.
  The Chancellor may have come to the House with a brand spanking new Budget box, but it was still red, and it was a box of old Labour tricks, albeit with a hint of new Labour characteristics.
  Of course, we welcome the cuts in corporation tax, which the Chancellor said were made to ensure that the United Kingdom was the number one destination for foreign investment. I am awfully sorry to tell him that it already is the number one destination.
  There have been all kinds of pretext for the changes that have been made today. Under the pretext of stability, progress, and in the name of reform, the Budget has at its centrepiece, like all Labour Budgets before it, the desire to raise taxes. It has introduced at least 10 new taxes—if we count the windfall tax as a single tax.
  At best, Labour has breached the spirit of its general election pledge not to increase the tax burden on the middle classes. The urgency, the emergency today, is one manufactured at No. 11 Downing street. There is no emergency. Such a state exists only because the Chancellor has told us that he must have an emergency Budget. There are times when one is necessary; we needed one in 1979 because the country was broke. Then, tax rates were at 83 per cent. and 33 per cent. and inflation was out of control.
  Those are not the circumstances of today, so how does Labour deal with its inheritance? It deals with it by raising taxes in the name of welfare to work, which is a perfectly laudable and proper aim, but how does it plan to achieve that end? By tax—an indiscriminate and unfair tax since almost none of it will be paid by the corporate sector, because one way or another the windfall tax will be passed on to consumers, ordinary people. It will hit pensioners extremely hard. In fact, 24 million households will find themselves paying an extra £200 a year for that new tax. That will, of course, hit pensioner households harder than anyone else because their incomes tend to be lower. Many of the shares of the companies that have been taxed today are held in some form by pensioners. The logic of the tax disguises the focus of its attack—the most vulnerable in our society. It is misguided, unfair and it is ordinary people who will suffer the most. Like all tax, it will hurt.
  The changes announced to advance corporation tax represent yet another step by which everyone who was led to believe that Labour would not raise taxes will now realise that he was misled. Labour's plans will create
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  instability in the pension market and see the transfer of investment out of the United Kingdom. It will undoubtedly lead to individuals picking up the bill.
  Far from the Chancellor's claim that the Budget concentrates on laying the foundations of tomorrow's wealth, it lays the foundations for dismantling Britain's wealth creation. That tax change, far from encouraging a long-term perspective in business investment, as Labour maintains, will simply increase the cost of capital for investment financed by new equity and will increase the overall level of taxation. The tax, ironically, reduces the investment that the Chancellor said that he was so keen to increase.
  Other new taxes were also announced. Taxes will be imposed on those who would own their own homes. People will be taxed when they buy a home, through increased stamp duty. They will be taxed when they try to pay for their home because the level of mortgage interest relief at source will also be reduced. Tax on petrol will be a particular blow to the people of Witney and all those who live in rural communities.
  This political Budget is not justified by a squandered inheritance, such as we found in 1979. This Budget was, however, utterly predictable—even if it had not been leaked—and its spirit runs according to the true vein of old Labour. The public were led to believe that there would be no new taxes. Small businesses were led to believe that Labour would understand their needs. Large companies were led to believe that Labour was a safe option and would not interfere. Yet in every pore and sinew of the Budget, Labour has shown its basic instinct: to tax and tax again. Ten new taxes will raise £10 billion. That has not been done because the Government are trying to protect the country in a recession. We raised taxes to protect public services, but the Budget reveals good old Labour policies of tax and spend. If the Labour Government will put up taxes now, when the economy is doing this well, what the heck will they do when the economy meets a downturn?
  The Labour party, this new Labour party, may have abandoned the heady aspirations it had when it last enjoyed such a substantial majority in 1945. It may be extremely arrogant and smug at the moment. Collectivism has been banished, but new Labour is no longer the intellectual powerhouse for socialist beliefs. Today is not the brave new world to which the electors looked forward or the new Jerusalem that they were led to expect; instead, we have witnessed the beginning of a return to the misery of tax, spend and subsidy. It is a Budget for deferred misery.
  I am a Conservative because I believe that, at its best, Conservatism is the most effective way in which to create real opportunity, real jobs and a better way of life for our country. In practice, socialism, despite its virtuous ideals, has always resulted in a levelling down. In the name of reform, it undermines stability. In the name of progress, it undermines achievement.
  Today's Budget does little to build on the stability that Britain has created or to enhance the achievements of our people in the past 18 years. The Chancellor says that it is a Budget for investment, work and for the future, but the train that left the platform this afternoon is inherently unstable. The Budget will create artificial jobs and throw many out of work. It institutes subsidy in place of enterprise and competition. It has at its heart the instinct of tax and tax again.

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  That the Labour party spent the election assuring the public that Britain had had enough of tax rises was like the kettle calling the pot black. Its prospectus and its statements today have revealed that that was not the case. Today, we see the value of those assurances. We can only predict that, like all houses built on sand, the economy will become inherently unstable.
  6.49 pm
  Ms Diane Abbott: There was much to welcome in the Budget. Any remaining Conservative supporters who heard the pathetic attempts of the Conservative party in Parliament to criticise it with bogus allegations of leaks would be forced to weep. It is a sign of how low the party has sunk that it is unable to mount a sustained, serious attack on the Budget.
  I want to discuss reform of the welfare state, which is probably the most important Budget theme for people who live in inner-city constituencies such as mine. My right hon. Friend the Chancellor of the Exchequer made much in his excellent speech of his aspiration to build a welfare state for the 21st century. No one who has had dealings with the welfare state, whether as a claimant or through trying to help claimants, could deny that it is creaking and in urgent need of overhaul. It is degrading, inefficient and laden with bureaucracy. We can all think of ways in which it could be reformed and of improvements in the way in which we deliver benefits. To cite one, the Benefits Agency has had a series of targets imposed on it by Government. A benefit take-up target is long overdue. How can it call itself effective if it does not ensure as near 100 per cent. take-up as possible? Some benefits have a very low take-up rate.
  I want to focus on the programmes that have been heralded today. First, there are my right hon. Friend's plans for lone parents. Much of the political debate about what politicians and society should do about lone parents is based on a body of prejudice and misinformation. The prejudiced and biased way in which the media have presented the debate down the years has meant that an unnecessarily and misleadingly mechanistic model of why young women become lone parents has seeped into the political consciousness. It has almost become the accepted wisdom that women become lone parents of their own free will, to get extra benefits and a new council flat. My constituency may have the largest proportion of single parents in the country, and anyone who thinks that women become single parents to get council flats should see some of the ones that they occupy in Hackney.
  The argument that women become single parents to get extra benefits—if it is not made by Conservative Members, it is often put by the tabloid press—asks us to accept that when young men and women get together on Saturday night and Sunday morning, the key factor in their decision whether to have sex is the thought that if the woman gets pregnant, she will get an extra £6.50 a week income support. Stated in those bald terms, the proposition is absurd. I make that point because if we fall prey to a mechanistic model of why women in the inner-city areas of Hackney, Manchester, Glasgow and the north-east become single parents, there is a danger that we shall fall prey to the reverse analysis that if we take away benefit, women will either not have children or will rush out to work.
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  I warn the House that I shall make this point over and over again in this Parliament. The reasons why poor young women in the inner city become single parents over and over again, often by different men, are complex and are not subject to mechanistic remedies, whether through the benefits system or through the welfare system. They have children because they are careless. Members of Parliament are not people to lecture others about being careless about sex. Single mothers have children because they believe that this time, the man will stay. A single mother may do it because she feels that if she has the child and dresses it up in the best that Mothercare can sell, she may, for the first time in her life, be someone. That may seen silly to hon. Members on the green leather Benches of this august Chamber, but unless we as legislators try genuinely to understand social conditions in the inner city and what drives young women to have, and keep having, children, we shall never address the problem.
  My right hon. Friend the Chancellor's proposals include a package of help for lone parents. We are offering them special interviews, access to the Internet for more information about jobs, fast-track help with family credit and the Child Support Agency, 50,000 training places, after-school clubs funded by lottery money and more money for the CSA.
  I object to none of those things in themselves, but let us be clear. It would be unfortunate if the Government got carried away by the assumption that young single-parent mothers do not go out to work because they do not know how much better off they would be if they did. A young single-parent mother has only to turn on the television or experience her child coming back from school and asking for trainers that cost the equivalent of a week's benefit to know how much better off she would be if she worked. While I do not decry or oppose giving single mothers interviews or having them sit in front of the computers so that they can find jobs on the Internet, the fundamental cause of their not going out to work is not lack of understanding of how much better off they and their children would be if they worked, but issues such as child care.
  Let us consider some of the other remedies advanced by my right hon. Friend the Chancellor. The information presented with the Budget talks about giving single-parent mothers who go to special interviews fast-track help with family credit and the Child Support Agency. If it is possible to speed up such access for some single-parent mothers, we should in justice and fairness, speed it up for everyone. It is not fair to offer swift and efficient service to some people, who will go through the rigmarole of interviews sitting in front of a computer and plugging into the Internet, while offering a slow process to others.
  We also talk about making 50,000 training places available for child care workers. I am not opposed to that, but again I put it to the Government that the problem with child care, and I speak with some feeling having brought up a child on my own for the past five years and nine months, is not a lack of trained child care workers, but the lack of availability of child care facilities, whether in the workplace or in the community. Training people for jobs in nurseries that have not been built or whose fees my constituents could not afford to pay will not meet the needs of my constituents. We also talk about giving extra money to the Child Support Agency. That is fine and will help some mothers, but it specifically will not help mothers on benefit.

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  There is nothing in the package that I disagree with, but until the economy or Treasury thinking reaches a point where we are prepared to put real money into a genuine national strategy to produce affordable child care, we shall still have the problem of lone mothers being out of work, not because they are lazy or want to watch daytime television rather than working, but partly because the jobs are not there and partly because of problems with child care.
  My hon. Friends have talked about after-school clubs; they are all well and good, but, as I know, they do not help in the holidays. The poorest single mothers will enter the work force and find jobs in shops and service industries that involve working nights and split shifts; it is precisely those single mothers who need elaborate child care arrangements. I do not see how after-school clubs will, in themselves, meet the child care needs of women who are increasingly working in retail, cleaning and service industries in which they are required to work nights, or strange shifts involving two days one week and one day another week. No normal nursery can meet those requirements.
  I should be happy to stand here today and say that the measures outlined in the Budget will meet the child care needs of my constituents this year, next year or even within the five-year parliamentary term, but meeting the child care requirements of the poorest women such as those I represent in Hackney requires more money and more thought than has been forthcoming today. As the labour market becomes more complex, so women's child care needs become more complex.
  Alongside the package of measures introduced today with much fanfare are the documents that go with the Budget. As I read them, I discover that we plan to go ahead with the cut in the lone parent family premium. We also plan to go ahead and cut the special rate of child benefit for lone parents. I very much regret that we have not felt able to reverse those Tory measures, which were so widely condemned by all the voluntary groups and all the groups that work with single parents. We shall achieve nothing by allowing single parents to remain poor.
  I know that Conservative Members do not agree, but the reason for the supplement for single parents on income support and the reason for the special child benefit rate for single parents is that it is more expensive to be a single parent. If we cut the special money for single parents as we plan to do, we shall be forcing single-parent mothers into poverty. It would have been better if we had allowed our positive measures for single parents to kick in before we went ahead and implemented the Tory cuts.
  Conservative Members have a lot to say about the glorious way in which they handled the economy and their marvellous economic legacy. It was a marvellous legacy for some, but many people, including many of my constituents, were left out of the economic legacy. Of course, I support my right hon. Friend the Chancellor's proposals for growth and his support for business, but I do not want a society in which the gulf between my constituents in Hackney and the people who did well out of the Tory years grows wider.
  I also wish to mention the welfare-to-work package as it impacts on young people. I welcome the proposals: youth unemployment is one of the most serious problems
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  facing us in Britain today. But the proposals need much thought and work. The House—certainly Labour Members—will not need me to point out that the evidence shows that when one tries to deal with unemployment by offering employers subsidies, those employers, if allowed, simply substitute existing jobs for jobs for which they can receive a subsidy. I want my hon. Friends at the Treasury to introduce concrete measures to ensure that employer subsidies do not result in job substitution.
  The welfare-to-work proposals must ensure that black and ethnic minority youngsters get their fair share of jobs—that is important for inner-city areas. In inner London, two thirds of young males between the ages of 18 and 25 are unemployed. That has serious implications for the fabric of society, the breakdown of families and issues such as crime. Those youngsters will not get back into work simply by wishing it; structural measures will have to be in place so that every facet of the welfare-to-work programme—whether it is the employer base, the voluntary sector or the training element—contains justice and equal opportunities for all our young people.
  As we approach the millennium, we must all agree that our welfare state needs reforming. However, we can have an effective welfare-to-work system or we can save money; we cannot have both. Occasionally I get the impression that some of my hon. Friends think that welfare to work is an easy way of containing the welfare bill. Genuine welfare to work, as demonstrated in the United States and other countries, costs more in the short term. As the months unfold and we put flesh on the measures in the Budget speech, it is important that we introduce the structural measures to meet the requirements that I have mentioned.
  It would be tragic if, having been elected with the biggest majority this century, our only legacy in the area of welfare reform was to put through the cuts in expenditure that the Conservatives never had the courage to implement. I am all for genuine welfare reform, but it is not easy to implement genuine welfare reform and genuine welfare-to-work programmes. I hope that when my hon. Friends in the Treasury put the flesh on the bones of the proposals in the coming months, they will bear my comments in mind.
  7.6 pm
  Mr. Brian Cotter: I welcome this opportunity to make my maiden speech in today's important Budget debate and I thank you, Mr. Deputy Speaker, for calling me. I congratulate the hon. Member for Eastwood (Mr. Murphy) on his interesting maiden speech and I can assure him that there are plenty of conveniences in Weston-super-Mare.
  I pay tribute to my predecessor, Sir Jerry Wiggin, who represented Weston-super-Mare for 26 years. He was notable for his strong and uncompromising views and his tenacity in representing the constituency for that length of time. I should particularly mention Sir Jerry's long service; I am always ready to rise to a challenge and it will be my aim to reach or even surpass his achievement—God willing.
  Weston-super-Mare has enormous charm, and I thoroughly recommend it to my colleagues in the House. It has a mixture of old charm and modern technology. The sea front is almost without modern high-rise buildings—

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  a rare thing now. It has a pier to rival any other, and many other attractive seaside features. We soon hope to attract even more money from tourists at a new casino—perhaps colleagues might care to have a dabble. A traditional yet forward-looking resort, it is one of the first in the country to get on to the Internet.
  Weston-super-Mare is full of small businesses, with hotels, guest houses, a great variety of shops—many small and privately owned—manufacturing companies, distributors, and information technology and engineering firms. That is why I am particularly glad to be the Liberal Democrat small business spokesman, especially as I have a background as managing director of a small manufacturing company.
  This Budget should be about strengthening the economy and creating jobs; I should like to plead the cause of small businesses. Small businesses account for nearly 40 per cent. of total United Kingdom turnover and employ 50 per cent. of the total private sector work force. If just one job were created in every small business, it would solve the unemployment problem overnight. I am especially glad to be making my maiden speech on business matters, because the previous Liberal Member of Parliament for Weston-super-Mare, Mr. Frank Murrell, was also in business; in his maiden speech on 30 May 1924, he spoke on industrial councils and about minimising unemployment—a subject still current today.
  The small business field has had a tough time and now is the time to revitalise and support it. My colleagues and I warmly welcome the Government's proposed late payment Bill and I shall do all I can to work with the Government to ensure that a sound Bill is passed. That may help to answer the concern expressed earlier about cash flow in small businesses. Another approach we have long argued for is the establishment of regional development agencies—a proposal now in consultation. I am glad that one of the agencies' main aims will be to support the small business sector.
  What do small businesses need that the Government or devolved agencies can provide? They need regionally based economic development and investment plans involving local people to provide opportunities for growth. Businesses need a fairer rating system, collected locally and with the receipts used locally. In the past, many attempts have been made to give support to, or establish schemes of various sorts for, small businesses, but, in my experience as a small business man, such schemes have frequently been short term and variable throughout the country. In addition, much money has been wasted by duplication of effort and vast bureaucracies and not enough has reached the intended point of delivery. That is why the whole of the past approach to giving the support and help that businesses need must be re-examined and slimmed down—concentrated, not duplicated. We need to use the best practice, one-stop-shop approach. A serious reassessment of the whole business support system is needed and I hope that the Government will consider doing that.
  The Government must now realise that we are at an economic crossroads—a moment of decision when we can either push the economy forward or take a step back. It is not a difficult decision to make. It is now that we must capitalise on our skills and go up-market into high-value-added goods and high-skilled production. That means valuing our businesses, both large and small.
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  Large firms are shifting from being conglomerate businesses to being slimline enterprises, and small businesses are playing a bigger role as suppliers of specialist services. Small firms represent the bulk of employment in Great Britain, yet we are still failing to give them the structures and support that they need. Part of that support can be achieved by giving businesses stability. We have to reduce the short-termism in Britain's economic cycle. The handing over of some responsibility to the Bank of England is a step in the right direction, but we must also allow local authorities to raise private finance for investment in local communities.
  Small businesses require stable and sustainable growth in a low-inflation environment, with an independent bank and a realistic inflation target. Long-term investment in this country's productive capabilities and responsible fiscal management are needed to ensure that that comes about. We can no longer put up with politically motivated tax cuts and the continuation of the boom-bust cycle. However, I welcome the investment help for small businesses announced in the Budget.
  The Budget must be about creating stability in our economy and putting more money into things that matter—education and health. Hard decisions may have to be taken, but let us take them—the interests of the people of this country come first. For the sake of our future generations, we cannot squander the opportunity to get our education system back on track and to provide everybody with high-quality care.
  However, today's Budget means that, once again, taxes are being raised by the back door. The windfall tax will inevitably hit consumers and pension fund holders; in addition, there is still a likelihood of higher council taxes. With the higher inflation forecast, that is a cause of great concern. We must also be concerned about the raiding of the contingency fund. Nevertheless, many of the intentions in the Budget are good and, with my small business hat on, I welcome the measures taken in that sector today.
  7.15 pm
  Mrs. Ann Keen: Thank you, Mr. Deputy Speaker, for giving me the privilege of making my maiden speech on such a memorable day—the new Labour Government's Budget day. I am indeed honoured. I congratulate the hon. Member for Weston-super-Mare (Mr. Cotter) on most of his comments, especially those relating to small businesses, but I disagree with the latter part of his speech.
  I start by thanking all the members of staff who work within the Palace of Westminster. They have welcomed all the new Members and I thank them for their patience, their knowledge and their—at times, much-needed—sense of humour. I congratulate every one of them. My hon. Friend the Member for Crawley (Laura Moffatt) and I are the first two nurses to enter the House of Commons as Members of Parliament, but we are, of course, not the first nurses to enter the Palace. Again, I congratulate my colleagues in the nursing profession who, for many years, have worked in the House of Commons caring for hon. Members.
  I thank the people of Brentford and Isleworth for giving me the privilege and honour of representing them in the House. I am proud to have been the Labour candidate for Brentford and Isleworth in the 1987 and 1992 general elections, so it is a great honour that I am now here as the elected Member of Parliament.

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  It is traditional to refer to one's predecessors in one's maiden speech. When I first fought the seat in 1987, the constituency was represented by Sir Barney Hayhoe, now Lord Hayhoe, who represented the constituency for over 20 years and was well respected both in the House and in the constituency. He retired in 1992 and was followed by Nirj Deva. Now, I welcome this opportunity to represent my constituency and I look forward to being in the House for some time.
  The constituency of Brentford and Isleworth is a diverse one, both culturally and economically. We celebrate that diversity and, having been the candidate and now the Member of Parliament, I have had the privilege of being welcomed into many cultures. I have much to learn, but I have been welcomed as a member of a family. What is so good about my constituency is that we are all one.
  The constituency starts at Hounslow. It contains the great international airport at Heathrow and I look forward to an integrated transport system that will get many of my colleagues out of Heathrow and into our great capital city with far greater ease than has hitherto been the case. It contains the historic town of Isleworth as well as Osterley, Brentford, where I am a resident, and Chiswick. We have many great parks—Syon park, Osterley park, Chiswick house and Gunnersbury park. They are the lungs that supply our air, and fight the pollution from the airport—one cannot have something that makes such good economic sense without suffering some disadvantages, but I hope that the new Labour Government will be looking at that.
  Chiswick is, of course, famous for Hogarth, but I am extremely proud of all my constituents—they are all fairly famous. One of them has today reached the quarter finals at Wimbledon—Tim Henman. I know that the House would want me to send our congratulations to him—and, by the way, I am not doing anything in particular next Sunday!
  The River Thames, the boat race, the Strand on the Green—these are all good features of the constituency which illustrate its diversity. Many companies have decided to locate their multinational headquarters in what was the golden mile of Brentford. I am fortunate also to have a brewery—my father is proud of me—known as Fuller's brewery. As a good constituency Member, I am obliged to sample the goods to make sure that they are all right for my constituents.
  We also have Brentford football club, which should have gone up to the first division in May, but did not quite make it, sad to say. I think the club should be in the Premier League—I am sure that it will be one day.
  The West Middlesex University hospital and its staff certainly are in the premier league. Its health workers, and those of the trust, show all the skills and commitment that entitle them to a place in the premier league.
  Unfortunately, the hospital building is not so good. I look forward to an announcement soon that a start will be made on rebuilding the hospital. I first worked there in 1985; some of the patients have told me that they would sooner spend the night on a trolley than in one of the wards, which all the experts say are a disgrace.
  We need to rebuild our health service. I am proud to represent the community nursing profession in the House and to be able to express my points of view about our
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  great health service, which has taken such a beating over the past 18 years. I congratulate the Chancellor on his announcements today. I am sure that all health workers, patients and families will also congratulate him on an excellent Budget which will open the door to a breath of freedom for all the people of this country.
  Health care is not delivered by hospitals, doctors, nurses or paramedic teams: it is delivered by what the Budget provides for. The fact is that health is about poverty, housing, access to transport, and the safety of the working environment. It is also about incomes derived from work. There is no question but that poverty and ill health are linked. The Labour Government in 1979 commissioned the Black report which unfortunately was ignored by the Conservatives for the next 18 years. They refused to acknowledge the links between poverty and ill-health.
  My football team did not nearly get to the first division by luck; it nearly got there by investment. Its manager, David Webb, invested in the youth side. Today, our Chancellor is investing in our youth. I welcome the opportunity to go to my constituency tomorrow and see the young people there.
  As a district nurse during the past 18 years, I have sometimes felt ashamed when I have gone into people's homes in the winter. There have been times when it has been so cold that I have not even managed to get the car engine hot enough to feel warm in my car, yet I know that when people see me get out of the car they put on their gas heaters. Their houses are still cold when I go in, though, and I have been embarrassed and ashamed to learn that elderly people, who gave my generation everything that we have, have had to live in such conditions. Today marks the start—it is long overdue—of caring for that generation with dignity. These people have told me that they face a choice between eating and heating. "Old and cold" is not just a slogan. We must quickly begin to tackle the problem. We have the highest incidence of hypothermia in Europe, and that must end soon.
  There is an air of freedom about everything that we have been doing since 1 May, and I am proud to be part of it. Caring makes economic sense. The first duty of a nurse is to be the patient's advocate. I have always striven to be that, regardless of people's age, race, religion, sexuality or disability. The first duty of a Member of Parliament is to be an advocate for one's constituents; similarly, I intend to be that, regardless of their race, age, religion, sexuality or disability. I look forward to learning much from, and contributing much to, the House of Commons.
  7.24 pm
  Mr. William Ross: This has been an interesting day—not just the speech by the Chancellor on the first Labour Budget for 18 years, but four maiden speeches, too. I have enjoyed all of them. Each new Member has shown a commitment not just to constituents but to serving the House.
  I came here first in February 1974. I looked around me at the time and wondered how long I would be here for. I am rather surprised to find myself still in possession of a seat in 1997. They seem to keep altering the boundaries in a serious effort to ensure that I always win. In any case, I hope that the maiden speakers will enjoy their time here

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  as much as I have. It is a wonderful place to be, not just a great honour but a great burden. Anyone who comes here as a Member of Parliament must speak up for constituents and seek their welfare. Each and every one of us came here because we believed in something, and we do not fulfil our role if we do not pursue the belief which brought us here in the first place.
  Those who have been here for some time will know exactly what my views are. Whether or not they are popular, they are always enunciated in the House to any hon. Member who cares to listen.
  I listened with interest to the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) talking about child care. I was rather surprised that she neglected to draw attention to the 16-hour rule relaxation, and even more surprised that she did not draw attention to the real problems experienced by nursery teachers, whose contracts of employment with schools mean that they are employed only in term time. Many other workers, mainly women, are similarly affected. Once the term is over, they find themselves denied social security benefits.
  I understand that the social security commissioners have looked into the matter, and some cases are under consideration at the moment. Although the previous Government were not prepared to deal with the problem, I hope that this Administration will try to reach a resolution that takes into account the needs of these women, many of whom are qualified in child care. When summer comes round, they find themselves turfed out the door and they do not get a penny until school resumes. I hope that the woman Minister whom I see on the Front Bench, the hon. Member for Bristol, South (Dawn Primarolo), will take note of what I have said.
  I also listened with considerable interest to the Chancellor's speech. It was interesting and wide ranging, and it was designed to endear him to some of his Back Benchers. I am sure that he will be aware that economics is the dismal science, and that if a Chancellor is popular with his own lot when he sits down, he is almost certain to have done something wrong.
  I well recall sitting on this Bench—Ulster Unionist Members do not cross the Floor when Governments change, so we are a permanent fixture on the Opposition side—the last time that the House echoed with cheers after a Chancellor delivered a Budget. I hope that the present Chancellor recalls that. I believe that it was the 1986 or 1987 Budget—that Budget in which income tax was cut by 2p and cohabiting couples were allowed to buy their houses and obtain the full benefit of the tax relief until August. The result was not quite what the cheers suggested on the day.
  I hope, therefore, that the present Chancellor keeps a fairly dismal eye on the economy as his policy develops, taking a properly sceptical view of the cheers and doing in time what he feels needs to be done. It would be in the interests of no hon. Member or constituent if the economy went wrong.
  I have listened with interest to the debate on the windfall tax—a tax which seems to find so much favour in some quarters. We are told that the windfall tax is a one-off, but it seems to me to be spread over a few years. Therefore, like most taxes, it will have downstream consequences and an ever-growing tail of expenditure, which will cause considerable difficulties for the Chancellor and other Ministers in future years.
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  I believe that the only honest way to raise tax to tackle a difficult situation is by means of income tax. It is immediate, quick and effective. I am not sure that to grab a windfall tax just because it is handy is the best way to proceed and I fear that, in the long term, it will be proven not to have been a wise way to proceed.
  However, I do welcome the policy that the Chancellor set out today on the public sector borrowing requirement. He pointed out a problem that for many years has worried those who take an interest in these matters—that the interest on the public debt is now the enormous sum of £25 billion a year. The idea that we are paying out that money year after year and getting nothing back has always horrified me.
  The Chancellor seemed, almost for the first time I think, to hint that he intended so to control expenditure and raise revenues that he would be able to repay national debt, and that the interest charges would eventually disappear. Whether he is doing that just to keep within the Maastricht criteria is of no great importance to me. That debate is under way and is bound to lead to ferocious arguments in the House.
  If the Chancellor can do what he is setting out to do—keep inflation low—there is merit in that in itself. We should keep all our financial affairs under firm control because, when those controls are removed, we always find it much easier to open Pandora's box than to get it closed again. In my time in the House, I have been through two major recessions. I do not believe that any hon. Member wants another—I certainly do not.
  I confess that I have a very real problem whenever I hear a Chancellor say that he wants to borrow only to invest. I find it difficult to grasp the concept of borrowing or tax revenues being targeted at a particular element, given the global nature of our taxation system, tied in with borrowing and the way in which we spend revenues. The Chancellor will find it very difficult to convince anyone that if he raises £10 billion, £15 billion or £20 billion a year, that money will go into investment, which will pay for itself in a few years. He is going down a road that could lead to inflation, and I hope that he will carefully reconsider the words that he used.
  When Budgets were moved from spring to autumn, some hon. Members drew attention to potential problems, and we are interested to note that the wheel has turned full circle. The present Chancellor has done what the Conservatives could not have brought themselves to do—he has admitted that it was a mistake, and we are now returning to a spring Budget. We were not told—I hope that we shall be told at the end of the debate—whether it is intended that there will also be a financial statement in the autumn, so that we may have a full-blown debate in the autumn, as used to be the case. That would give us not one, but two bites of the financial cherry a year, enabling us to hold the Government to account for the way in which they handle the revenues and expenditures of the nation during the year.
  Interestingly, this time we shall have two Budgets within a year. In the 1970s, we had two, or even three, Budgets in a year. I hope that the change is not a precursor to returning to that mode of conducting our affairs. One Budget a year is quite sufficient. Although, understandably, this will be a short year, I hope that the Government will restrict themselves to one Budget a year for the remainder of this Parliament.

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  I welcome the expenditure on education, the national health service and housing, but I point out to the Minister that, in the present year's expenditure plans, planned housing expenditure for Northern Ireland—the part of the kingdom which I represent—has received a substantial reduction on last year's figure. Do the Government intend to reverse that trend? Great need exists, especially for the refurbishment and repair of dwellings, and for housing grants for those purposes.
  Ulster Unionist Members welcome the help for small businesses on capital investment allowances and we welcome the reduction of VAT on fuel. However, I hope that the Government will examine the other burdens that are carried by retail businesses especially. In this case, I am referring to Northern Ireland, in that we have just had a complete rates revaluation, which is bearing very heavily on many businesses. There is a very short tapering-in period and it is limited to relatively low valuations.
  The revaluation is bearing especially heavily on small businesses in town centres, for a variety of reasons. I hope that in future we shall have a longer tapering-in period and that rates revaluations will take place at intervals of five years, not 10 years, as previously. Ten years is far too long an interval.
  I hope that valuation officers will remember that the increase in rental values that we are witnessing is very largely due not to the building or its situation, but to the capacity of the people who run the business. We all know of rundown businesses in small towns or villages that have improved when a sharp, capable business man has been brought in to run them. The quality of the shopping improves, but, five or 10 years later, they find themselves clobbered by the rates, whereas less able business men get away with a much smaller increase. That trend should be reversed.
  In Northern Ireland, we have car parks controlled by the Department of the Environment. We are told that full-cost recovery is necessary. I have never been able to understand what elements the Department of the Environment was taking into account in calculating the full-cost recovery for the economic return, but there must be a scale laid down somewhere. A car park needs to be built only once and I cannot see why car park charges must increase.
  The experience of retailers immediately adjacent to car parks is that even a relatively small increase in car parking charges can have an immense effect on those retailers' turnover because, within a week, people move to shopping centres outside towns. Very often, those customers do not return for a long time.
  I hope that the Government will consider that problem, because we want to keep the commercial centres of many small towns, villages and, indeed, the larger towns in Northern Ireland as vibrant and thriving as they currently are. I have travelled through many towns in England, Wales and Scotland, and I know that, where there are out-of-town shopping malls, the town centre dies and the entire trade of the area passes into the hands of national multiples, which drain money away from the local area in large quantities. We want to preserve small local businesses and create an environment in which they can not only compete but grow and create real competition for the multiples.
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  My next point is more national in character. The Chancellor seems to be trying to increase the sum available for research and development, and for investment. I welcome the reduction in the tax burden in terms of investment, but there is another aspect of industrial regeneration—research and development in aerospace, defence and many other areas—where we invest insufficient money compared with our competitors in Europe, the far east and north America. We must act urgently to encourage our manufacturing base, especially those firms at the leading edges of technology, to invest more money in research and development.
  Given the long lead times from when research and development take place until a product is sold, not only in this nation but across the world—it can take 10 or 15 years—people need tremendous encouragement if they are to invest so far ahead. The Government must keep a close eye on the matter so that the money apparently earmarked for research and development is not filched away and then given to shareholders under some pretext a year or two later. We must find a way to ensure that research and development becomes so acceptable to our major manufacturing industries that they go ahead and spend money on it. That is where the jobs will be created—not immediately, but for boys and girls who are now in their teens or at primary school. If they are to have high incomes and if this country is to have wealth-creating industries, we must look at that aspect of industrial regeneration.
  There is supposed to be a two-way street with the United States in defence procurement. It might be a two-way street, but so far as I can see, five lanes seem to come from America while only half a lane goes there from the United Kingdom. The Government should exert a little more pressure to ensure that at least two lanes go back across the Atlantic so that we benefit from that.
  The Chancellor spoke about the environment. In the current year, environmental services in Northern Ireland are booked for a 13.6 per cent. reduction. We shall not improve the environment by chopping off the money invested in it at that level; the Government should look at that matter again carefully.
  I wish to register with the Government not only my deep concern about, but my absolute opposition to, what is happening to fuel prices. Those who live in or adjacent to large urban conurbations have alternatives to the private car, whereas those who live in Northern Ireland, Wales, Scotland or the west country have no alternative. In those areas, a car is not a luxury; it is an absolute essential. It is essential not only for the man of the house to reach his work but for the wife, mother and other people living in the dwelling so that they can get out, because they are often miles from anywhere.
  I live a mile from my nearest village and we rarely walk there. Nowadays, few people walk that far to do their shopping, let alone carry it home; they use a car. A car is essential. People who live on the outskirts of London can hop on the underground or train and be in the west end in half an hour; shopping is much easier. The Government are far too willing to behave as though the whole country were urban and to close their eyes to the real dangers and problems of people in rural areas.
  Mr. John Hayes: Does the hon. Gentleman agree that, before the car,

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  people in those types of communities were restricted to their communities? To increase the cost of car travel for people in rural areas would limit people to travelling only short distances to hamlets and villages, which would be sad. Today was a bad step in that direction.
  Mr. Ross: Moreover, the shopping facilities enjoyed by the pre-car population no longer exist. They have disappeared as a result of the car, so this is a two-edged sword to some extent. People now want choice and they must go to large towns to get it.
  I am also deeply concerned about the effect of steadily increasing taxes on tobacco. I do not smoke—thank God. Last year, Customs and Excise admitted—the Chancellor gave a similar figure today—a loss of some £560 million in tobacco tax due to smuggling and cross-border shopping. In the Budget debate earlier this year, Northern Ireland Members drew attention to the fact that hand-rolling tobacco can leave Gallaher's factory in Ballymena in Northern Ireland, go to the continent and, within two weeks, be sold on stalls in Northern Ireland for little or nothing. That happens to many other tobacco products, too. The Tobacco Alliance believes that the lost revenue is not less than £600 million but nearer £1.6 billion a year.
  Raising taxes on tobacco can be counterproductive. I wonder whether we are trying to raise money from tobacco for the Exchequer or whether we are raising taxes, as some would allege, for health purposes. I should be happy if nobody smoked because it is a dangerous occupation. We know that it causes lung cancer and all sorts of problems, but it is legal and people do it. If we want to reduce smoking on health grounds, we should try other ways of doing it rather than constantly raising revenue from tobacco, which simply proves counterproductive.
  We must also consider whether the concept of green taxes—taxing petrol, for example—is counterproductive. We now have a tax on the dumping of waste. Northern Ireland has a problem with certain types of waste. We have no facility to treat it because there is not enough of it, so it is not economical and must be shifted out of the country to be treated and recycled. Taxes raise the cost of doing that enormously and put an inordinate burden on certain industries in Northern Ireland. I therefore hope that the Government will look carefully at that matter.
  Northern Ireland has another problem because it has a land frontier. The Chancellor said that he was looking at the environmental implications of quarrying, the extraction industries and the pollution of water supplies. If we start to pile more burdens on that large industry in Northern Ireland, it will close down and move across the frontier where there is no environmental tax. A whole industry and the manufacturing capacity in building products will be wrecked as a result.
  Before the Chancellor goes too far down that road, will he look at the implications for the Province of an environmental tax? People in England will not face that problem—they will have to carry the burden—but folk in Northern Ireland will avoid it and, given the common market, nothing can be done about it.
  The Chancellor also touched on the conversion of building societies. I understand that that means an injection into the economy this year of some £35 billion. I have often wondered what the effect of the repayment of public debt was the last time that we got round to it,
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  when quite large sums were repaid. Some was repaid to people overseas and some into our own economy. When I ask economists in the House what effect that has, they simply look blank and say, "I don't know, Willie." May I ask the Minister whether the Treasury knows what the effect was. Has the effect of that input of money into the economy finally been determined? Did it lead to inflation? Was it part of the problems that we encountered in the late 1980s and early 1990s, or did it have no effect whatever? Was that money invested elsewhere?
  What will be the effect of the injection into the economy of the present windfall from building societies? It is not going into the pockets of a few people or into a few companies. It is going into the pockets of millions of people, many of whom will go out and spend it, so we can expect a rise in retail sales. Given the present state of the economy, those will be sales of imported goods, so we could be adding to our problems, unless the Government find some way of making it attractive for people to keep that money in savings.
  Today, we saw the first instalment of the Chancellor's programme—a programme which I think will be comprehensive and far reaching. No doubt some aspects of it will have merit and, as with all Chancellors, other aspects will go horribly wrong. Some measures may be based not on the sound principles of financial prudence that he expressed today, but on other, more political considerations, and something will go wrong. As there is so much to come, we shall have to wait until his spring Budget to find out the Chancellor's final conclusion after his assessment of the financial state of the country, and where he wants to go.
  Having handed to the Bank of England control over such a large part of our financial affairs, will the Chancellor be able to do what he desires to do? I think that the Bank of England does as the Bundesbank does, and that getting ourselves into that position is neither wise nor far-sighted. It will bring us grief. We should have learnt from the past that, whenever the crunch came, the central German bank did what the German Government said.
  There must be a political input into national finance. Ultimately, the Government must face the electorate, as the previous Government did and lost. Some day, the present Government will have to do so. It is up to politicians—to the Government—to take political decisions as to what is best for the nation's economy and its people.
  By handing control to the Bank of England, we have handed it to what might be described as a peculiar quango, which is not responsible to the electorate. I deplore that and I believe that we will live to regret it.
  I wonder whether, at the end of the day, the Chancellor's figures will add up.
  I said at the beginning of my remarks that Chancellors should expect to be unpopular. I hope that when this Chancellor becomes unpopular, he is unpopular for the right reasons, but I am always a sceptic on these matters.
  7.52 pm
  Mr. Martin O'Neill: I begin by putting on record my appreciation of the speech of the Chancellor of the Exchequer, my right hon. Friend the Member for Dunfermline, East (Mr. Brown).

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  I remember that, when I entered the House, one of the defining moments was the speech by the then Chancellor, now Lord Howe, in his first Budget in 1979. Some of us were filled with optimism and enthusiasm. We had won seats from political opponents, and the realisation that the Labour Government had been defeated had not yet sunk in. In the space of a few short paragraphs, Lord Howe cut income tax, raised VAT and put interest rates through the roof.
  I remember the sharp intake of breath in the Chamber that afternoon. We realised that power had shifted. Those of us who had not been on the other side of the House—we knew the significance, but we had not physically shifted over to the Opposition Benches—got an idea that things were on the move.
  I should like to think that the Chancellor's speech today will have had a similar impact on Conservative Members. It has given great encouragement to us, which was evidenced by at least two of the maiden speeches tonight—the speeches of my hon. Friends the Members for Eastwood (Mr. Murphy) and for Brentford and Isleworth (Mrs. Keen).
  My hon. Friend the Member for Eastwood, a new Scots Member, took us round his constituency and made a good, comprehensive contribution, although he omitted the other famous national drink that emanates from his constituency. He concentrated on a process a little further down the line—the toilet facilities provided by Shanks. My hon. Friend the Member for Brentford and Isleworth made a first-class speech. I hope that she will not mind my saying that she is an old hand. Many of us had been hoping since 1987 that she would get into the House. We are delighted that she is here, and we know the contributions that she has made elsewhere. I know that, from both those colleagues, there will be telling contributions in the future.
  From the other side of the House, we heard contributions from the hon. Members for Witney (Mr. Woodward) and for Weston-super-Mare (Mr. Cotter). I wish them well in their endeavours. The hon. Member for Witney may find that in subsequent debates there is a 10-minutes rule and he will be constrained in the length of his speech.
  I shall not detain the House unduly with such pleasantries, important as they are. I return to the boldness of the Chancellor's speech. Despite what has been said about what was or was not promised in the election campaign, no one can doubt that the windfall profits tax was to be one of the core elements in Labour's strategy. It is clear that there is no public support, political will or financial resources to return to public ownership any of the privatised utilities or companies. That is not an issue.
  We have seen the movement from public ownership to privatisation to regulation and, in the case of the energy utilities, we shall see before long the process of liberalisation. In the early stages of the post-privatisation period, there was a degree of laxity on the part of the regulatory bodies in handling the prices charged by the companies and other aspects of their activity.
  It is not a worthwhile exercise to try to ascribe motives to individuals. Suffice it to say that the utilities were sold too cheaply and regulated too lightly and, although the
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  capital gains that arose from their flotation were taxed, they were never properly dealt with. In the case of the energy utilities, the profits came as much from world market conditions and fairly obvious cost cutting as from management expertise, and led to the share options scandals and the fat cat syndrome. That, in turn, led to the windfall profits tax and attempts to disparage the tax on the grounds that it was the politics of envy.
  In the previous Parliament, I was fortunate enough to chair the Select Committee on Trade and Industry. My colleagues and I investigated the regulation of energy utilities. Thanks to the herculean efforts of the Clerk and her staff and our superb advisers, we were able to squeeze out a report in the dying days of the Parliament, just before the election. We did not have an opportunity to debate the report, but, had we had that chance, it would have informed the discussion about the character of windfall profits taxes.
  The report did not take upon itself the task of advocating a windfall profits tax. It was a unanimous report. The Committee consisted of six Conservative and five Labour members. The report showed clearly the extent of the excess capital gains and returns on investment enjoyed by shareholders, against the comparatively small cuts in electricity and gas bills over the same period. The figures given by the Department of Trade and Industry to the Select Committee showed that, between the fourth quarter of 1986 and the first quarter of 1996, average domestic prices for electricity fell by 1 per cent., and by 8.5 per cent. on a value added tax exclusive basis. Over the same period, gas prices fell by 25 per cent. At the same time, however, shareholders, before tax and year on year, were enjoying an 11 per cent. increase in their income. I am speaking of British Gas shareholdings.
  Regional electricity shareholders were seeing a before-tax return of between 32 and 46 per cent. per annum over five to six years. The figures were slightly different for the Scottish and Irish companies because they were privatised at a higher price than the other electricity companies and were subject to a different basis of price regulation. In simple terms, it was the cost of living minus the X factor rather than the cost of living plus that factor that was the core of the utilities' problem in England and Wales.
  It is correct that due account should be given to differing circumstances. There are complications when considering the position of Scottish Power, for example, because it is now a multi-utility. The three elements that make up the company have all been subject to different forms of regulation. I am sure, however, that my hon. Friend the Paymaster General is more than up to the task that faces him. The figures for dividend yield and capital gain have been of the order of those to which I have already referred. If anyone wants to look them up, I suggest that he or she reads pages 63 to 67 of the report of the Select Committee on Trade and Industry.
  There are those who argue that all that I have said is irrelevant because many of the companies are under new owners. I have taken the trouble to talk to some of the predominantly north American owners of the companies. It might well be put to them that the companies were purchased in the knowledge that there was more than a chance of a change of Government, and that the Labour party had flagged up repeatedly that there was to be a windfall profits tax. How would the directors go to their annual general meetings, having to say, "I am sorry but

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  our profits from our UK operation are not as high as we would have hoped because, out of the blue, there has come a windfall profits tax"?
  I spoke to senior managers and directors of those American utilities. They gave me an old-fashioned look and said, "We have made provision for this." They made provision in the financial structuring of the company or they discounted the price when they purchased the company in the first place.
  I am aware that, in this morning's press, consideration has been given to the tactics adopted by Southern Electricity, which has been one of the most prominent opponents of the windfall profits tax. Before the election, it was talking at one stage about raising legal actions on such a tax. We have heard no more about taking the matter to the courts. I presume that Southern Electricity has been given additional legal advice to the effect that it would not be worth spending too much money on such actions. At the same time, however, the cupboards were stripped bare. There was a process of asset stripping.
  Concern arose over the regulation of electricity companies when Northern Electric was to be taken over by Trafalgar House, a British firm. It appeared that £500 million was found out of nowhere to provide a fighting fund to withstand the predatory approaches of Trafalgar House. Another company was able to clean out £470 million from the accounts and shift it elsewhere.
  Those companies will complain, or moan. They would not be doing their job if they did not take that approach. When it comes to increasing prices, however, a company that is regulated and operating under a licence granted by a regulator and approved by the Monopolies and Merger Commission—I am talking of increasing prices for reasons that go beyond the licence—has first to approach the regulator to convince him or her of the need for a change. The regulator then has to pass the matter to the MMC for its consideration and approval.
  Before the application, as it were, can go to the MMC, it must go to the Secretary of State of the appropriate Department. At that stage in the process, I cannot envisage a Labour Secretary of State not vetoing any further movement on the renewal or review of the licence in between terms. Even at the end of the period covered by the licence, I cannot see that regulated companies would be able to make their consumers pay. The new licence that would be sought in the new round would not, I think, be acceptable to the regulator or to the MMC.
  Those who talk about the consumer paying are not sufficiently aware or they are being wilfully dishonest. My right hon. Friend the Chancellor of the Exchequer referred in passing to the regulators, but it was clearly stated in evidence that my Select Committee took from regulators that the companies had the ability to make consumers pay again. It must not be forgotten that the purpose of the windfall profits tax is to take account of the fact that the people paid too much in the first place. The companies are sufficiently cash rich to deal with a windfall profits tax and I do not think that there will be a problem.
  The exciting feature of the tax is that it will give us the opportunity of introducing the welfare-to-work programme, which is central to the Government's ambitions. When sitting on the Opposition Benches, my right hon. and hon. Friends became impatient in the knowledge that large sections of our communities were
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  languishing on the dole for long periods in the absence of pump-priming facilities to get people back into employment. It was the greatest frustration that we experienced in our period of opposition. That is why we place such great importance on the Budget. It is a defining moment in our political lives. My right hon. Friend the Chancellor of the Exchequer has identified the means and the objectives to achieve a reduction in unemployment and so to eliminate people from that disease.
  I think that it was the hon. Member for Witney who talked about 1.5 per cent. unemployment in his constituency. There are villages in my constituency where unemployment is in excess of 40 per cent., where virtually no young people have ever worked for an employer in their lives. I am speaking of men of 22 and 23. I say to them, "Are you interested in better dole money, better social security or a job?" They say. We are sick and tired with social security. We want a job."
  The tragedy of many of our people has been that as George Bernard Shaw once said, if we do not get what we like, we come to like what we get. There are far too many people whose ambitions are too low, along with their expectations. They are resigned to lives that are not anything like those that they should be enjoying in a civilised society.
  Against that background, my colleagues and I see today's Budget statement as a watershed in British politics. We see not a return to the 1970s, the halcyon days of a previous Labour Government, but a means of breaking through and moving forward to a new frontier within which we shall have a strong economy and high levels of employment that will be sustained for decades ahead. That is the test that my right hon. Friend the Chancellor of the Exchequer has set himself. It is the test which the Government must pass. Given the start that has been made today, I am confident that we shall go a long way to achieving our objectives in making the United Kingdom a better, more civilised and happier country than it has been for a long time.
  8.9 pm
  Mr. David Prior: Thank you very much, Mr. Deputy Speaker, for calling me to make my maiden speech this evening. There is an old adage that the opposite of talking is not listening, but waiting. I hope that the hon. Member for Ochil (Mr. O'Neill) will excuse me, on this occasion, for not having listened to his speech as carefully as I might otherwise have done. This Chamber has a great reputation for honesty, but I hope that no one will object when I go home to my constituents and say that I addressed a packed and noisy Chamber this evening.
  I have the great privilege to represent North Norfolk. I am grateful for the fact that the ex-chairman of the North Norfolk Conservative Association, my hon. Friend the Member for Cotswold (Mr. CliftonBrown), is here tonight at my side. For the past 27 years, my constituency has been represented by Sir Ralph Howell, who was well known for the care that he lavished on his constituents. Ministers knew that he was the sort of man who, when he wrote letters to them, would never give up. He was the scourge of Ministers, local government officials and bureaucrats at all levels.
  Sir Ralph had two great passions. First, he was a passionate believer in the European Union. When he was a young man, the first time that he saw continental Europe

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  was when he looked down on Germany through the bomb sight of a Wellington bomber. That experience made him believe that a strong European Union was vital for peace in Europe.
  Sir Ralph's second abiding passion was his belief and faith in workfare. He would have been pleased to have heard some of the welfare-to-work proposals in the Budget statement. I was very much struck when the hon. Member for Ochil spoke about long-term unemployment. It was the waste and misery surrounding that which drove Sir Ralph towards workfare. I share his views about the awful waste of long-term unemployment, having seen it in much of England, Scotland and Wales when I worked for British Steel. I do not believe that welfare to work, based on Government subsidy, is the right way to cure the problem, but I share the deep concern of the hon. Member for Ochil about the tragedy of unemployment for so many people. Sir Ralph was a man of great conviction and principle and I am proud to follow in his footsteps.
  When making one's maiden speech, it is tradition to refer to one's constituency. I am afraid that I shall disappoint the House and continue with that tradition, so I ask hon. Members to bear with me for a while. Agriculture remains one of the most important industries in North Norfolk. The Cokes and the Townshends, whose families were the foundation of the agricultural revolution in the 18th century, still hold land and farm in North Norfolk. A strong, profitable and competitive agriculture industry is vital to the interests of North Norfolk.
  My county is still very rural. I agree with my hon. Friend the Member for Witney (Mr. Woodward) about field sports. They are a vital freedom, a tradition and a way of life in North Norfolk and our countryside would be much the poorer without them.
  North Norfolk still has a local shellfish industry. The Cromer crab has a reputation that extends way beyond Norfolk. Our history of shellfish fishing shows that the best regulators are the generations of fishing families who have caught shellfish off the coast, not distant bureaucrats in Whitehall or Brussels.
  Probably the most difficult issue in North Norfolk—and, indeed, in most rural areas—is the balance between keeping Norfolk special and the requirements of development. Because of the development of out-of-town supermarkets, the hearts of towns such as Fakenham and Cromer have disappeared. There has been a demise in village shops and local amenities. There is constant conflict between the need for a strong tourist industry and the pressure on the Norfolk broads and the coast. I believe strongly in the need to provide decent, affordable housing and public transport for local people, but I realise the real pressures of housing on the countryside.
  Small businesses are the mainstay of employment in North Norfolk. I was disappointed to hear no reference in the Budget statement to improving the uniform business rate as it applies to small businesses. There is no doubt that it is skewed too much against small, usually retail, businesses. Some of it should be switched back to larger businesses.
  North Norfolk has an elderly population. Many people have worked hard all their lives and, although they do not have great savings, they have enough to prevent them from getting any help from the state. Those people are
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  especially vulnerable and they will not welcome the news today that their pensions will be adversely affected by the abolition of the tax credit on dividends paid to pension funds. Neither will many of them be pleased to hear that they will no longer get tax relief on the premiums paid for private health insurance.
  We have a very special hospital at Kelling. It is a community hospital, not a big hospital, and many of its patients are old people. I serve notice on the Secretary of State for Health that Kelling is special and that everyone in North Norfolk will fight to keep it alive.
  I have spent the past 20 years working in manufacturing, mainly for British Steel. I have seen a fantastic impact on competitiveness and efficiency over the past 20 years. It has come about through deregulation, tax reduction, vastly improved industrial relations, privatisation and much less government.
  My father, Jim Prior, made his maiden speech in this House in 1959, when the Japanese were about to open their first transistor radio factory in Ireland. He said then that, as a farmer, he would never again buy any Irish bullocks if the Japanese were allowed to open a factory in Ireland. Things have changed a great deal since 1959. We now live in a global economy with unrestricted capital movements and widely dispersed technology and skills. The general agreement on tariffs and trade has reduced many of our trade barriers.
  My right hon. Friend the Leader of the Opposition earlier quoted from a report by the World Economic Forum. He must have had pre-knowledge of my speech. The report said:
  "what we see in the United Kingdom is an economy reborn and the sweeping privatisation, deregulation and other structural reforms have made us well poised to compete in a global economy."
  That success has been recognised by companies around the world. There has been more foreign direct investment in Britain since 1979 than Germany received in Marshall aid after the war, in real terms. It is against that background that we must look at today's Budget.
  The Budget contains three illusions. The first is that the windfall tax and the abolition of the advance corporation tax credit have no victims. Both have victims. The windfall tax will erode the investment potential of those on whom it is levied. The abolition of the ACT credit will hit pensioners.
  The second illusion is that Government can create jobs. In fact, only competitive and strong companies and businesses can create jobs. Jobs built on short-term subsidies will have no security.
  The third and last illusion is that the Government believe in the long term. They cannot and will not stop meddling in the short term. Surely one of the lessons of the past 20 years is that it is best for Governments to keep out of business as much as possible.
  The Budget, combined with the Government's views on the minimum wage and the social chapter, marks a watershed. I pray that it will not bring to an end all the improvements that we have achieved in the past 20 years.
  8.19 pm
  Mr. Barry Jones: I congratulate the hon. Member for North Norfolk (Mr. Prior) on his maiden speech, which was made in the relaxed, generous and genial style of his father, Lord Prior, whom

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  I remember as a notable Minister of Agriculture, Fisheries and Food and Secretary of State for Northern Ireland. Lord Prior was a much liked House of Commons man, so if the hon. Gentleman does half as well as his father he will do very well indeed.
  I also congratulate my hon. Friend the Member for Brentford and Isleworth (Mrs. Keen) on her maiden speech, which went very well. She was once my constituent and her mother still is. Her late father, who was my friend, would have been proud of her. She will be a fine Member of Parliament for her constituency.
  With the Budget in mind, I should point out that between 1979 and 1981 about 2.5 million manufacturing jobs disappeared from the British economy. During that time we had a terrible trio of principals: Mrs. Thatcher was the Prime Minister, Geoffrey Howe was the Chancellor and the Secretary of State for Trade and Industry was Sir Keith Joseph. In so short a time, that trio destroyed more jobs than Adolf Hitler could have dreamt of destroying, and it led to huge and enduring unemployment queues. Thereafter, we became a divided society.
  In less than one hour, the new Labour Chancellor delivered an historic reforming Budget. He was convinced of the need to relate his statistical detail to the flesh and blood of ordinary and underprivileged people. I thought that it was an innovative and compassionate Budget. The Chancellor has kept our party's promises, honoured our manifesto and not abused the mandate that the Labour party received from the electorate at the general election on 1 May. I also noted the cool authority with which he delivered that reformist Budget.
  The Chancellor wants to equip the nation for the future and to rebuild the welfare state. It is the first Budget in 18 long years that seeks both economic efficiency and social justice. It will end abuses and loopholes. It is good that the Chancellor is taking a strategic view of our manufacturing capacity. He proposes to end the spending of huge sums of money on the few, and offers skill-less and workless under 24-year-olds a new deal. He has a highly planned scheme to tackle long-term unemployment, and lone parents and the disabled are not forgotten. My constituents will benefit from those measures.
  From what I have seen and heard today, I can sum the Budget up as moral, practical and honourable. I judge that it will improve the fabric of our communities. I hope that it begins soon to help to heal the divisions and wounds that are so self-evident in British society. The Chancellor is to be commended on a Budget that will prepare our nation for tough, international competition in the next century.
  There are more than 1 million fewer jobs in Britain than there were in 1990, one in five families have no one working, and 1 million single mothers are trapped on benefits. The gap between rich and poor is wider now than it has been for generations. Those facts—those human details that to me are grim realities—set this remarkable Budget in a serious context.
  The Budget seeks social justice and maps out a strategic high road for our national recovery. I judge it to be a Budget which takes a sophisticated look at the means of achieving the much needed recovery of our former national industrial greatness. That is what I hope will be the consequence of today's Budget.
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  I am glad that the Government will get a quarter of a million under 25-year-olds off benefit and into work by using money from a windfall levy on the privatised utilities. It is clear to me that this Chancellor and this Government are determined not to continue down the road of a permanent have-not class of unemployed and disaffected people. My constituency can only benefit from the proposals that have been outlined today.
  I admire the Chancellor's long-term objective of high and stable levels of employment: it has shades of Mr. Attlee's programme in 1945–50. The best way to tackle poverty is to help people into jobs. Unemployed citizens have a responsibility to take up training places or work, but they must be real job opportunities. In past years, we have had some disgraceful schemes that have led to cynicism among the young and their parents.
  The Chancellor's welfare-to-work programme will attack unemployment and break the spiral of escalating spending on social security. The scheme cannot work without partnership between government and business. Partnership will best tackle the shame of long-term unemployment.
  I like the positive approach to proper qualifications by 2000 for every 17 and 18-year-old. Many people in that age group have missed out. It is a forgotten army, a mighty army, a youthful army, and an army without any purpose as of now. Perhaps our colleges of further education could be centres for the operation of this programme: they could share in the challenge. Deeside college of further education is a good college and it seeks to play a role in making welfare to work a success.
  I shall briefly describe the problem that we are tackling. My constituency contains large social housing estates which are the seat of intractable problems of unemployment and decay. I do not believe that my constituency is unique, because every city has a near permanent have-not class of unemployed. It cannot be right for young people under 24 years of age to remain unemployed. At last, the Government are initiating measures to tackle the problem.
  If we hate and fear the growth of violence and other criminal activity in our constituencies, we should welcome the welfare-to-work Budget. Given the drug abuse, graffiti, constant harassment of families, vandalism, car crime, squalor, ugliness, disrepair and dereliction, the welfare-to-work Budget is a big step in the right direction. It just has to be. So far, nothing has been done and if we leave the problems alone, British society will face even graver problems in the near future. In the same way, the plan to release in Wales the sales receipts of municipal housing has to be good in so far as it will improve housing and generate wealth.
  If a British Government do not tackle the problems, if we fail, if the have-nots remain rooted in their evident despair and continued separateness, the future for British society will be bleak. A divided, ill-educated Britain will not be able to renew her industries and cope with the growing cut-throat international competition. Without social justice and a successful welfare-to-work programme, without a clear national strategic industrial policy, our society will be ripped apart by division, resentment and envy. That might be our fate.
  The windfall tax has been criticised today by the Leader of the Opposition. My right hon. Friend the Chancellor's plans for the windfall tax have been criticised for their

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  ruthlessness. I welcome the tax and its ruthlessness because it will give hope and dignity to tens of thousands of alienated young people in Britain today.
  8.31 pm
  Mr. Geoffrey Clifton-Brown: It is a great privilege to have been here this evening to hear five such excellent maiden speeches. It was a particular privilege to hear the speech made by my neighbour, my hon. Friend the Member for Witney (Mr. Woodward), from whom I am sure we shall hear many excellent speeches in the future. I was also particularly pleased to be here for the maiden speech of my hon. Friend the Member for North Norfolk (Mr. Prior). He represents a constituency I know well, having been constituency chairman of his excellent association for five years. I completely agree with his comments on his forebear, Ralph Howell, who I am sure would have been pleased to hear my hon. Friend's maiden speech this evening.
  This is a Budget like the house of mirrors—what we see on first impression is the obverse of the reality. It is also premature and unnecessary. I was surprised not to hear anything today about the biggest technical revolution in the way we present public finances, which is about to occur in the next two years: the change from cash accounting to an accruals basis of accounting. That will be an extremely important change and it will, among other things, involve individual Departments' producing their individual accounts, including valuations of their assets, so we will begin to see the total assets that are used by the Government and whether they are used effectively.
  The Chancellor was able to present such a glowing picture this afternoon because of the superb economic situation that he inherited. The combined picture of growth, inflation and interest rates and unemployment is probably the most favourable that Britain has seen since the second world war. It is a tribute to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) that he has presided over such a successful economic phase in this country. His particular success has been his judgment in setting the base rate. He has been able consistently to set a rate which keeps inflation at the target level. For that, a great tribute must be paid to him.
  If we have a Chancellor who can exercise that judgment, it is much better left in the hands of the Chancellor and the Treasury than in the hands of an independent panel comprising the Governor of the Bank of England and other experts. On the other hand, if we have a Chancellor who is not sure of his judgment, the decision will be handed over to the Bank and an independent panel of experts.
  Another reason for today's glowing economic situation is the fact that the incoming Government have been able to rely on probably one of the tightest two-yearly rounds of public expenditure since the second world war. Tribute must be paid to the previous Member for Bristol, West, Mr. Waldegrave, and his intellectual rigour in controlling each Department's expenditure. This is a fiscal tightening Budget, which is probably correct in the current situation. It overcomes the problems that have begun to emerge of broad money expanding too fast, interest rates having to be put up, too strong a pound and the danger to our balance of payments thereby. This is probably the right sort of level of fiscal tightening and it will be marginally reduced next year.
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  However, I am much less happy with the reduction in reserves of some £2.2 billion. Whereas the previous Conservative Government managed to put an extra £1.6 billion into the schools budget without raiding reserves, the present Chancellor has been able to put in only £1.3 billion while running down the reserves, which is not particularly satisfactory.
  The Chancellor referred to reducing the trend rate of growth to nearer 2.4 per cent. because, as I say, the economy shows some signs of overheating. The critical factor in that reduction will be the rate of inflation. It was a retrograde step to allow the Bank of England to set the rate of inflation to plus or minus 1 per cent. above or below the Government target rate of 2.5 per cent., which shows that the Chancellor is prepared to see the inflation rate slip up to 3.5 per cent.
  The Red Book predicts growth of 3.25 per cent. in 1997 and 2.5 per cent. in 1998, with inflation at 2.5 per cent. and 2.75 per cent. in those two years. That is an excellent picture because on only two occasions since the war has growth outstripped inflation, one of which was last year. If the Chancellor manages to achieve that target this year, that will be very satisfactory. That tends to be the trend in the major industrialised nations, as shown in table 3A.1 in the Red Book.
  I was also particularly pleased to see in the Red Book that the rate of debt is coming down. It is predicted to come down as a percentage of gross domestic product from 53.75 to 53 per cent. next year and 51.5 per cent. the year after. That is particularly welcome because, as the hon. Member for East Londonderry (Mr. Ross) said, we pay £25 billion a year to service that debt. That is a huge on-cost which we would do well to try to reduce in the longer term.
  I am not particularly in favour of the windfall tax because it is a one-off tax and once the utilities have been taxed they cannot be taxed again. On the other hand, I am pleased with the welfare-to-work programme that the Chancellor endorsed today. As my hon. Friend the Member for North Norfolk said, it is, in essence, a form of workfare, which I have long championed. If the public purse is paying people, particularly youngsters, a benefit because they are unable to work, society should be able to request them to participate in some social scheme, education or community work. It is high time that we came round to that way of thinking.
  The real betrayal of all betrayals in the Red Book is in table 4.9, which shows us that the Chancellor predicts that, over the lifetime of this Parliament, unemployment will remain at 2 million. That is a shocking admission, because throughout the five years of the previous Parliament we were constantly criticised by the Labour party for tolerating that level of unemployment. The prediction is a disgrace and if the Labour party cannot get unemployment down, they ought to resign and let us have another general election.
  The trend rate of growth depends critically on three factors—on trends in the labour force and on levels of unemployment and productivity. I have already referred to the rate of unemployment and I am pleased to see that productivity and investment are likely to grow. In that respect, I pay tribute to the Chancellor for having reduced the rates of corporation tax for both larger and smaller firms.

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  That was a great surprise to me, because it was one of the great successes of the previous Administration that we managed to reduce the rate of corporation tax so much. That is especially important in today's fast-changing world. Large multinational corporations can shift great chunks of capital and even their corporate headquarters or their research and development around the world at short notice.
  By keeping corporation tax at what is—as the Chancellor said—the lowest level in the G7, we shall retain such world-beating companies as Glaxo, which has both its research and development and its corporate headquarters in this country. The substantial amount of corporation tax that that company pays will therefore keep coming into the United Kingdom Treasury, and I pay tribute to the Chancellor for that shrewd move.
  I also welcome the measures affecting capital allowances for small businesses. It is helpful to have a short-term boost for capital allowances and that will help to increase our investment.
  However, I criticise the Chancellor for his failure to contemplate any changes in the uniform business rate. Many small businesses, especially in rural areas such as my constituency, are suffering because the rate is too high.
  I visited many post offices, village shops and other, similar, small businesses during the election campaign. Their proprietors were pleased to see our proposals for reducing the uniform business rate valuation by £1,000. I urge the Labour Government to consider that idea for a future Budget. It would be most welcome and it would not be hugely expensive.
  I welcome the environmental measures in the Budget, although I do not think that they are imaginative enough or go anything like far enough. One subject on which the Chancellor has listened to the environmentalists is improving the insulation of houses for the lower paid through the home energy efficiency scheme. I know that the previous Government were constantly asked to do that and I am glad that it has now happened.
  I must tell the Labour party, however, that if we are to meet our international environmental targets, especially the reductions in CO2 levels, we shall have to go much further with the type of environmental and fiscal measures that have been so successful in the past. One example is the conversion to unleaded petrol. Ten years ago, unleaded petrol accounted for about 10 per cent. of the market; now, it represents about 90 per cent. Through fiscal incentives, we can do a huge amount of good for the environment.
  None the less, I echo the comments made by various hon. Members to the effect that we cannot go on taxing the car out of existence, especially for poorer people in rural areas, for whom the car is a lifeline. They often live in isolated areas, or in villages without a shop or a reasonably regular bus service. If they are to have any standard of living at all, they must rely on the motor car.
  I caution the Government about going too far towards taxing the car out of existence, but of course we shall have to find ways to reduce the rate of growth in the number of cars in the nation.
  I was unhappy to realise that there was little really new thinking in the Budget. Given that a new Government have won an election with a big mandate, I thought that we might see some really imaginative thinking, such as the reform of capital gains tax.
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  Speaking on the previous Conservative Budget, I advocated different rates for short and long-term capital gains. It seems to me that if people hold a gain on an asset for more than five years, they should pay a rate of capital gains tax lower than their marginal tax rate. That is only reasonable. As things are, many people are locked in to long-term gains, which does not benefit their business or their savings. Some good research has been carried out in America on this subject, showing that the business increase by a fiscal reform of this kind over five years is almost neutral. I urge the Government seriously to consider that.
  I add a note of caution to the middle classes who, by and large, have not been hit today. I do not think that they have seen anything yet. They will find in future Budgets that there will be increases in national insurance and in the marginal rates of income tax and that there will be reform of inheritance tax to make it more like the old capital transfer tax by abolishing the seven-year rules—the so-called potentially exempt transfers. It did not happen today, but the Government will introduce these measures next year or the year after.
  This Budget was unnecessary and it will not help jobs, growth or savings. It points the way to increases in interest rates—which will have a disastrous effect on an already too high pound and our balance of payments—and to higher inflation and personal taxes. Economic growth will decline over the next five years and the Budget will reverse all the economic gains that we have made so painstakingly in the past five. Each time after a socialist Government have been in office, a Conservative Government have come in and taken over an economic mess. I hope that we will not be doing the same thing in five years' time.
  8.45 pm
  Mr. Ken Livingstone: I hope that the five hon. Members who made their maiden speeches will not be offended if I do not spend time praising them, but know that other hon. Members wish to make maiden speeches this evening. I hope also that my right hon. Friend the Chancellor will not be too offended if I do not lavish much praise on him. He has had far too much praise from my hon. Friends today than is good for any human being to take in one day. Clearly, after 18 years of horrendous Budgets, it would have been a relief even if he had come here and said nothing. Many of the measures are particularly welcome, and the relief for education and the NHS will be welcomed throughout the country.
  I want to focus on two or three points that cause me concern. First, I would have been happier if the relief were coming more rapidly. The crisis in the NHS this autumn and the fact that many schools need more money mean that the relief should have been provided immediately. I was particularly disappointed by the small amount of money available for council housing and modernisation. Even if we build very cheap houses, the entire sum of £900,000 means that we will be hard put to build 15,000 new homes. I know of a dozen London boroughs with waiting lists longer than that, and this matter must be looked at again. We must bear in mind the fact that even in the worst days of the last Labour Government—when the IMF was at our necks—we were building more than 100,000 council houses a year.
  I am worried about my right hon. Friend the Chancellor's underlying assumptions about the global economy. In every one of the assumptions on which my

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  right hon. Friend has based his Budget, he has taken the most optimistic projection. That is unwise—certainly for someone who has gone out of his way to create such a dour iron Chancellor image. Life just does not work out that way—all assumptions do not come up on the sunny side. In particular, the assumptions about the global economy are optimistic. We are told in the Red Book that we expect the American economy to slow down but still grow, and that growth will pick up in Japan and in Europe.
  The American economy is coming close to the end of seven years of growth—a long business cycle. The issue is how rapidly the American economy turns down and how severe that will be. It could turn out that very little good news comes out of the American economy. As long as the European Governments continue to force their economies into the Maastricht corset, I see little prospect of sustained growth in Europe to assist us. The underlying assumptions about the global economy must mean that some problems will emerge for the Chancellor as the projections become reality in the next year or two.
  We are having a consumer boom in this country. It may not be on the scale of Nigel Lawson's boom in the 1980s, but it is beginning to look horrendously like it—particularly its concentration in the south-east and on those who have so much already.
  The £35 billion of windfalls that will drop into people's pockets following the ending of building societies' mutual status and the insurance companies' sailing off into the new bright wonders of the entrepreneurial market—the Chancellor mentioned that—will have a horrifying impact. Again, that £35 billion will be largely concentrated on fairly well-off people in the southern half of Britain. If such people are able to shift money from one building society account to another, they are unlikely to have large debts to pay off. That money could fuel a massive consumer boom, sucking in imports, overheating the economy and causing inflation to rise. I deeply regret the Chancellor's failure to take firm measures to claw a substantial proportion into the state.
  There is no justification for anyone today to receive the money. It is wealth that has been built up over generations, which people are cashing in because of the climate of greed that has become the norm. The Chancellor has missed a great opportunity to pull some of it into the Government's finances in order to reduce the scale of Government borrowing.
  There is a real risk of a consumer boom that will cause severe damage, and we know exactly what will happen in such circumstances. If the economy has to overheat, one of two things will happen. Eddie George will bang up interest rates, which will massively depress the real economy and industry, and cause those who have not benefited from the boom either to lose their jobs or to suffer a decline in living standards; or the Chancellor himself will have to introduce, in a year or 18 months, measures to take the heat out of the economy—thus running the risk of precipitating a severe turndown in the economy that could lead to recession. We saw that happen in 1990. I believe that the lack of action to deal with overheating of consumer demand will return to haunt us, especially as it is so strongly led by the housing market.
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  Someone with half a million pounds to spend on a house will not worry about spending 1 per cent. more on stamp duty, and someone with a quarter of a million pounds to spend will not worry about another half a per cent. The measures taken by the Chancellor to take the heat out of the housing boom are entirely inadequate. I hope that those who collect their windfalls will save and invest them—that would be wonderful—but, if they cash them in and spend, we risk facing the problem experienced by the British economy at the end of the 1980s. After a recession such as that, more industries have gone, more of the real economy has been destroyed, and many people's lives are ruined.
  Then there is the question of debt. For all the talk of the iron Chancellor, he strikes me as a great big cuddly toy. There is nothing threatening about what he is doing about debt. Here we are, borrowing after five years of growth. We are in the sixth year of growth, and the Government are continuing to borrow. I agree with the Chancellor about the golden rule; I just wish that he would implement it now, from day one. It is barmy to say that we will carry on borrowing for two more years, ratcheting up more debt, undermining the competitiveness of the economy and causing those who are thinking of investing in gilts to demand a higher rate of return. I am glad that the rate of return that is being demanded on long-term investment in the British economy has dropped by a few fractions of a per cent., but our level of borrowing is likely to continue to be consistently worse than the equivalent long-term borrowing rates in Germany and our other major competitors. I want much firmer action to be taken on debt.
  The Opposition are making a big row about the windfall tax, but every City analyst who studied it said that the utilities could stand a tax of £10 billion without any problems, and we are taking only half that. The Tories should all be celebrating the fact that we have been so lenient. We could have taken the other £5 billion and used it to stop Government borrowing. We could have returned to the golden rule, and stopped all borrowing to cover revenue expenditure. That would have enabled us to build up the long-term strength of the British economy and to lower long-term interest rates, thus creating a better climate for investment.
  I cannot believe that we are reducing corporation tax; it is almost as though the Chancellor has lived on another planet these past 18 years. Tory Governments have consistently cut the tax that the corporate sector has to pay, always saying that they were creating a climate in which people would be encouraged to invest, and it has always failed to happen. There is clearly not the slightest evidence on the basis of the past 18 years' experience to suggest that it would happen.
  Mrs. Thatcher genuinely believed that, when she came to power in 1979, by slashing corporate tax, undermining trade union bargaining power, holding down wages and creating the highest profits in real terms that the corporate sector had ever had, she would unleash an entrepreneurial spirit, and British capitalists would rush out and turn us into a miniature version of America, expanding and investing; but it did not happen.
  What did people do? They took the money. They paid it out in dividends, largely because our company laws leave everybody running a company in fear that Lord Hanson will come along if they do not constantly jack up dividend

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  payments, irrespective of the state of the company. There is no evidence to suggest that cutting corporate tax will encourage investment.
  It would be much better to increase corporation tax and say to every company that we will give them 100 per cent. tax rebate on real investment. I am delighted that we are increasing tax relief for small and medium firms from 25 to 50 per cent. We should give 100 per cent. for every company in Britain, to increase our productive capacity and create real jobs to put people back to work. That cannot be done simply by dangling the carrot of further tax cuts; we need a bit of stick to wield over the City and Britain's corporate sector, to encourage them to invest.
  I know exactly when things went wrong in investment. In 1955, investment was 15 per cent. of gross domestic product. It built up to 22 per cent. under the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), until his Government shifted our tax law: until 1973, there was a presumption in favour of investment, our tax laws were geared to that, and investment picked up virtually year by year; his Government removed the presumption and left the tax system wholly neutral, and we have declined back to 15 per cent.
  The Chancellor's Budget is wanting in those areas. My worry is that if all those factors come together, if the world economy does not surge forward, if the consumer boom becomes unsustainable, if Government debt does not come down as rapidly as we would like, and if the corporate sector does not invest, we may have to make difficult and painful choices a year or 18 months ahead, and, once again, a Labour Government in mid term may struggle and become unpopular.
  I remember what Iain Macleod once said about the Budget that is cheered on the day being the Budget that is cursed six months later. I sat among my colleagues and heard them cheering, and the nasty thought occurred to me: has this Budget done more to encourage the prospect of Labour's second term, which we so desperately need? If anything, I think that it has created an element of risk that has endangered that prospect. Many of my colleagues who cheered today may live to regret the fact that the Budget was not bolder and firmer in tackling our institutional problems.
  8.58 pm
  Mr. John Wilkinson: We have had the privilege of hearing six maiden speeches today; not, I hasten to add, from the hon. Member for Brent, East (Mr. Livingstone). He is the opposite of a political innocent, but he brought to the debate the authenticity of his real-life political experiences.
  When I said that we had heard six maiden speeches, I included that of my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), who today made his maiden speech in debate as leader of our party. To reply to the Budget statement is one of the most demanding tasks to face any Member and I hope that my right hon. Friend will not think me condescending when I say, as a former Yorkshire Member, that, in such extraordinarily difficult circumstances, he produced a speech of great succinctness and clarity. He gave heart to many Conservatives who have looked for leadership and direction for far too long.
  If one is blessed with a name that begins with the letter W, as I am, from time to time we tend to find ourselves called to speak towards the end of debates. Today is no
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  exception and perhaps it gives me the opportunity to make a winding-up speech from the Back Benches, since there will be none from the Front Benches today, and to say some nice things for the record about some particularly good maiden speeches. I include in that those made by Labour Members.
  The hon. Member for Eastwood (Mr. Murphy), who is less craggy and cleaner shaven than his respected predecessor, Allan Stewart, brought a similar sense of commitment to his constituents. He will obviously make a serious contribution to our proceedings. My hon. Friend the Member for Witney (Mr. Woodward) made a fluent speech which was notable for his confident delivery. We shall certainly hear much more from him as his natural enthusiasm will be energetically deployed in criticising much that will prove worthy of criticism in Labour's programme, and possibly more.
  We then heard a speech from the hon. Member for Weston-super-Mare (Mr. Cotter), who spoke with knowledge and experience of small business. He was followed by the hon. Member for Brentwood and Isleworth (Mrs. Keen), who told us that she had fought the seat three times. In her case, it was not just an example of third time lucky because she will be able to teach us all how to nurse a constituency. She brought to the debate a warm heart and professional experience in medicine which will be most appreciated in our debates on the health service.
  My hon. Friend the Member for North Norfolk (Mr. Prior), who is in his place, likewise made a big-hearted contribution. How nice it was to hear him speak so well of Sir Ralph Howell. How good it is that my hon. Friend brings to the House experience of manufacturing industry. He clearly has a deep love of his constituency and the countryside. He will prove a very worthy successor to his constituency and his paternal predecessors.
  At the beginning of my remarks about the Budget, I should declare an interest as the director of a small company. The Chancellor made a grandiose start when he spoke about the United Kingdom rising to the challenge of the global economy. Having heard his speech, however, I understand that he has firmly set his sights on placing the British economy within the overall European one. It is not the kind of dynamic model which we should follow.
  When the right hon. Gentleman announced his much-vaunted reduction in VAT on domestic fuel—how right it is that he did achieve at least a 3 per cent. reduction in it—he also vouchsafed the admission that were it not for the European Union he would have abolished VAT on domestic fuel. This is evidence of how our sovereignty is slipping away to the European Union and how the living standards of our people are suffering. The Chancellor made no mention of the opportunity cost to the British economy that is related to our contributions to the European Union. Nor did he go in depth into the implications for the sovereign running of our economy of handing monetary policy over to the Bank of England as a precursor, potentially, to handing it over to an independent European central bank.
  There were some positive measures in the Budget statement. First, there was the determination to reduce public borrowing. However, as the hon. Member for Brent, East observed, would it not have been much better to set a clear target for the elimination of public borrowing

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  and the creation of a public sector debt repayment? This could reasonably have been achieved, and is a hallmark of the tiger economies in the global economy, to which the Chancellor referred, which we badly need to emulate.
  Secondly, I welcome the reduction of corporation tax by 2 per cent. for both large and small companies. I regret that no threshold was instituted for the payment of corporation tax by the smallest companies, because they grow so much from retained profits. Thirdly, there was the doubling of tax relief for a year on capital investment in plant and machinery for small and medium-sized companies.
  A fundamental deficiency in the Budget statement is that the Chancellor does not recognise the important role of private savings and private investment in the generation of growth in the tiger economies. We need greatly to increase the private savings ratio. To that end, I hoped that instead of announcing a review of the operation of capital gains tax, the Chancellor would have been bold—through we could not expect this from a socialist Chancellor—and announced abolition of capital gains tax and inheritance tax.
  On the global economy, none of the tiger economies would do anything so rash as to institute a windfall tax on profitable enterprises that have been recently privatised. Those enterprises are not utilities; many are already global companies competing in the global marketplace. I take an example of particular relevance to my constituency. Many of my constituents work at Heathrow airport for companies such as the British Airports Authority. BAA is par excellence an international company in that it provides services not only for British Airways and British carriers but for international airlines that wish to use British airports such as Heathrow, Stansted and Gatwick. The imposition of a windfall tax may cost jobs. It will certainly diminish BAA's profitability and its ability to invest in schemes such as the fifth terminal, which is crucial to Heathrow's long-term competitiveness against other European gateways such Frankfurt, Amsterdam and Paris. Higher landing charges may ensue. All those potential consequences are wholly negative.
  The tiger economies do not have the arcane and highly complex tax system of the United Kingdom. I was deeply disappointed that the Chancellor introduced no measures to simplify our tax system, which is replete with reliefs and allowances. Even the workfare scheme and the welfare-to-work provisions are not in the spirit or the practice of the tiger economies. Those economies do not achieve their very low rates of unemployment through subsidies, but by generating enterprise across the board.
  I do not wish to be parochial, but the Budget will hit my constituents particularly hard. I mentioned the British Airports Authority and the consequences of the proposed windfall tax on the privatised utilities. The reduction of mortgage interest tax relief to 10 per cent. may seem minor, but for many of my constituents in outer London, whose family budgets are stretched to the limit, it is a matter of considerable consequence.
  My constituents will also be affected by the increase in duty on motor fuel. They do not all travel by public transport; many have to rely on using their cars on greatly over-congested roads and the provision will create an
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  additional burden. It is not even as if the Budget contained a commitment to higher investment in London Underground or the railway network. On the contrary, Railtrack will suffer under the windfall tax.
  I heard what the hon. Member for Brent, East said about stamp duty, but there are a great many properties in my constituency worth more than £250,000. The families who are moving into them are often fully stretched. The Budget will bring higher duties on motor fuel, tobacco and alcohol; there will inevitably be higher council taxes. The Budget contained no indexation of personal allowances and no upward indexation of tax bands to take account of inflation.
  The tiger economies are noteworthy in their encouragement of private provision, but this Budget penalises the most vulnerable section of the community—those who are over 60—for their thrift and for providing for their health care through private medical insurance. The impost is particularly vindictive, and one which I would not have expected from a son of the manse.
  The Chancellor intends to impose environmental taxes on British industry. I am all in favour of those taxes as long as they are multilaterally applied. British industry should not be singled out. Through vigorous international action, we must ensure that taxes are imposed as uniformly as possible among our competitor nations to ensure that industrial polluters and despoilers of the environment are taxed appropriately.
  To conclude, the Budget is deeply depressing. I was especially depressed by the early raid on the contingency reserve. If the Chancellor wanted to establish a reputation for fiscal rectitude, it would have been so much better had he not made that raid. It was especially depressing that public spending will not be reduced sufficiently to eliminate the budget deficit. The Budget will be particularly depressing for my constituents and for the many others whose living standards will suffer.
  9.13 pm
  Jacqui Smith: Thank you, Mr. Deputy Speaker, for giving me the opportunity to make my maiden speech in this important debate on the first Budget of a new Labour Government.
  It is an additional honour when one can claim to be the first Member of Parliament for a new constituency, but I shall pay tribute to the hon. Members who previously represented my constituents. The town of Redditch was previously part of the Mid-Worcestershire constituency and was therefore represented by the current right hon. Member for Bromley and Chislehurst (Mr. Forth). It has been said that, with 101 women Members on Government Benches, they will become far more colourful; however all hon. Members would agree that the former right hon. Member for Mid-Worcestershire played a significant part in bringing colour to these Benches as a Minister in the Conservative Government, with both his speeches and his ties. I am sure that he will continue to express his forthright views from the Opposition Benches.
  The villages of Inkberrow and Cookhill were previously part of the constituency of Worcester and were represented by the current hon. Member for Mid-Worcestershire (Mr. Luff). He is an enthusiastic and lively Member and I know that people in Inkberrow and Cookhill appreciated his interest in their communities and related issues. I am sure that he will continue to speak up for Worcestershire.

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  I pay a special tribute to my most recent Labour predecessor in Redditch, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis). He won an historic by-election in the seat of Redditch and Bromsgrove in 1971. During our campaign, we were fortunate to have my hon. Friend coming to help us on several occasions. He is still widely recognised in the town and it was a particular honour for me when a gentleman we met described me as "the new Terry Davis". My aim as the new Member of Parliament for Redditch is to serve local people as diligently and effectively as my hon. Friend did—a tall order for any Member, new or old.
  It will also be my duty and pleasure to put Redditch and the surrounding villages of Inkberrow, Cookhill and Feckenham firmly on the map. Although Redditch was designated as a new town in 1964, it already had a population of 29,000. That figure has more than doubled since that time to the present day, but people and buildings from the old Redditch remain. The mix of old and new gives a sense of history, linked to a vibrant and forward-looking town. Having welcomed so many newcomers, the people of Redditch are friendly and tolerant. We shall stand up for our town and its interests, but we shall embrace the opportunities offered by the new Government with enthusiasm.
  I hope that hon. Members will visit Redditch, especially the site of Bordesley abbey where, in the 12th century, Cistercian monks set up home. Nearby, the Arrow brook flows through a layer of red clay, thereby giving the early derivation of the name—red ditch. Hon. Members could also visit the Forge Mill national needle museum, which tracks the development of industry in Redditch through needle-making and the production of fish hooks to spring manufacture. That is still an important industry in the town today.
  The town's industry has not depended on past successes. Through the hard work and skills of local people, the innovative work of Redditch borough council in economic development and the continuing support of Redditch and Bromsgrove business link, local industry has diversified. The Chancellor's announcements on corporation tax and capital allowances will reassure the Redditch business community that the new Government will support and encourage its efforts.
  In Redditch, we combine an entrepreneurial spirit with a social conscience. The town boasts two credit unions, supported by the borough council and run by volunteers. The town is also launching an innovative mutual guarantee scheme for small and medium-sized businesses, which will provide guarantees for business loans on a co-operative basis. I am sure that such initiatives will be supported by the new Government, who believe that social justice and economic prosperity are integrally linked, as we have clearly seen in the Chancellor's statement today.
  As a new town, Redditch has a young population—more than one in three people are under 25. Those young people are the future of our town and our local economy. But 561 of them are without a job or training. That is a waste of lives and talents. They will form a wasted generation unless they can work and train. Those young people will welcome the announcement in the Chancellor's Budget statement that the windfall levy will be used to provide real opportunities to work and train. Young people to whom I speak in Redditch want the
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  chance to make something of their lives. Today, they have been offered that chance. The Chancellor has announced four high-quality options for work and training.
  That is not just another scheme or an attempt to massage the unemployment figures. Those opportunities, and the personal support and guidance that will accompany them, will offer young people a real choice. Young people voted Labour in large numbers on 1 May in Redditch and throughout the country, and today the Chancellor is repaying their trust.
  I am also honoured to represent the villages of Inkberrow, Feckenham and Cookhill. Those are excellent communities where local people often work hard to support their villages. Those areas are not always, however, a rural paradise for the people who live in them. There are important issues, to do with housing, transport, jobs and business, and the fear of crime, which I will make it my job to raise in the House. I was particularly pleased to learn that Wychavon district council, which covers the rural part of my constituency and is under new political control, is implementing an anti-poverty strategy. There is real poverty in rural areas and we must not allow it to continue to be hidden.
  Hon. Members may also he interested to learn that some people believe that Inkberrow village is the model for Ambridge in "The Archers". I was intrigued to read a letter in the Radio Times the other week, complaining that Pat Archer had greeted the election of a new Labour Government with such delight. While I cannot vouch for the support for new Labour of Jack Woolley or Brian Aldridge, and I am sure that we would positively discourage any support from Simon Pemberton, I can assure hon. Members that there are many people in rural areas who welcome the election of a new, truly one-nation Government, urban and rural. It will be my pleasure to represent the common interests of all my constituents, while also recognising their distinct communities and needs.
  The Chancellor has spelt out clearly the new Government's taxation principles. A tax system should encourage work and long-term investment, and should be fair and based on ability to pay. The most unfair tax imposed by the previous Government was VAT on fuel. That tax fell on 2.5 per cent. of the disposable income of the most well-off families, but it fell on 12 per cent. of the disposable income of the poorest families—a clearly regressive tax which caused distress and fear among poorer families. It would now be imposed at 17.5 per cent. were it not for the work of my hon. Friends in the previous Parliament, and the good sense of the electors of Redditch. The Chancellor's announcement today on that tax is another clear sign that the new Government will promote fair taxes.
  Some people try to justify the tax on environmental grounds, but for an elderly person or a family with young children, heating the home is not a luxury which they can or should cut down on to save money. One reason why we spend so much on heating our homes is the poor state of much of our housing and insulation. How much better it is to give young people opportunities to work in the environmental task force, and local councils the opportunity to repair and insulate homes through the use of capital receipts. That is the proper way to ensure fuel efficiency—not freezing our elderly and our young families with regressive taxation measures.

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  I welcome the Chancellor's statement today. It makes a vital start on delivering the promises that I made to the people of Redditch in the election campaign: action on jobs and opportunities for young people; tough rules on Government borrowing to maintain stability in the economy; a taxation system based on fairness; and support for our schools and hospitals. Not only did our new Chancellor hit the ground running, but today he has clearly shown that he is prepared for a record-breaking marathon.
  9.24 pm
  Mr. David Amess: It is an honour to follow any maiden speech, but it was a special honour to follow the excellent maiden speech of the hon. Member for Redditch (Jacqui Smith). She spoke with great fluency and warmth about her constituents and showed good humour. I am sure that I speak for hon. Members on both sides of the House when I say that we wish her well in the years—at least until the next general election—during which she will serve Redditch.
  It would be remiss of me not to mention the other five maiden speeches. I believe that I have heard most of them from near and afar. They were made from all parts of the House, and all those Members should be congratulated on their speeches. The father of my hon. Friend the Member for North Norfolk (Mr. Prior) would be rightly proud of the way in which his son delivered his maiden speech today. I owe my hon. Friend's father a great debt of gratitude, because GEC Avionics is in my former constituency, and he did a magnificent job in attracting new jobs and investment to that firm.
  There endeth the pleasantries, because I should now like to discuss the Budget. Tomorrow morning, in my constituency of Southend, West, I shall attend a Budget breakfast meeting, organised by the excellent chamber of commerce and a firm of accountants. In my Budget breakfast speech, I shall say that I believe that this will prove to be a rotten Budget, delivered by what I am sure by the end of this Parliament will prove to be a rotten Government.
  Mr. Paul Tyler: It takes one to know one.
  Mr. Amess: The hon. Member for North Cornwall (Mr. Tyler) says, "It takes one to know one." Perhaps I may deal with a point of order at this moment. There seems to be some row about the seating arrangements in the Chamber, and just—
  Mr. Deputy Speaker: Order. Any points of order are for the Chair. That matter has been dealt with. I suggest that the hon. Gentleman gets on with his speech about the Budget.
  Mr. Amess: With regard to the Budget, Mr. Deputy Speaker, I am very pleased to be surrounded by Conservative colleagues. I am not so pleased to be surrounded by Liberal Democrat Members. They power-share on Essex county council and on Southend-on-Sea borough council, so I have not the faintest idea why they are sitting on the Conservative side of the House. They would
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  be better placed to sit with Labour Members—they have much more in common with them than with Conservative Members.
  There was an air of triumphalism among new Labour Members as the Chancellor delivered his Budget statement. Their faces lit up at each new announcement. They were watching our faces and thinking that we were being caught out in a range of measures, but it was laughable to describe today's self-indulgent, patronising Budget as the people's Budget. The Labour party manifesto said:
  "New Labour is not about high taxes on ordinary families".
  As I look at the Labour Benches, I am not sure what Labour Members now know about ordinary families because, far from representing the working classes, it appears to me that they have much more common with the middle and upper classes. They have nothing in common with the working-class people whom they represent.
  The Budget offers working people nothing. The posters that were deployed in the four-week general election campaign told us that there would be no tax rises, but, however they are dressed up, today we had 17 tax rises. Those 17 tax rises are equivalent to a 3p increase in the standard rate of taxation, so immediately new Labour Members have let their constituents down. They have broken their promises.
  Of the 659 constituencies, Southend, West is 31st in terms of senior citizens. Pensioners in Southend, West have been badly let down by today's Budget. We are all on life's journey; no matter where we are on it, everyone's life is important. The fact that senior citizens are somewhat more advanced on that journey means that they deserve the same treatment as anyone else. All hon. Members will have received a brief from Help the Aged on pensions and income, health care and social care, housing standards, mobility and independence. Many new Members turned up at the tea party that Help the Aged gave us. Nothing in the Budget meets any of the points that that charity put to us just last week.
  I note that the Economic Secretary is in her place. I understand that she worked for Mr. Robert Maxwell, so I am surprised at the direct attack that has been made on pension funds and pensioners today. It is bad news for my constituents in Southend, West.
  We then heard about the employment programme. I accept that it will create some jobs temporarily, but the minimum wage and the social chapter will destroy jobs permanently. I dare say that we shall hear more on that issue tomorrow. The programme will result in work to welfare, not welfare to work.
  In September, the leader of the Labour party said:
  "We have no plans to increase tax at all."
  The present Chancellor said:
  "There is no black hole for the Labour party because we have no public spending commitments that require extra taxes."
  There seemed to be no harmony on the Labour Benches today. The hon. Member for Brent, East (Mr. Livingstone), who has left his place, mentioned horrendous Budgets. Through his stewardship of the Greater London council, he is an expert in horrendous budgets. Neither he nor the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) seemed to be in accord with anything that the Chancellor said today.

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  Even before the Budget, the Labour party gave the game away. Its manifesto did not say that it would hand over stewardship of the economy to the Governor of the Bank of England. That says it all. If the Labour party honestly believes that the British people are daft enough to allow it to get away with pushing responsibility on to the Governor of the Bank of England, it is in for a big shock. Then to humiliate the Governor in the Chancellor's Mansion House speech, by saying that if the Governor gets the inflation forecast wrong, he must write out 100 lines and apologise to the British people, is irresponsible.
  The newly elected Government will parrot for the next year or two that everything is the fault of the Conservative party over the past 18 years, but it is the newly elected Labour Government's responsibility to manage the economy well, because all the hopes and aspirations of hon. Members depend on their management of the economy.
  Since 1 May, we have already had two interest rate rises, which have damaged the living standards of a range of people. They have damaged small businesses and those who pay mortgages. Today, the housing market has been further damaged by the Chancellor's announcement on MIRAS. Again, we heard further hypocrisy from the Labour party. Speaking about MIRAS, the leader of the Labour party said last year:
  "if we cut it, it will add to insecurity, destroy confidence in the housing market and make people much more wary of buying and selling homes."
  The cop-out from the Labour Chancellor today was that as the Conservatives had done it, it was okay for Labour to continue. That is not what the present Prime Minister said last year. The Chancellor has a short memory.
  There is to be a new scheme forcing insurance companies to pay for medical services for road accident victims. That is an additional medical levy on vehicle owners. Through raised insurance premiums, all vehicle owners will be forced to pay twice for medical care. I wonder what will come next.
  We heard a throw-away announcement about capital receipts. The Conservative Government said that capital receipts could not be released until local authorities had paid off their debt. No detail was given about that today. We heard about the new house building programme that everyone will apparently rejoice at, but as there has been such a furore about the green belt being destroyed in Essex, I hope that Labour county councillors there will articulate clearly where all those new houses are to be built.
  I noticed two more so-called causes for joy among Labour Members. There was an announcement about the health service, which the hon. Member for Brentford and Isleworth (Mrs. Keen) touched on. Labour Members were pleased at the announcements about health spending and about education. What was announced today with regard to the health service was no more and no less than the Conservative Government were pledged to do.
  When it was announced that £1.3 billion would be spent to improve the fabric of our schools, Labour Members rejoiced. However, the Chancellor said that that £1.3 billion would be spent over the lifetime of this Parliament, so about £250 million will be spent each year, which will certainly not meet the expectations of all—
  Mrs. Ann Keen: Having worked in the health service for the past 20 years, I can assure the hon. Gentleman that
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  the contribution is welcome. It is the first time that money is being put into patient care, rather than management bureaucracy, which far exceeds any management facility that the health service needs. At last the health service is back on track. Ask any health worker—the hon. Gentleman is looking at one.
  Mr. Amess: I respect the hon. Lady's expertise with regard to the health service. However, I was not impressed when the new Secretary of State for Health wrote to hon. Members stating that the money saved through the removal of the internal market would reduce waiting lists. I do not see how that can be delivered.
  I seized on the fact that for the first time we have three Ministers of State in the Department of Health. Four of the new Ministers are based in London. Unless we tackle the London problem—the hon. Lady has a vested interest in that—none of the difficulties of the health service will be sorted out.
  The Budget is extremely disappointing. It is not fair to ordinary families. The British people deserve better than they got today.
  9.38 pm
  Ms Joan Ryan: I am grateful for the opportunity to make my maiden speech in this important debate. I congratulate all hon. Members who have made their maiden speeches today, especially my hon. Friends the Members for Redditch (Jacqui Smith) and for Brentford and Isleworth (Mrs. Keen).
  I congratulate the Chancellor of the Exchequer, my right hon. Friend the Member for Dunfermline, East (Mr. Brown) on his first Budget. It is, as he promised, a Budget to serve the many and not just the few. His welfare-to-work proposals are radical, far reaching and extremely welcome. They will be welcomed across Britain, and they are particularly welcome in Enfield, North.
  I shall say a word about my predecessors. The House will know that my immediate predecessor was the right hon. Tim Eggar. He served Enfield, North from 1979 and served as a Government Minister continuously for 12 years. I am sure that we all wish him well in his chosen career change, working in industry and commerce.
  From 1974 to 1979, Bryan Davies served as the Member for Enfield, North. He is remembered with affection as a man of integrity who worked hard for the people of Enfield, and I hope to follow his example. I have the honour to be the first woman Member to serve Enfield, North.
  I shall spend a few moments, as is traditional, telling the House a little about my constituency, which is one of contrasts. It is London's most northerly constituency and is fortunate to have much designated green-belt land. The Countryside Commission has stated that the finest landscapes in the Greater London area are generally acknowledged to be those such as Enfield Chase. I readily agree with that view. I intend to work hard with local groups, notably the Enfield Preservation Society, which has done so much over the years to safeguard the nature and character of Enfield.
  Enfield Chase and areas such as Forty Hill served as royal hunting grounds for over 400 years. Both Henry VIII and Elizabeth I often hunted in the area. No hunting

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  takes place there now. Today, the unique characteristics of the area, and historic buildings such as Forty hall, are enjoyed by all members of the population and by many from further afield.
  Enfield town is at heart a traditional English market town. Eastern Enfield, in contrast, is a much more urban scene. It is an area shaped by industry. It is the part of Enfield that gave the world such things as Belling cookers, Scrabble and the Lee Enfield rifle. The disappearance of much of east Enfield's old manufacturing industry has brought its problems and the area now has assisted area status. It is thanks to the efforts of our Labour Member of the European Parliament, Pauline Green, and the local authority, that regeneration is beginning to take place through the use of objective 2 funding and the single regeneration budget.
  Ponders End may be known as the birthplace of Lord Norman Tebbit, or perhaps because Kenneth Horne and Kenneth Williams brought it to the nation's attention in their many references to it in the 1960s radio series entitled, "Round the Horne". Ponders End's chief landmark was the gasworks, and the area was perhaps thought graceless. That is no longer the case because these days it is a most salubrious place. Indeed, it is home to my constituency office. Like the rest of Enfield, North, it is populated with warm, welcoming and energetic people who have a strong sense of community. These are people and communities that I am privileged to represent.
  Enfield, North has a diverse population. Diversity is evident in culture, ethnicity, language and religion. More than 30 languages are spoken by children attending schools in my constituency. Discrimination undoubtedly exists in employment opportunities, but the enterprise of Enfield residents has seen many new businesses come into being from the talents of people of all backgrounds.
  I have spoken to many people in the Cypriot community, for example, who have made a significant contribution to the economy of Enfield and of north London generally.
  Unemployment among some groups—notably youths and black and Bangladeshi groups—remains disproportionately high. The measures that my right hon. Friend the Chancellor of the Exchequer announced today will bring real hope. There will be a new future of hope for all my constituents, either as the recipients of opportunities for training and employment or as parents or grandparents, whose aspirations for their children and grandchildren will be better served by the Budget.
  Enfield, North is one of the major centres of industrial activity in London. It has particular strengths, including an advantageous location, excellent communications, a manufacturing base, a reliable and skilled work force and a resilient enterprise culture with a strong small business sector. Over the past decade, however, many locally established manufacturing companies have either closed or announced major redundancies—Belling, Royal Small Arms and Ferguson, to name but a few.
  Annual employment data demonstrate that in my constituency there has been a shift away from manufacturing, transport and communications into service sector industries such as financial services. Although we value and encourage those new directions, the gradually disappearing manufacturing and production base has also meant the loss of skilled apprenticeship opportunities.
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  Young people in Enfield, North are keen to get on. Participation in full-time education among 16 and 17-year-olds in Enfield is slightly higher than the level for London as a whole, and significantly higher than for England as a whole. Yet some 47 per cent. of the long-term unemployed in Enfield are in the 18 to 24 category. When they complete their education, they do not have the training and employment opportunities that they deserve. We look to the Budget proposals to break that logjam.
  Unemployment is one of the major sources of instability in our society. It has a very real impact on the health and welfare of individuals. It creates stress for them and their families and can lead to a wide range of problems, including debts, homelessness and family breakdown.
  The new deal offered in the Budget will raise both the education and skills level of our young people and, in doing so, will not just fulfil a social need but play a key role in improving the competitiveness of the British economy and raising the long-term growth rate. The defining characteristic of this new deal is choice—choice for young people who will be offered four high-quality options—but, rightly, no fifth option of passive reliance on benefits.
  Young people—indeed, the whole community—will welcome the opportunity that the welfare-to-work Budget opens up for them. Enfield, North is well placed to take advantage of those opportunities. Middlesex university and Enfield college can offer training and day release courses. Capel Manor, Greater London's only specialist college of agriculture, has an excellent record of working with the long-term unemployed and helping people back into worthwhile employment. Enfield, North contains the Lea Valley innovation centre. Its task is to tap the financial, physical and human resources of the Lea Valley to stimulate the creation and expansion of innovative technology-based small and medium enterprises.
  In terms of large enterprises, it is significant that Ford announced on 12 June, after a meeting with my right hon. Friend the Prime Minister, that it will invest £40 million in its plant in my constituency to provide new production facilities. I very much welcome that positive news. I also welcome Ford's commitment to back the Government's welfare-to-work programme and to seek further meetings with the Government to discuss what role it could play. Indeed, Ford already runs a scheme that takes on 100 young people each year. The welfare-to-work programme will succeed with such co-operation from the private sector.
  Members of Parliament have a leadership role in their local areas to bring together the private sector, the Government and all other agencies to work towards the goal of getting long-term unemployed people off benefit and back to work. That is my primary objective in Enfield, North. Only through the partnership approach of welfare to work can a solution be found to the cycle of deprivation and welfare dependency that is so prevalent in Britain's towns and cities.
  Other partners have an important contribution to make to the success of this new deal. In Enfield, they include the North London training and enterprise council and the very active and well-organised chamber of commerce.
  The windfall levy is entirely fair. It is based on the fundamental principle of social justice. We have seen the size of the profits on which the tax will draw. Given how

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  the tax will be used, it is wholly right and wholly justified. It is a tax which will pay for a future. It is what the British people so overwhelmingly endorsed on 1 May. It is the new Labour Government delivering on their promises.
  I welcome the Budget; Enfield, North welcomes the Budget; and I commend it to the House.
  9.48 pm
  Yvette Cooper: Mr. Deputy Speaker, thank you for calling me during this historic debate. I am honoured to be uttering my very first words in the House on behalf of the people of Pontefract and Castleford on Budget day. This is Labour's first Budget for 18 years—and what a Budget. It is hard to know where to begin: resources for education and health, help for the young and for the long-term unemployed, measures to calm growth in consumption, boost for investment or help with child care.
  It is also an honour to conclude the debate today, and to hear so many maiden speeches. We have had such speeches from my hon. Friends the Members for Enfield, North (Ms Ryan), for Redditch (Jacqui Smith), for Eastwood (Mr. Murphy) and for Brentford and Isleworth (Mrs. Keen), and from the hon. Members for Witney (Mr. Woodward), for Weston-super-Mare (Mr. Cotter) and for North Norfolk (Mr. Prior). We have had a tour of the country, and we have heard how the Budget will affect people across Britain. It is truly a people's Budget.
  Almost 100 years ago, Lloyd George launched his people's Budget for this century. Now we have a new people's Budget to begin the next century. I congratulate my right hon. Friend the Chancellor on a wise and radical Budget. It faces up to the long-term problems of the British economy. It also takes immediate steps to tackle some of the deep-rooted inequalities faced by my constituents.
  I represent a corner of West Yorkshire which is proud of its industrial heritage and its hard-working people; the liquorice fields and factories of Pontefract; the potteries of Castleford; the pits—the heart and belly of the constituency; the power station at Ferrybridge; the glassworks and the chemical works of Knottingley and Castleford; and, near the corner of Normanton that I represent, a Japanese electronics factory.
  These past two decades have been hard times in my constituency. Many of the pits are now closed, jobs in traditional industries have gone and, most important, we lack new investment and help to reskill the work force to generate new jobs to replace the old ones that have gone.
  I must report to the House that 2,600 people in my constituency are officially unemployed: a third of them have been unemployed for more than a year. The number of people not working, either because they have been forced into early retirement or on to sickness benefit, is much higher. Too many of my constituent have not had their fair share of opportunities to learn and to obtain the qualifications that they need to prosper in a modern economy. That matters for the future, as one generation follows in the footsteps of another. Evidence shows that the chance of the sons and daughters of miners in my constituency becoming high earners when they grow up is a mere tenth of that of the sons and daughters of well-educated and wealthy professionals. That figure is shocking.
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  The House must not misunderstand me. It is true that my constituency is plagued by unemployment, but I represent hard-working people who are proud of their strong communities and who have fought hard across generations to defend them. They are proud of their socialist traditions, and have fought for a better future for their children and their grandchildren. In the middle ages, that early egalitarian, the real Robin Hood, lived, so we maintain, in the vale of Wentbridge to the south of Pontefract. It was a great base from which to hassle the travelling fat cats on the Great North road.
  Centuries later, Pontefract became home to another true fighter for social justice, Barbara Castle. In her autobiography, she describes her politicisation during the miners lock-out in 1921. Through the years, my constituency has been home to other Members who have fought hard for the working people whom they represent in nearby constituencies, including the former Member for Hemsworth, Derek Enright, and my hon. Friend the Member for Normanton (Mr. O'Brien), who has helped me so much in these early months.
  The people of Pontefract and Castleford owe most to the man who represented them for the past 19 years, and who battled hard for their welfare, Sir Geoffrey Lofthouse, now Lord Lofthouse of Pontefract. I know that hon. Members will join me in paying tribute to someone who, as a former Deputy Speaker, worked hard for the House, was fair and honourable, and, above all, was a kind man. He governed the House, which can sometimes be rowdy and alarming, with a firm but fair hand.
  For some, the traditional tribute to a predecessor is something to be swallowed swiftly, got over as fast as possible. For me, it is an honour and a privilege to be able to pay that tribute on behalf of the House and the people of Pontefract and Castleford to Sir Geoff, as he is known locally.
  Sir Geoff was a well-loved constituency Member of Parliament. Like my grandfather, he began his working life in the pits as a teenager. The mischievous among his Pontefract friends describe him as a corner-stint man, but they would never use the same phrase to describe his commitment to his constituents. His proudest achievement was his work for the welfare of the miners with whom he served for so long, getting emphysema recognised as an industrial disease.
  I pay a personal tribute to him, too, for Sir Geoff has been extremely supportive during these curious first months here. I hope that we can continue to work together for the people of Pontefract and Castleford, a partnership which I hope echoes the strength of this new Government, young and old, energy and experience, women and men, across the country and across the generations working together for common goals. The Budget gives us the chance to achieve those goals.
  More important to my constituents than anything else will be the new deal for the unemployed. In Pontefract and Castleford we are raring to go. Already, the Groundwork Trust in Castleford has approached me with a proposal for an environmental task force. We hope to encourage young unemployed people in some of the highest areas of unemployment in our constituency—in Knottingley and on the Airdale estate in Castleford—to join regeneration projects that are already planned. That way, they can take their first steps into the world of work straight from their own doorstep, be part of rebuilding

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  their own troubled estates, learning transferable skills and building their own personal pride in their environment and in their work.
  We think that this is such a good idea that we are not even waiting for the windfall tax money to come through. A local partnership is already drawing up a proposal for European money, and I hope that we will provide a successful model for the rest of the country to follow. At the same time, Wakefield council is itching to expand on its successful job subsidy programme, Workline, which it has been operating for the past 11 years. Employers there have a year-long subsidy of up to £40 a week to take on unemployed workers.
  I asked one employer involved whether he would have taken someone on anyway. After all, his business was expanding. He told me two interesting things. The first was that the subsidy encouraged him to take on a new employee a year earlier than he would otherwise have done. The second was that, without the subsidy, he would not have considered taking on someone who was unemployed. There, in that one anecdote, was the proof that such a job subsidy can speed up job creation and help people in most danger of being locked outside the work force, trapped on the dole, into jobs.
  That is important because it means that the new deal gives us a chance to tackle the long-term roots of inequality—people who are trapped on the dole in my constituency. Moreover, by helping those who find it hardest to get work, the new deal also boosts the capacity of the economy. That means that, as the economy grows, instead of running into the old inflationary buffers, as so often happens, we can have growth that creates jobs and more jobs, because we have boosted the capacity. That is
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  the Budget's greatest strength. At the same time as controlling consumer demand and stopping it expanding too fast, the Budget is boosting the supply side to try to raise Britain's long-term sustainable rate of growth.
  I hope that the new deal will receive support from both sides of the House, because it is about our future. In Pontefract and Castleford, I found enthusiasm for these proposals on both sides of the political spectrum.
  As recently as Monday morning, a small business man came into my surgery. He admitted to being one of the few people in the area who had voted Conservative for 30 years—until the recent election. However, he said that he was delighted with what he had seen about Labour's plans for young people. He said that he wanted to take on three young unemployed people, asked when they could start, and where should he sign. His enthusiasm was infectious, and I hope that such enthusiasm will encourage more small businesses, both in my constituency and throughout the country, to take up the challenge to provide a new deal for the unemployed. It is something which we all need to work on together.
  I am sure that that man will be even more delighted now that he has heard my right hon. Friend's Budget. It truly is a people's Budget—a Budget for social justice and for Britain's future. Tough choices have to be made, but they will generate results in the long run.
  Keynes said:
  "In the long run we are all dead"—
  but I say, "So what?" Our children and our grandchildren will still be alive. Therefore, for the people of Pontefract and Castleford and for their children and grandchildren, I welcome the Budget.
  It being Ten o'clock, the debate stood adjourned.
  Debate to be resumed tomorrow.

  War Pensions
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]
  10 pm
  Mr. Peter Viggers: We have listened to an exceptionally good maiden speech by the hon. Member for Pontefract and Castleford (Yvette Cooper), who spoke with great clarity and concern for her constituency. She will find that, in the House, those who speak on behalf of their constituents with knowledge and concern will always win an audience.
  In my mere 23 years in the House, I have twice followed maiden speakers. They were both men, and I have followed their future careers with keen interest. The hon. Lady is my first "parliamentary god-daughter", and similarly, I shall follow her career with interest—until the Conservatives can sweep her out of Pontefract and Castleford, which I hope will be as soon as possible.
  I am also delighted to see my comparatively near parliamentary neighbour, the hon. Member for Southampton, Itchen (Mr. Denham), as the Under-Secretary of State for Social Security on the Government Front Bench. If we have to have Labour Ministers, I suppose that I am as happy to see him there as anyone else, and I hope that he will listen to my plea on behalf of my constituents. Perhaps he will decide that there is merit in the case.
  I welcome the chance to speak on behalf of two of my constituents who, I believe, have been treated inappropriately by Government, which has resulted in profoundly serious damage to them. The issue is connected with an allowance called the allowance for lowered standard of occupation. The acronym for that is ALSO, but I shall refer to it as "the allowance".
  I shall quote copiously from a guide to war pensions policy produced by the Department of Social Security. It says:
  "The original idea behind this allowance, which was introduced in 1946, was to compensate the World War 2 conscript who, as a result of an injury sustained during the war, was unable to follow the civilian job he had had before he was called up. Later, in the 1970s, the law was amended to enable career servicemen who had had no pre-service occupation to qualify for the allowance."
  The injury or disablement
  "must be such as to 'render him incapable, and likely to remain permanently incapable, of following his regular occupation and incapable of following any other occupation which is of an equivalent standard and is suitable in his case".
  Of course, those terms need careful definition. "Regular occupation" means
  "(i) the occupation which was his regular (service) occupation on the date the injury was sustained, or
  (ii) the occupation which was his regular (service) occupation on the date he was first removed from duty because of the disease on which his award is based, or
  (iii) if there were no such occurrences, the occupation which was his regular (service) occupation on the date he was discharged.
  I would interpret that guidance as meaning that one should apply first test (i), then test (ii), and failing those,
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  test (iii). "Regular occupation" for service after 31 July 1973 means
  "the regular service job that the claimant was doing at the appropriate date … It is important therefore that the precise service job is identified eg infantryman: electrician: weapons mechanic: cook: clerk: driver: pilot: navigator etc. before consideration is given as to whether the war pensioned disablement renders the ex-serviceman 'incapable, and likely to remain permanently incapable, of following [that] regular occupation".
  The note continues:
  "Where the regular occupation is the service occupation, and the claimant was invalided because of the accepted disablement, it can normally be accepted that he is incapable of following his regular occupation. That will also be the case if, because of the accepted disablement, the claimant was moved from his regular occupation to another job, albeit still in the armed forces."
  That is exactly the case in one of my constituency cases. The note concludes:
  "Occasionally a claimant might argue that although his pensioned disablement did not prevent him carrying on in his regular occupation, he should be entitled to ALSO because he was excused because of his disablement from involvement in certain activities which would normally be expected of all servicemen eg training, exercises/sport. Clearly a marine commando who could not cope with training exercises would be eligible on discharge to ALSO (peak physical fitness being an essential prerequisite for such a job); in that case, it would be very unlikely that he would have retained his job.
  The allowance was paid to about 13,500 ex-service men and women until 1996. The maximum amount was £38.12 and those in receipt of it made all their financial plans on the basis that the allowance would continue. Who would contemplate—even in one's worst nightmares—that an allowance granted by the British Government would be withdrawn? Surely such an allowance should be as solid as the Bank of England.
  Those receiving the allowance made housing and other long-term plans on the basis of it, and took it into account when taking on mortgages or other debts. To take an extreme example, a recipient of the allowance faced with separation or divorce would make a settlement on the basis of the allowance continuing. The loss of the allowance in those circumstances could lead to real hardship.
  For about 1,300 people in receipt of the allowance, their worst nightmare came true. In January 1996, the Department of Social Security informed 1,300 ex-service men that they were to lose their allowance. I have one such letter here, addressed to my constituent Mr. Ken Harding. The letter states:
  "when we first looked at your claim for ALSO, we made the mistake of considering only whether you could get back into service, and whether your civilian earnings (or potential earnings) were less than your service earnings. What we should have done was to consider whether your pensioned disablement itself actually made you incapable of following your service occupation and any other occupation of an equivalent standard. It has, therefore, been necessary to reconsider your case … We have reviewed your case and have concluded that your pensioned disablement assessed at 6–14 per cent., does not make you permanently incapable of following your regular (service) occupation of aircraft engineering mechanic."
  That disablement allowance was for deafness. Mr. Harding became a chief petty officer in the Navy and worked as a supervisor with special responsibility for deck operations on aircraft carriers. He served on a range of ships, and worked on deck with Gannet aircraft, Sea Vixen and Phantom jets and Sea King helicopters.

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  I wonder whether the person who decided that Mr. Harding was not permanently incapable of following his occupation has ever been at sea during fleet operations. It is noisy and hazardous, with tons of heavy metal catapulting off the heaving deck and back on again. Accuracy and reliability are crucial. To describe him simply as an engineering aircraft mechanic is simplistic and inadequate. Mr. Harding later went on to work at the Royal Navy's aircraft yard in my constituency, working on land on helicopter servicing and repairs. I suspect that the Department of Social Security regarded this as an extension of his service work when they disqualified him from the allowance.
  My other constituency case is more bizarre. Mr. Mike Tungate served in the Royal Marine Commandos and reached the rank of sergeant. He was supremely fit and took pleasure and pride in physical activity. In July 1985, he was injured when he was thrown from his motor cycle in an accident that was not his fault. He has since suffered permanent injuries to his shoulder and elsewhere. I have a medical report here from a Doctor Grayson, dated May 1997, which states:
  "This man's left shoulder injury is likely to continue to be a major disability throughout his life and will I imagine have limited his chances of promotion as he cannot achieve battle fitness."
  Another medical report—also issued in 1987—from Mr. Neville Seymour, in Plymouth, states:
  "His general activities have been severely restricted: he has been unable to undertake battle fitness tests; he cannot lift and hold weapons. He tells me that his service contract has three years to run, but he had hoped to spend another five years in the forces."
  The contents of those medical reports are reflected in the armed forces reports on Mr. Tungate. A letter from Major Binnie of the Royal Marines in Plymouth, dated May 1987, says that Mr. Tungate
  "was medically downgraded to P2 (Modified Commando) on 9 March 1987 as a result of his accident. This means that he must henceforth work in the rear echelons of units and in office jobs. Additionally he cannot undergo Mountain and Arctic Warfare Training nor can he attempt the normally mandatory Basic Fitness Test and the Annual Personal Weapons Test.
  Whilst this does not directly affect his fitness for promotion it inevitably damages his prospects. Being ineligible to hold field posts in a Commando Unit denies him the full range of job experience that is an essential part of a man's promotion. Nor is he able to compete effectively with his contemporaries who have the opportunity to gain a balanced career.
  Whilst it is difficult to quantify his damage, he has been disadvantaged by his accident and the subsequent medical downgrading. I do not believe he will now gain the width of experience necessary for further promotion."
  In the official report on Sergeant Tungate for 1987–88, his reporting officer said—after praising Sergeant Tungate's qualities, his enthusiasm and his excellence generally—
  "Regrettably, Sgt Tungate's medical condition puts certain restrictions upon him and his career … Sgt Tungate has now been a Sergeant almost 9 years. I am of the opinion that his medical condition and somewhat limited experience in the clerical branch would debar him from being employed as a CSgt (C1)"—
  that is, a colour sergeant.
  "It is with sincere regret that I have to suggest that Sgt Tungate has reached his final rung on the ladder of promotion."
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  His colonel said:
  "Sgt Tungate is doing a good job … and I am very happy to have him here but in all honesty for the reasons stated above he has reached his ceiling."
  Sergeant Tungate received a letter telling him that he would not be eligible for the allowance for lowered standard of occupation. It said:
  "We have reviewed your case and have concluded that your pensioned disablement assessed at 40 per cent., does not make you permanently incapable of following your regular (service) occupation of—
  wait for it—
  "clerk".
  Later, the war pensions policy unit wrote to me as follows:
  "Examination of Mr. Tungate's Service documents shows that at the time of his shoulder injury in 1985 his listed trade was that of Clerk, and that he had not been removed from duty on account of his shoulder or other injuries. The WPA therefore determined that his injuries had not prevented him from following his 'regular occupation' up to the time of his discharge"
  in 1990, and that he was not eligible for the allowance.
  A Royal Marines commando was described as a clerk! I suppose that clerking duties are involved; I suppose that a Royal Marines commando must keep an inventory of hand grenades, and make sure that the men have weapons, food and everything else that they need in order to fight—and, of course, he will be carrying his own weapon just in case it becomes necessary for him to fight back. To call him a clerk, however, is completely wrong. The person who arrived at that classification cannot have known about Royal Marines mountain and Arctic training, cannot have know what it is like to patrol the streets of Northern Ireland and cannot have seen the areas in the Falklands across which it was necessary for Royal Marines and others to yomp.
  How can Mike Tungate be deprived of his allowance? I repeat that the Department's briefing notes say:
  "Clearly, a marine commando who could not cope with training exercises would be eligible on discharge to ALSO (peak physical fitness being an essential prerequisite to such a job); in that case, it would be very unlikely that he would have retained his job."
  Sergeant Tungate was so highly regarded that he was kept on, in a slightly different role, in the rear echelon. It may be that that act of kindness to him, because of his great quality, deprived him of his allowance. If that is the case, it is quite wrong.
  I am absolutely sure that I know the answer in this case. A mistake was made when 13,500 cases were reviewed. The fact that Mr. Tungate continued to be defined as a clerk up to the end of his service led officials to believe that he had not suffered lowered standard of occupation. I am convinced that he had, and that there was a mistake.
  The Minister has been provided with a brief, no doubt by the same team of civil servants who prepared the brief from which answers were given to me previously, but I say to the hon. Gentleman—whom I could almost, as a neighbour, call an hon. Friend—that there are cases in which Ministers need to read the brief and form their own decision. That is why we have Ministers and why he and not a civil servant is sitting there.
  There has been an error, to the great loss of my constituents. They are fine men who have given devoted service. I plead with the Minister to reconsider and to restore to them the allowance for lowered standard of occupation.
  10.15 pm
  The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): I thank the hon. Member for Gosport (Mr. Viggers) for bringing this matter to the House and for his warm introductory words. He has a deep knowledge of service matters and represents a constituency with an unusually high proportion of service and ex-service personnel.
  I pay tribute to those former members of the forces who have suffered disablement or death in the service of their country. I also acknowledge the invaluable work performed by the ex-service organisations in serving the interests of former service men and women. My Department keeps in close and regular touch with those organisations, as we recognise the importance of ensuring continuing awareness of feelings and concerns among the ex-service community. Indeed, my noble Friend Baroness Hollis, as the Minister with special responsibility for war pensions, met representatives of the ex-service organisations twice last month.
  I would like to set this debate about one supplementary allowance into the context of the war pensions scheme as a whole. The scheme provides a number of allowances to supplement the basic war disablement pension, forming a wide range of financial provisions for disabled ex-service men and women.
  Allowances are available in respect of age, unemployability and care and mobility needs arising as a result of war pensioned disablement. Most of the allowances are at preferential rates compared with social security counterparts and some are peculiar to the war pensions scheme. The scheme also provides pensions for the widows and other dependants of ex-service personnel whose death is linked to service.
  The allowance for lowered standard of occupation is known in both the ex-service world and official circles by the abbreviation ALSO. I propose to refer to it as such during this debate.
  The forerunner of ALSO, which is currently £40.44 maximum a week, was a special hardship allowance introduced in 1946. Its clear purpose was to compensate an ex-service man who, because of injury incurred as a result of service during the war, was unable to do the civilian job that he did before he joined up and had to settle for a job with less pay. The allowance was to help to bridge the gap between his current earnings and those that he had enjoyed in his pre-service occupation. In May 1948, the allowance was renamed the allowance for lowered standard of occupation.
  The original allowance was to compensate world war two conscripts where pre-service careers had been adversely affected by their injury. From 1973, the law relating to ALSO was amended to provide for career service men. For those disabled due to service after 31 July 1973, the comparison is made with the pensioner's occupation in service, instead of his pre-service occupation. Under the change, it became necessary for the Secretary of State to determine what the ex-service man's "regular occupation" was while he was in service on whichever of three dates applies in the individual case. Those dates were the date his service wound or injury was sustained; or the day he was first removed from duty because of the disease on which the award is based; or if neither of the above occurred, the date he was discharged.
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  Subsequently, from April 1978, the conditions were further amended to widen the scope to include war pensioners whose disablement was due to service before 1 August 1973 and who had entered the forces straight from school or higher education after 2 September 1939 and before 1 August 1973. Those pensioners had previously been excluded from consideration of ALSO because they had no regular pre-service occupation.
  From April 1997, a new award of ALSO may not be made where the claimant has attained the age of 65; nor may an award be made where the degree of disablement is assessed at less than 40 per cent. With those exceptions, ALSO may be awarded to the war pensioner whose war pensioned disablement is such as to
  render him incapable and likely to remain permanently incapable of following his regular occupation and incapable of following any other occupation which is of an equivalent standard and is suitable in his case".
  The allowance is therefore designed to compensate the ex-service man who, because of his war pensioned disablement, is unable to follow his regular service trade or occupation and a civilian one of an equivalent standard. It is not intended to provide compensation solely on the ground that his earnings have reduced since leaving the forces. That is a situation often faced by ex-service men because service pay is based on the earnings of comparable civilian occupations, with the addition of what is generally referred to as the X factor in recognition of the special circumstances of service life.
  I should explain at this stage that "regular occupation" is interpreted by the Secretary of State as the regular service job that the claimant was doing at the relevant time. It is important therefore that the precise service job is identified, in the same way as it is important for world war two conscripts to identify the precise job the ex-service man was doing as a civilian before he joined the armed forces. The "regular occupation" therefore is not simply "service man" but, for example, as the hon. Gentleman said, infantryman, electrician, weapons mechanic, cook, clerk, driver, pilot, navigator and so on.
  Once the precise occupation is determined, consideration is given to whether the war pensioned disablement is such as to render the ex-service man incapable of following that regular occupation and one of an equivalent standard which is suitable for him.
  The law does not define what is meant by the terms "equivalent standard" or "suitable", but the Secretary of State interprets that as meaning any other job with equivalent earnings and which is suitable for him taking into account his training, education, experience and physical and mental condition. I should stress that that is a generous interpretation. The earnings comparison is with the level of earnings in the regular service occupation, not with the level of earnings in a civilian equivalent job.
  In 1994, it came to light that the legislative provisions for ALSO were being misinterpreted. Some awards had been incorrectly made. Consideration had been given only to whether the man's earnings in civilian life were less than his service wages and whether the man could now get back into service. That led to payments being made where relatively minor disablement had not had any effect on the pensioner's earnings potential or, in some cases, prevented continuation of the service career up to normal military retirement. No consideration had been given to

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  whether the man's disablement itself actually made him incapable of following his service occupation. I am sure that the hon. Gentleman agrees that it is right that any payments are within the law.
  In March 1995, the matter was brought to the attention of the Advisory Committee on War Pensions. It was explained that new awards would be made only where the pensioned disablement would prevent the war pensioner from following his regular service occupation and a suitable equivalent and that existing cases would be reviewed to ensure that existing awards were soundly based in accordance with the legislation. Some awards were eventually withdrawn from a common date of 3 April 1996. All those affected were given at least two months' notice of the withdrawal. None of the ex-service men affected had been discharged from the forces because of their service disablement. All had a full career or were made redundant. They were not asked to repay the money that they had received.
  If a service man is invalided out of service on account of his disablement, it can normally be accepted that he is incapable of following his regular service occupation, and ALSO will be payable. That will also be the case if, because of the disablement, the pensioner was moved from his regular occupation to another job in the armed forces. On the other hand, if a service man completes his service engagement in the normal way despite some disablement, it is evident that it did not prevent him from following his regular service occupation and ALSO will not normally be payable. However, if there is subsequently a significant deterioration in the degree of disablement due to service, to the extent that it is judged that the disablement would then prevent him from following his regular service occupation, ALSO may be awarded.
  I am aware of the hon. Gentleman's previous interest in this allowance, and in particular of the parliamentary question he raised with his party's Administration in March last year asking what discretion Social Security Ministers have on the payment of ALSO. The answer then, which still reflects the legal position today, was that the Secretary of State would pay the allowance when satisfied that the requirements for it in war pensions law are met.
  I am also aware of the previous ministerial correspondence which the hon. Gentleman has had and of his contact with officials from the War Pensions Agency and with departmental headquarters about the cases of his constituents, Mr. Harding and Mr. Tungate. I shall now turn to the cases of those ex-service men.
  Neither man was invalided or otherwise removed from duty on account of their pensioned disablements. On the contrary, both continued in their regular service occupations until their discharge on the normal completion of their engagements. I am advised that their respective disablements did not therefore affect their ability to carry out their regular service occupations. Mr. Harding was an air engineering artificer (mechanical) and Mr. Tungate was a clerk. The judgment has therefore
  398
  been made that the legal requirements for entitlement to ALSO have not been satisfied. I am aware that both men's awards of ALSO were withdrawn as a result of the review exercise begun in 1994 to which I referred earlier.
  The hon. Gentleman suggested that because Mr. Tungate was medically downgraded to modified commando as a result of his shoulder injury incurred in 1985, his promotion prospects were adversely affected. That may or may not be so, but the facts appear to be that Mr. Tungate's regular service occupation when injured was that of a clerk and that his injury did not prevent his carrying on in that occupation for the next five years until normal discharge in 1990, when he made his claim for war pension. If that is the case in the circumstances of Mr. Tungate's claim, the law on ALSO provides that the allowance could be awarded only if he was incapable, because of his war pensioned disablement, of doing the job that he was doing when injured.
  The hon. Gentleman made the case that the identification of the occupation of clerk is not appropriate in Mr. Tungate's case. I have no reason to believe that my predecessors were anything less than punctilious in the examination of Mr. Tungate's position. None the less, the case has been made by the hon. Gentleman and I therefore undertake to look once more at Mr. Tungate's case and at whether the identification of occupation was correct, though I would not wish to prejudge the case or hold out any particular prospect of what the hon. Gentleman seeks.
  The hon. Member also suggested that Mr. Harding's award of ALSO should be reinstated on the grounds of his occupation and, perhaps, of hardship. Mr. Harding was discharged from the Navy in 1986 and claimed a war pension in respect of his hearing loss in 1991, when his disablement was assessed at 6 to 14 per cent. He received a lump sum gratuity of £3,129 in respect of that disablement and was awarded ALSO following a claim made in 1992. It seems clear that he was able to do his service job with his disablement and the award of ALSO was therefore withdrawn from April 1996.
  Mr. Harding has been advised that the Secretary of State has the discretionary power to reinstate the allowance in whole or in part and that the normal policy is to do so where withdrawal of the allowance would result in a real risk to the health of the pensioner or a dependant, or to keeping the family home. The War Pensions Agency has invited Mr. Harding to complete a form detailing his income, capital and commitments and reasons why he believes that the Secretary of State's discretion should exceptionally be exercised in his case, but I understand that he has not done so. I am, of course, in no position to say that he will be successful in getting his allowance restored if he does so.
  I listened carefully to what the hon. Gentleman said. I am not convinced of the need to reconsider the matter, but if there is any further evidence on conditions or employment records that he wishes to provide, I will give the matter my further consideration.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Ten o'clock.

HOME DEPARTMENT

  Postal Votes
  Mr. Burstow
  To ask the Secretary of State for the Home Department what his Department plans to spend on advertising the availability of postal votes before the proposed referendums on(a) Welsh devolution and (b) a greater London authority. [5855]

  Mr. George Howarth
  There will be no Home Office expenditure for these purposes.

  Responsibility for publicity on the availability of postal votes in the Welsh devolution referendum and the referendum on the strategic authority for London will be the responsibility of the Welsh Office and the Department of Environment, Transport and the Regions respectively.

  Mr. Burstow
  To ask the Secretary of State for the Home Department what his Department spent on advertising the availability of postal votes before the General Election. [5857]

  Mr. Howarth
  Absent voting facilities were publicised at the general election through a television campaign and advertisements in the national press, at a cost of £700,000.

  Firearms
  Mr. Colvin
  To ask the Secretary of State for the Home Department (1) if sufficient collection centres will be made available in each police constabulary area to ensure that firearm certificate holders do not have to travel unreasonable distances to hand in weapons prohibited by the Firearms (Amendment) Act 1997; [5828]

  (2) what guidance he has given to chief constables on reasonable distances between collection centres which are used for weapons to be handed in as a result of the Firearms (Amendment) Act 1997; [5827]

  (3) if he will list the police constabularies which intend to make available only one collection centre in their area for weapons which are to be handed in as a result of the Firearms (Amendment) Act 1997. [5830]

  Mr. Michael
  Decisions about the collection arrangements for weapons and equipment surrendered under the terms of the Firearms (Amendment) Act 1997 are for the chief officer of police for each force area and we are grateful for their co-operation in this important task. The arrangements in place will differ from one area to another, taking into account such factors as the need to ensure public safety, numbers and locations of firearm certificate holders and registered firearms dealers and police resources. These are matters for local decision and we have not sought to establish a central record of the arrangements in each area.

  Polling Stations (Disabled Access)
  Mr. Öpik
  To ask the Secretary of State for the Home Department if he will make a statement on the level of disabled access to polling stations in Wales in the last General Election; and if he will ensure that failures to provide adequate access are remedied before their next use. [6086]

  Mr. George Howarth
  Information on the accessibility of polling stations in use in Wales for the General Election is not available centrally. County and County Borough Councils in Wales are statutorily required to designate as polling places for parliamentary elections, so far as is reasonable and practicable, only places which are accessible to the disabled. Acting returning officers may apply to the Home Office for grants towards the cost of providing temporary ramps, where it is not possible for them to use a building for the purpose of a polling place at a parliamentary election which affords easy access for the disabled. Grants are also available for specially adapted polling screens for use by the disabled.

  The same provisions will apply at the forthcoming referendum to be held in Wales. In this instance, grants will be available from the Welsh Office towards the cost of temporary ramps.

  Sex Offenders
  Mr. Etherington
  To ask the Secretary of State for the Home Department what proposals he has to ensure that children are protected from convicted sex offenders. [5601]

  Mr. Michael
  The Government give a very high priority to ensuring that children are protected from sex offenders. There are a number of proposals under consideration, including legislating to enable sex offenders on release from prison to be supervised by the probation service for much longer periods of time, and making it an offence for a convicted sex offender to seek work with, or offer services to, children.

  We also plan to implement the Sex Offenders Act 1997 as soon as possible. It will require offenders convicted of serious sex offences against children to notify the police of their name and address and any change in these details and we are determined to make sure the information is used to protect children rather than gathering dust in a file or sitting unused on a computer database.

  Deportations
  Dr. Iddon
  To ask the Secretary of State for the Home Department how many people were deported from(a) Manchester, (b) Gatwick and (c) Heathrow airports in each month of 1997. [5871]

  Mr. Mike O'Brien
  [holding answer 30 June 1997]: I regret that the information requested is not held centrally.

  New Polling Districts
  Mr. Barnes
  To ask the Secretary of State for the Home Department what estimate he has made of the number of electors who had moved into new polling districts between the commencement of the operation of the current electoral register and the last general election; and if he will make a statement. [6015]
  163
  Mr. George Howarth
  [holding answer 1 July 1997]: None. No information is held centrally which would allow such an estimate to be made.

  Dangerous and Careless Driving
  Mr. Kidney
  To ask the Secretary of State for the Home Department how many prosecutions were brought for(a) murder or manslaughter and (b) causing death by dangerous or careless driving in respect of fatal road traffic accidents in England and Wales in each of the last three years; and in each case how many resulted in (i) conviction and (ii) a custodial sentence. [5967]

  Mr. Michael
  The table below gives the information requested.

  Prosecutions and convictions for murder or manslaughter and causing death by dangerous or careless driving, arising from fatal road traffic accidents

  England and Wales 1993–1995 1

  Prosecutions

  Convictions

  Custodial sentence2

  1993

  Murder or manslaughter

  19

  10

  10

  Causing death by dangerous or careless driving3

  442

  313

  226

  1994

  Murder or manslaughter

  18

  —

  —

  Causing death by dangerous or careless driving3

  375

  307

  237

  1995

  Murder or manslaughter

  13

  4

  4

  Causing death by dangerous or careless driving3

  369

  323

  242

  1 Murder or manslaughter cases are tabulated according to the year the offence was initially recorded by the police and causing death by dangerous or careless driving by the year of completion of proceedings.

  2 Young offender institution and unsuspended imprisonment.

  3 Includes offences of causing death by aggravated vehicle taking.

  Information for 1996 is not yet available.

  Drink Driving
  Mr. Kidney
  To ask the Secretary of State for the Home Department what plans he has to introduce(a) random breath testing of motorists by police, (b) a reduction in the current legal limit for drink driving, (c) a complete ban on drinking and driving, (d) a ban on carrying alcohol in lorry drivers' cabs and (e) all-year-round campaigns against drink driving. [5968]

  Mr. Michael
  We have no plans to introduce random breath testing, a complete ban on drinking and driving or a ban on the carrying of alcohol in lorry cabs.

  The law already provides the police with wide powers to test drivers for drinking and driving: they may administer a test in the event of an accident, a moving traffic offence or if they have cause to suspect a driver of having alcohol in his body. These powers are used extensively; in England and Wales in 1996 it has been calculated that some 781,000 roadside breath tests were carried out, the highest number ever.
  164
  My noble Friend the Minister with responsibility for roads is currently considering a number of options for improving road safety, including the legal limit for drinking and driving. She will be looking very carefully at the findings of a research study into drink-drive countermeasures throughout the world, which was published by the Portman Group on 1 July.

  It is the Government's intention to continue with regular drink-drive publicity campaigns, including at Christmas but not only at Christmas. The police act to identify drink-drive offenders all year round and the number of roadside screening tests and their results are published annually.

  Alcohol Consumption (Young People)
  Mr. Gordon Marsden
  To ask the Secretary of State for the Home Department what plans he has to encourage councils to introduce byelaws to restrict on-street consumption of alcohol by those aged under 18 years. [5944]

  Mr. George Howarth
  A model byelaw is available to local authorities to prohibit the consumption of intoxicating liquor in designated areas. Byelaws do not apply selectively to particular age groups.

  We will be implementing the Confiscation of Alcohol (Young Persons) Act 1997. Under this legislation, a police constable may confiscate alcohol from under-aged drinkers and it will be an offence to refuse to hand over the drink.

  Murder Case (Abdul Kamal Samad)
  Ms Oona King
  To ask the Secretary of State for the Home Department what further internal inquiries are planned into the handling of the murder of Abdul Kamal Samad. [5804]

  Mr. Michael
  The Commissioner informs me that the Head of Number 2 Area Complaints Unit in the Metropolitan Police District has been appointed to investigate the initial response to Mr. Samad's murder, which occurred on 21 May 1997. Upon receipt of his report, a decision will be made as to whether a full disciplinary enquiry is required. At this stage no formal complaint against a Metropolitan Police officer has been made. The murder of Mr. Samad is currently being investigated by a team of detectives.

  Stephen Lawrence
  Mr. Winnick
  To ask the Secretary of State for the Home Department if he will make a statement on his meeting with the parents of Stephen Lawrence. [5679]

  Mr. Straw
  I met Mr. and Mrs. Lawrence on 24 June. I was deeply moved listening to the tragic circumstances surrounding the death of their son Stephen. We also discussed broader issues, including racially motivated crime and the relationship between the police and ethnic minority communities. I recognise that a strong case has been made by Mrs. Lawrence for some form of inquiry and I am actively considering what she put to me. I will also consider carefully the other issues that were raised during our meeting and reflect on the best way to address the widespread concern resulting from this case. I hope to make an announcement soon.

  Sentencing (Class A Drug Users)
  Mrs. Ballard
  To ask the Secretary of State for the Home Department what plans he has to review mandatory drug sentences for Class A drug users, including first time offenders. [5668]

  Mr. Michael
  We will make an announcement as soon as possible about implementation of provisions in the Crime (Sentences) Act 1997 which establish minimum sentences of seven years' imprisonment for those convicted for a third time of trafficking in class A drugs.

  Polling Stations (School Closures)
  Mr. Denzil Davies
  To ask the Secretary of State for the Home Department if he will publish the number and percentage of schools in Wales which were closed, wholly or partly, on 1 May for use as polling stations; and what percentages of pupils were affected. [6072]

  Mr. George Howarth
  Information of the kind is not collected centrally either by my Department or by the Welsh Office.

  Youth Justice Task Force
  Mr. Burnett
  To ask the Secretary of State for the Home Department if he will list the ages of the members of the Youth Justice task force; and what plans he has to ensure that there is representation of young people's organisations on the task force. [6328]

  Mr. Michael
  The ages of the task force members are listed below. Members are appointed on the basis of their relevant knowledge, experience and individual merit rather than to represent particular organisations.

  William Atkinson: 47

  Jonathan Black: 40

  Cathryn Bowker: 37

  Anthony Butler: 52

  Paul Cavadino: 48

  Ann Fuller: 60

  Cedric Fullwood: 57

  Thomas Luce: 57

  Jenny Rowe: 41

  Ian Johnston: 51

  John Lyon: 49

  David Norgorve: 49

  Teresa Reynolds: 41

  Denise Platt: 52

  Norman Warner: 56

  Joan Webster: 52

  Geoffrey Wicks: 62

  Andrew Williamson: 49.

  Police Areas
  Mr. Ian Taylor
  To ask the Secretary of State for the Home Department what procedures govern the transfer of areas from one police force area to another. [6224]
  166
  Mr. Michael
  These procedures are set out in sections 32 to 34 of the Police Act 1996. The main points are as follows:

  The Secretary of State may by order make alterations in police areas in England and Wales, other than the City of London police area. These alterations may result in increases or reductions in the number of police areas, but not in the abolition of the Metropolitan Police District.

  The Secretary of State may not exercise this power unless either he has received a request to make the alterations from each of the police authorities affected or if it appears to him to be expedient to make the alterations in the interests of efficiency or effectiveness.

  The Secretary of State must give notice of his proposed alterations to the police authorities and local authorities for every area affected. He must consider their objections and give further notice stating whether he accepts the objections and, if he does not, giving his reasons.

EDUCATION AND EMPLOYMENT

  EU Education Council
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what were the outcomes of the Council of EU Education Ministers held on 26 June. [6786]

  Mr. Andrew Smith
  The Council of Education Ministers, at which my noble Friend the Minister for Education and Employment and my hon. Friend the Minister for Education and Industry, Scottish Office represented the UK, reached agreement on the adoption of a common position on the European Commission proposal to increase the budget of the SOCRATES education programme. The common position will provide for the budget to increase from 850 million ECU1 over 5 years to 875 million ECU2.

  The Council adopted Conclusions on Safety at School, on Information and Communications Technology and Teacher Training, and on the Commission White Paper "Teaching and Learning: Towards the Learning Society". The Council received reports on the Commission's draft Recommendation on Quality Assurance in Higher Education and on the Fifth Research and Development Framework Programme.

  Ministers also discussed the Commission Green Paper "Education. Training, Research: The Obstacles to Transnational Mobility" and language teaching.

  The Council minutes will be placed in the Library as soon as they become available.

  Notes:

  1 £596.3 million at £1 = 0.7015 ECU.

  2 £613.8 million at £1 = 0.7015 ECU.

  EU Social Affairs Council
  Mr. Darvill
  To ask the Secretary of State for Education and Employment if he will make a statement on the outcome of the EU Social Affairs Council on 27 June. [6785]
  167
  Mr. Blunkett
  The UK was represented by the Minister of State, Department of Trade and Industry, the Minister for Employment and Disability Rights and me.

  The UK was welcomed to the Government's first Social Affairs Council by the Presidency, at the start of the meeting. I replied by setting out the Government's intention to take a positive approach to European employment and social affairs matters, including playing a full part in discussions of matters being taken forward under the Social Chapter. I also set out the Government's view that the key should be to tackle unemployment, particularly by taking action to develop people's employability and to promote labour market flexibility.

  Political agreement was reached on the common position of the draft Directive on the Burden of Proof in sex discrimination cases, incorporating UK amendments bringing the Directive into line with the approach of UK Courts in this field.

  The Council also reached political agreement on the proposed Directive on Chemical Agents, which will lay down minimum standards for the protection of workers from exposure to chemical agents.

  There was discussion of the Commission's follow-up to its 1995 Communication on social protection. The UK highlighted the need for innovative approaches to moving people out of dependency and into work.

  Reserve for LEAs

  £ million

  At 1 April 1990

  At 1 April 1991

  At 1 April 1992

  At 1 April 1993

  At 1 April 1994

  At 1 April 1995

  At 1 April 1996

  City of London

  201.8

  171.6

  173.0

  195.7

  232.8

  221.1

  221.9

  Camden

  17.3

  -1.0

  -7.3

  0.7

  7.0

  18.7

  36.5

  Greenwich

  24.6

  17.8

  17.9

  11.8

  35.5

  39.7

  45.1

  Hackney

  -0.5

  1.2

  0.6

  4.3

  7.4

  8.1

  8.3

  Hammersmith and Fulham

  34.4

  35.5

  30.4

  17.9

  22.6

  17.1

  16.5

  Islington

  9.9

  -2.5

  6.9

  0.3

  -0.6

  2.6

  8.1

  Kensington and Chelsea

  10.1

  8.5

  4.4

  20.5

  43.4

  62.8

  66.4

  Lambeth

  -4.7

  -16.3

  -14.8

  -7.5

  3.1

  -17.0

  -19.7

  Lewisham

  8.9

  -2.1

  -3.7

  3.0

  6.2

  7.6

  21.2

  Southwark

  12.6

  10.2

  6.0

  7.8

  30.9

  47.5

  51.9

  Tower Hamlets

  26.4

  20.7

  21.7

  18.9

  23.1

  27.6

  19.0

  Wandsworth

  53.1

  50.9

  46.4

  32.1

  57.4

  23.9

  43.6

  Westminster

  15.7

  15.9

  24.5

  27.9

  32.4

  44.6

  40.1

  Barking and Dagenham

  47.0

  44.8

  34.7

  40.7

  45.4

  49.0

  50.6

  Barnet

  16.0

  6.9

  9.9

  13.8

  32.3

  44.5

  45.3

  Bexley

  14.6

  0.0

  3.7

  7.8

  13.4

  15.0

  14.1

  Brent

  9.1

  8.1

  7.1

  5.6

  5.6

  9.4

  6.4

  Bromley

  36.8

  39.4

  38.2

  58.4

  77.2

  78.0

  74.5

  Croydon

  55.1

  39.7

  44.5

  30.2

  49.8

  58.5

  52.2

  Ealing

  0.0

  -8.2

  3.8

  23.4

  43.5

  46.1

  33.6

  Enfield

  0.0

  9.1

  7.3

  19.6

  41.7

  48.3

  50.2

  Haringey

  -0.5

  -6.9

  -6.7

  4.0

  16 7

  17.4

  27.4

  Harrow

  11.9

  7.4

  12.9

  21.2

  27.5

  29.9

  26.7

  Havering

  20.5

  20.0

  15.0

  14.8

  24.8

  26.2

  28.1

  Hillingdon

  31.1

  11.0

  1.1

  5.5

  12.3

  14.4

  11.6

  Hounslow

  39.9

  29.7

  18.5

  12.1

  13.1

  14.1

  10.8

  Kingston upon Thames

  9.1

  5.6

  3.6

  4.1

  8.0

  10.9

  10.1

  Merton

  36.6

  18.1

  13.2

  11.1

  19.1

  12.9

  6.3

  Newham

  3.4

  2.9

  6.4

  13.5

  40.5

  45.3

  59.0

  Redbridge

  5.4

  0.6

  3.4

  11.4

  20.3

  18.7

  19.8

  Richmond upon Thames

  -14.0

  4.9

  3.0

  7.3

  16.6

  20.0

  15.8

  Sutton

  9.0

  9.2

  6.5

  8.3

  15.8

  14.4

  15.0

  Waltham Forest

  2.1

  2.1

  2.4

  10.4

  17.6

  16.8

  13.2

  Bolton

  8.8

  3.2

  11.2

  10.3

  16.9

  19.5

  20.6

  Bury

  10.9

  9.0

  5.0

  5.8

  13.5

  14.1

  10.9

  168
  The Council also discussed the report of the Davignon Group on employee involvement in the European Company Statute and agreed Council Conclusions which note the contribution of the Report. They also agree that detailed discussion of the Statute should continue.

  The Council noted the Presidency report on action in the context of the French memorandum submitted to the Turin European Council in 1996. The Commission gave information on the social partners' discussions of information and consultation in the context of industrial restructuring and on progress in the area of the social dialogue. Presentations were also given on the European Social Fund and on the Commission's report on access to continuing training.

  Education Authority Reserves
  Mr. Don Foster
  To ask the Secretary of State for Education and Employment if he will list for each education authority in England, and by class and in total, the amount of balances held in reserve for each year since 1990. [6342]

  Mr. Byers
  Local education authorities have reported the information set out in the following tables on the level of general fund revenue reserves held each year since 1990. The figures include reserves held by schools under local management, and funds, which may be substantial, held for specific purposes which may not be available for general expenditure. Comparisons made between financial years may be affected by changing accountancy practices, particularly the reclassification of some provisions as reserves.
  169

  Reserve for LEAs

  £ million

  At 1 April 1990

  At 1 April 1991

  At 1 April 1992

  At 1 April 1993

  At 1 April 1994

  At 1 April 1995

  At 1 April 1996

  Manchester

  31.7

  4.0

  19.0

  -2.5

  13.2

  21.1

  20.9

  Oldham

  9.1

  31.6

  34.1

  40.0

  34.4

  25.4

  21.5

  Rochdale

  11.1

  3.6

  2.4

  5.3

  16.9

  16.7

  17.6

  Salford

  10.4

  2.0

  0.0

  6.6

  24.0

  28.2

  27.8

  Stockport

  8.4

  6.4

  6.4

  18.7

  27.0

  28.9

  27.1

  Tameside

  16.3

  8.4

  4.0

  0.8

  6.3

  10.5

  12.1

  Trafford

  14.7

  14.3

  15.5

  18.1

  52.9

  55.3

  62.3

  Wigan

  8.9

  13.1

  7.2

  11.5

  32.1

  33.8

  36.0

  Knowsley

  2.3

  0.2

  1.2

  3.8

  8.0

  12.5

  13.9

  Liverpool

  -2.1

  0.0

  -3.9

  9.9

  12.6

  9.0

  4.4

  St. Helens

  15.8

  18.3

  9.2

  11.6

  13.5

  13.4

  14.2

  Sefton

  7.0

  4.8

  3.9

  6.0

  8.6

  10.4

  6.3

  Wirral

  13.2

  0.0

  1.4

  6.4

  9.1

  13.8

  11.8

  Barnsley

  14.1

  19.8

  21.6

  20.5

  21.4

  15.7

  15.9

  Doncaster

  17.5

  8.0

  4.6

  23.7

  39.9

  41.1

  41.2

  Rotherham

  8.8

  7.8

  21.6

  19.9

  18.3

  25.2

  17.2

  Sheffield

  109.5

  0.0

  15.5

  16.1

  14.2

  8.9

  5.4

  Gateshead

  33.9

  25.0

  23.3

  22.3

  19.7

  30.0

  21.5

  Newcastle upon Tyne

  23.7

  8.3

  8.9

  24.4

  40.7

  40.7

  36.7

  North Tyneside

  6.8

  3.9

  2.9

  3.2

  10.3

  11.8

  12.4

  South Tyneside

  16.4

  10.3

  9.9

  10.3

  11.7

  12.8

  9.9

  Sunderland

  9.7

  24.8

  24.6

  22.7

  32.3

  31.5

  26.6

  Birmingham

  25.4

  24.1

  29.9

  65.5

  114.2

  89.6

  50.9

  Coventry

  0.0

  24.5

  11.0

  13.8

  66.1

  73.1

  68.4

  Dudley

  10.8

  11.7

  17.5

  17.1

  31.8

  30.1

  28.7

  Sandwell

  0.0

  0.0

  7.3

  20.5

  34.4

  30.8

  31.6

  Solihull

  4.1

  14.8

  7.0

  23.7

  30.6

  18.1

  22.9

  Walsall

  0.0

  32.4

  23.3

  18.6

  18.8

  19.3

  13.0

  Wolverhampton

  4.8

  4.2

  3.3

  12.3

  32.6

  44.1

  43.9

  Bradford

  5.8

  3.5

  4.8

  10.9

  27.5

  22.8

  12.1

  Calderdale

  5.7

  11.6

  8.3

  11.0

  12.7

  12.5

  10.1

  Kirklees

  12.0

  14.8

  7.4

  16.7

  26.3

  32.5

  27.8

  Leeds

  18.3

  15.1

  12.5

  21.9

  53.5

  82.2

  71.3

  Wakefield

  18.7

  13.4

  9.5

  17.5

  32.3

  34.7

  23.7

  Avon

  12.8

  13.3

  11.6

  19.8

  48.8

  26.7

  0.0

  Bedfordshire (old)

  13.2

  15.7

  16.9

  22.2

  25.7

  21.6

  16.8

  Berkshire

  4.5

  7.9

  17.0

  72.1

  58.0

  61.8

  58.3

  Buckinghamshire (old)

  26.7

  0.0

  27.5

  38.0

  46.8

  51.7

  52.5

  Cambridgeshire

  22.2

  58.5

  48.1

  53.8

  55.8

  55.5

  49.4

  Cheshire

  4.2

  41.9

  27.9

  50.2

  78.6

  67.1

  63.5

  Cleveland

  9.7

  7.4

  4.8

  13.4

  22.9

  27.8

  0.0

  Cornwall

  23.4

  28.4

  33.1

  24.8

  51.1

  45.4

  47.7

  Cumbria

  3.3

  10.1

  14.2

  12.4

  18.5

  19.8

  25.6

  Derbyshire (old)

  0.0

  0.0

  11.3

  21.1

  24.5

  23.1

  23.9

  Devon

  46.8

  52.8

  47.9

  47.1

  45.1

  36.5

  34.2

  Dorset (old)

  5.7

  14.4

  7.8

  4.3

  19.0

  25.3

  24.8

  Durham (old)

  22.4

  23.9

  22.0

  19.3

  20.1

  20.9

  30.1

  East Sussex (old)

  27.4

  8.9

  16.4

  21.6

  30.1

  42.9

  41.5

  Essex

  26.8

  18.1

  39.4

  45.4

  90.1

  120.1

  104.8

  Gloucestershire

  2.4

  2.4

  3.9

  13.8

  23.5

  25.0

  26.1

  Hampshire (old)

  7.4

  29.9

  52.9

  74.2

  83.0

  92.1

  70.7

  Hereford and Worcester

  7.4

  6.2

  5.4

  22.2

  36.4

  38.2

  35.4

  Hertfordshire

  13.0

  19.4

  25.6

  42.0

  82.6

  85.2

  75.9

  Humberside

  19.4

  27.5

  27.7

  25.0

  35.2

  37.1

  0.0

  Isle of Wight

  1.3

  5.0

  4.1

  4.7

  5.0

  0.0

  0.0

  Kent

  19.8

  30.4

  20.5

  33.9

  62.2

  67.1

  57.2

  Lancashire

  12.8

  21.3

  26.2

  69.4

  73.1

  61.5

  47.1

  Leicestershire (old)

  28.8

  24.2

  20.0

  15.3

  31.2

  35.3

  26.9

  Lincolnshire

  44.9

  50.9

  42.9

  42.3

  48.4

  39.9

  29.6

  Norfolk

  13.1

  13.1

  13.1

  31.0

  83.1

  85.9

  77.4

  North Yorkshire (old)

  38.8

  38.7

  34.4

  33.9

  36.6

  42.0

  0.0

  North Yorkshire

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  27.1

  Northamptonshire

  9.3

  9.1

  9.1

  37.9

  28.1

  33.4

  32.9

  Northumberland

  19.5

  24.8

  23.2

  19.8

  25.7

  25.4

  26.8

  Nottinghamshire

  0.0

  0.0

  6.5

  81.6

  73.8

  55.2

  32.1

  Oxfordshire

  16.2

  10.5

  12.0

  25.6

  48.4

  34.1

  25.8

  Shropshire

  9.7

  13.7

  9.9

  12.4

  22.1

  14.8

  10.2

  Somerset

  14.7

  15.9

  28.2

  28.3

  40.6

  41.9

  34.3

  Staffordshire (old)

  13.2

  17.1

  16.5

  20.7

  69.9

  87.2

  78.1

  Suffolk

  9.7

  9.8

  16.1

  34.5

  42.6

  52.2

  46.6

  Surrey

  8.7

  15.9

  41.7

  59.0

  99.7

  86.2

  64.4

  Warwickshire

  19.2

  12.8

  7.4

  32.2

  34.7

  26.4

  30.1

  West Sussex

  39.5

  7.2

  7.9

  27.9

  29.4

  34.4

  23.4

  Wiltshire (old)

  0.0

  25.4

  9.4

  20.0

  38.8

  42.7

  31.7

  Isles of Scilly

  0.5

  0.0

  0.6

  0.7

  1.2

  1.7

  2.1

  170 171

  Reserve for LEAs

  £ million

  At 1 April 1990

  At 1 April 1991

  At 1 April 1992

  At 1 April 1993

  At 1 April 1994

  At 1 April 1995

  At 1 April 1996

  Bath and North East Somerset

  UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  8.7

  Bristol UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  4.0

  South Gloucestershire UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  27.5

  North Somerset UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  25.5

  Hartlepool UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  5.4

  Middlesborough UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  6.0

  Redcar and Cleveland UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  Stockton on Tees UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  5.3

  East Riding of Yorkshire UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  4.0

  Kingston upon Hull UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  12.4

  North East Lincolnshire UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  6.7

  North Lincolnshire UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  9.1

  Isle of Wight UA

  0.0

  0.0

  0.0

  0.0

  0.0

  8.8

  12.5

  York UA

  0.0

  0.0

  0.0

  0.0

  0.0

  0.0

  17.6

  England

  1,873.9

  1,683.5

  1,737.2

  2,495.2

  3,810.6

  3,913.7

  3,657.3

  Inner London

  409.6

  310.3

  306.1

  333.3

  501.0

  504.4

  558.7

  Outer London

  333.0

  244.3

  228.6

  323.1

  541.4

  589.7

  570.7

  Mets

  512.6

  396.5

  391.3

  565.0

  978.1

  1019.9

  898.3

  Shires

  618.2

  732.4

  810.5

  1,273.1

  1,788.8

  1,789.2

  1,482.6

  Unitaries

  0.5

  0.0

  0.6

  0.7

  1.2

  10.5

  146.9

  1. Data from 1 April 1990 to 1 April 1995 is derived from LEAs' Revenue Summary (RS) returns.

  2. Data for 1 April 1996 is derived from LEAs' Revenue Account (RA) budget returns for 1997–98.

  3. The figures do not include appropriations to and from reserves during the financial year.

  4. The figures include LMS balances for schools and ear-marked funds which are not available for general use.

  Discretionary Awards
  Mr. Hinchliffe
  To ask the Secretary of State for Education and Employment if he will make a statement on the availability of discretionary awards from local education authorities in the United Kingdom and the steps he is taking to encourage young people on low incomes to continue their studies to further education. [5054]

  Dr. Howells
  Discretionary Awards are a matter for local education authorities. Each local authority is free, in the light of its own priorities, to determine its own budget and how the money is spent. We are committed to reviewing educational finance and maintenance for those older than 16 to ensure higher staying-on rates at school and college and that resources are used to support those most in need.

  Brixham and Dartmouth Community Colleges
  Mr. Steen
  To ask the Secretary of State for Education and Employment when he expects to announce the decision on the application for sixth form status for Brixham and Dartmouth community colleges; and if he will make a statement on the reasons for the delay. [5702]

  Dr. Howells
  [holding answer 30 June 1997]: The proposals for sixth forms for these schools are under consideration. We shall announce a decision as soon as possible, consistent with full consideration of the proposals.

  Leicestershire Training and Enterprise Council
  Mr. Reed
  To ask the Secretary of State for Education and Employment what levels of funding Leicestershire training and enterprise council have received in (i) 1994–95, (ii) 1995–96 and 172
  (iii) 1996–97; and what level of balances they carried forward in (1) 1994–95; (2) 1995–96 and (3) 1996–97. [6220]

  Dr. Howells
  The total amounts paid by the Department for Education and Employment to Leicestershire Training and Enterprise Council, and the amounts of reserves carried forward by the TEC are:

  £000

  Year

  Amount paid

  Reserves

  1994–95

  20,039

  5,221

  1995–96

  20,535

  6,473

  1996–97

  21,638

  —

  Information on the amount of reserves held by Leicestershire TEC at the end of the 1996–97 financial year is not yet available.

  Civil Service
  Mr. Laurence Robertson
  To ask the Secretary of State for Education and Employment if the Civil Service Compensation Scheme provision for the Principal Civil Service Pension Scheme(a) requires or (b) permits payments above the statutory minimum to members of staff being made (i) compulsorily and (ii) voluntarily redundant: and to what extent the arrangements for staff taking voluntary early severance or voluntary early retirement differ from those for staff being made voluntarily redundant. [5834]

  Dr. Howells
  The terms of the Civil Service Compensation Scheme for Principal Civil Service Pension Scheme members require set benefits to be paid to staff made compulsorily or voluntarily redundant. These are usually above the statutory minimum. As explained in my
  173
  reply on 16 June, Official Report, columns 49–50, no members of staff have been made either voluntarily or compulsorily redundant from this Department (including the Employment Service) over the last 12 months, but a number have taken voluntary early retirement or voluntary early severance.

  Where an early release has been agreed on compulsory terms, there is no difference between these arrangements and those which would apply in the case of redundancy. Where the release has been agreed on flexible terms, the main differences between these and the terms which would apply in the case of voluntary redundancy are in the length of notice required to be given or compensation payment made to those individuals concerned.

PRIME MINISTER

  Arms Reduction
  Mr. Cohen
  To ask the Prime Minister what action the Government are initiating to promote disarmament and non-proliferation. [4976]

  The Prime Minister
  We are strongly committed to preventing the proliferation of all types of weapons of mass destruction. We shall pursue this vigorously through maintaining and strengthening the relevant treaties (Non-Proliferation Treaty, Chemical Weapons Convention, Biological Weapons Convention) and international export control regimes (Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group).

  We have also made clear our commitment to the goal of the global elimination of nuclear weapons and our commitment to press for multilateral negotiations towards mutual, balanced and verifiable reductions in such weapons. We will be considering how best to implement these commitments, particularly in the context of the Strategic Defence Review.

HEALTH

  Cystic Fibrosis
  Mr. Reed
  To ask the Secretary of State for Health what representations he has received about including cystic fibrosis in the list of treatments set out in the NHS (Remission of Charges) Regulations 1988; and if he will make a statement. [6165]

  Mr. Milburn
  We receive regular representations from Cystic Fibrosis sufferers.

  Prescription charges, and all other aspects of Government spending, are being reviewed as part of the Government's Comprehensive Spending Review.

  General Practitioners
  Dr. Stoate
  To ask the Secretary of State for Health what plans he has to improve the recruitment and retention of general practitioners in the national health service. [5869]
  174
  Mr. Milburn
  We are aware that recruitment and retention difficulties are occurring in some areas. We are talking to the profession about ways in which some of the difficulties might be tackled; in particular how family friendly policies might be pursued.

  Fluorosis
  Mr. McCabe
  To ask the Secretary of State for Health what studies his Department has(a) commissioned and (b) evaluated into the causes of fluorosis in children; what links have been identified between fluorosis and the fluoridation of water supplies; and if he will make a statement. [5965]

  Mr. Milburn
  The Department of Health has not itself commissioned any research into the causes of fluorosis in children. Extensive research over many decades undertaken independently of the Department, confirms a link between water fluoridation and dental fluorosis.

  Genetic Material (Health Prognoses)
  Mr. Gordon Prentice
  To ask the Secretary of State for Health what assessment he has made of the implications for the NHS of developments which allow prognosis of an individual's future health based on analysis of genetic material. [5948]

  Ms Jowell
  The Department of Health and the Medical Research Council are currently jointly establishing an Advisory Group on Scientific Advances in Genetics (AGSAG) to advise the Department and the Medical Research Council on the implications of advances in genetic science for the National Health Service, public health and medical research. AGSAG will advise the Chief Medical Officer and the NHS Director of Research and Development on the likely implications for public health and for the NHS of scientific advances in genetics and will also advise the NHS Executive Board on the establishment and evaluation of innovative genetic services and their longer term development.

  The department also takes advice from a number of other specialist bodies including the Advisory Committee on Genetic Testing which advises United Kingdom Health Ministers on genetic testing issues, and the Expert Advisory Group on Cancer which advises the Secretaries of State for Health and Wales and the Chief Medical Officers for England and Wales on the organisation of cancers services including the implications of cancer genetics.

  Cannabis
  Mr. Gordon Prentice
  To ask the Secretary of State for Health (1) what recent discussions he has had with the British Medical Association on the legislation of cannabis for medical use; [6067]

  (2) what recent assessment he has made of professional opinion in respect of the legislation of cannabis for medical use. [6068]

  Ms Jowell
  We have not had any discussions with the British Medical Association on this subject. Department of Health officials, including professionals, are keeping the available research into the medicinal use of cannabis under review. At present, the evidence is inconclusive. The key point is that a cannabis—based medicine has not
  175
  been scientifically demonstrated to be safe, efficacious and of suitable quality. This is what has to happen before any drug can be licensed for medicinal use. Misuse of drugs legislation allows for research involving cannabis under Home Office licence. Any proposed clinical trial would have to be submitted to the Medicines Control Agency for approval or exemption in accordance with the Medicines Act 1968. Any application for a licence or a certificate, or both, would be carefully considered.

  North Lakeland Healthcare Trust
  Mr. Martlew
  To ask the Secretary of State for Health on what dates members of the Board of Carlisle North Cumbria Health Care Trust are due for reappointment. [5867]

  Mr. Milburn
  The terms of office of the non-executive directors of the North Lakeland Healthcare National Health Service Trust expire on the following dates:

  Appointed to

  Dr. Brian Lindley (Chairman)

  31 October 1997

  Mr. Paul Hargreaves

  31 October 1997

  Mrs. Jane Johnston

  31 October 1997

  Mrs. Barbara Loffill

  31 October 1997

  Mr. John Noctor

  31 October 1997

  Mrs. Jessica Riddle

  31 October 1997

  Electro-magnetic Fields
  Mr. Flynn
  To ask the Secretary of State for Health (1) what assessment his Department has made of the potential health risks posed by mobile phone usage; and if he will make a statement; [2723]

  (2) what assessment he has made of the possible health risks connected to the use of electric blankets; and if he will make a statement. [2710]

  Ms Jowell
  [pursuant to her reply 10 June 1997]: I regret that there was an error in my previous reply. The last paragraph should read as follows;

  "The NRPB's advice is that there is no convincing scientific evidence of exposure to either microwave radiation associated with mobile phone usage or electro-magnetic fields associated with electric blanket usage being harmful to human health."

  Water Fluoridation
  Mr. Etherington
  To ask the Secretary of State for Health (1) what representations he has received from the(a) British Dental Association, (b) British Fluoridation Society, (c) Northumbrian Water Ltd., (d) NHS Executive and (e) Water Services Association regarding the Water Fluoridation Order 1987; [3206]

  (2) what plans he has to review the Water Fluoridation Order 1987; and if he will make a statement. [3207]

  Mr. Worthington
  I have been asked to reply.

  I have received no representations from the organisations mentioned and have no plans to review the Water Fluoridation Order 1987. Fluoridation continues to be part of dental health promotion policy.

TREASURY

  Non-departmental Public Bodies (Fraud)
  Rev. Martin Smyth
  To ask the Chancellor of the Exchequer how many members of non-departmental public bodies have been found guilty of fraud offences in each of the last three years. [4949]

  Mr. Darling
  This information is not collected centrally. The arrangements for fraud reporting, which are described in Chapter 37 of Government Accounting, do not require non-departmental public bodies (NDPBs) to report frauds to the Treasury. Rather, they report to sponsoring Departments, which are asked to tell the Treasury only of any novel or usual frauds occurring in NDPBs. This approach, which was adopted some years ago, was part of an effort to encourage sponsoring departments to take closer and more direct responsibility for the oversight of NDPBs.

  Strategic Defence Review
  Mr. Keith Simpson
  To ask the Chancellor of the Exchequer if he will name the ministers, officials and political advisers in his Department who will be involved directly in the Strategic Defence Review. [5611]

  Mr. Darling
  As in any review of this nature the identity of the Ministers, officials and political advisers involved in the Strategic Defence Review will depend on the issues that arise, and on the detailed allocation of responsibilities at the time.

  Construction Industry
  Mr. Jack
  To ask the Chancellor of the Exchequer when he expects to announce his detailed proposals for the construction industry tax scheme outlined in paragraph 6B.17 of the 1997–98 Financial Statement and Budget report. [3377]

  Dawn Primarolo
  Legislation is contained in the 1995 and 1996 Finance Acts to provide for changes to be made to the construction industry tax scheme. The Inland Revenue are continuing to consult with industry representatives on the more detailed proposals which will be included in regulations. An announcement will he made shortly about the implementation of the new scheme.

  Capital Receipts
  Mr. Maples
  To ask the Chancellor of the Exchequer if, under present conventions, the spending of local authority capital receipts counts as public spending. [3261]

  Mr. Darling
  Local authority expenditure (including expenditure financed by local authority capital receipts) is scored as part of General Government Expenditure, except when other local authorities or central government receive the expenditure.

  Third World Debt
  Mr. Stunell
  To ask the Chancellor of the Exchequer what plans he has to secure a multi-national agreement on the cancellation or reduction of third world debt. [5850]
  177
  Mrs. Liddell
  The Heavily Indebted Poor Countries (HIPC) Initiative to reduce the debt burdens of the poorest countries to sustainable levels was launched at the IMF and World Bank Annual Meetings last September. At the recent Summit of the Eight held at Denver, the other Finance Ministers followed my right hon. Friend the Chancellor of the Exchequer in calling for rapid implementation of this initiative. However, there is no room for complacency, and we shall continue to press for the international community to provide further debt relief.

  Inland Revenue Offices
  Ms Atherton
  To ask the Chancellor of the Exchequer when the decisions to close the Redruth, Penzance and Truro Inland Revenue offices were taken, what were the criteria for these decisions; what are the terms of reference for the Inland Revenue rationalisation No. 3; and if he will make a statement. [3518]

  Dawn Primarolo
  Since 1993, the Inland Revenue has been carrying out a 10-year programme to reorganise its whole network of local offices. I have now asked the Revenue to review all of the proposed reorganisations which would result in closure of the only local office in a particular town. This includes Truro and Penzance but not Redruth which is not proposed for closure.

  Opticians (VAT)
  Mr. Hunter
  To ask the Chancellor of the Exchequer what was the total value of the VAT receipts which HM Customs and Excise has been obliged to return to opticians as a result of the High Court and Appeal Court hearings of the case brought by Leightons Opticians. [5245]

  Dawn Primorolo
  To date, Customs and Excise have refunded in the order of £211 million VAT and £63 million in statutory interest as a result of the aforementioned High Court decision.

  Single Market
  Mr. Jack
  To ask the Chancellor of the Exchequer, pursuant to H.M. Treasury press release 60/97 of 4 June 1997, what specific measures are required to complete the single market; and which of these the Government supports. [3359]

  Mrs. Liddell
  The Commission presented an "Action Plan for the Single Market" to the European Council in Amsterdam, describing in detail the steps it regards as necessary to complete the single market. A copy of the text has been placed in the House Library. The Government welcomes the Commission's initiative in bringing forward this plan and supports in particular its strategic targets for improving transposition and enforcement of existing rules, ensuring that competition policy is effective, simplifying legislation and reducing the level of state aids. Taking significant steps towards the completion of the single market will be a top priority for the British presidency of the European Union in the first half of 1998.

  Single Currency
  Mrs. May
  To ask the Chancellor of the Exchequer if Her Majesty's Treasury will publish quarterly reports of progress on preparations for the introduction of a European single currency. [3529]

  Mrs. Liddell
  The Bank of England publishes quarterly reports entitled "Practical Issues Arising from the Introduction of the Euro". The most recent report was published on 24 April. The Government is considering whether additional information would he useful to help businesses prepare for the practical implications of economic and monetary union, some of which will arise whether or not the United Kingdom participates.

  Health Spending
  Mr. Norman
  To ask the Chancellor of the Exchequer if he will publish his estimates of the future share of health spending as a percentage of gross domestic product. [3707]

  Mr. Darling
  The plans for health spending in 1997–98 and 1998–99 were published in the Financial Statement and Budget Report 1997–98 at the time of the 1996 Budget.

  Beer Duty
  Mr. Lansley
  To ask the Chancellor of the Exchequer if he will list the rates of beer duty applicable, by value and alcohol content, in(a) France, (b) the Netherlands and (c) Belgium. [3424]

  Dawn Primarolo
  The rates of duty are listed in ECUs.

  Member state

  Variables

  Excise1 duty/hl/° Plato (ECUs)

  Excise2 duty/hl/° alc (ECUs)

  Belgium

  —

  1.75

  —

  Netherlands

  up to 7° Plato

  9.29

  —

  from 7° to 11° Plato

  16.36

  —

  from 11° to 15° Plato

  21.79

  —

  above 15° Plato

  27.25

  —

  France

  —

  —

  2.62

  1 Excise duty is charged per hectolitre per degrees Plato.

  2 Excise duty is charged per hectolitre per degree of alcohol.

  Euro
  Mr. Fearn
  To ask the Chancellor of the Exchequer what assessment he has made of the ability of blind people to identify the different proposed Euro coins. [5296]

  Mrs. Liddell
  Organisations representing visually impaired people have been involved in discussions organised by the European Commission about euro coins. The Royal Mint has separately been in contact with organisations representing visually impaired people in the United Kingdom. During negotiations on the specifications of euro coins, the Government has supported the use of features to assist their recognition by visually impaired people.

  Local Government Reorganisation
  Mr. Timms
  To ask the Chancellor of the Exchequer how the Government propose to reflect local government reorganisation in the European regional classification known as NUTS. [6788]
  179
  Mrs. Liddell
  The Nomenclature of Units for Territorial Statistics (NUTS) is the European Commission's classification of sub-national areas for statistical purposes, and is managed by Eurostat, the Commission's statistical office. The Government Statistical Service has drafted a new NUTS structure for the UK which takes account of Government Office regions and local government reorganisation. The draft structure was the subject of wide consultation last summer, and the results of that consultation are incorporated in the final proposals. Dr. Holt, the Director of the Office for National Statistics, has submitted the proposals to Eurostat for their consideration. Copies of the proposals, and a report on the consultation of last year, are being placed in the Libraries of the House today.

  Dealing Rate
  Mr. Denzil Davies
  To ask the Chancellor of the Exchequer if he will instruct the Bank of England to place in the Library the press notices which it issues announcing each month's decision of its Monetary Policy Committee in respect of the official dealing rate. [5878]

  Mrs. Liddell
  [holding answer 30 June 1997]: The announcements of the Monetary Policy Committee's decisions will be placed in the House of Commons Library by the Bank of England.

  Taxation
  Mr. Heathcoat-Amory
  To ask the Chancellor of the Exchequer what are the implications of the policy of open government for the release of Treasury analysis of the effects of proposed taxation at the time of the Budget statement. [5981]

  Dawn Primarolo
  [holding answer 30 June 1997]: Information and analysis of the effects of the Budget are widely available by a number of means, in accordance with open Government Principles.

  The main source is the Financial Statement and Budget Report (FSBR), but information is also published in a Pocket Budget format, on computer disc and Treasury press releases. All published Treasury material is also available on the Internet. Other Government Departments and agencies also publish relevant Budget Information.

  Local Government Finance (Scotland)
  Mr. Swinney
  To ask the Chancellor of the Exchequer if he will list(a) the current formula for the determination of Scottish block expenditure, (b) each area of English expenditure to which it applies, (c) the changes that have been made to the formula since 1978 and (d) the level of Scottish block expenditure (i) planned, (ii) forecast and (iii) outturn, in each year between 1978–79 and 1997–98 at current and constant prices; and what plans he has to review the formula. [4218]

  Mr. Darling
  [holding answer 19 June 1997]: The existing Block arrangements are governed by the Barnett formula established in 1978.

  The Scottish Block changes by 10.66 per cent. of any changes made to provision for analogous English programmes in the course of the public expenditure survey and 10.06 per cent. of any changes to provision for analogous programmes which cover England and
  180
  Wales. The Block covers all expenditure by the Scottish Office and associated Departments except for that on Agriculture and Fisheries and on Nationalised Industries. The areas of comparable English, or English and Welsh, expenditure are: industry enterprise and training; roads and transport; housing; other environmental services; law, order and protective services; education and sport; arts and libraries; health; social work services; other public services; central government support to local authorities.

  Since the introduction of the Block the only significant change to the 1991 population based formula was made in 1992 to reflect the 1991 population Census.

  The Government will set out its proposals for the future financing of public expenditure in Scotland under devolution, in a White Paper which will be published before the recess.

  Information on the Scottish Block from 1985–86 is contained in the Scottish Office Departmental Reports published since 1991. Information for earlier years is contained in the Scottish Chapter in Part 2 of the Public Expenditure White Papers. (It will be noted that the composition of the Scottish Block has changed over time and that the price bases are different).

DEFENCE

  Construction Work Contracts
  Mr. Baldry
  To ask the Secretary of State for Defence what use his Department is making of the new engineering contract in construction work for which it is responsible. [3429]

  Mr. Spellar
  My Department has not let any contracts under New Engineering Contract (NEC) terms to date, but future use of the NEC is being examined as part of a review of our contractual arrangements conducted against the background of the Latham Report.

  Atomic Weapons Establishment
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence how many series of technical papers or reports have been produced by the Atomic Weapons Research Establishment since 1967; what were the titles of each series; what were the dates of each paper; how many papers or reports were published in each series; and how many of the papers and reports in each series are currently unclassified. [5682]

  Mr. Spellar
  Because of classification considerations and the volume of documentation it is not possible to respond in precisely the terms asked. However, between 1953 and 1970, the Atomic Weapons Research Establishment produced four main series of technical reports: B, (Bomb); E, (Weapon Effects); 0, (Research); and T, (Trials). Further separate series covered administrative and contractual matters and reports by AWRE Divisions. About 300 reports from the B and E Series from that period are due for transfer to the Public Records Office by October 1997. My noble Friend, the Minister for Defence Procurement will write to the hon. Member at that time with details of these reports and a copy of his letter will be placed in the Library of the House of Commons.

TRADE AND INDUSTRY

  Compensation (Credit Cards)
  Mrs. Dunwoody
  To ask the President of the Board of Trade if she will take action against companies which fail to meet claims for compensation on credit card transactions made overseas. [5690]

  Mr. Nigel Griffiths
  It is primarily a matter for the individual concerned to take action in such circumstances, through the courts if necessary. In so far as there may be a question of a company's fitness to hold a consumer credit licence, I look to the Director General of Fair Trading to act with his usual vigour.

  Consumer Protection
  Mrs. Dunwoody
  To ask the President of the Board of Trade if she will review the adequacy of consumer protection measures contained in section 75 of the Consumer Credit Act 1974. [5689]

  Mr. Nigel Griffiths
  I am considering all aspects of the Consumer Credit Act. The Director General of Fair Trading monitors the working of the Act and administers the consumer credit licensing system, and I have asked him to advise me on this matter.

  Ferry Merger
  Mrs. Dunwoody
  To ask the President of the Board of Trade when she expects to make a decision on the proposed merger between Stena and P&O Ferries. [4388]

  Mrs. Beckett
  The Monopolies and Mergers Commission (MMC) report on the proposed merger between P&O and Stena will be published as quickly as is practicable. I cannot comment on the likely publication date of the MMC report or its contents, which remain confidential until publication. Copies of the report will be laid before Parliament at the same time as it is published.

  Consumer Credit Act
  Mrs. Dunwoody
  To ask the President of the Board of Trade if she will consider the application of section 75 of the Consumer Credit Act 1974, to cover credit card transactions made overseas. [5858]

  Mr. Nigel Griffiths
  I am considering all aspects of the Consumer Credit Act. The Director General of Fair Trading monitors the working of the Act and administers the consumer credit licensing system, and I have asked him to advise me on this matter.

  Departmental Advisers
  Mr. Alan Simpson
  To ask the President of the Board of Trade if she will list each person advising or assisting her Department who has(a) membership of and (b) involvement in (i) the European Round Table of Industrialists, (ii) the European Centre for Infrastructure Studies, (iii) the Competitiveness Advisory Group, (iv) Transatlantic Business Dialogue, (v) the Association for the Monetary Union of Europe, (vi) Union of Industrial and Employers Confederations of Europe, (vii) Europe Bio and (viii) the World Business Council for Sustainable Development. [5311]
  182
  Mrs. Beckett
  Membership of the European Round Table of Industrialists, the Competitiveness Group and the Transatlantic Business Dialogue is on a personal basis. Sir Peter Bonfield is a member of the European Round Table and also advises the Department as a member of the Table Policy Forum.

  Membership of the European Centre of Infrastructure Studies, the Association for the Monetary Union of Europe, the Union of Industrial and Employers Confederations of Europe, Europe Bio and the World Business Council for Sustainable Development is on a corporate basis. Representatives from companies and organisations involved with these groups may advise Departments from time to time.

  Indonesia
  Mr. Bercow
  To ask the President of the Board of Trade what plans she has to visit Indonesia. [6077]

  Mrs. Beckett
  [holding answer 1 July 1997]: I have no plans to visit Indonesia at present.

  Accountancy Firms
  Mr. Mitchell
  To ask the President of the Board of Trade if she will take steps to ensure that accountancy firms criticised in her Department's inspectors' reports are required to(a) state that they have understood the criticisms and (b) demonstrate that they have taken the required steps to deal with the shortcomings. [4825]

  Mr. Nigel Griffiths
  [holding answer 25 June 1997]: Any consequential and continuing regulation of accountancy firms criticised in Inspector's reports is a matter for the firms recognised supervisory bodies.

  Mr. Mitchell
  To ask the President of the Board of Trade (1) if she will list those accountants disqualified from public practice as a result of the criticisms of their conduct in her Department's inspectors' reports; [4818]

  (2) if she will list those accountancy firms whose affairs have been investigated following criticisms of their conduct in her Department's inspectors' reports. [4820]

  Mr. Griffiths
  [holding answers 25 June 1997]: The investigation and disqualification from public practice of accountants and accountancy firms is a matter for their recognised supervisory bodies.

  EU Structural Funds
  Mr. Andrew George
  To ask the President of the Board of Trade if she will recommend to the European Commission that Cornwall should be designated as a separate NUTS 2 region. [5428]

  Mrs. Roche
  [holding answer 1 July 1997]: The Government Statistical Service is this week sending its proposals for the UK's NUTS structure to Eurostat (the European Commission's statistical office). A copy of the full set of proposals will he placed in the Library of the House. The Government Statistical Service's proposals include, amongst others, the suggestion that Cornwall should be a separate NUTS level 2 area.
  183
  Mr. George
  To ask the President of the Board of Trade (1) how many NUTS 2 level regions she will recommend to the European Commission in the present round of negotiations for EU structural funds; [5429]

  (2) what efforts she will make to secure Objective 1 status for Cornwall. [5430]

  Mrs. Roche
  [holding answers 1 July 1997]: Eligible areas for the European Structural Funds will not change before the end of 1999. For the period from 2000 onwards, the areas eligible under Objective 1 and the other Objectives depend on Commission proposals for future financing of the EU and for reform of the Structural Funds. These may lead to substantial changes to the current structure, including the system of Objectives. Once the Commission has put forward proposals for reform of the Structural Funds and these have been negotiated and agreed, the Government will then consider proposing particular areas within the United Kingdom.

  Patenting of Animals
  Mr. Flynn
  To ask the President of the Board of Trade what studies she has(a) commissioned and (b) evaluated into the patenting of animals; and if she will make a statement. [3226]

  Mr. Battle
  [holding answer 17 June 1997]: I am replying because my Department has responsibility for intellectual property matters.

  My Department has not yet commissioned studies into the patenting of animals nor I understand has the Ministry of Agriculture, Fisheries and Food.

NATIONAL HERITAGE

  Tourism
  Mr. Butterfill
  To ask the Secretary of State for National Heritage, pursuant to his answer of 25 June,Official Report, column 527, on VAT and VAT thresholds, what representations he had made to the Chancellor of the Exchequer in respect of the tourism industry's concerns. [6148]

  Mr. Tom Clarke
  I refer to the answer I gave to the hon. Member on 25 June 1997, col 527. The Chancellor of the Exchequer is aware of the tourism industry's concerns on VAT-related issues.

  Mr. Butterfill
  To ask the Secretary of State for National Heritage, pursuant to his answer of 25 June,Official Report, column 526, if he will introduce a scheme of statutory registration for all businesses supplying bed spaces for tourists; and if he will make a statement.[6149]

  Mr. Tom Clarke
  Once we have had the opportunity to consider the results of the ETB's Agenda 2000 consultation exercise on this issue, and the industry has commented on the detail of the proposed rating schemes for serviced accommodation, we shall be in a position to draw up proposals for any further steps needed to achieve our objective of raising the quality of accommodation in England.
  184
  Mr. Gordon Marsden
  To ask the Secretary of State for National Heritage what plans he has to curb the development of unlicensed and unregistered private households offering bed and breakfast facilities to visitors outside the six bed rule. [5951]

  Mr. Clarke
  I am aware of the concerns which many hoteliers have about the impact of the six person test for non-domestic rates and the six bed-space exemption for fire certification. Although neither of these is the direct responsibility of my Department, the interests of the tourism industry would of course be taken into account in any review of either.

  Mr. Marsden
  To ask the Secretary of State for National Heritage what plans he has to ensure that individual hotelier and guest house associations are included in any body charged with overseeing the proposed rationalisation of accommodation grading schemes throughout the United Kingdom. [5952]

  Mr. Clarke
  The ETB, AA and RAC will be consulting widely on the schemes announced in February this year for the rating of serviced accommodation. I hope that individual hotelier and guest-house associations will take the opportunity to feed in their views when the consultation document is published and to participate in the new schemes when they are launched.

  British Library
  Mr. Woolas
  To ask the Secretary of State for National Heritage if the new building at St. Pancras has now been handed over to the British Library Board. [6735]

  Mr. Chris Smith
  The new building at St. Pancras and 3.4 hectares of land were transferred to the British Library Board on 1 July.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Water Services
  Dr. Tony Wright
  To ask the Secretary of State for the Environment, Transport and the Regions which water companies(a) have and (b) have not accepted responsibility for a free leak repair service for domestic supply pipes following the recent water summit. [4990]

  Angela Eagle
  Water companies have generally responded positively and constructively to my right hon. Friend the Deputy Prime Minister's call to offer a free leak repair service for household customers' supply pipes. We are pursuing this issue with a few companies who have yet to give a fully satisfactory response and we shall be making a further statement in the next few days.

  Dr. Wright
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish the replies he has received from the water companies in response to the issues he raised with them at the recent water summit. [4991]

  Angela Eagle
  We shall publish an analysis of all the responses after obtaining clarification on certain matters from some of the companies. Copies of the responses will be placed in the Libraries of both Houses.

  Earth Summit 2
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, Transport and the Regions if he will place in the Library a copy of all United Kingdom documents submitted to, and ministerial speeches made at Earth summit 2. [5337]

  Angela Eagle
  The Prime Minister addressed the Special Session of the UN General Assembly on Monday 23 June. A copy of his speech has been placed in the House of Commons Library.

  Leghold Traps
  Mr. Coaker
  To ask the Secretary of State for the Environment, Transport and the Regions when he plans to implement European Regulation 3254/91 on leghold traps. [5558]

  Angela Eagle
  The Environment Council meeting on 19–20 June took no decision on the Commission's proposals for a "Framework Agreement on humane trapping standards", which are not supported by the UK or a number of other Member States. The Commission and the Council will now have to decide whether to pursue the proposals for an agreement which we regard as unsatisfactory, or consider other options, including the implementation of the original EU import ban under Regulation 3254/91 on the import of furs taken in leghold traps.

  Sewage Outfall (Falmouth)
  Ms Atherton
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what plans he has to ensure that water purity is maintained in Carrick Roads, Falmouth following South West Water's proposals for a sewage outfall there; [5482]

  (2) what assessment he has made of the likely impact on the Truro oyster fishery of South West Water's plans to site a sewage outfall in Carrick Roads, Falmouth; [5477]

  (3) how many representations he has received regarding South West Water's plans for a sewage outfall in Carrick Roads, Falmouth. [5483]

  Angela Eagle
  It is for the Environment Agency, in the first instance, to protect controlled waters from pollution through the operation of the discharge consents system set out in the Water Resources Act 1991 and other water pollution legislation. In relation to the proposed sewage outfall at Carrick Roads, Falmouth, the Agency has negotiated the scheme with South West Water as an interim measure to secure water quality improvements to meet the requirements of the Bathing Water Directive, pending completion of the full scheme planned for compliance with the Urban Waste Water Treatment Directive at the end of the year 2000. The Agency will have had in mind the need to ensure that the discharge meets the water quality requirements of all relevant legislation. This includes the need to meet the requirements of the Shellfish Waters Directive for those designated waters in the Fal estuary at Turnaware Bar and the Percuil River. In addition, the Agency operates a policy whereby, in relation to discharges where the commercial use of an area for harvesting shellfish has been established, no deterioration in water quality should 186
  normally be allowed which would he expected to cause a deterioration in the classification of waters at the time of consent determination.

  The Agency is minded to allow a discharge consent on certain conditions and subject to post-scheme monitoring of the discharge to demonstrate that its objectives have been met and to request adjustments to optimise the discharge regime in the light of operational experience. However, my Department has received 32 representations regarding South West Water's plans and is currently considering whether the Deputy Prime Minister should call-in for his own determination the associated application for discharge consent.

  Gas Safety
  Mr. Wigley
  To ask the Secretary of State for the Environment, Transport and the Regions what requirements are placed on gas emergency engineers in respect of the carrying of equipment to trace carbon monoxide. [5431]

  Angela Eagle
  There are no specific requirements. However, the Gas Safety (Management) Regulations 1996 place a duty on gas transporters and/or emergency service providers to attend the scene of a reported gas emergency and make the situation safe. The Regulations also require those undertaking the work to have the necessary skills, competence and hardware to enable them to discharge their duties effectively and safely.

  On the broader issue of gas safety, we are determined to support the Health and Safety Commission/Executive in their policy of raising awareness and encouraging tough enforcement where action is necessary. We have asked officials for advice before the autumn on ways in which a higher profile for gas safety can be achieved.

  Diesel (Sulphur Content)
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions if he supported moves by the Dutch Government to lower the maximum permissible level of sulphur in diesel from 2000 at the recent Council of European Environment Ministers meeting; and if he will make a statement.[6166]

  Angela Eagle
  The UK supported the proposal by the Dutch Presidency that diesel fuel containing an indicative level of 50ppm sulphur should be phased in from 2005. This proposal was accepted as part of the Common Position at the Council of European Environment Ministers. The UK also supported proposals for a level of 350ppm sulphur in diesel as a mandatory standard for 2000. This was proposed by the Commission, supported by the Presidency and accepted as part of the Common Position.

  Town and City Centres
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to amend planning guidance to local authorities in respect of their management of town and city centres; and if he will make a statement. [5055]
  187
  Mr. Raynsford
  The Government's planning guidance on town centres and retail developments, PPG6, already contains advice on town centre management; we have no current plans to amend it. The Government also provides core funding for the Association of Town Centre Management (ATCM ), which has a lead role in the promotion of town centre management. The Government has also provided financial support for three ATCM research projects, two of which I launched on 18 June. "Town Centre Partnerships: A Survey of Good Practice" (undertaken by Hillier Parker and URBED) and "Managing Urban Open Spaces" (undertaken by Chesterton's), and one on "Town Improvement Zones" (undertaken by KPMG) which will report shortly.

  Mr. Hinchliffe
  To ask the Secretary of State for the Environment, Transport and the Regions what discussions he has had with local authorities and their associations, concerning the economic viability of town centres, city centres and local markets. [5056]

  Mr. Raynsford
  Ministers and officials have regular meetings with the local authority associations, the Association of Town Centre Management and other bodies about town and city centre issues, including their economic wellbeing. I also addressed the Association of Town Centre Management on 18 June and launched two ATCM research projects "Town Centre Partnerships: A survey of Good Practice" (undertaken by Hillier Parker and URBED) and "Managing Urban Open Spaces" (undertaken by Chesterton's), both of which received financial support from the Government.

  English Partnerships
  Mr. Rendel
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the number of houses built by English Partnerships in each year since 1993, by local authority: and if he will make a statement. [5721]

  Angela Eagle
  English Partnerships has not built any houses since it was launched in 1993. The Agency cannot, under Section 160(2) of the Leasehold Reform. Housing and Urban Development Act 1993, provide housing itself. It can however, facilitate the construction of housing, both private and social, by others. The amount of housing indirectly created by English Partnerships in this way since it cane into being in November 1993 is as follows:

  Estimated number of housing units facilitated

  Number

  1993–94 (part)

  800

  1994–95

  2,900

  1995–96

  4,900

  1996–97

  5,200

  Mr. Pearson
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 23 June,Official Report, column 378, if he will give a breakdown of English Partnerships' spending in each of the last three financial years by standard planning region as covered by Government offices. [6050]

  Angela Eagle
  The information is not readily available. I have asked English Partnerships to write to the hon. Member with the information in due course. A copy of the letter will be placed in the Library of the House.

  Development Agency (East Midlands)
  Mr. Reed
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the time scale for the creation of the Regional Development Agency for the east midlands. [6219]

  Angela Eagle
  I refer my hon. Friend to the reply given to my hon. Friend the Member for Morley and Rothwell (Mr. Gunnell) on 11 June,Official Report, column 473, by my hon. Friend the Minister for the Regions, Regeneration and Planning.

  Estates Renewal Challenge Fund
  Dr. Naysmith
  To ask the Secretary of State for the Environment, Transport and the Regions if he will be running a further round of the Estates Renewal Challenge Fund; and when he will be inviting local authorities to apply for places on the 1998 Housing Transfer Disposal Programme. [6625]

  Ms Armstrong
  I will launch tomorrow Round Three of the Estates Renewal Challenge Fund and invite Local Authorities to apply for places on the 1998 Housing Transfer Disposal Programme. Transfer will remain a voluntary process and will take place only with the consent of tenants and the local authority.

  Local authorities should consider housing transfer as one of the options when developing their housing strategy. Transfer can provide an effective and value for money means of getting investment into local authority housing. We want to see transfer delivering a high standard of service for tenants, providing decent and good quality homes.

  Bids for money form the Estates Renewal Challenge Fund must also be set firmly within the context of authorities' housing strategies, and I am keen for authorities to package better and poorer quality housing together. This will enable more local authorities to revive and renew their worst estates. The Government is committed to improving standards of living and bringing back the sense of community which is so often lacking in large, poor quality estates.

  Disability Discrimination Act
  Mr. Burstow
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to extend the scope of the Disability Discrimination Act 1995 to incorporate drivers of minicabs and private hire cars. [5847]

  Ms Glenda Jackson
  We currently have no such plans. The public transport vehicles which are included in the Act are essentially those which offer the opportunity for spontaneous travel. Private hire cars are booked in advance, when customers can specify any particular needs they may have. Our priority is to use the powers which are currently provided by the Act to bring forward accessibility regulations for taxis, buses and coaches and rail vehicles. We hope to begin consultation on draft technical specifications in the next few weeks.

  Fuel Lubricants
  Mr. Edward Davey
  To ask the Secretary of State for the Environment, Transport and the Regions what research his Department has(a) commissioned and (b) evaluated into (i) non-lead fuel lubricants and (ii) XPCL in respect of their effect on fuel consumption; and if he will make a statement. [5975]

  Ms Glenda Jackson
  None. Investigation and evaluation of the performance of proprietary fuel additives and non-lead lubricants such as XPCL is not undertaken by the Department.

  Inland Waterways (Union Jack)
  Mr. Blizzard
  To ask the Secretary of State for the Environment, Transport and the Regions if he will review the law under which a fine can be imposed for flying the Union Jack on a boat on an inland waterway. [5877]

  Ms Glenda Jackson
  To change the law in this manner would require primary legislation. Although there are no current plans to review merchant shipping legislation, we will consider this issue the next time an appropriate opportunity arises.

  Channel Tunnel
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions (1) if he will place in the Library a copy of the report compiled by Channel Tunnel Safety Authority Observers attending the BINAT 7 channel tunnel exercise on 7 and 8 October 1995; [5671]

  (2) if he will place in the Library a copy of the report produced by members of the Public Safety Working Group of the Channel Tunnel Safety Authority who observed the TABLEX II exercise on 19 May 1995; [5686]

  (3) if he will place in the Library a copy of (a) the letter sent on 27 February 1996 by the Channel Tunnel Safety Authority to Eurotunnel regarding the BINAT 7 exercise and (b) Eurotunnel's response. [5672]

  Ms Glenda Jackson
  I am not in a position to do so. All three sets of papers contain information supplied by Eurotunnel. Disclosure would be a breach of clause 33 of the Concession Agreement of 1986, covering intellectual property and confidentiality, which includes a requirement on all parties to that Agreement, and also the Intergovernmental Commission and Safety Authority, to hold in confidence all documents and other information supplied to them by, or on behalf of, any other party.

  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what were the conclusions of the Channel Tunnel Safety Authority in relation to(a) alerting and activation, (b) delivery of emergency medical response, (c) evacuation of passengers and (d) Eurotunnel management of bi-national emergencies during the BINAT 7 exercise on 7 and 8 October 1995; [5685]

  (2) if passengers were evacuated within the 90 minute guidance during the BINAT 7 exercise undertaken in the Channel Tunnel on 7 and 8 October 1995. [5673]
  190
  Ms Jackson
  The Safety Authority letter of 27 February 1996, referred to in paragraph 86 of their Annual Report for 1995–96, is addressed to Eurotunnel and contains the key issues which the Safety Authority wished the Company to address following analysis of the outcome of the BINAT 7 emergency exercise.

  It is not the practice of the bi-national Safety Authority to release detailed information about emergency exercises conducted by Eurotunnel.

  Heathrow and Gatwick Airports
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment his Department has made of the reduced final approach aircraft separation trials at Heathrow and Gatwick airports. [5604]

  Ms Glenda Jackson
  National Air Traffic Services Limited commenced a trial at Heathrow in October 1994 to reduce the distance between aircraft at final approach from 3 to 2.5 nautical miles in certain specific circumstances. Its use has been infrequent as it is confined to daytime and used only when there is sufficient visibility. The trial was monitored continuously and modified from experience gained. A full safety assessment was carried out and is now being considered by the Safety Regulation Group of the Civil Aviation Authority. A similar trial is expected to start at Gatwick soon.

  Southport-Preston Train Services
  Mr. Fearn
  To ask the Secretary of State for the Environment, Transport and the Regions what provision exists for public subsidy to promote the reinstatement of a train service between Southport and Preston utilising the Burscough Curves. [5958]

  Ms Glenda Jackson
  As with all "new" services, it would be a matter for the sponsoring body to liaise with Railtrack, the train operating company and any other interested party, for example the relevant local authority, to establish whether such a scheme was viable. The Franchising Director has powers to designate services as experimentals for a period of up to five years. At the end of that time, the Franchising Director would decide whether he was prepared to provide financial support if necessary to secure the continued provision of the service.

  Transport Safety
  Liz Blackman
  To ask the Secretary of State for the Environment, Transport and the Regions what research his Department has(a) commissioned and (b) evaluated on the relationship between Government spending on transport safety and casualty rates. [6253]

  Ms Glenda Jackson
  The Department has not directly commissioned any research of this kind. However, the Royal Society for the Prevention of Accidents (ROSPA), as part of the work programme for which they receive a grant from the Department, have recently carried out a survey of Local Authorities covering spending on transport safety in relation to accident rates. The results are not yet available and therefore have not been evaluated.
  191
  The Department commissioned the Transport Research Laboratory to carry out research into the cost effectiveness of individual local authority safety schemes financed from the local transport capital settlement since 1992–93. The TRL report shows that the overall first year rate of return from 212 schemes in 12 authorities averaged 190 per cent.

  Seahorse and Exodus Incident
  Sir Richard Body
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the current state of his Department's investigations into the incident involving the flagged vessel "Seahorse" and the Irish vessel "Exodus" in March 1997. [6151]

  Ms Glenda Jackson
  The Marine Accidents Investigation Branch is carrying out an investigation into this tragic accident and its report will be sent to the Marine Safety Agency and forwarded to all involved parties.

FOREIGN AND COMMONWEALTH AFFAIRS

  General Affairs Council
  Mr. Hope
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will report on the outcome of the General Affairs Council on 26 and 27 June. [6436]

  Mr. Doug Henderson
  The 24 A points in Document 9256/97, the text of which will be placed in the libraries of the House as soon as it is available, were agreed.

  The Council noted the resolutions adopted by the European Parliament listed in Documents 8021/97 and 8773/97. Copies of these documents will also be placed in the libraries of the House as soon as they are available.

  Following agreement on the Amsterdam Treaty, the Council noted that legal editing of the text was under way, with a view to signature in Amsterdam in October. COREPER was mandated to consider any necessary preparations before the Treaty entered into force. The Council called on the Secretariat-General to report back after signature of the Treaty on possible organisational arrangements for setting up the CFSP policy planning cell, and integrating the Schengen Secretariat into the General Secretariat of the Council.

  The Council reconfirmed the position set out in the December 1996 Common Position on Cuba and approved the Presidency proposals for its evaluation and implementation. The objective of the European Union remains the encouragement of a process of peaceful transition to democracy, respect for human rights and fundamental freedoms, a sustainable economic recovery and an improvement in the living standards of the Cuban people. The Council will re-evaluate the Union's position after a further six months.

  The Council agreed conclusions on preparatory work for the extraordinary European Council on Employment.

  The Presidency and Commission reported on the Denver Summit of the Eight. Member States took note of the achievements of the Summit, particularly on the environment, financial stability and Hong Kong.
  192
  The Presidency and the Commission reported on the EU/Canada Summit held in Denver on 20 June. The Summit reviewed progress on the EU/Canada Action Plan and Political Declaration signed in December 1996. The UK intends to use its Presidency of the EU to build upon Dutch efforts to maintain the momentum of the EU/Canada process.

  The sixth EU/Japan Summit was held in The Hague on 25 June. It discussed the importance of a successful ASEM (Asia Europe Meeting) Summit in London in April 1998. Japan confirmed that broad-based deregulation remained an essential part of its structural reform programme. Both sides reiterated support for Chinese and Russian accession to the World Trade Organisation on commercially viable terms.

  The EU issued a declaration on the eve of the parliamentary elections in Albania which urged all political parties to participate and to respect the results and accept the OSCE assessment on their validity. The EU reaffirmed its commitment to support the elections including sending monitors, although responsibility for holding free and fair elections remains with Albania. It stressed the importance of consolidating the reconciliation process after the elections and is prepared to support economic recovery in Albania once certain conditions are met. Future relations with Albania depend on the restoration of democratic principles and sound economic practices. The Council agreed that, subject to an agreement with the IMF, it was desirable to hold an International Donors' Conference for Bosnia and Herzegovina at the earliest possible date. Close co-ordination with the High Representative, the World Bank and other donors would he required to achieve this.

  The Council discussed the current situation regarding the extension of the UN Transition Administration for Eastern Slavonia (UNTAES) mandate in Eastern Slavonia.

  The Council stressed the importance of efforts to conclude negotiations for Association Agreements with Egypt and Lebanon as soon as possible. It agreed to assess how to meet Spanish concerns about a review clause in the EU/Jordan Agreement dealing with the section on agricultural quotas.

  The Council discussed the implications for the EU of Burma's accession to ASEAN, underlining concerns about the deteriorating human rights situation in Burma, and calling on the SLORC to allow a visit to Burma by the UN Special Rapporteur. The Council confirmed its commitment to the EU/ASEAN dialogue and reaffirmed that Burma's membership of ASEAN did not automatically imply membership of ASEM. Possible additional measures against Burma will be considered again in September in the light of the forthcoming ASEAN Regional Forum/Post Ministerial Conference (ARF/PMC) meetings and developments in Burma.

  A Dutch proposal to solve the impasse in agreeing the mid term review for the Overseas Countries and Territories was opposed. I pointed out that the failure to reach agreement was prolonging the suffering of a number of Dependent Territories, including Montserrat. The UK urged the Council to proceed with discussions on the basis of the Irish Presidency proposal. This view was supported

  193
  by others. It was agreed that the Netherlands would consult further with the Commission with a view to reaching agreement in July.

  The GAC discussed the handover in Hong Kong. A Declaration was agreed, underlining the Council Support for continuing democracy in Hong Kong and calling for free and fair elections to take place as soon as possible, or in any case within twelve months.

  The Council discussed recommendations from the EU Special Envoy, Miguel Moratinos, for following up the declaration on the Middle East Peace Process agreed by the Amsterdam European Council. These included support for Egyptian mediation to break the current deadlock on the Palestinian track, action on the economic situation of the Palestinians, on economic assistance to Jordan, and to promote respect for democracy and human rights, and on efforts to build up long term momentum in the peace process. The Council extended Moratinos' appointment for a further year.

  The Council discussed the situation in the Democratic Republic of Congo and EU relations with the transitional government. It took note of the intention of the incoming Luxembourg Presidency to send a ministerial troika to Kinshasha. The Council approved the extension for 12 months of the mandate of the EU Special Envoy for the Great Lakes region, Aldo Ajello.

  The Council agreed that following the Ministerial Troika meeting in New York on 23 June, dialogue with the Organisation of African Unity (OAU) should be intensified at all levels, particularly regarding the proposed EU/OAU Summit.

  The 7th session of the European Economic Area (EEA) Council met on 26 June. All parties were happy with the continued smooth running of the EEA Agreement. The past year had seen important progress, particularly in the field of medicinal products. It was hoped that outstanding work on veterinary matters could he completed by early 1998. The non-EU members of the EEA outlined their interest in the EU gas market directive currently under negotiation. They also expressed their satisfaction that an agreement had been possible in the dispute between the EU and Norway over farmed salmon. A political dialogue covering the Middle East Peace Process, Russia, Albania, Former Yugoslavia and Transatlantic Relations also took place. The official record is contained in document EEE 1603/97, Presse 223.

  The EU/Australia Joint Declaration was signed. UK has always advocated a closer EU/Australia relationship—Joint Declaration establishes a foundation for co-operation.

  British Council
  Mr. Colvin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the future Government funding of the British Council, indicating the split between his Department and the Department for International Development. [6290]

  Mr. Fatchett
  This Department and the Department for International Development, together with other government departments, are currently examining the deployment of all their resources, including those 194
  dedicated to the British Council, as part of the Comprehensive Spending Review. The findings of the review will be submitted to the Cabinet's Committee.

  Amsterdam Treaty
  Sir Richard Body
  To ask the Secretary of State for Foreign and Commonwealth Affairs which European Union Governments are planning to put the Amsterdam treaty to a national referendum; and what is Her Majesty's Government's policy. [6104]

  Mr. Henderson
  Denmark will hold a national referendum on the Amsterdam Treaty in 1998. We are not aware of any other Member State whose Government has announced that it will hold a referendum, though the situation may change. The Government does not intend to hold a referendum on the Amsterdam Treaty.

  BBC World Service
  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken to implement the suggestions for monitoring the effect of restructuring the BBC World Service made by the then Minister of State at the Foreign and Commonwealth Office to the Foreign Affairs Committee on 12 November 1996; and if he will make a statement. [5832]

  Mr. Tony Lloyd
  We are monitoring closely the effects of the restructuring, and the implementation of the 20 agreed measures contained in this Department's/BBC World Service Working Group Report. We have regular meetings with the World Service to review progress. Diplomatic posts abroad have been asked to monitor World Service broadcasts. The Working Group is due to reconvene in the Autumn.

  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs is he will list the safeguards announced in October 1996 for the protection of the BBC World Service during the period of restructuring, indicating in each case the extent to which it has been implemented; and if he will make a statement. [5831]

  Mr. Lloyd
  Copies of this Department's/BBC World Service Working Group Report, which contain the 20 agreed measures designed to safeguard the World Service, are available from the Libraries of the House. The Working Group will reconvene in the autumn to ensure that the measures are functioning satisfactorily and producing the desired results.

AGRICULTURE, FISHERIES AND FOOD

  Live Animal Transport
  Mr. Caton
  To ask the Minister of Agriculture, Fisheries and Food (1) what steps his Department takes to ensure the enforcement of the Welfare of Animals during Transport Order 1994 and directive 91/628/EEC during the import of cattle into the United Kingdom from third countries; and if he will make a statement; [4143]

  (2) what assessment he has made of the compliance with (a) the Welfare of Animals During Transport Order 1994 and (b) directive 91/628/EEC in respect of (i) the recent birth of a calf on a sea voyage from Canada to

  195
  Bristol, (ii) the transport onward from Bristol of the calf and its mother, (iii) the weather during the voyage and (iv) the containers used for the cattle during the sea voyage. [4722]

  Mr. Morley
  Enforcement of the legislation concerning the welfare of animals during transport is the responsibility of local authorities, and Ministry staff liaise with them in relation to this work. In April officers from the enforcement authority for the Welfare of Animals during transport Order 1994, (North Somerset District Council), and the Ministry's veterinary service monitored the arrival of 227 cattle at the Royal Portbury Dock which had been transported from Canada. One heifer calved on the dockside and the movement of these two animals was authorised, after their welfare had been assessed, under a statutory notice to specified premises near Chepstow. A subsequent visit was made to these premises when both the heifer and calf were reported to be in good condition. The remaining cattle were reported to be in excellent condition and were transported to their destination. The containers provided suitable accommodation during this, and on other, sea voyages. No incidents of abrasions, lameness or injury to the animals whilst in the containers were reported.

  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 12 June,Official Report, column 536, what assessment he has made of the impact of the decrease in the number of abattoirs since 1975 on (a) journey times and (b) distances within England for animals between point of production and point of slaughter. [4145]

  Mr. Morley
  [holding answer 17 June 1997]: Various studies have been made of movement patterns in the British livestock sector. These indicate that a range of factors rather than just distance from the nearest abattoir influence the length of animals' journeys to slaughter.

  Fur Farms
  Mr. Coaker
  To ask the Minister of Agriculture, Fisheries and Food how many mink and fox fur farms there are in England and Wales by county. [5555]

  Mr. Morley
  There are currently no licensed mink farms in Wales. At 20 June 1997, there were the following mink farms in England:

  County

  Number of licensed mink forms

  Cornwall

  1

  Dorset

  1

  Hampshire

  1

  Isle of Wight

  1

  Lancashire

  6

  Northumberland

  1

  Staffordshire

  1

  South Yorkshire

  1

  West Yorkshire

  2

  Total

  15

  There is no requirement to register fox fur farms. However, I am not aware of any in England and Wales.

  Rare and Endangered Species
  Mr. Coaker
  To ask the Minister a Agriculture, Fisheries and Food what steps he is taking to review agricultural and food policies in order to safeguard rare and endangered species. [5183]

  Mr. Rooker
  The Government are fully committed to protecting biodiversity and will take account of this when considering all relevant aspects of agricultural and food policies.

  Slaughterhouse Pre-stunning Equipment
  Sir Richard Body
  To ask the Minister of Agriculture, Fisheries and Food what steps he plans to take to ensure compliance by abattoirs with paragraph 9(a)(ii) of Schedule 5 to the Welfare of Animals (Slaughter or Killing) Regulations 1995; and if he will make a statement. [6066]

  Mr. Morley
  Recent developments will help both enforcement staff and slaughterhouse operators to ensure full compliance with this requirement. A testing unit has been developed which will confirm whether electrical stunning equipment contains an effective impedance device ("fail-safe"). In addition, a "fail-safe" device which may be fitted into existing stunning equipment is expected to be available commercially later this year. Once this equipment is available, appropriate enforcement action will then be taken when necessary.

  Sir Richard Body
  To ask the Minister of Agriculture, Fisheries and Food what steps he plans to take to reduce the incidence of pre-stun electric shocks experience by turkeys at slaughter; and if he will make a statement. [6065]

  Mr. Morley
  The Government wish to see the highest standards of welfare at slaughter and this is one area where improvement can be achieved. Research, funded by this Ministry and others, has already suggested ways of reducing pre-stun shocks, and commercial trials on further developments are in progress. We are also supporting proposals issued by the European Commission to amend the present rules on slaughter to require slaughterhouse operators to take measures to prevent pre-stun shocks in turkeys.

  Association of Sea Fisheries Committees
  Mr. Bernard Jenkin
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his statutory annual meeting with the Association of Sea Fisheries Committees. [6071]

  Mr. Morley
  I represented the Minister at the annual statutory meeting with the Association of Sea Fisheries Committees (ASFC) which was held on the afternoon of 25 June. All twelve SFCs were represented, along with officials from their association and the Environment Agency. Officials from this Department and the Welsh Office were also present.

  There was a useful discussion of progress on a range of issues which the ASFC has requested for discussion. These included the implications for them of the local government review in England and Wales, the Sea Fisheries Regulation Act 1966, technical conservation, shellfish licensing and bass conservation.

  Bees
  Sir Richard Body
  To ask the Minister of Agriculture, Fisheries and Food what European Commission proposals are currently under discussion in respect of bee health; what estimate he has made of their cost to the British Government; and in what respects they differ from measures already taken on a national level. [6090]

  Mr. Rooker
  The Commission proposal for a regulation concerning the production and marketing of honey was adopted at the Council of Ministers meeting of 23–25 June. The regulation's main aim is to assist the beekeeping sector in dealing with the burden of the bee disease varroa.

  The programme will cost 15 mecu annually from 1998 (£10.81 million using the June 1997 exchange rate of 1 ecu = £0.7208). The gross United Kingdom contribution to this new expenditure would be 2.2 mecu (£1.6 million). However, the regulation will involve 50 per cent. reimbursement of eligible items of expenditure made under approved programmes. There could thus be some receipts from the Commission under the bee programme to set against the expenditure, but no final decision has yet been taken. At present we spend £1.5 million annually on bee health measures, some of which would be eligible for reimbursement.

  Ritual Slaughter
  Mr. Colvin
  To ask the Minister of Agriculture, Fisheries and Food (1) which religious bodies he has met to discuss proposed legislation to make ritual slaughter more humane; [6239]

  (2) what plans he has to proceed with the draft Bill drawn up by the last Government to make ritual slaughter more humane. [6238]

  Mr. Morley
  The Government has no plans to introduce new legislation on religious slaughter without prior stunning, which is already subject to detailed statutory requirements. We will, however, be looking to discuss the requirements of the religious communities with a view to encouraging, where possible, an increase in the incidence of stunning before slaughter.

SCOTLAND

  PFI Projects (Effect on Staff)
  Mr. McAllion
  To ask the Secretary of State for Scotland if he will ensure that NHS staff transferred to private sector employers under PFI projects retain the same wages, conditions and rights as when they were directly employed by the NHS. [5863]

  Mr. Galbraith
  In general terms, NHS employees who transfer to the employment of a private operator are protected by the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). TUPE protects the contract of employment at the point of transfer to the new employer. Thereafter, pay and other terms and conditions of service may only be changed as a result of the normal joint process of negotiation between employer and staff, and with the agreement of both sides. Under 198
  common law, any significant variance from the terms of an existing contract of employment could represent a breach of contract.

  Despite the protection offered by TUPE regulations described above, some staff may be concerned about transferring from the NHS to private sector employment. There are benefits for the NHS in the inclusions of service elements in current models of PFI, but it is also important to take the interests of employees fully into account, and we shall do so in the fundamental review of PFI in Health that is being currently undertaken.

  Mr. McAllion
  To ask the Secretary of State for Scotland what estimate he has made of the number of staff currently directly employed by the NHS who will(a) lose their employment and (b) transfer to private sector employers under the PFI proposal to build the new Edinburgh Royal Infirmary. [5864]

  Mr. Galbraith
  As a new hospital we expect the new Royal Infirmary to provide considerable efficiency savings particularly as it will be situated on only two sites whereas at present it comprises seven hospitals on four sites. We recognise, therefore, that there will be implications for staffing levels. The Trust will manage this process over a 5 year period and it is expected that excess posts can be shed mainly through natural losses.

  Around 190 non-clinical staff will transfer to work for the private sector employer.

  Public Appointments
  Mr. McAllion
  To ask the Secretary of State for Scotland what steps he is taking to include local communities in appointments of board members of non-departmental public bodies in Scotland. [5865]

  Mr. Dewar
  I believe that local communities should be prominently represented on public bodies whose work affects their areas. I have already announced measures to strengthen local democratic control of the Scottish water authorities. I shall continue to look for further opportunities to strengthen local community representation on the boards of non-departmental public bodies.

  Dr. Godman
  To ask the Secretary of State for Scotland what plans he has to modify public appointment procedures; and if he will make a statement. [5342]

  Mr. Dewar
  [holding answer 26 June 1997]: We are committed to full implementation of the Nolan procedures on public appointments. I am considering with colleagues how this might best be taken forward.

  Devolution
  Mr. Burstow
  To ask the Secretary of State for Scotland what his Department plans to spend on advertising the availability of postal votes before the proposed referendum on Scottish devolution. [5856]

  Mr. McLeish
  The Department plans to run a campaign to alert absent voters to the arrangements for voting in the referendum. The details of the planned campaign are still under consideration.

  Foxes
  Mr. Flynn
  To ask the Secretary of State for Scotland what assessment he has made of the benefits to forests of foxes: and if he will make a statement. [5822]

  Mr. Chisholm
  [holding answer 1 July 1997]: The Forestry Commission will publish a paper later this year setting out the results of its review of the available information on foxes and forestry. Foxes are an integral part of the woodland ecosystem. In particular, they are natural predators of rabbits and voles, both of which can damage young trees.

  Museums
  Mr. Garnier
  To ask the Secretary of State for Scotland if he will list the museums in Scotland which receive non-formula funding from the Higher Education Council. [6319]

  Mr. Wilson
  [holding answer 1 July 1997]: Museums which received specific grants for 1996–97 from the Scottish Higher Education Funding Council were the:

  Manschal Museum. University of Aberdeen.

  Russell Collection, University of Edinburgh.

  Collection of Historical Musical Instruments, University of Edinburgh.

  Hunterian Museum and Art Gallery, University of Glasgow.

  University Collections, University of St. Andrews.

  Mr. Garnier
  To ask the Secretary of State for Scotland what is his Department's policy with regard to the finding of university museums; and if he will make a statement. [6309]

  Mr. Wilson
  [holding answer 1 July 1997]: University Museums play an important part in maintaining, and enhancing access to, our intellectual and cultural heritage. Responsibility for funding of University Museums lies primarily with the parent universities, together with the Scottish Higher Education Funding Council and The Scottish Office.

  Mr. Garnier
  To ask the Secretary of State for Scotland what proposals he has to co-ordinate policy with the Department for Education and Employment and the Department of National Heritage with regard to the funding of university museums; and if he will make a statement. [6308]

  Mr. Wilson
  [holding answer 1 July 1997]: The Secretary of State for Scotland has responsibility for funding of University Museums in Scotland, and consults on major policy issues with Ministers from the Department for Education and Employment and the Department for National Heritage.

  Mr. Garnier
  To ask the Secretary of State for Scotland if he will list the museums in Scotland(a) owned and (b) managed by universities. [6314]

  Mr. Wilson
  [holding answer 1 July 1997]: There are 29 museums owned and managed by universities in Scotland and registered with the Museums and Galleries Commission. A list of registered museums in Scotland drawn up by Museums and Galleries Commission is available in the Library.

NORTHERN IRELAND

  Fair Employment Commission
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what is the religious and political breakdown of the members of the Fair Employment Commission. [5574]

  Mr. Ingram
  The religious breakdown of the current membership of the Board of the Fair Employment Commission is as follows:

  4 Protestants

  3 Catholics

  2 Other

  The information requested on political breakdown is not available.

  Fox and Mink Factory Farms
  Mr. Coaker
  To ask the Secretary of State for Northern Ireland how many fox and mink factory farms there are in Northern Ireland by county. [5556]

  Mr. Murphy
  None.

  Sir David Fell
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland from what date the retirement pension of Sir David Fell will be paid. [5571]

  Mr. Murphy
  Under the terms of the Principal Civil Service Pension Scheme (Northern Ireland) Sir David Fell will receive payment of an annual compensation payment equal to his preserved pension from 1 October 1997 until age 60 at which time his retirement pension will be paid.

  Dundonald Training Centre
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland which courses are being retained at Dundonald Training Centre; which courses will cease to exist this year; if the training centre will be required to limit the number of trainees it accepts; and if she will make a statement. [5488]

  Mr. Worthington
  Responsibility for the subject in question has been delegated to the Training and Employment Agency under its Chief Executive, Mr. Ian Walters. I have asked him to arrange for a reply to be given.

  Letter from Ian Walters to Mr. John D. Taylor, dated 27 June 1997:
  The Secretary of State for Northern Ireland has asked me, as Chief Executive of the Training and Employment Agency, to reply to your question about the courses being retained, or not retained, at Dundonald Training Centre and the overall limitation on numbers at the Centre.
  In the training year commencing September 1997, Dundonald Training Centre will offer apprenticeship training in Mechanical Engineering, Electrical Engineering, Fabrication, Light Vehicle Repair, Light Vehicle Body Repair, and Contractors Plant Maintenance.
  Apprenticeship courses for construction industry trades will not be available to new entrants but the Centre will ensure that trainees in this sector who have completed their training at Dundonald

  201
  continue to be monitored during their subsequent period of employer based training. The Business Administration class previously offered at the Centre will also cease.
  Short term courses to meet the needs of employers and, in particular, courses in natural gas fitting will continue to be offered wherever possible.
  All the Agency's Training Centres limit the number of trainees they accept in line with the resources available. Dundonald Training Centre will be limited to 75 new entrants in its Jobskills programme in 1997/98. There is no limit to the number of trainees who may be admitted to courses which are directly funded by employers.

  Director of Public Prosecutions
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what steps her Department is taking to increase the speed at which the Office of the Director of Public Prosecutions processes cases to conclusion; and if she will make a statement about its targets. [5573]

  Mr. Ingram
  The Northern Ireland Office is responsible for providing the Director of Public Prosecutions for Northern Ireland with staff, accommodation and other resources. The Director, who is independent of government, is superintended in the due performance of his functions under the Prosecution of Offences (Northern Ireland) Order 1972, by the Attorney General for Northern Ireland.

  The Northern Ireland Office, both in relation to the Office of the Director of Public Prosecutions and, as part of its general responsibility for criminal justice in Northern Ireland, seeks to maintain and improve the efficiency of the criminal justice system as a whole. Measures in hand include responsibility for an administrative time limits scheme, research commissioned in conjunction with other criminal justice agencies on the time taken to investigate and process prosecutions, and, facilitating work by inter-agency working groups tackling delay issues.

  Under the administrative time limits scheme, an overall time limit is set for custody cases of 10 months from first remand before the Magistrates' Court to arraignment at the Crown Court. Within this scheme, time limits are set for individual stages; performance in these stages will depend on various criminal justice agencies including the Royal Ulster Constabulary and the Northern Ireland Court Service and not solely the Office of Director of Public Prosecutions. The overall target from receipt of a police investigation file by the Director to committal for trial to the Crown Court is 97 days. In 1996, this was met in 73 per cent. of scheduled cases and 86 per cent. of non-scheduled cases respectively.

  A number of cases arising in Northern Ireland are of a particularly complex nature, whose investigation and preparation is necessarily prolonged. Nevertheless, it is vital to continue to explore means of avoiding delay. My Department, in conjunction with others more directly involved in the criminal justice process, is continuing to investigate ways in which delay can be addressed at every stage.

  Royal Group of Hospitals, Belfast
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland what representations she has received in respect of the recent introduction of car parking charges at the Royal Group of Hospitals in Belfast; and if she will make a statement. [5409]
  202
  Mr. Worthington
  Representations have been received from the hon. and learned Member for North Down (Mr. McCartney) and the hon. Member for South Down (Mr. McGrady), some local councils and the Trade Unions. The need to expand the car parking facilities has been driven by the loss of some 500 spaces subsumed by the planned development scheme. The Royal Group of Hospitals and Dental Hospitals Health and Social Services Trust considered that the private finance route was the only feasible option to expand and improve the car parking facilities. The Trust thinks that the imposition of a car parking charge is preferable to diverting resources from the provision of patient care. Discussions have taken place with the Trade Union side and I am hopeful that the situation will be resolved to the benefit of patients and staff and all those involved in this matter.

  Public Appointments
  Mr. Godman
  To ask the Secretary of State for Northern Ireland what plans she has to modify public appointment procedures; and if she will make a statement. [4420]

  Mr. Paul Murphy
  [holding answer 24 June 1997]: Ministerial appointments to executive non-departmental public bodies in Northern Ireland have been subject since 1 July 1996 to the Code of Practice and Guidance of the Northern Ireland Commissioner for Public Appointments, whose Office was created on the recommendation of the Nolan Committee on Standards in Public Life. The Government will be seeking opportunities to ensure that the appointments process is as open and inclusive as possible, and will be considering with the Commissioner whether his remit should he extended to other public bodies.

  Extradition
  Mr. Roy Beggs
  To ask the Secretary of State for Northern Ireland what progress has been made in obtaining co-operation from the United States Government for the extradition of George Finbar Ross to Northern Ireland to answer charges relating to the collapse of International Investments Ltd. Gibraltar. [4575]

  Mr. Ingram
  There has for some time been good co-operation with the United States Government, through the Department of Justice, in the matter of the extradition of George Finbar Ross. Discussions with the United States Government on the case are continuing.

  Disturbances (Belfast)
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what were the police costs associated with disturbances in the Limestone road area of Belfast during, the past year. [4068]

  Mr. Ingram
  It is not possible to give separately costs specifically associated with disturbances in the Limestone road area.

WALES

  "Welsh Economic Trends"
  Mr. Wrigley
  To ask the Secretary of State for Wales if he will publish annually "Welsh Economic Trends". [5436]
  203
  Mr. Hain
  The information previously published in Welsh Economic Trends is now published regularly in other volumes. Data on the Welsh economy are published annually in the Digest of Welsh Statistics; in addition, economic data for local authorities and other areas now appear annually in the Digest of Welsh Local Area Statistics.

  Nursery Education
  Mr. Barry Jones
  To ask the Secretary of State for Wales (1) what plans he has to improve nursery education provision in rural areas; [6101]

  (2) what assessment he has made of the adequacy of nursery provisions in rural areas. [6102]

  Mr. Hain
  At January 1996, over 90 per cent. of four year olds were receiving education in state schools. In predominantly rural areas, provision ranged from 70 per cent. in Gwynedd to 100 per cent. in Powys. Resources provided for the 1997–98 financial year are geared to funding at least a half-time place for every four year old in Wales whose parents want this. From April 1998, local authorities will be expected to produce early years development plans. These will address the issues of demand for places, additional provision needed to meet any shortfall, and the quality of provision.

  Low Pay Commission
  Mr. Öpik
  To ask the Secretary of State for Wales if he will ensure that the Low Pay Commission consults the small business sector in Wales; and if he will make a statement. [6085]

  Mr. Hain
  I have ensured that the Low Pay Commission will consult widely in Wales; including the Federation of Small Businesses, whom I met recently to discuss this precise matter.

SOCIAL SECURITY

  State Retirement Pension
  Mr. Quentin Davies
  To ask the Secretary of State for Social Security what would be the annual cost to public funds, net of savings in other social security expenditure, of increasing the basic state retirement pension by £5 per week for a single person, and by £8 for a married couple. [3531]

  Mr. Denham
  Security in retirement will be one of our key priorities. We will retain the Basic State Pension as the foundation of pension provision, increasing it at least in line with prices. The estimated net cost of increasing the standard rate of Basic State Pension by £5 for a single person and £8 for a married couple in 1997–98 is £.2.1 billion.

  Source:
  Gross costs provided by Government Actuary's Department based on April 1997 estimates. Net costs have been calculated by the Department of Social Security Analytical Services Division.

  Notes:

  1. Figure is rounded to the nearest £100 million.

  2. Calculation assumes that increases apply to Retirement Pension and all linked benefits (i.e.: Widows Benefits, Incapacity Benefit, Non-Contributory Retirement Pension and Industrial Injuries Death Benefits and Adult Dependency Increases paid with these benefits).

  Disabled People (Computer Equipment)
  Mr. David Atkinson
  To ask the Secretary of State for Social Security what grants and allowances for computer equipment are available to meet the specific needs of disabled people. [4378]

  Mr. Field
  The Government's overall objective in providing equipment to disabled people is to help them live as fully and independently as possible.

  The Department for Education and Employment has the main responsibility for making grants and allowances to disabled people in order to remove barriers to employment. The largest area of support is through the Employment Service's Access to Work programme. Last year the programme helped around 10,000 disabled people with specialist support and equipment, tailored to their individual needs. No details are held on grants given specifically for the purchase of Information Technology.

  In addition computers are supplied in some cases by the National Health Service, mainly as communication aids to people with communication difficulties. The National Health Service also supplies electronic environmental controls to help severely physically disabled people operate home appliances, which provide access to computers where necessary.

  Grants and allowances for computer equipment are not generally available through the Social Security system.

  Cold Weather Payments
  Mr. Evans
  To ask the Secretary of State for Social Security how many cold weather payments were made; and how much was spent on cold weather payments in the winter of 1996–97, [4724]

  Mr. Keith Bradley
  During the winter of 1996–97, almost five million cold weather payments worth over £42 million were issued.

  Housing Benefit (Portsmouth)
  Mr. Hancock
  To ask the Secretary of State for Social Security how many people are claiming housing benefit in Portsmouth; and what were the figures for(a) 1974, (b) 1979, (c) 1988 and (d) 1996. [4742]

  Mr Keith Bradley
  The existing Housing Benefit scheme was introduced only in 1988. In November 1996, the latest date for which figures are available, Portsmouth City Council paid housing benefit to 21,190 recipients.

  Source:
  Housing Benefit Management Information System (HBMIS) quarterly caseload count.

  Notes:
  1. Recipients may he a single person or a couple. 2. The local authority advises that 3,900 of the recipients were tenants of Portsmouth council properties in Havant.

  Internet
  Mr. Sheerman
  To ask the Secretary of State for Social Security what use she plans to make of the Internet to make Government more open. [5100]

  Mr. Field
  The Government is looking at ways to be responsive and accessible through electronic communication. The Department already has a presence on the Internet World Wide Web with information about
  205
  Social Security and the work of the Department and its Executive Agencies. We see the Internet as an important tool in our plans to modernise the Social Security system, and in helping us to provide more and better quality information to the public. In developing its use we will have regard to the needs of all our customers (many of whom may not have ready access) and to data protection and other issues.

  Child Support
  Mr. Kirkwood
  To ask the Secretary of State for Social Security in respect of how many cases(a) her Department and (b) a Child Support Officer has sought leave to appeal against Child Support Commissioner decisions to the Court of Appeal. [5305]

  Mr. Keith Bradley
  The Chief Child Support Officer has sought leave to appeal the decisions of Child Support Commissioners in five cases. In one case leave to appeal was ruled out of time by the Commissioner. Leave to appeal on three cases was refused initially by Commissioners, but subsequently granted by the Court of Appeal. All four of these cases involved joint applications by the Chief Child Support Officer and the Secretary of State. In the remaining case the Chief Child Support Officer alone applied for leave to appeal, but this was not determined by the Commissioner who invited a late application for the decision in question to be set aside (the application to set aside was made, accepted and the decision duly set aside).

  The Secretary of State has made no applications for leave to appeal a Commissioner's decision in addition to those made jointly with the Chief Child Support Officer.

  Mr. Kirkwood
  To ask the Secretary of State for Social Security what plans she has to introduce the penalty for late payments of child support maintenance provided for under section 41A of the Child Support Act 1991; and what form this penalty will take. [5249]

  Mr. Bradley
  The Government believes that all children are entitled to the support of both parents, irrespective of where they live. We will be looking carefully at the steps that can be taken to encourage absent parents to pay the maintenance they owe and we will consider whether a financial penalty under section 41A of the Act might have a part to play in achieving that aim. In the meantime, administrative arrangements are in place under which persistent non-payers can be required to pay up to 40 per cent. of their net income in current maintenance and arrears, rather than the usual maximum of 33 per cent.

  Benefit Entitlement (Capital Limits)
  Mr. Hinchliffe
  To ask the Secretary of State for Social Security if she will review the notional income levels from capital for benefit entitlements. [5057]

  Mr. Keith Bradley
  We want to develop a Social Security system that supports work, savings and honesty. Our first steps are to focus on helping people off welfare and into work and to review the central areas of insecurity for older people. As time and resources permit, we will be examining other aspects of current benefit rules.
  206
  The notional (tariff) income from capital attempts to strike a balance between encouraging people to save and an expectation that people with more substantial savings can make some contribution towards their living expenses from those savings. The tariff is currently applied if a person has over £3,000 in capital, unless they are in a residential care or nursing home, or in certain types of residential accommodation, in which case it is applied only on savings over £10,000.

  Appeal Tribunals
  Mr. Wallace
  To ask the Secretary of State for Social Security (1) what was the average waiting time between the submission of an appeal and the tribunal hearing in respect of(a) social security appeal tribunals, (b) child support appeal tribunals, (c) disability appeal tribunals and (d) medical appeal tribunals, in (i) Scotland, (ii) Orkney and (iii) Shetland in (1) 1995 and (2) 1996; [6041]

  (2) how many applicants who have submitted an appeal to the Social Security Appeal Tribunal since 1 January 1995 in (a) Scotland, (b) Orkney and (c) Shetland have had to wait more than (i) three months, (ii) six months, (iii) one year and (iv) 18 months or more for a tribunal hearing to take place; [6043]

  (3) how many applicants who have submitted an appeal to the Disability Appeal Tribunal since 1 January 1995 in (a) Scotland, (b) Orkney and (c) Shetland have had to wait more than (i) three months, (ii) six months, (iii) one year and (iv) 18 months for a tribunal hearing to take place; [6045]

  (4) how many applicants who have submitted an appeal to the Medical Appeal Tribunal since 1 January 1995 in (a) Scotland, (b) Orkney and (c) Shetland have had to wait more than (i) three months, (ii) six months, (iii) one year and (iv) 18 months for a tribunal hearing to take place; [6042]

  (5) how many applicants who have submitted an appeal to the Child Support Appeal Tribunal since 1 January 1995 in (a) Scotland, (b) Orkney and (c) Shetland have had to wait more than (i) three months, (ii) six months, (iii) one year and (iv) 18 months or more for a tribunal hearing to take place. [6044]

  Mr. Keith Bradley
  We intend to bring forward legislation to speed up appeals arrangements for all Social Security matters. Further details will be announced shortly.

  Questions on the operational performance of the Independent Tribunal Service should be directed to its President, Judge Bassingthwaighte.

  Absent Parents
  Mr. Pearson
  To ask the Secretary of State for Social Security, pursuant to his answer of 24 June,Official Report, column 490, in what circumstances child support assessments may exceed 30 per cent, of an absent parent's net income. [6051]

  Mr. Keith Bradley
  An absent parent may be required to pay more than 30 per cent. of his net income, as assessed under the maintenance formula, if he is subject to an interim maintenance assessment because he has not co-operated with the Child Support Agency or if he owes arrears. Any absent parent who has co-operated with the
  207
  Agency will retain at least 70 per cent. of his net income. In exceptional circumstances, an assessment may also exceed 30 per cent. of an absent parent's net income where the £1 de minimis rule on a change of circumstances applies and assessment is not immediately revised; or where the absent parent is required to pay the minimum amount (currently £5 a week) and his total income is £16.66 or less a week.

  Industrial Injuries
  Mr. Öpik
  To ask the Secretary of State for Social Security if she will make a statement on the rules governing Industrial Injuries Disablement Benefit for the prescribed disease occupational deafness. [6084]

  Mr. Denham
  Industrial Injuries Disablement Benefit can be paid if a person has worked for an employer for 10 years in certain jobs where noise is a hazard, and they have suffered a hearing loss of at least 50 decibels in both ears due to damage in the inner ear, and in at least one ear this damage was due to noise at work. A person must have worked in one of the specified jobs at some time during the five years before they make their claim. A wide range of jobs is specified in the regulations, and the Government are advised by the independent Industrial Injuries Advisory Council about those jobs which they consider are particularly at risk and should be added to the regulations. The Council is currently reviewing the list of diseases for which benefit can be paid, including occupational deafness.

  The rules for claiming Industrial Injuries Disablement Benefit for occupational deafness, and the jobs which are covered, are clearly set out in leaflet NI 207 produced by the Benefits Agency which is widely available.

  Departmental Spending Plans
  Mr. Burgon
  To ask the Secretary of State for Social Security if she will make a statement on Her Department's spending plans. [6787]

  Ms Harman
  My main priorities are to tackle social division and worklessness. Work is the best form of welfare and our New Deal will be an investment in the future of lone mothers, the young jobless and the long-term unemployed. We will also bring forward proposals to extend the New Deal to sick and disabled people. My Department's spending will no longer be used as an alternative to the proper strategy of ensuring that all of our people share in our economic prosperity.

  Spending plans for the immediate future, 1997–98 and 1998–99, assume that a number of measures announced in the November 1996 Budget will be taken forward. I have undertaken a rigorous review of this unwelcome legacy and have made some changes. The details of the New Deal for lone mothers and the changes to the proposals I inherited are as follows:

  Lone mothers
  We have today announced our New Deal for Lone Parents to help them take-up work We will offer help and advice on jobsearch, childcare and training to 40,000 lone parents this year and half a million next year.

  Childcare
  The allowance for childcare costs in Family Credit, Housing Benefit, and Council Tax Benefit will be extended and improved to make it easier for lone parents and breadwinners with disabled partners to return to work.
  208
  From April 1998 the disregard for childcare costs will be increased from a maximum of £60 to £100 a week where there are two or more children in the family and the maximum eligible age will be increased from 11 to 12.
  These measures will be financed from the windfall levy and will cost some £200 million over this Parliament.

  Child Support Agency
  An additional £15 million a year will be invested from 1998–99 to assist lone mothers. This funding will help them by raising an extra £120 million in maintenance and will ensure that absent parents face up to their obligations.

  Housing Benefit
  The extension of the single room rent to those aged 25 to 59 will not now proceed in October. The cost of this will be met in part by adjusting the level of non-dependent deductions from next April. We intend to protect the position of those in greatest need.

  Jobseeker's Allowance
  The previous Government decided that the waiting days before Jobseeker's Allowance becomes payable will be increased from 3 days to 7 days from April 1999. However, by managing the cycle of Jobseeker's Allowance payments, we will ensure that nobody will have to wait more than the current maximum time before they receive their first payment of benefit.
  I am committed to keeping my spending within the ceiling for social security expenditure already announced. I am also committed to modernising the social security system. The following measures will ensure that overall spending is contained and represent a step forward in modernising the system.
  The time limit of three months for claiming social security benefits will be reduced to one month, in line with the current backdating rules where there is a change of circumstances. These limits will apply to Housing Benefit and Council Tax Benefit.
  The intention is that the new provisions will come into force from June 1998, except for Housing Benefit and Council Tax Benefit which is subject to necessary legislation and has a planned date of introduction from October 1998.
  The alignment of the time limits will be an integral part of modernising and streamlining the social security system and underlines the importance of people making their claims promptly.
  In addition improved Social Fund loan recoveries allow for the planned level of gross funding to be delivered with £3 million less net budget, releasing these savings to be used elsewhere. The discretionary Social Fund gross budget for this year remains at £467.5 million, an increase of £27.5 million over 1996–97.
  Other measures announced in the November 1996 Budget but not implemented by the time of the General Election will go ahead as planned. They are as follows:

  new arrangements for Compensation Recovery;

  the abolition of the 50 per cent. top-up which allowed certain rents above the average to be met in Housing Benefit;

  restricting Council Tax Benefit so that claimants with property in Bands F, G and H, have their Council Tax Benefit restricted to that of Band E;

  removing the right to claim Disability Living Allowance for those aged between 65 and 66;

  standardising the date on which child allowances are reviewed in Family Credit and Disability Working Allowance.

  Withdrawal of entitlement to Lone Parent Family Premium in Income Support for new claimants will take effect in April 1998. Withdrawal of the lone parent rate of Child Benefit is subject to necessary legislation, and is now expected to come into effect from June 1998.
  209
  These measures are necessary to ensure that social security expenditure remains within the previously announced ceilings. The re-prioritising of expenditure in this package is the beginning of an urgent and long overdue reform of the social security system. We have no illusions about the size of the task, but the rewards for getting it right for individuals, for society and for public expenditure are enormous.

  Publications (Blind and Partially Sighted People)
  Mr. Burstow
  To ask the Secretary of State for Social Security how many of her Department's publications have been available in(a) Braille, (b) audio tape and (c) large print in each year since 1992; and what percentage of the total number of publications this represents in each case. [3604]

  Mr. Field
  [holding answer 17 June 1997]: I am sorry that the information requested by the hon. Member is not available in the format requested. Such information as is available is reproduced in the table.

  Year

  Braille

  Audiotape

  Large print

  1992

  n/a

  4

  n/a

  Percentage of total publications

  n/a

  n/a

  n/a

  1993

  21

  4

  4

  Percentage of total publications

  13

  2

  2

  1994

  31

  10

  4

  Percentage of total publications

  17

  6

  2

  1995

  44

  16

  15

  Percentage of total publications

  22

  8

  7

  1996

  53

  23

  17

  Percentage of total publications

  26

  11

  8

  1997

  52

  28

  16

  Percentage of total publications

  24

  13

  7

  1. n/a = not available.

  2. A full list of Departmental information that is not available in alternative formats is listed in CAT 1. A Catalogue of leaflet, posters and information.

  Benefits Agency
  Mr. Pond
  To ask the Secretary of State for Social Security what was the performance of the Benefits Agency in 1996–97 against its targets for processing claims from newly unemployed people. [5444]

  Mr. Field
  Our objective is to reduce poverty and welfare dependency and to promote work incentives. We will streamline services to provide better, simpler more efficient services to clients within this framework. Operational matters of the Benefits Agency are the responsibility of Peter Mathison, its Chief Executive. I have asked him to write directly to the hon. Member and for his reply to be published with the answer.

  Letter front Peter Mathison to Mr. Chris Pond, dated 1 July 1997:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking what was the performance of the Benefits Agency in 1996–97 against its target for processing claims from newly unemployed people.
  The information is not available in the format requested. Claims made by unemployed people between 1 April 1996 and 6 October 1996 would have been for Income Support and Unemployment Benefit. Performance data on Income Support is not broken down into individual client groups and Unemployment Benefit was administered by Employment Services.
  210
  However JobSeekers Allowance was introduced on 7 October 1996. This replaced Unemployment Benefit and Income Support for unemployed people. Details of JSA performance against targets are shown in the attached tables.
  I hope you find this reply helpful.

  JSA performance and targets—1996–97 (from 7 October 1996–31 March 1997)

  Target: JSA claims clearance (BA)

  Per cent.

  Percentage of claims to be cleared in 6 days

  65

  1996–97 performance

  84

  Percentage of claims to be cleared in 14 days

  90

  1996–97 performance

  96

  1 Measures performance from the date the claim was received by the BA from the Employment Service to the date the decision on the claim was notified to the customer.

  Target 1: JSA claims clearance (overall)

  Per cent.

  Percentage of claims to be cleared in 10 days

  65

  1996–97 performance

  70.2

  Percentage of claims to be cleared in 21 days

  90

  1996–97 performance

  94.7

  1 Measures performance from the date the claim was received by the Employment Service to the date the decision on the claim was issued to the customer by the BA.

  Camborne Benefits Advice Shop
  Ms Atherton
  To ask the Secretary of State for Social Security (1) on what date the decision was taken to close Camborne benefits advice shop; and when the proposed closure will come into effect; [2174]

  (2) which criteria were used in making the decision to reduce the service at Camborne benefits advice shop: and if she will make a statement. [2175]

  Mr. Field
  One of our key aims is that delivery of service should be simpler and more efficient. No decision about changes will be made until an alternative has been carefully piloted and that the service meets our objectives. Queries on operational matters are for the Chief Executive of the Benefits Agency. Peter Mathison. He will write to the hon. Member.

  Letter from Peter Mathison to Ms Candy Atherton, dated 1 July 1997:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Questions asking on what date the decision was taken to close Camborne benefits advice shop; when the proposed closure will come into effect and which criteria were used in making the decision to reduce the service at that advice shop.
  No decision has been made to close Camborne benefits advice shop. However, as you will be aware, following your meeting with the Cornwall Divisional Manager Peter Duke on 30th May, the licence to occupy the advice shop premises expires in December 1997.

  211
  Consultation always takes place before a decision is taken to close a Benefits Agency (BA) advice shop. Preliminary consultation with customers and customers' representatives on the future of Camborne benefits advice shop and alternative possible ways of meeting customers' needs has already commenced.
  We are running a two month pilot exercise from 9 June to deliver an advice service from Camborne Employment Services Job Centre (ESJ) on Mondays, Wednesdays and Fridays. For the duration of the trial, the advice shop will be closed on those days and open on Tuesdays and Thursdays. The ESJ is situated five minutes walk from the advice shop.
  Following the trial, an evaluation of its effectiveness will take place, taking into account views of the public and their representatives. We are directing our resources to where they are needed most and BA Divisional Managers, using their local knowledge, will continue to review the service they provide to ensure that the needs of our customers are met and that the tax payer receives value for money.
  I hope you find this reply helpful.

  Benefits Agency Staff
  Mr. Todd
  To ask the Secretary of State for Social Security how many staff were employed on temporary or fixed-term contracts in the Benefits Agency(a) at the latest date for which figures are available, (b) 12 months before that date and (c) 24 months before that date. [4868]

  Mr. Field
  Modernising the Social Security system is a key priority of the Government. We will streamline services to provide better, simpler more efficient services to clients. As recruitment into the Benefits Agency is a matter for Peter Mathison, its Chief Executive, I have asked him to write directly to the hon. Member and for his reply to be published with the answer.

  Letter from Peter Mathison to Mr. Mark Todd, dated 1 July 1997:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking how many staff were employed on temporary or fixed term contracts in the Benefits Agency at the latest date for which figures are available, 12 months before that date and 24 months before that date.
  The information requested is shown in the table below:

  30 April 1995

  30 April 1996

  30 April 1997

  Casuals

  3,978

  3,403

  4,010

  Fixed term appointments

  2,608

  3,658

  4,359

  Figures are provisional and subject to change.

  I hope you find this reply helpful.

CABINET OFFICE

  Meetings
  Mr. Baker
  To ask the Minister without Portfolio if he will list the meetings he has had since I May with(a) Cabinet colleagues and (b) others in respect of the Royal Yacht; and if he will make a statement. [6168]

  Mr. Mandelson
  [holding answer 1 July 1997]: It is not going to be my general policy to announce meetings I have with Ministerial colleagues and others on specific subjects.

DUCHY OF LANCASTER

  Better Regulation Unit
  Mr. Mike Hall
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the role of the Better Regulation Unit in his Department. [4936]

  Dr. David Clark
  The Government is committed to ensuring that regulations are simple, helpful and fair for business and the citizen.

  The work of the Better Regulation Unit will contribute to my Department's White Paper on "New Government" to be published in the autumn, setting out a unified programme for the renewal of government.

  Public Services (Young People)
  Mrs. Fyfe
  To ask the Chancellor of the Duchy of Lancaster what initiatives he is taking to consult young people on the use of public services. [4941]

  Mr. Kilfoyle
  My Department has organised a meeting with school-children from around the country next Monday, when I will be asking these citizens of the future for their views on public services.

  Public Appointments (Freemasons)
  Mr. Gunnell
  To ask the Chancellor of the Duchy of Lancaster if he will make it his policy that all future applicants for public sector appointments should be asked to indicate if they are members of the Freemasons. [4942]

  Mr. Kilfoyle
  I see no need to do so as a general rule. The Commissioner for Public Appointments' Code of Practice already sets out the seven principles which must be applied to appointments to executive non-departmental public bodies and NHS bodies. All appointments must be governed by the overriding principle of selection based on merit, to ensure that those appointed have the abilities, skills and experience to match the needs of the posts in question.

  Quangos
  Dr. Tony Wright
  To ask the Chancellor of the Duchy of Lancaster what proposals he has to improve the accountability of quangos. [4943]

  Dr. David Clark
  The Government is determined that all public bodies should be held to proper account and the full implementation of the Nolan recommendations, to which we are committed, will make quangos more transparent, accountable and efficient. I will be dealing with these matters in the forthcoming White Paper on Better Government.

  Mr. Pickthall
  To ask the Chancellor of the Duchy of Lancaster what representations he has received about changes to the numbers and structures of quangos. [4954]
  213
  Dr. Clark
  The Government has received no formal representations. However, as was announced to the House on 4 June Official Report, column 192, we propose to undertake a review of quangos with the aim of reducing overall numbers.

  Freedom of Information
  Mr. Skinner
  To ask the Chancellor of the Duchy of Lancaster what recent discussions he has had with interested groups regarding a freedom of information Bill. [4944]

  Dr. Clark
  We have recently had useful discussions with the Campaign for Freedom of Information and with the National Consumer Council.

  Mr. Hanson
  To ask the Chancellor of the Duchy of Lancaster what progress has been made with regard to a publication date for his proposed White Paper on freedom of information. [4946]

  Dr. Clark
  Work on the White Paper remains on schedule for publication before the summer recess.

  Mr. Canavan
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement about the time scale for legislation on freedom of information. [4952]

  Dr. Clark
  We plan to publish a draft Bill for public consultation early in the new year with a view to introducing a Bill as soon as the Parliamentary programme permits.

  Mr. John Smith
  To ask the Chancellor of the Duchy of Lancaster what consultation process he has set up for the development of freedom of information legislation. [4956]

  Dr. Clark
  I am keen to ensure full and comprehensive public consultation on this important Bill. I shall shortly be publishing a consultative White Paper setting out the Government's proposals and, in the light of comments received, plan to publish a draft Bill, also for consultation, early in the new year.

  Open Government
  Mr. Rooney
  To ask the Chancellor of the Duchy of Lancaster what steps he has taken to make Government Departments more open. [4945]

  Dr. David Clark
  I refer my hon. Friend to the answer I gave earlier to my hon. Friend the Member for Ellesmere Port and Neston, (Mr. Miller).

  Mr. Corbyn
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on his policy on open government. [4950]

  Dr. Clark
  The Government is determined to bring greater transparency and openness to the working of Government and to public services more widely. Our proposed Freedom of Information Act is intended both to ensure people's right to official information and to improve the business of government itself.

  Disabled People (Access to Information)
  Mr. Burstow
  To ask the Chancellor of the Duchy of Lancaster what consultations he(a) has had and
  214
  (b) plans to have with organisations of and representing disabled people in relation to the publication of Government information in accessible formats. [4947]

  Mr. Kilfoyle
  The accessibility of government information for disabled people will be included in the planned consultation with the general public and with disability organisations on what people want from public services.

  We welcome the views of all interested groups and individuals on the proposals to be set out in the Freedom of Information White Paper and subsequent draft Bill. The views and proposals of those representing the particular interests and needs of disabled people will, of course, be considered very carefully.

  Efficiency and Effectiveness Group
  Mr. Ian Stewart
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the role of the efficiency and effectiveness group in his Department. [4948]

  Dr. David Clark
  The Efficiency and Effectiveness Group comprises Efficiency Unit and the Next Steps Team. It is central to carrying out the Government's programme to provide high quality and efficient public services, at the lowest cost to the taxpayer. The Group supports departments (and their agencies and other public bodies) to improve the management of their business, by maintaining pressure for continuous improvement through the following measures: overseeing the creation and review of Next Steps agencies and monitoring their performance in the annual Next Steps Review; scrutinising departments' efficiency plans; sponsoring efficiency scrutinies, for example the recent scrutiny on prescription fraud, and other special studies. The Efficiency Unit, along with the No. 10 Policy Unit and the Treasury, is fully involved in the Government's Comprehensive Spending Review.

  Deregulation
  Mr. Pike
  To ask the Chancellor of the Duchy of Lancaster what recent representations he has received in relation to deregulation. [4951]

  Dr. David Clark
  I regularly receive representations concerning deregulation and welcome further dialogue from interested parties. I am committed to delivering responsible and responsive regulation, listening to and involving business, particularly small firms, and the citizen in decisions.

  New Government
  Mrs. Humble
  To ask the Chancellor of the Duchy of Lancaster with whom he intends to consult regarding his Department's New Government programme. [4953]

  Dr. David Clark
  We intend to consult widely, drawing on views from users of and staff involved in the range of public services, and from small businesses representatives, consumer organisations, academics and other interested individuals and organisations. I would welcome any suggestion my hon. Friend would like to put forward.

  Special Advisers
  Mr. Clappison
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the role of Special Advisers to Ministers. [4955]
  216
  Dr. David Clark
  Special Advisers are appointed to provide advice to their Minister in the Development and Presentation of Government policy. They are employed under terms and conditions based on the Model Contract for Special Advisers, a copy of which has been placed in the Library of the House.

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

Lord Patten
The Right Honourable John Haggitt Charles Patten, having been created Baron Patten, of Wincanton in the County of Somerset, for life—Was, in his robes, introduced between the Lord Quinton and the Lord Harris of Peckham.
Several Lords—Took the Oath.

Sudan
2.47 p.m.
Baroness Coxasked Her Majesty's Government:
What is their policy towards the Government of Sudan, with particular reference to the human rights of its people and its continuing military action against civilians.
Lord Whitty: My Lords, for the second time in 24 hours, it falls to me to pay tribute to the noble Baroness's efforts on behalf of the victims of human rights abuses. In line with our overall priority on human rights in our foreign policy, the Government are very concerned about the situation in Sudan, in particular the widespread lack of respect for human rights and the continuing civil war. We would press the Government of Sudan to comply with the UN resolutions on human rights in Sudan. We are strongly behind the EU embargo on arms sales. We are pressing the Government of Sudan and all parties to the civil war to end human rights abuses, and for a negotiated settlement of their differences.
Baroness Cox: My Lords, I thank the Minister for that reply, which will give encouragement to those who are suffering in Sudan.
Is the Minister aware that during four visits to Sudan this year I have witnessed and can testify to the atrocities the Government of Sudan are perpetrating although they deny those atrocities, including the encouragement of slavery in Bahr El-Ghazal, the massacre of civilians in the Nuba Mountains, the scorched earth policy in Southern Blue Nile, and the deportation of the Beja people from their homelands in north-eastern Sudan? Will the Government step up their pressure on the Government of Sudan to allow access to all parts of Sudan by human rights monitors, and perhaps put increasing pressure for United Nations Security Council sanctions?
Lord Whitty: My Lords, I accept that those kinds of atrocities are going on within Sudan. We are very
194
concerned about the repeated refusal of the Government of Sudan to allow access to a number of locations in Sudan. The UK has strongly supported the efforts of the UN to press the Government of Sudan to lift their restrictions and to allow humanitarian assistance to be delivered to all people in urgent need. We have also taken the view that the best way to secure the broadest access to people in Sudan is to continue to operate under the Operation Lifeline Sudan umbrella. We have also given over £135 million in humanitarian aid to Sudan in recent years. So far as the UN Security Council is concerned, we will examine the situation. However, it depends on the support of others. We have acted through the EU and we will examine the UN situation.
Lord Avebury: My Lords, is the noble Lord aware that everybody in this House admires enormously the work that is done by the noble Baroness, Lady Cox, and particularly her work in the Sudan? It has brought to light so many of the evils inflicted by the NIF regime on civilians throughout the whole country, not merely in the south.
In the particular case of the Security Council which the Minister mentioned, is he aware that the Sudanese authorities themselves allege that military attacks on their territory were made by forces from Ethiopia? Is that not a reason for having the matter dealt with by the Security Council, and asking the Government of Sudan to agree to international observers in any areas where they allege military action has been taken on their territory by neighbours?
Lord Whitty: My Lords, I am aware of a number of allegations of border incursions in both directions. I agree with the noble Lord that that is the best way of dealing with the matter. However, it requires agreement at the United Nations Security Council; and it would require the agreement of the Government of Sudan, who have hitherto been fairly obdurate in their response to allowing independent observers in those areas.
Lord Robertson of Oakridge: My Lords, does the Minister agree that any long-term solution to the problems of Sudan will have to take into account the fact that the people of northern and southern Sudan have very little in common?
Lord Whitty: My Lords, there are certainly different cultures and religions between the south and the north of Sudan. We believe, however, that negotiated settlements are possible within the international boundaries of Sudan. We will use our best efforts to ensure that such negotiations start taking place. I believe there has been some minor progress in that direction, although as yet all the parties to the resistance in the south of the country are not yet involved.
Lord Cocks of Hartcliffe: My Lords, would Her Majesty's Government consider establishing alternative mechanisms for the evacuation of wounded from Sudan, where the suspension by the NIF regime of the operations of the International Committee of the Red Cross since last November has caused needless death and suffering for

195
thousands; and, in particular, will the Government consider providing financial assistance for non-governmental organisations which can reach those areas of the Sudan which are designated by the Sudanese Government as "no go" areas to rescue the wounded, who will otherwise suffer and die without treatment?
Lord Whitty: My Lords, the organisation I have already mentioned, Operation Lifeline Sudan, which consists of a large number of NGOs, gives us the best prospect of reaching areas that are otherwise inaccessible to relief operations. So far as the International Red Cross is concerned, I regret the break-off. As I understand it, the International Committee of the Red Cross is now negotiating again with the Government of Sudan to re-establish its operations. In the meantime, Operation Lifeline Sudan is undertaking air evacuations of war wounded under the green light criteria. Previous ICRC operations were still subject to flight restrictions imposed by the Government of Sudan. The International Committee of the Red Cross continues to operate the hospital and provide support to hospitals in Juba through the Sudanese Red Crescent.
The Earl of Lauderdale: My Lords, will the Minister tell the House whether it is the case that the Sudanese Government discriminate between different tribes, largely on account of their religion? Is it not also the case that there is a desperate lack of medical supplies, not least for those who cross the southern Sudan desert by camel and for whom there is sometimes no medical help within reach?
Lord Whitty: My Lords, the noble Earl has a detailed knowledge of southern Sudan which I cannot hope to match. Nevertheless, it is undoubtedly true that there are certain communities within southern Sudan for whom access to medical supplies and other forms of relief is very difficult indeed, and the Sudanese Government are making it no easier.
The Lord Bishop of Lichfield: My Lords, given the extremely fruitful mediation in the conflict in Zaire by President Mandela—whereby, I understand, Kinshasa fell without extensive bloodshed—and given the principle that African conflicts may sometimes be best helped by African leadership, does the Minister believe that help might also be given from this direction to Sudan's deadlocked agony, as I understand may also happen in the troubled area of the Great Lakes?
Lord Whitty: My Lords, the Inter-governmental Authority on Development, which consists of several African states within that area, is already actively involved in seeking a peaceful solution in Sudan. Like the previous Government, this Government support its endeavours in that direction. The right reverend Prelate is absolutely right. The best solution is one that is achieved by African countries acting together themselves to end this terrible conflict.
Lord Chesham: My Lords, will the Minister kindly indicate whether the presence of two Sudanese ambassadors in the United Kingdom is consistent with Britain's obligation to decrease the numbers and activities of Sudanese diplomats in accordance with UN Security Council resolutions?
Lord Whitty: My Lords, following the United Nations sanctions that followed the apparent involvement of the Sudanese Government in the assassination attempt on President Mubarak, the British Government cut back Sudanese representation in London. The alleged second ambassador is not on the Diplomatic List; and we have therefore cut the number of diplomatic representatives in the Sudanese embassy as substantially as any other country.

Diabetes
2.57 p.m.
Baroness Masham of Iltonasked Her Majesty's Government:
Whether they support the introduction of a national screening programme for diabetes.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, the Chief Medical Officer now chairs a national screening committee for the Department of Health which prioritises existing or possible future screening programmes against criteria that have been internationally established. The committee will consider national screening for diabetes as part of its developing work programme. Any future decision on implementing a national programme will be made in the light of those considerations.
Baroness Masham of Ilton: My Lords, I thank the Minister for that interesting and encouraging reply. Does she agree that it is easier to diagnose younger people; and would it not be best to have a screening policy for the over-40s in order to try to prevent some of the very serious complications, such as strokes, eye problems, ulcers of the feet etc.?
Baroness Jay of Paddington: My Lords, I am very much aware of the complications described by the noble Baroness. One of the problems is that, since the condition can occur at any time—the noble Baroness rightly draws attention to those who may be older and who get the illness at a later stage in life—if a general screening programme is established it is not possible to do the screening only once. It may have to be done several times. That is one of the concerns being taken into account by those examining the illness in the context of a screening programme. A further point is that, if we think about screening in terms of those conditions that can be cured rather than simply helped, diabetes is unfortunately not a condition that can be cured.
Lord Mowbray and Stourton: My Lords, is the Minister aware that I have personally suffered through

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my wife getting this horrible illness in her fifties? Her grandfather had had it; however, we were idle and did not do much about it. Suddenly we found that she had the illness. Having various grandchildren, I should like to ask the Minister about the importance of this being recorded in someone's medical history. It is known that if someone has an antecedent with the illness, the likelihood of getting diabetes is considerably increased. As I am sure the noble Baroness is aware, the degree of lessened resistance suffered by diabetics to every disease known is quite incredible.
Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord for drawing attention to those important matters. The point about the continuing vulnerability—if one can call it that—of different generations, where one person has diabetes, is recognised. It is clearly an issue where more public information about those things which make people more vulnerable or which may be indicators that people are potential diabetes sufferers is important. But, as I said in reply to the noble Baroness, Lady Masham, the problem is that if you test a person for diabetes once, you may have to test them regularly in order to achieve anything.
Baroness Robson of Kiddington: My Lords, does the Minister agree—I am sure that she does from the replies she has given—that it is quite common for people to develop diabetes as they grow older? Often they are not aware of it because they put down the tiredness they feel to getting older. There is a good way of diagnosing diabetes: through the eye test. Will the Government therefore consider reinstating free eye tests?
Baroness Jay of Paddington: My Lords, the noble Baroness is correct that it is older people who tend to get this unexpectedly in later life. I believe that 2.4 per cent. of the population are concerned. As I understand it, and I am not a medical expert in this field, the more complicated test to ascertain diabetes is far more unpleasant and difficult than the eye test. But I am sure that is something that the screening committee, under the chairmanship of the Chief Medical Officer, will consider.
Lord Howell: My Lords, is my noble friend aware that her answers are welcome, together with the further consideration to be given to the subject that she has announced? Will she acknowledge that only 50 per cent. of diabetic people are known to be diabetic? Therefore, the failure to deal with the other 50 per cent. at an early stage brings enormous expense later on to the health service when serious illnesses arise.
Baroness Jay of Paddington: My Lords, I am grateful to my noble friend for reinforcing those points. As he is aware, people who have already been diagnosed with diabetes are regularly screened to ensure that the medical treatment they receive once the diagnosis is made is appropriate and helps them with what is obviously a serious condition.
Baroness Cox: My Lords, is the Minister aware that recent research in the United States shows that a slight reduction in the diagnostic threshold level for diabetes results in a substantial increase in the proportion of the population recognised to be at risk? Given the complications which arise if diagnosis is not made early, does the noble Baroness agree that the research highlights and strengthens the need for a national screening programme?
Baroness Jay of Paddington: My Lords, I am aware that there has been additional research in the United States which was presented at an American national medical conference recently. I am sure that it will be drawn to the attention of the Chief Medical Officer.
Lord Rea: My Lords, does my noble friend agree that while a full nationwide random screening for late onset diabetes is not a viable option, those at risk of developing diabetes should be advised to attend their GP for a properly controlled blood glucose check? Does she agree with the British Diabetic Association that those at risk include not only those with a family history of diabetes but also those who are overweight and those whose origin is from south Asia, Africa or the Caribbean?
Baroness Jay of Paddington: My Lords, my noble friend, with his expert information on the subject from his experience in general practice, underlines the point that I was making earlier—that the more information that is available to encourage people who may feel themselves to be vulnerable to attend their general practitioner to receive the appropriate screening, the better.
Lord McColl of Dulwich: My Lords, is the noble Baroness aware that the noble Lord, Lord Butterfield, carried out a great deal of work on this subject? He discovered a large number of people potentially with diabetes. But the problem is that if we discovered the extent of it throughout the nation, would we have the resources to deal with it?
Baroness Jay of Paddington: My Lords, I was interested to see the noble Lord, Lord Butterfield, rise behind the noble Lord, Lord McColl. Perhaps he was going to give us more detail of his extremely good work in the field. One of the questions that arises if one is examining the potential for a national screening programme is the resource implications, as well as clinical ones. That is something that the national screening committee, with its capacity to prioritise both in terms of clinical need and resources, will look at.
Lord Butterfield: My Lords, will the Minister confirm that the British approach will be to base screening on community physicians in general practice? I am sure that that is the right place for it and we must not lose the general principle.
Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord for underlining that point.
Baroness Masham of Ilton: My Lords, can the Minister say whether the incidence of diabetes is rising, particularly in some ethnic groups?
Baroness Jay of Paddington: My Lords, as has been mentioned in response to several supplementary questions this afternoon, as screening develops and as more people become aware of it, we appear to have rising numbers of people with diabetes. But as my noble friend said, it may simply be a question of identifying people in the community who were already suffering from the disease. There is a problem with some of the minority ethnic groups.

Nuclear Weapons
3.5 p.m.
Lord Jenkins of Putneyasked Her Majesty's Government:
Whether they will include in the current defence review plans to move towards the achievement of their object of eliminating nuclear weapons.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, we have made clear our commitment to the goal of the global elimination of nuclear weapons and our intention to press for multilateral negotiations towards mutual, balanced and verifiable reductions in nuclear weapons. We are examining how best to implement that commitment, particularly in the context of the Strategic Defence Review.
Lord Jenkins of Putney: My Lords, I thank my noble friend for that very good Answer. Can he give the House a little more detail as to the direction in which the Government are moving and whether they have plans to consult other nuclear powers with a view to forming a common policy towards elimination?
Lord Gilbert: My Lords, my noble friend will realise that it is far too early to anticipate where the results of the Strategic Defence Review will lead us.
My noble friend will probably wish to take into consideration the fact that other nuclear weapon states will also probably be concerned about other weapons of mass destruction, like chemical and biological weapons, when they come to their conclusions as to how to approach global nuclear disarmament.
Lord Taylor of Gryfe: My Lords, can the Minister give us more information about the review? Will representations be received from organisations and individuals concerned with the abolition of nuclear weapons to discussions held by the Government or the department? Alternatively, is this purely an internal review?
Lord Gilbert: My Lords, I am happy to give my noble friend some good news. The Secretary of State for Defence has made it absolutely clear that at the end of the review he wants no one to be in a position to say that their voice was not heard. At least one representative from the Campaign for Nuclear Disarmament has been invited to one of our all-day seminars.
Lord Chalfont: My Lords, does the Minister recall that in the gracious Speech which opened this Parliament one sentence stated that it is the intention of Her Majesty's Government to keep,
"strong armed forces, including the nuclear deterrent"?
Lest there be any misunderstanding, will the Minister confirm that that remains the policy of Her Majesty's Government?
Lord Gilbert: My Lords, it certainly remains the policy of Her Majesty's Government to keep a minimum strategic deterrent in the form of Trident. I would not be standing at this Dispatch Box if that were not the case.
Lord Judd: My Lords, does the Minister agree that the principles of the non-proliferation treaty would be immensely strengthened if the three smaller nuclear powers were to make a declaration that, as long as Russia and the United States continue to decrease the number of their nuclear weapons, there will be no question of our increasing our own arsenal? Will the Minister assure the House that this principle will in any case apply to the number of warheads deployed on Trident?
Lord Gilbert: My Lords, as regards the suggestion of a get-together by what my noble friend calls the "smaller nuclear powers", I possibly touched on the point in the earlier reply which I gave to the noble Lord, Lord Jenkins. There is not much more that I can add at this stage.
Earl Howe: My Lords, what is the Government's approach to the possibility of a fissile material cut-off treaty? Do they agree that such a treaty would be a useful step towards containing nuclear proliferation?
Lord Gilbert: My Lords, at the moment we are conducting negotiations about the kind of range and subjects that this fissile material cut-off treaty should cover. I cannot help the noble Earl much further at this stage but I shall be happy to get back to him.
Lord Renton: My Lords, can the Minister say whether it is known to where the various nuclear missiles which were in various states of the former Soviet Union have now gone?
Lord Gilbert: My Lords, I think I am right in saying that all the land-based ICBMs, if that is what the noble Lord is interested in, are now on the territory of the Republic of Russia.
Lord Jenkins of Putney: My Lords, can my noble friend confirm that the strategic review will perhaps

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succeed in solving the apparent contradiction between the retention of Trident on the one hand and devotion to elimination on the other? Is it not therefore the case that the particular undertaking so far as concerns Trident must necessarily be subservient to the general undertaking to eliminate?
Lord Gilbert: My Lords, nothing is subservient to Her Majesty's Government's intention to ensure that this country remains properly defended. That is why we said what we did say about the strategic system of Trident. I do not therefore see the inconsistency to which my noble friend alludes.

Schools: Collective Daily Worship
3.10 p.m.
Lord Dormand of Easingtonasked Her Majesty's Government:
Whether they will consult the National Association of Head Teachers following the decision of their national conference in favour of the abolition of the legal requirement for schools to hold a daily act of collective worship.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the Government are aware of head teachers' concerns. The National Association of Head Teachers is currently involved in an extensive independent consultative exercise called Collective Worship Reviewed, established by the Religious Education Council, the National Association of Standing Advisory Councils for Religious Education and the Inter-Faith Network for the United Kingdom. That includes representatives of teachers' associations, governors' associations, religious bodies and a wide range of other interests. A report will be published in due course and the Government will look carefully at any recommendations that it contains.
Lord Ashbourne: My Lords, does the Minister agree—
Lord Dormand of Easington: My Lords, I think it is the moment for my supplementary question.
I thank my noble friend for what I think is a promising reply. Is she aware that there are a number of reasons why the law should be changed? Two of them are very widely held and not only by head teachers. First, it is hypocritical to ask teachers to force religion on children who do not hold religious beliefs. Secondly, there is the more practical point that many schools, including three-quarters of the secondary schools, are physically unable to have such an assembly because the room or hall is not big enough. As this reform has been talked about by both religious and non-religious groups for many years, is it now time to do something very quickly?
Baroness Blackstone: My Lords, I am aware of my noble friend's concern about these matters. He is right to say that some schools find it physically difficult to
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provide daily worship. We understand those problems. But the law permits several acts of worship for separate groups of pupils rather than one big event for the whole school. Moreover, we are aware that there can be a problem, especially for head teachers, when teachers refuse to take daily acts of worship. But there are other solutions. Suitably qualified people from the local community can also lead worship. So far as concerns parents, my noble friend will be aware that any parent has a statutory right to withdraw his or her child from the daily act of worship, if he or she wishes to do so.
The Lord Bishop of Lichfield: My Lords, with regard to the review that is being undertaken, do Her Majesty's Government recognise the value and the importance of the Government themselves consulting the Churches and other faith communities if any change is to be made in this matter?
Baroness Blackstone: My Lords, I am grateful to the right reverend Prelate for raising that question. Yes, of course the Government will want to consult very widely if any change is to be made as a result of the review, and we want to include the Churches in any consultation that takes place.
Lord Ashbourne: My Lords, I apologise to the House and to the noble Lord, Lord Dormand of Easington, for my undue enthusiasm in joining in his question.
Does the Minister agree that the act of school worship is a vital ingredient in the spiritual and moral life of a school?
Baroness Blackstone: My Lords, the School Curriculum and Assessment Authority is developing guidance on spiritual, moral, social and cultural development, all of which the Government regard as important. That will extend beyond the curriculum and will embrace the contribution that daily collective worship can make.
Lord Henley: My Lords, bearing in mind that this is a legal requirement and, I understand, has been a legal requirement since the 1944 Act, a measure which has been supported by governments of all political persuasions, will the noble Baroness inform the House just what the Government will do before the results of the review? I believe that it is the 28th review that the Government have announced since the election. Before that review is completed, what action will the Government be taking to ensure that that legal requirement is enforced?
Baroness Blackstone: My Lords, perhaps I may explain to the noble Lord—I am a little surprised that he is not aware of it, as he was a Minister of State in the Department for Education and Employment—that this review was set up under his own Government and not during the office of the new Government. We want to see the results of collective worship reviewed before deciding whether to take any further action. With regard to the question of non-compliance, which I believe is

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the question that the noble Lord is raising, we must keep the matter in perspective. Inspection evidence shows that the vast majority of primary schools comply with the law. It is the case that only about a quarter of secondary schools do so. However, they generally hold regular worship but simply fall short on the act of daily worship.
Lord Sefton of Garston: My Lords, does the Minister agree, as pressure builds up in society for an extension of the privileges now enjoyed by the Christian religion to be extended to other religions which are just as credible, that we should even now give consideration to the question of installing a secular system of education as applied in the USA?
Baroness Blackstone: My Lords, to respond to that question at this stage would pre-empt the results of the review. We must wait to see what it says. Perhaps I could add that it is perfectly possible for schools to have secular assemblies as well as a daily act of worship that involves religion.
Baroness Blatch: My Lords, does the Minister agree that, irrespective of what other organisations advise the Government, the Government themselves believe that education without a spiritual and moral dimension is nothing more than a clinical and arid experience?
Baroness Blackstone: My Lords, I have already made clear, in answering an earlier question of one of the noble Baroness's noble friends, that the Government regard education with a social and moral dimension as extremely important.

Business
3.17 p.m.
Lord McIntosh of Haringey: My Lords, after the speech of the noble Lord, Lord Gisborough, in today's first debate on youth crime, my noble friend the Leader of the House will, with the leave of the House, repeat in the form of a Statement an answer to a Private Notice Question in another place on the setting up of a Select Committee to investigate advance disclosure of the Chancellor of the Exchequer's Budget Statement. I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should not exceed 20 minutes from the end of the Minister's initial reply to the Opposition spokesmen, and contributions in the discussion should be confined to brief comments and questions for clarification.

Business of the House: Debates this Day
The Lord Privy Seal (Lord Richard): My Lords, I beg to move the Motion standing in my name on the Order Paper.
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Moved, That the debate on the Motion in the name of the Lord Elton set down for today shall be limited to three hours and that in the name of the Lord Vivian to two-and-a-half hours.—(Lord Richard.)
On Question, Motion agreed to.

Youth Crime
3.18 p.m.
Lord Eltonrose to call attention to the importance of youth crime prevention initiatives; and to move for Papers.
The noble Lord said: My Lords, first, I should like to welcome the large number of noble Lords who intend to speak in this debate and particularly the noble Lord, Lord Evans, and the right reverend Prelate the Bishop of Leicester, who are to embark on the waters of this House for the first time under circumstances which mean that the ordeal will be quite brief.
Last autumn the Audit Commission published a seminal report on young people and crime. Its title is, misspent Youth. It is a lucid source book for all those anxious to improve our practices. It draws attention not only to the volume, but also to the cost of crime to this country and to the modest results and the far from modest costs of what we are doing about it.
The report calculates, convincingly, that 28 million offences are committed every year at a cost to taxpayers and victims of £16,000 million. Our concern today is with young people. They contribute handsomely to that total. In 1994 two out of every five known offenders was under 21; a quarter were under 18 and that quarter accounted for around 7 million offences a year. Under one fifth of those offences were even recorded by the police and a bare 5 per cent. cleared up. Only a microscopic 3.1 per cent. of crimes committed resulted in any attempt at corrective action and that attempt often failed. While 1.8 per cent. led to a caution, only 1.3 per cent. ended in court. Of that microscopic 1.3 per cent., roughly a quarter were either discontinued or dismissed.
That leaves three quarters of 1.3 per cent. of all crimes committed ending in a conviction. Even of that tiny percentage who were convicted, one in four was given either an absolute or conditional discharge. I hope others will have time to talk about the prevention of re-offending; I alas have not. But it is clear that the majority of the tiny proportion who do go to custody re-offend after release. Can the Minister confirm that only 2.5 per cent. of all youth crime committed in this country results in any corrective action at all and that only just under 1 per cent. leads to a conviction? The 2.5 per cent. figure means one in 40.
Of course I agree that the assured prospect of being caught and punished would deter. But even if those figures are seriously flawed—and they are not—it would still be clear that the prospect of arrest and conviction never has been assured and never will be. Criminals, particularly the optimistic young criminals about whom we are talking, do not expect to be caught; do not expect to be tried; do not expect to be convicted, and expect least of all to be sentenced.

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The effects of custody on the select few are minimal. In Gloucestershire, in a recent year, no less than 88 per cent. had re-offended within a year of release from custody. So, however draconian the sentences the courts hand down, their deterrent effect on the general offending population is very close to zero. Therefore prevention must be better than punishment.
As the general offending population commits around 32 per cent. of all crime at a rate of one or two offences each and at a cost of around £1,250 million, that really is a pity; and we must not pretend it is otherwise. Even significant improvements in any quarter's figures are simply the melting of a few splinters of ice on the bit of the iceberg that we can see—welcome but small. And at what a cost we melt them. Merely identifying a single young offender costs the police around £1,200; a successful prosecution costs a further £2,000; providing a place for a week in a local authority secure unit in Greater London costs over seven times as much as providing a place for a week at Eton College. Our combined efforts to catch and deal with young criminals cost the taxpayer roughly £1 billion a year. Prevention really must be better than such a ruinously expensive and grossly ineffective cure as that.
Happily, that was agreed by the last government at the beginning of its Green Paper and has been agreed by the new one at the beginning of their term of office. If this debate achieves nothing else, it should welcome and hold them to that conclusion and the policies that must flow from it. The aim must be to get people before they turn to crime, not afterwards. If these were our children we would act at once.
On 17th June the Home Secretary announced the Government's response to this new perception of the problem of youth crime in a glimpse of the forthcoming Crime and Disorder Bill. This major initiative—setting up a new task force on youth justice—comes, in my view, late; outrageously late; dreadfully late; far too late. The noble Lord may look startled; that is because he misunderstands me. I did not mean late in the life of the Government; I mean late in the life of the child.
The press release shows that every item on the agenda of that task force is punitive. I do not object to the punishment of crime—far from it. But I object to waiting for the crime to be committed and, worse still, waiting for the criminality to develop. There is a temptation to wait because of the difficulty of deciding who exactly is going to turn into a criminal. Massive research has produced an impressive list of pre-disposing conditions but none of them is certain in its effect. Applying statistical rules seems worse than random choice.
In one series of experiments four out of every five children indicated as embryo criminals, without their knowledge, grew up to be absolutely respectable citizens. There are two important lessons to be learnt from that. It is not just that if we try to spot budding criminals we will almost certainly get it wrong. It is that in the process we may do needless and possibly serious harm to those who have been wrongly labelled. Had those children been told that they had been labelled as criminal material and treated as such, the result would
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have been disastrously different. Much of childhood consists of finding out who one really is. If authority says that one is a criminal, one will react either by adopting this exciting new role with enthusiasm and, as one may say, with conviction; or, with similar results, by violent hostility to the authority making the suggestion. Pre-labelling or stereotyping children as potential criminals or, indeed, as disruptive pupils is a largely self-fulfilling prophesy and must be avoided.
Yet it may be said that we cannot prevent juvenile delinquency if we do not know in whom it is going to break out. I believe that to a large extent we can, partly by identifying stages in children's development and areas of their activity in which easily defined deprivation or other circumstances make the risk obvious; and partly by a modest redeployment of government expenditure to unlock a formidable and under-exploited resource.
That enables the teaching, explicit or implicit, of the simple lesson that must undergird our society if it is not altogether to fail, and by which social behaviour ultimately is judged: that the first duty of citizens is not to look after themselves; it is to look after each other.
Anyone who has seen the school-age child of a school-age mother attempting to cope with herself becoming a school-age mother, will recognise the danger in which she and her child stand. That is an acute example of a need for education in parenting, very often met in milder forms, which has concerned many of us for many years. The paper published by the noble Lord's then honourable and now right honourable friends last November shows that they take it seriously. I hope he will tell us a little of their concrete plans now that they are in government.
The next area of obvious risk is school—not every school. I am not one of those who believes that the whole of our education system has become degenerate since so-called "child-centred education" made its damaging appearance. But in those schools which do not provide, and firmly enforce, standards of behaviour which the pupils can understand and identify with, which are backed by all staff—academic and non-academic—and explained to and supported by the parents; or where individual children fall irremediably behind their peers in both academic and non-academic work until they are starved of both achievement and self-esteem; or where a pupil insecure or persecuted at home can find no friend among the staff in whom to confide; or where they are conveniently, but prematurely, labelled as trouble or troublesome pupils—those children are at risk.
If pupils are at risk in school, they are at greater risk out of it. A recent survey for the Home Office showed that 22 per cent. of non-truant pupils were offenders—that is a shocking figure in itself—but more than 30 per cent. committed crimes while they were temporarily excluded; 50 per cent. of truants and no less than 78 per cent. of those permanently excluded from school committed criminal offences.
These pupils, who are all out of school in term time, have one enemy in common with many who join them in the holidays, and also with the young unemployed. It

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is intensified in rundown estates and anywhere else where there are no sporting or recreational facilities, little or no public transport, no money with which to escape into a better environment and where the parents are away at work. These children are full of all the natural vigour, curiosity, enthusiasm and love of excitement of youth. Your Lordships surely remember how it was when you were young yourselves. But they have no legitimate means of employing it.
If they are boys they also have a need for rivalry, to excel at something and for the addictive thrill of adrenalin in the bloodstream. In that environment, where every exciting activity is illegal, breaking the law has its own cachet among the young; escaping the law can be very exciting if you are prepared to take the risks and the thrills of the chase. Joyriding a stolen vehicle is of the essence. I do not want to legitimise that crime. It is costly, dangerous and altogether deplorable. But I want the House to understand its fascination and the need therefore to provide other, better, legal occupations. Imagine the tedium for a 12 or 15 year-old of 12 weeks with absolutely no provision for recreation. Of all people, surely your Lordships should best recognise the call of the chase after a long summer with no sporting activity!
An even more dangerous, and more easily obtainable, stimulus is provided by drugs. Suffice it to say that, with a quite modest habit of, say, £50 a day, and the street value of a decent stolen car stereo at £20, a single young addict has to break into 18 cars a week to stay solvent.
These crimes are the product of unrestricted idleness. Yet the country is full of responsible young adults, anxious to preserve the standard of life in communities threatened with a flood of juvenile crime and needing only advice and a modest amount of cash to start up anything from a jazz band to a football team—and many points in between—to offer youngsters challenging activities and the chance to grow up into happy, contributing members of society.
Educational excellence is the business of professional teachers and the DfEE. Yet adults exist wanting only training and the entrée to schools to serve as mentors to youngsters whose home life and school careers may be equally unstable. As chairman of the Divert Trust, which funds both sorts of activity, I declare an interest and tell the Government that there is a sleeping army of volunteers out there that they cannot afford to neglect. For a list of other organisations I refer them to the lecture last Wednesday night on youth justice of the noble and learned Lord the Lord Chief Justice.
Some youth crime is unavoidable, but much is unnecessary. That sleeping army—with the huge advantages of enthusiasm and commitment and the fact that they represent none of the authorities with which children may be in conflict—needs funds. It is brilliant at raising them. A survey of clients of the Intermediate Treatment Fund showed them raising £5 from other sources for every £1 of government money. But the many who do not get lottery money are up against it. Thanks again to the lottery, they are increasingly reliant on corporate donors—i.e., commercial companies prepared to shave a little off the dividend to give to
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charity. Does the noble Lord know that Harrods, for instance, already gets 800 such requests a week and the Nationwide Building Society gets between 6,000 and 10,000 a year? Into this desperate competition between largely amateur fund-raisers, the Government have now thrown a professional fund-raiser with the task of taking £150 million out of what little there is to go round. That money is to help to pay for a building to celebrate the birth of Our Lord. A better memorial would surely be to shave just a half of 1 per cent. off the budget for detecting crime and punishing criminals and giving it to the voluntary sector to prevent crime. The results would delight both him and the Chancellor of the Exchequer. My Lords, I beg to move for Papers.
3.34 p.m.
Lord Evans of Parkside: My Lords, I crave the indulgence of the House to make my maiden speech. I congratulate the noble Lord, Lord Elton, on his choice of subject because crime truly is a major problem in Great Britain today. It is an activity which impinges on the lives of millions of our fellow citizens. It affects their happiness and well-being.
Sadly, levels of crime have risen sharply over the past 18 years. Home Office statistics show that since 1979 recorded crime has doubled—I stress the words "recorded crime"—violent crime has almost trebled—and rose by 11 per cent. during last year alone—and the chance of being a victim of a burglary has risen from one in 32 in 1979 to one in 11 today. The reverse side of that coin has been that the number of people convicted of these offences has slumped by a third. In fact only one crime in 50 results in a conviction and only one in 750 in a prison sentence. The chance of a criminal being convicted of burglary has fallen from one in 11 to one in 33.
The number of crimes committed by youngsters—those under 18—rose by around 36 per cent. between 1984 and 1995, yet the number of young people cautioned or convicted slumped by 36 per cent. Delays have worsened, costs have risen and in some areas persistent offenders have got away with scores of offences before any effective action has been taken.
One of the five early pledges in Labour's manifesto referred specifically to youth crime. It referred to "fast track punishment for young offenders". I am very pleased that the Home Secretary is honouring that pledge by announcing that the Government are to bring forward a major crime and disorder Bill which will include overhauling the failing youth system. In practical terms, the Home Secretary has made an excellent start with the establishment of a task force on youth justice which has been formed to drive forward the Government's proposed changes for dealing with young offenders.
I think perhaps that my right honourable friend the Home Secretary might like to give consideration to another task force which would consider preventing young people embarking on a life of crime in the initial stages. I should also like to offer a small criticism of the committee that my right honourable friend has established in the sense that it is very heavily

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metropolitan based. North of Watford, the north of England seems to be rather under-represented, with the sole representative being the chief probation officer from Manchester. I should like to suggest to my right honourable friend that he should give some consideration to appointing someone to the committee who resides in the northern part of England, has some knowledge of inner-city estates and has an understanding of the link that exists between unemployment, poverty and crime.
I shall concentrate briefly on two issues in the proposed Bill. The first is the fast-track system which proposes to halve the time it takes from arrest to sentence for persistent young offenders and to streamline the youth court system. This measure is truly long overdue. In my 23 years as a Member of Parliament, first for the Newton constituency and then for the St. Helens, North constituency, I have been only too well aware that nothing infuriates the residents of housing estates more than seeing a persistent young criminal who everyone knows is a thief or a vandal, or frequently both, being arrested time after time by the police, getting repeated warnings from the police but simply carrying on with a life of crime; or worse, being taken to court, often getting bail, and then proceeding to commit dozens of further offences and finally winding up with a community service order which he then proceeds to ignore. One thing that has emerged from that is considerable cynicism among people about the attitude of the police and the magistrates. Too often the attitude seems to be, "Your insurance will cover the burglary, the car theft or the car break-in". To halve the time between arrest and sentence will be welcomed by the victims of criminals everywhere.
The second measure is the proposition to give courts new sentencing powers, with an action plan order, a new reparation order and a parental responsibility order to make parents face up to their responsibilities. That is also welcome because much more emphasis needs to be placed on making young offenders face up to the consequences of their actions for themselves, for their victims and for the community.
Young offenders account for an incredible estimated 7 million crimes a year. The Audit Commission in its report misspent Youth last year revealed that the youth justice system cost the taxpayer £1 billion a year. It is obvious that the system that deals with them is in urgent need of radical reform. We want a youth justice system that is more effective and efficient and in the longer term reduces crime dramatically.
3.40 p.m.
Lord Ackner: My Lords, it gives me particular pleasure to follow the last speaker and to congratulate the noble Lord on a powerful and well-researched speech. It will have whetted our appetites to hear more from him in the near future. The noble Lord enters this House from another place with a fine reputation. He was a member of the National Executive Committee of the Labour Party, he has been chairman of the Labour Party and he has held important offices from a political point
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of view, even including being a Member of the European Parliament. We look forward very much to having the advantage of his wisdom in future.
There has already been one reference to the speech which was delivered by my noble and learned friend the Lord Chief Justice on Wednesday, 25th June entitled "Justice for the Young" which was given to the Prison Reform Trust. It was a wide-ranging and highly informative speech. It ended with what was referred to as "One last thought". That thought was,
"In a pamphlet published by the Prison Reform Trust in January of this year, Sir Louis Blom-Cooper and Professor Shaun McConville persuasively argued the case for the appointment of a Royal Commission on crime and punishment to conduct a comprehensive review of crime and the responses to crime.
I hope this proposal will be seriously considered. No one can be confident that we have all the answers, or even most of them, to the important and intractable problems which exist in this area of our national life … Alternatively, as has been urged in other quarters, notably by Lord Ackner, the Advisory Council on the Penal System. set up in 1966 and later disbanded, might be revived. If such a Royal Commission or revived Advisory Council were able, with the benefit of intensive world-wide research and consultation, to reach authoritative conclusions which commanded the respect of public and professional opinion, and if those conclusions were given legislative effect, this Parliament would earn an assured and honourable place in the history of this country".
I urged the setting up of at least the Advisory Council on the Penal System because it is clear that our penal policy is in a mess. In 1990, followed by the legislation in 1991, imprisonment was carefully established as the punishment of last resort. About three or four years later, as a result of rather low-grade jury speeches to the party faithful, it was suggested that more use should be made of prison. As a result the prison population has gone up by 50 per cent. in the past four years and it has reached a crisis state. It is increasing at something like 200 prisoners a week—in other words, the capacity of a prison ship in a fortnight—and that is the situation as regards to which a different answer has to be found.
As regards the youth side, I refer to the Audit Commission report which has already been referred to by two of the earlier speakers. It says this at page 96:
"The current system for dealing with youth crime is inefficient and expensive, while little is being done to deal effectively with juvenile nuisance. The present arrangements are failing the young people—who are not being guided away from offending to constructive activities. They are also failing victims—those who suffer from some young people's inconsiderate behaviour, and from vandalism, arson and loss of property from thefts and burglaries. And they lead to waste in a variety of forms, including lost time, as public servants process the same young offenders through the courts time and again; lost rents, as people refuse to live in high crime areas; lost business, as people steer clear of troubled areas; and the waste of young people's potential.
Resources need to be shifted from processing young offenders to dealing with their behaviour. At the same time, efforts to prevent offending and other antisocial behaviour by young people need to be co-ordinated between the different agencies involved; they should also be targeted on deprived areas with high crime rates, and piloted and evaluated".
Dealing with the question of evaluation in the last moments of injury time, so to speak, I invite your Lordships' attention to a handbook Community Programme for Young and Juvenile Offenders, produced this year by the Institute for the Study and Treatment of Delinquency. In a foreword by the Director of Public

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Prosecutions, she points out that a wide range of schemes exist for young offenders across the country. She goes on to say:
"There is an overwhelming need for a more co-ordinated and informed approach between these agencies to ensure that resources are used effectively and good practice is identified".
In none of the examples given in the handbook is there any evaluation. These are the essential reasons for suggesting that the matter should be the subject of a careful, balanced and non-political inquiry of the status of a Royal Commission or the like.
3.48 p.m.
The Lord Bishop of Leicester: My Lords, I am grateful to the noble Lord, Lord Elton, for bringing the issue of youth crime to our attention and I am pleased to contribute to our debate in this my maiden speech. It seems that crime is a young man's game, and I say "man" advisedly because it seems to be young men rather than young women who are most prone to crime. The peak age is between 16 and 18. The noble Lord, Lord Elton, in his introduction said that if these were our children we would do something about it. I am sad to say that many of them are our children.
In a confidential poll carried out recently, 67 per cent. of boys from that age group admitted to committing at least one offence. The good news is that most grow out of crime by the age of 30; the bad news is that some do not. Of those sentenced in court, nine out of 10 have no educational qualifications, two out of three are unemployed, one-third are involved with drugs and one-quarter have no fixed accommodation. The most worrying statistic for me is that it seems that four out of 10 of those locked up in young offenders' institutions have previously been in care. That is a vital connection: the link between youth crime and parenting. Most young men grow out of crime, but it would be better if most never grew into it. The seeds of crime are planted at a young age and it seems that we should also be planting the seeds of the cure at that same young age.
I recently visited a primary school on one of our large housing estates. The head told me that he had had a bad day. A nine year-old child had, in the words of the head, "flipped his lid" that morning and had gone out of school, shouting and swearing. By the time the class teacher had found another adult to look after the class, the child had left the school, was out of the school gates and well on his way home. The teacher went after him. The child saw the teacher coming and jumped on the back of a passing milk float, pulling a couple of crates of milk on top of him. The teacher, to his horror, saw the child lying on the ground, covered with broken glass and milk. The milk float driver stopped, went round, saw the carnage and began kicking the child, at which the boy got up, ran back down the road, climbed over the school gates and said to the teacher, "Do him, sir". That child might well have had a very wobbly sense of right and wrong—certainly, he had not been listening to my school assemblies—but he had a clear sense of where his true friends were, in the school. Sadly, for many children from wobbly homes, the primary school is their only place of security. Surely that is where we
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should start our crime prevention. We should be working with harassed parents before the problems of crime really begin.
When I visited another local estate school I saw a classroom that had been turned into a parents' centre. Carpet had been laid on the floor, comfortable chairs had been brought into the room and tea and coffee-making facilities were provided. A teacher was even allocated to the room for an hour or so every afternoon to be around when the young parents arrived. That teacher then encouraged those young parents— some no older than children themselves—with their own literacy and parenting skills, under the guise of helping them to help their children with their homework. I believe that that is time and money well invested.
One of our neighbouring parishes has an even more ambitious project—again, aimed at young adults. The project is located in a church hall and is funded by both public and private finance. It teaches young mothers word processing and computing skills—very marketable skills in today's world—but at the same time it provides a nursery and a crèche. Those young women are getting companionship, dignity, skills for the world of work and skills for the world of parenting. I believe that as a result their children are far less likely to fall into crime.
Another strategic group which we should be targeting if we are serious about crime prevention comprises first-time offenders. The aim here is surely to divert those young people from custody and from becoming involved in more serious crimes. Eighty per cent. of those receiving a formal caution from the police in the presence of their parents never offend again, whereas 80 per cent. of those locked up in custody do offend again. Those are dramatic statistics. Obviously, the gross overcrowding in young offenders' institutions at the moment makes it difficult for the regime to give any attention to education or rehabilitation, but the fact is that intensive supervision in the community pays dividends in changed lives.
Forty years ago Leicester was the location for the first college which trained youth leaders. Sadly, in more recent times the youth service has been decimated. That means that we must all co-operate in running bail clubs, community service schemes and employment training schemes. A partnership must be developed between the police, the education service, the Probation Service, the social services, the churches and the voluntary agencies. Too many of our young people are being lost to crime. Too many of our young people are lost morally and socially. Now is the time to hold hands and to reverse the trend.
3.55 p.m.
Lord Gisborough: My Lords, it is a great pleasure for me to congratulate the right reverend Prelate the Bishop of Leicester on a predictably excellent speech. His voice, so familiar on the eight o'clock programme, will become even more familiar here, but I hope that he will not allow his love of the marathon to influence the crispness of his speeches. He has climbed every tower and spire of his diocese; he has climbed a new one here today, and most successfully, and I congratulate him on that.

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By the year 2000 there will be 10,000 teenage criminals, each one responsible for some 20 crimes. The effect of every crime on the victim can be catastrophic. On becoming adults, that very small minority of youths are likely to cascade a criminal role model to their children. As my noble friend Lord Elton described, few are caught and even those are seldom punished, so prevention is the better course than cure.
Steps to prevent youth crime need to be taken by a wide range of agencies before those at risk start to offend. Parents need to be helped to bring up their children to respect the law. Schools play a major role. Social services, health, housing, leisure, youth training and drug and alcohol services all need to be involved. Both central and local government need to commit resources to implement crime-prevention initiatives, particularly aimed at this minority group.
I can personally speak of initiatives already in place within the Cleveland Constabulary. The force has recently appointed a community safety officer for youth issues. It has produced a youth strategy to encourage an appropriate local response to the needs of all young people. It is seeking to work with and to encourage young people through public, private and voluntary organisations to address underlying social issues which contribute to crime and to anti-social behaviour. That police force has, with other agencies, been seeking to divert youth from criminal activities.
I should like to give some examples of its outstanding work. All juveniles in the "Prison! Me! No Way!" scheme are required to attend a presentation by prison officers and a member of the cautioning support project as part of the cautioning procedure. The prison officers frankly describe prison life and a video recording charts the life of a juvenile from the commission of a criminal offence to his entry into the prison regime. Some mothers attending with their sons become distraught at the prospect. The post-cautioning support project then offers support in an attempt to divert the juveniles from re-offending. The support offered consists of positive help and a realistic plan for the future for that individual to remain crime-free.
Another project, the Safe in Teesside Project, has negotiated discounts with the leisure providers, cinemas and fast-food outlets. Discount cards are offered to all young persons in Teesside aged 11 to 18. The aim of the scheme was to divert young people from offending through boredom during the summer holidays by encouraging them to make more use of the leisure and recreation facilities available across the area. There was a very high take-up of the offers available.
A summer leisure activity programme, sponsored by the local authorities, takes place annually during the schools' summer holidays. The scheme has attracted 1,500 young people to take part in 54 quality leisure activities. Several young persons with convictions attended the scheme which thrived throughout the summer. The area saw a reduction in crime during that period, some of which must be thanks to the
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scheme. A measure of the success can be taken from a worthy comment made by the parents of one attendee to police officers:
"Before this you wouldn't have got across my doorstep. You are welcome any time now".
There are 15 junior crime prevention panels in the force area. One such panel, at Grangefield School, Stockton, is acknowledged to be the most successful junior panel in the country. Started four years ago as a direct result of crime within the school, the panel has raised thousands of pounds to finance security systems for the premises, virtually eradicating crime. The Learning from Landscape scheme has also been very successful.
Police liaison with schools continues to foster citizenship to build mutual trust and understanding. A drugs awareness package has been produced by the force in partnership with the health authority. It is aimed at children in primary education. The scheme has significantly raised the level of awareness of drugs by children in the nine to 11 year-old age group.
There is another field of initiative set up by Youth at Risk, a national charity that devises schemes to enable offenders to face the future without crime. That has had great success in the provision of places at a cost of £6,000, compared with £50,000 per place at an offenders' institute. Divert is another organisation, and there are many more. I hope that the Government will support these highly cost-effective charities, along with the methods that have been successfully used in Cleveland and elsewhere by government agencies.

The Budget
4 p.m.
Lord Richard: My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to a Private Notice Question asked in another place on whether or not the Government will set up a Select Committee to investigate advance disclosures of the Chancellor of the Exchequer's Budget Statement:
"No, we do not intend to establish such a Committee. There is always speculation at the time of the Budget about its content. I have seen no evidence that details of my right honourable friend's Statement have been leaked. If the complaints are that we are sticking to manifesto commitments and election pledges then I am happy to confirm that this is the case".
4.2 p.m.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the Leader of the House for repeating the Answer to the PNQ asked in the other place by my right honourable friend Peter Lilley. I know the difference between speculation and disclosure. I hope that the Leader of the House will not use that as his first answer to my questions. Of course speculation occurs all the time; but this morning when I awoke I heard on the radio some speculation about whether the Government would remove the tax allowances for private health care for the over 60s. That is fine. However, the BBC, which

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appeared to believe that it had a story of some import, reported that Treasury sources had confirmed the story. I may be slightly wrong in my choice of words because I am relying on my memory; but it was perfectly clear that that had been confirmed by the Treasury. That goes beyond speculation about the Budget; it is disclosure of the content.
When I arrived in your Lordships' House today I read the Financial Times and the article on the front page written by very responsible journalists: Mr. Robert Peston (who may well be known to quite a few Members of your Lordships' House), Mr. Edward Luce and Mr. Steve Thompson. The article discussed speculation that the Government might be about to drop their plan to abolish dividend tax credit on advance corporation tax. If so, that would mean that pension fund income would be reduced by £3.5 billion. Whether or not ACT is to be abolished is a fairly sensitive piece of information. The speculation has been that it would be abolished. We now move across the boundary between speculation and disclosure. I quote the article in question:
"A senior member of the Government said: 'The markets are honkers … we are pressing ahead'".
Either these three respectable journalists are wrong or they are right and a senior member of the Government—whom I take to be a Treasury Minister—used those words to one or all of those three journalists. That is not speculation but disclosure. I believe that the Government should take this matter much more seriously than they are. Of course the Government have every right to follow their manifesto pledges; but one of those pledges was to refrain from indulging in disclosure before the Budget of price-sensitive information. If the noble Lord the Leader of the House looks at the markets this morning, he will see that that information is indeed price-sensitive. I would be interested to know the identity of the senior Member of the Government who spoke to the FT. Perhaps he should do what Hugh Dalton did and come clean, but perhaps the motto should be "New Labour, old habits".
It is rather unfortunate that Treasury sources and a senior member of the Government should disclose information before the Budget. It is doubly unfortunate that the Government do not take these matters seriously.
Lord Harris of Greenwich: My Lords, I thank the Leader of the House for repeating the Statement. I also pay tribute to the noble Lord who has just resumed his seat. We should also thank him for repeating what Mr. Lilley said in the House of Commons about 15 minutes ago, except that the noble Lord, Lord Mackay, did it rather better than Mr. Lilley. Mr. Lilley gave one of the most pathetically inept performances that I have ever seen in the House of Commons.
Is the noble Lord aware that the comparison between what the noble Lord, Lord Mackay, has just said and the Dalton leak in the early years of the 1945 Labour Government is manifest nonsense? Is he also aware that, curiously enough, no Select Committee was set up when the Daily Mirror received a copy of the previous Chancellor's Budget? I do not recall that the previous
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Government suggested that there should be a Select Committee of the House of Commons to investigate that matter. However, I do remember—perhaps the noble Lord, Lord Richard, will also recall it—allegations made in 1969 that a budget leak had taken place which had appeared on the front page of the Sunday Express. Those were allegations made by Sir Gerald Nabarro and were taken up with energy by the Conservative Opposition. A Select Committee was appointed. I quote from paragraph 12 of the committee's report:
"Your Committee are forced to conclude … that Sir Gerald has no evidence which would support this allegation".
There was a Select Committee appointed to look at an alleged budget leak which led to substantial expenditure of public time and money but reached no sensible conclusion.
Further, a leak took place when Mr. Nigel Lawson was Chancellor of the Exchequer. Disclosures were made by a national newspaper that the Chancellor intended to withdraw tax privileges from those who took out endowment policies. I do not recall that the then Government set up a Select Committee to investigate this matter, despite the fact that tens of thousands of people took out endowment policies in order to obtain tax relief and so save themselves a great deal of money.
Is the noble Lord the Leader of the House aware that many of us would prefer a situation in which there was far greater sensible discussion before Budget statements and that a great deal of Budget secrecy is unnecessary? Further, is he aware that perhaps we would all benefit from much more mature debate on the options facing the Chancellor before he presented his Budget?
Lord Richard: My Lords, I do not believe that the House should become too excited about this. It is perfectly obvious what is going on. This is a very transparent attempt by the Opposition in another place to disrupt the Budget of my right honourable friend the Chancellor of the Exchequer. It is not a new tactic. It has happened before and no doubt it will happen again. I wholly agree with the comments of the noble Lord, Lord Harris of Greenwich. What he said was powerfully expressed. He had his facts right. The argumentation was good and I agreed with it.
Lord Marsh: Give him a job!
Lord Richard: My Lords, your Lordships cannot expect me to say anything else. I too watched the television performance of the noble Lord's right honourable friend Mr. Lilley. If ever there were a threadbare case, I am bound to say that this is it. On what is it based? As I understand it, it is based on one comment by the BBC and one sentence in the Financial Times. The article in the Financial Times bears looking at for a moment. Perhaps we shall see the extent of this leak. There has been speculation about ACT for a long time. The article states:
"Traders said some of the rise in share prices was due to rumours—believed to be ill founded—that the Government had dropped its plan to abolish the dividend tax credit, a move which would cut pension funds income by an estimated £3.5 billion".

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I do not comment on the arithmetic because I am not qualified to do so or the technicalities of those rumours. The article goes on to say:
"A senior member of the Government said: 'The markets are bonkers'".
That seems to me to be a somewhat concealed leak. It states:
"A senior member of the Government"—
if indeed one ever did talk to the Financial Time—
"said: 'The markets are bookers … we are pressing ahead'".
What does that mean? In relation to what are we pressing ahead? Apart from anything else, the comment is made after the speculation on the Stock Exchange has taken place and not before. It is today's comments upon yesterday's business. With great respect it is a pretty threadbare case. I finish by congratulating the noble Lord, Lord Mackay. He is becoming the Government's all-purpose spokesman.
Lord McIntosh of Haringey: Opposition!
Lord Richard: My Lords, one day it is trade and industry; the next day social security; the third day it is Treasury; last night it was devolution. What guise will we see him in next? Whichever it is, I hope that he will have a better case than the one he has today.
4.10 p.m.
Lord Marsh: My Lords, that was a rather quick exchange, with the exception of the noble Lord, Lord Harris of Greenwich, whose support for the Government is as admirable as it is enthusiastic. The quicker he gets a job the better, and then we can all relax. The noble Lord is using sleight of hand. Yesterday the market shifted 147 points, as I remember it, for no apparent reason. Normally the day before a Budget one would expect all the dealers to sit on their hands for very obvious reasons. One of the issues that has been around is tax credits and ACT, as the noble Lord rightly said. There was a great deal of expectation that that was the Government's policy.
If a government source said, "The market is bonkers", that is a statement that the opposite is a fact. It can only be one or the other. The noble Lord may be able to jump up to say in retrospect, "As a matter of fact, the Government have been highly intelligent and sensible. They decided not to proceed with such an idiot idea". If that is so, obviously it had no effect on the market. But if the Government have decided to proceed with action on ACT and tax credits, and they were told yesterday that the rumour that they were not so going to do caused the market to shift, and therefore it was bonkers, that is a leak.
Lord Richard: My Lords, it is a pretty imprecise leak. "That is bonkers", can mean a great deal. There was speculation on the Stock Exchange yesterday. Speculation and disclosure are, as the noble Lord, Lord Mackay, said, two entirely different things. We have no intention of setting up a Select Committee to investigate the statement, "The markets are bonkers".

Youth Crime
4.13 p.m.
Debate resumed
Lord Judd: My Lords, the noble Lord, Lord Elton, has introduced a timely debate, but I start by joining with those who said what an immense privilege it has been to hear the outstanding maiden speeches of the right reverend Prelate the Bishop of Leicester and my noble friend Lord Evans of Parkside. We look forward to hearing many more such contributions from them both in the years ahead.
Criminal and anti-social behaviour by the young too often adversely affects those least well equipped to deal with it—the frail, the elderly, and the vulnerable, frequently trapped on housing estates. It is difficult to exaggerate the sheer hell it can mean for those who have no means of escape.
It is therefore encouraging that the Government have indicated their resolve to look beyond the immediate priorities and not to limit themselves to essential, firm reactive action alone, although that firm, reactive action is clearly essential. Understanding and the ability to ask, "Why?"—"Why is this happening?"—are the basis for taking effective and rational rather than emotional action. Rational action must lie in the realm of prevention—obviously the best lasting solution.
I am glad to be president of the YMCA in England. That brings no executive or trustee responsibilities, but it enables me to be a privileged witness of extensive practical community service. The YMCA has come to understand that an integrated social programme is imperative in its work with young people at risk. That includes housing, training, family services, preparation for, and support in, parenting, counselling—often drugs counselling—childcare, nursery school provision and sporting, health and fitness facilities.
It is essential to recognise what contributes to offending behaviour by the young and to address it at source. The London City YMCA, for example, focuses on detached youth work on estates at the edge of the city. Youth workers go where young people are likely to be, especially in the evenings, and build up relationships of trust, using informal education techniques to work on drug and alcohol misuse, on sexual health and on criminal behaviour.
Elsewhere, in all regions of England, the Foyer scheme has proved a highly relevant way of breaking the no-home, no-job cycle by providing accommodation, training, job search, and counselling under one roof. It has certainly been the experience of YMCA, with some 50 per cent. of the total Foyer projects, that that work has achieved significant success across the country.
Problems with the behaviour of young people can rapidly escalate out of control as a result of inadequate skills in parenting or lack of confidence on the part of parents in dealing with difficult behaviour patterns which could end up as criminal offending. The YMCA is therefore now starting programmes which will be designed to provide at community level at least some support and guidance for parents of teenagers.

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Where young offenders are in custody, the appropriateness of their treatment also requires close scrutiny. Punishment is important, but rehabilitation is the bigger challenge. There is no point in just producing fitter hardened criminals. I have seen some of the interesting pioneer work already being done by the YMCA in two young offender institutions. I understand that discussions are taking place with a view to extending that work to a further seven such institutions. The key to that work, as I see it, is to invest the offenders with a sense of personality, of personal worth, personal self-respect, and personal responsibility— certainly never to dehumanise them, for many of those young people have known little love or appreciation in their lives and may have never had the opportunity to sense what they might become.
The pre- and post-release training and personal development cover formal training—numeracy, NVQs and the like—and the informal training—life skills, handling and resolving conflict, team building and, most important of all, preparation for the harsh realities which will be encountered on release. The positive results from all those activities, as monitored in the post-release records of offenders, are already encouraging.
The vital strength which I detect in what I have been describing is the continuity of support through custody to post-release help with accommodation, training, and other support. That continuity is indispensable if we are serious about rehabilitation and reducing the risk of re-offending. There is a need to take the hand of the young offender, as there is of those of the young at risk, and walk with them through the trauma to a better life. We are very good at talking severely about the young, but where is our solidarity?
It has been suggested that young offenders should make reparations and apologise to their victims. That makes a lot of sense. We cannot be sentimental about anti-social or criminal behaviour. Society must be firm about its essential rules, but those rules have to be based on confidence and self-evident consistency about what are the civilised values which we embrace. Our deeds and vocabulary, our culture as a nation, have demonstrably to be those of integrity, responsibility, care, compassion and vision. We have to be able to say to the young, "Do as we do" not just "Do as we say".
As it is, it may be that society has itself to make reparation to many of the young and to apologise for its hypocrisy and inconsistency—too much greed at the apex of the social triangle—for the unemployment, the soulless estates, the abuse of the environment, the inadequate educational and recreational resources, parents overwhelmed by adversity and by the struggle to survive and the general hopelessness which confronts the millions of excluded. Indeed, to what will many young children be going home under a curfew? Sometimes, tragically, the streets may be preferable.
There is an urgent need for integrated social, economic, and employment policies which bring together all the key elements in a battle for the young rather than against them. In so far as the Government
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can set that direction, they should have our unqualified support. For that, surely, is the real, unsentimental road of hard-headed common sense.
4.20 p.m.
Baroness Warnock: My Lords, I am most grateful to the noble Lord, Lord Elton, for initiating today's debate. I am also very pleased indeed to be following two such outstanding maiden speakers as we have heard this afternoon. I should simply like to make one suggestion; namely, that we should ask the Government to think again, dispassionately and without prejudice, about the provision of boarding education for some children who, I believe, are children in severe need. What they are in need of is often not punishment, even though they have offended: they are in need of preventive care and, more importantly, education.
I am sure that no one will disagree with me when I say that education is at the heart of the question of preventing young persons from committing crime. Therefore, we ought to take that thought seriously and not allow ourselves to be prejudiced against boarding education which has fallen into decay largely because local authorities have not been able to afford fees for such schools as, for example, Peper Harrow, which is probably the best known of the schools for boys suffering from behavioural and emotional deprivation, or difficulties, at school. Many of those boys fell into crime through having been excluded from their normal schools.
I believe that such schools ought to be reinvented. The fact that we all know horror stories about boarding education ought not to entail the closure of such schools, thus shutting off this possible source of help for society; rather we should devise better and more efficient ways for inspecting such schools. It is impossible to blame local education authorities for not being able to afford the fees for those schools, which are inevitably very high because the student-teacher ratio has to be very tight.
I blame the situation on a policy which has made it impossible for local education authorities to take their duties seriously. After all, many of the young people about whom I am talking had statements of special need when they were thrown out of their schools and the local education authorities could not—and, indeed, have not been able to in the past—do what they had a duty to do; namely, to supply proper and suitable education for such children.
No one should be too much committed to keeping a child in the family when thinking about the kind of problems that we are discussing this afternoon. For one thing, and as we have already heard, many of the children who offend are already in care and have virtually left their families. However, for a large number of them, the difficulties that they have in concentrating, in being interested in anything or, indeed, in having any set of moral standards, stem from the family. Very often there is tremendous conflict within the family for which a steady, continuous and absolutely solid supportive school is the proper solution. I simply want to emphasise the great difference that I believe there is between

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punishment of offending children and the support that they receive from education. I should add that education for some of them must be a 24-hour process and not just a matter of going in and out of school, and often truanting.
I know that boarding schools for such offending children have to be secure, but that does not turn them into prisons. I say that because the intention behind all that they receive from those schools is not punitive; indeed, it is disciplinary and educative. One cannot exaggerate the importance that education might have in eventually turning these children away from crime.
I do not believe that such schools should be closed simply because they do not deliver the whole of the national curriculum. That argument has been used in the past as a reason for closure. Of course, the delivery of the whole of the national curriculum should be an ideal for such schools, but often the young people who attend them are in no position to learn anything at the beginning. It is a long process to prepare these offending children for education and thus enable them to benefit from it, especially if they are drug abusers, as many of them are. Therefore, if the schools are trying to deliver the national curriculum and have that aim very much in mind, but have much more at the front of their minds—namely, the preparation for education which, for example, drug abusers need—they should not be closed or subject to closure on academic grounds. I beseech the Government to look again at the policy of causing such schools to be closed based on the financial difficulties experienced by local education authorities in supporting such children and paying their fees.
4.25 p.m.
Viscount Caldecote: My Lords, in his excellent introduction to the debate, my noble friend Lord Elton emphasised the urgent need to prevent crime occurring. The detection, arrest and punishment of crime all indicate a failure to prevent it, and the cost is enormous; indeed, something like £4 billion a year is spent dealing with juvenile crime. One of the vital contributions to the prevention of youth crime is made at school. Those leaving school with a constructive outlook, who see life ahead as a great opportunity, will be unlikely to embark on a life of crime. However, maladjusted children leaving school with no clear purpose for their life in sight, and perhaps with some grudge against society stemming from an unhappy home, family neglect, poverty or drugs, can all too easily be led astray into a life of crime.
I believe that we should devote far greater efforts and resources to helping young people to leave school without such disadvantages. That involves pastoral care on a one-to-one basis. Although most teachers no doubt recognise the need for such care, they have no spare time for it in a very busy life. Experience shows that the best way of helping disturbed and disadvantaged children is through well-trained pastoral workers coming into the school by invitation of the head teacher and working closely with staff and parents.
A charity, Schools Outreach, is one organisation which carries out such work supremely well, as I know from connection with it over many years. The
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organisation gives very thorough training to pastoral workers. Its success is undoubted and well documented. I should like to give your Lordships two such examples, although there are many others. In 1992 Berkshire County Council approached Schools Outreach and a pastoral careworker was allocated to each of two schools which drew pupils from an estate beset with unemployment, social and drug problems.
The head teacher at one of those schools reported that before a Schools Outreach worker was appointed, pupils were running riot. She said:
"We had a lot of very aggressive children, but having a resident pastoral care worker has changed the school. There is a sense of calmness now. Children come to school feeling a greater sense of security".
In another school, the headteacher reported on the outcome of the appointment of a Schools Outreach pastoral worker and said that, two years before the appointment, there were 38 and 50 temporary exclusions in each of those two years, one of which was permanent. Two years after, there were three temporary exclusions in one year and two in the next with, again, one being permanent. On staffing, the year before the appointment of a Schools Outreach pastoral care worker, there was a 90 per cent. staff turnover, while two years after there were no staff changes. I believe that that indicates the real success of the Schools Outreach workers in those very difficult schools. The report of that headmistress continued that the Schools Outreach project was of tremendous value to the school, to the children and community, enabling staff, parents and carers in the local community to work closely together.
Those are just two examples and they are very clear and decisive examples. They are surely convincing of the value of those pastoral workers and there is no doubt that a major factor in the success of those workers is that they are seen as non-official adult friends. They remove the reluctance of children to approach staff and, of course, they have the time available for that demanding work.
Workers like those can make a major contribution to ensuring that those young people leave school in a constructive, positive frame of mind without hang-ups. Therefore, they are far less likely to embark on a life of crime.
But of course, all that costs money. It costs some £20,000 to £25,000 per year per worker, including training costs. At present, the number of Schools Outreach workers is severely limited by lack of funding, with minimal support from the Department for Education and Employment and local education authorities.
Over the past five years, I have tried to persuade HMG to allocate more money. The Department for Education and Employment says that it is a matter for the LEAs and the LEAs say that there is no money to spare. Therefore, I tried the Home Office, for which it would be a marvellous investment because it would save some of the huge costs spent on juvenile crime later on. But the Home Office says it is a matter for the DfEE.
We now have one Secretary of State responsible for transport and the environment which is a very good idea. If we are to take seriously crime prevention among

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young people, surely we need one Minister with overall responsibility, for that is not just a Home Office or DfEE responsibility.
I urge Her Majesty's Government first to provide extra funding, rising to perhaps £100 million per annum over the next four years. That would fund another 4,000 pastoral workers among our 25,000 schools and would cover most of those in need of such workers. It is a drop in the ocean compared with the £4 billion which is now spent on dealing with juvenile crime.
Secondly, I urge the Government to clarify and concentrate responsibility in that field. If it is impracticable to give responsibility to one Minister, perhaps it could be shared effectively between the Minister of State responsible for criminal policy at the Home Office and the Minister responsible for school standards in the DfEE. Moreover, it would be absolutely essential to give them a budget specifically for that purpose.
I hope that the noble Lord who is to reply will be able to say something encouraging in that respect because I believe that it is of immense importance and a very good investment for the nation.
4.33 p.m.
Lord Graham of Edmonton: My Lords, I am conscious when the clock says seven minutes that time has been well exceeded and I do not intend to do that in my speech.
I begin by thanking most warmly the noble Lord, Lord Elton, for giving the House an opportunity to discuss what has been demonstrated clearly to be a very interesting topic. I want also to congratulate my noble friend Lord Evans. He spent most of his younger life on one side of the Tyne in Jarrow, whereas I spent most of mine in Scotswood Road, Newcastle, looking across there. For the past 25 years we have been comrades in the Labour Party at various levels. I know that he will make some down-to-earth contributions to our discussions.
I know that the Minister who is to reply is a caring Minister. I speak for the Association of London Government, of which I have the pleasure to be a joint president. In the past, there was a lack of cohesion and of an overall strategy. The previous government had many fine initiatives but they were disparate. My noble friend Lord Evans referred to the initiatives by the present Home Secretary where there is to be a co-ordinated effort to deal with the matter.
The size of the problem is not only sad; it is horrific. Many statistics have been introduced into the debate. But when I did my research what I found particularly sad was the enormous cost involved to family life, industry and the prospects of young people who have wandered into crime of one sort or another. However, I was interested that a research paper of March 1997, Preventing Children Attending, indicated that there were "significant family risk factors". Those factors relate to a child's environment, parental control, hereditary matters and many other aspects. Inherent in criminality among young people are factors such as poor parental
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supervision, parental neglect, harsh or erratic discipline, parental conflict, long-term separation from a biological parent and having a parent with a criminal record. While it is not suggested that those are the causes of delinquency, they are bound to have an influence on the youngster and whether he drifts into or is kept out of crime.
The two major institutions involved in whether a youngster drifts into or is kept out of crime are the family and the school. I am sure that none of us is brave enough to say which is more important. School risk factors include low educational achievement, disruptive behaviour, persistent truanting and permanent exclusion from schools.
When the dust dies down, I hope that the Minister will be able to give us a pointer in the right direction. Yes, we must look after the victims of crime but we must examine also the causes of crime. We must be fair and recognise that the issue is not black and white. It is not even a party issue and it is certainly not a party political issue because we are all members of the same community.
The House will be well aware that I have the pleasure to be associated with the retail business. I am secretary of the all-party retail group. The retail industry is extremely conscious of the enormous cost to industry of youth crime. Perhaps I may give one or two statistics. The Retail Crime Survey showed that crime committed against retailers cost the industry £1.42 billion. In addition, retailers spent £450 million on crime prevention. Therefore, the total for the year was almost £2 billion. That is paid for by other customers who subsidise those who do not pay for what they take from a shop.
I am glad to see the initiatives by Marks & Spencer, among others. There is a genuine programme of collaboration between retailers and schools in order to alert youngsters to the fact that they need to have more respect for property. They need to be well aware of the dangers when they go into a supermarket or a department store and look upon it as an Aladdin's Cave.
In order to keep to my earlier threat or promise, I shall deprive your Lordships of the very interesting tail end of my speech and sit down now.
4.38 p.m.
The Lord Bishop of Lichfield: My Lords, I add my congratulations to our two maiden speakers and also to the noble Lord, Lord Elton.
To the evidence from Gloucestershire, Jarrow, Newcastle and Cleveland, I should like to add evidence from the West Midlands. I come from a diocese covering a population of 2.5 million, including communities in Stoke-on-Trent, Wolverhampton, West Bromwich and other Black Country towns. This issue impinges heavily upon us also.
In the Stoke and Longton district, 3,100 offences were committed last year by 2,100 young offenders. Twenty-seven of these offenders were in the younger age groups and were responsible for about 20 per cent. of the offences. As regards the industrial, or in places

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post-industrial, West Midlands, I reiterate that the problem cannot be separated from other serious issues in the region, in particular youth unemployment.
I have learnt in this House the discipline of not depending on purely sociological analyses of human ills. However, the fact remains that in some of our Black Country senior schools, 20 per cent. of school-leavers fail to find jobs although they try to do so. That figure can rise to 30 per cent. among young Asian and Afro-Caribbean school-leavers. If there is a prospect of unemployment, that causes disillusion and absenteeism during the school process. In one of our urban boroughs the local education authority reports nearly 11 per cent. of pupils being absent on any one half day. In one senior school the figure can rise to 15 per cent. on any one half day.
Nor can we forget the overall impact of what has been called post-industrial shock. Much of the community life of our region was bound up with a large industrial workforce in which sons followed fathers and grandfathers into the foundries, the collieries and the large-scale manufacturing industries. For many that kind of community "glue" has gone, denting pride, security and self-respect, although marvellous human qualities of humour, courage and resilience remain.
However, the intention of this debate is positive: it is to call attention to the importance of the initiatives. I wish to mention two that are known to me. The first is closely connected with what the noble Lord, Lord Gisborough, has said about the Cleveland police. I wish to praise the policy and the efforts made in our region by the Staffordshire police not only for their support of a police inspector who has become a nationally respected expert on getting children back to school; not only for the work, which has already been mentioned, of police schools liaison officers who are out every day delivering training packages to counter drug abuse; but also—this was mentioned by the noble Lord, Lord Gisborough— the setting up in our region of the Burslem Divisional Junior Consultation Panel for young people under 21. Police consultation panels exist but they are often for adults. This panel is made up of representatives from every school in that populous region of Stoke-on-Trent. It has gathered no fewer than 100,000 answers from young people aged 11 to 16 to questions about youth crime—the subject of this debate—and about how to improve the quality of life for young people in the region. That information is proving valuable and the consultation is fruitful.
Secondly—here I pick up what the noble Viscount, Lord Caldecote, said—I wish to praise a number of people, such as school outreach workers, who work alongside school welfare officers in Wolverhampton and the Black Country. They are committed to helping disaffected young people to re-enter both education and community life by re-establishing relationships. It is unstable relationships which are close to the heart of this problem. I support the views of the noble Baroness, Lady Warnock, the noble Viscount, Lord Caldecote, and the noble Viscount, Lord Brentford; namely, that families and workers must sustain these relationships because it is in relationships that personal responsibility and choice are nourished.
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But here, finally, comes the crunch. In one of the key boroughs where such schemes exist in my diocese a 10 per cent. cut in the education budget is expected. As the noble Viscount, Lord Caldecote, said, we need 4,000 pastoral workers of the kind I have mentioned throughout the country. When lottery funding or City Challenge funding comes to an end and school outreach projects find it hard to sustain the funding, how will those workers survive? Perhaps that question is being answered or not answered in another place this afternoon. I say to the Minister that it is too long to wait for the co-ordinating committee; we need these workers now.
4.45 p.m.
Viscount Tenby: My Lords, the House is grateful to the noble Lord, Lord Elton, for initiating this important topic at this particular time and for kicking off with a thoughtful and compassionate speech. We have also had the added bonus of hearing two excellent maiden speeches.
This is a big subject and the allotted time is short so I propose to concentrate on only one aspect of youth crime prevention; namely, the desirability of speeding up the time between the committal of an offence and the sentence. In this context I look forward with some expectation—as I am sure many do within the legal system—to the Government's "fast track" proposals in their forthcoming crime and disorder Bill. I hope I shall not be accused of any partiality if I own to a certain frisson of anticipation about this year's round of criminal justice proposals, particularly on the youth front—an experience which has been sadly absent for me in recent years.
Although I have been a magistrate for many years, and therefore declare an interest in these matters, I say with great regret that I have never sat on a juvenile panel. Nevertheless, it is a matter of some satisfaction and indeed pride to me that north Hampshire, my home Bench as it were, is one of the areas in which this speeding up process is being tested even now.
Facts about the present situation make pretty sombre reading. The average time between the committal of an offence and the eventual disposal is 128 days, but at worst can be as much as 170 days; that is, 24 weeks. We should just contemplate that. To take it to an extreme hypothesis, suppose that the offender commits only one offence per week during that period; by the time the original offence had come up for sentencing, 24 further matters would have to be taken into consideration. The main point, however, surely is this: the further the sentencing is from the commission of the crime, the greater the difficulty in making the offender face up to the implications of his or her behaviour. In some instances they even forget that they have been responsible for a particular offence. I know that is hard to believe but it is true.
Much time is also currently being lost, in the case of persistent offenders, in gathering up the various offences over what may be a period of some months, and often over a number of different court areas, into one sentencing parcel, if I may use that word. Admirable

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though this sentiment may be in sentencing terms, in the case of juveniles there is much to he said for dealing as rapidly as possible with only the case in hand so that the offender can be confronted with his or her anti-social behaviour when the event is still fresh in the mind and before the offender becomes irretrievably locked into a downward spiral of repeat offending. In this context the Audit Commission's recent invaluable report, which has already been referred to today, points out that only 17 per cent. of youth cases were sentenced on first hearing, the average requiring no fewer than four sittings of a court. So noble Lords will see what a mountain there is to climb.
A speeding up of the legal process is one arm of the fight against juvenile criminals but the other surely is the strengthening of effective means of dealing with the offenders themselves in order to ensure, so far as is possible, that they do not re-offend. Establishing multi-agency youth offender teams under the aegis of local authorities can provide the means for doing this. The creation of the Northamptonshire Diversion Unit, consisting of representatives of the police, the probation, social, health, youth and education services some three years ago, shows that such an initiative can produce results. For example, 76 per cent. of all compensation claims were paid against only 48 per cent. in an area without this innovative service. Most important of all perhaps, 76 per cent. of victims expressed themselves as either satisfied or very satisfied with these new arrangements.
The area of juvenile crime is a delicate one. A false move, an over-reaction, may result in an offender being lost to society for ever. There are 101 reasons why a young person may turn to crime: peer pressure; inadequate parenting; failure at school; lack of job opportunity; drug or alcohol abuse, and so on. But unlike adults, juvenile offending patterns can disappear almost overnight and for no discernible reason, we hope never to reappear. Accordingly, it is surely not too much to ask of ourselves as a civilised society that we use every endeavour, every scrap of our imagination and resolve, to deter young people from a life of crime; and by doing so we shall of course protect ourselves from the depredations of young people who account for some 40 per cent. of all indictable offences in this country today.
As the noble Lord, Lord Elton, said, we have lost far too much valuable time in dealing with this problem already. Let us now set to with a will and as a matter of urgency to attempt to solve it.
4.51 p.m.
Earl Kitchener: My Lords, I shall speak only about causes of youth crime, and indeed about only one of the many possible causes: that is diet. The harmful effect of lead, of which we consume more than did our more primitive ancestors, is now generally acknowledged, although not enough notice is taken of it. Much has been written about the effects on behaviour of minerals, vitamins and other nutrients, both in general and for particular individuals, and to my mind their importance
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is established. But policy statements by two of the professions most concerned, psychiatrists and psychologists, attach little or no importance to diet.
I must declare an interest as chairman of a charity, Natural Justice, which, with the University of Surrey, is running a double-blind trial on the effect of a fairly standard vitamin and mineral supplement on the behaviour of prisoners. The results are expected in a few months, and I shall be very disappointed if they are not positive. I am glad to say that the Home Office has promised a small contribution to that work. The Department of Health gives an annual grant to the Hyperactive Children's Support Group which has had successes with dietary changes, but in recent years that grant has been reduced. I hope that the new Minister will look at the work of this group and will decide whether the very hardworking mother and daughter team which runs it merits more support. Dare I hope that its gender base will commend it to the Government?
Why do the orthodox dismiss the importance of diet on behaviour? It is probably because doctors tend to concentrate on the things which only they can do, and because of the complexity of the interactions between different nutrients. Why should more attention be paid to diet? It is because action on it is cheap, effective and, with proper precautions, harmless.
4.54 p.m.
Lord Henderson of Brompton: My Lords, the noble Viscount, Lord Tenby, went further than the noble Lord who cut his speech so dramatically from six minutes to five. We now have a little extra time to speak if we wish to—but that might be rather unfortunate.
I thank the noble Lord, Lord Elton, for having raised the subject today. He is chairman of the Divert Trust which is the successor to the so-called IT Fund which the Government sponsored for five years on the initiative of Lord Ennals. He was before his time in taking that initiative. It is important that it should he followed up. As the noble Lord, Lord Elton, said, it is difficult to attract funds for this purpose unless the Government participate too. For that reason I ask for funding for the successor body, the Divert Trust, to be considered again by the Government perhaps for another £500,000. At £100,000 a year it seems chicken feed compared with demands that I have heard from others today. It would fund the body well into the next century and over the millennium.
Another small organisation related to the Divert Trust is the John Hunt Award Trust. It exists with pathetically small funds to reward new work aimed at diverting youngsters at risk and publicising that new work in local communities. Both organisations are well worth supporting.
Although the subject has been mentioned previously, I, too, wish to refer to the issue. The noble and learned Lord the Lord Chief Justice recently called for,
"measures to be taken to divert young people from crimes at the earliest opportunity".
I was one of those who was fortunate enough to hear the noble and learned Lord give that lecture. I strongly endorse what he said. The powerful support of the

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Lord Chief Justice indicates that the Ennals initiative should be followed into the next millennium. I hope that it will be.
Now is surely the time to help the existing organisations about which we have heard in the impressive contributions today. All over the country small groups operate, some started by the police in small communities and others which have prospered and grown bigger. But the local initiative is what matters. I refer again to the Divert Trust, a body which should be supported with funding.
I hope that what I shall say is not party political in any way. I am impressed by the Government's election manifesto. It contains seeds to do just what we have all been urging. The first element is to place a new responsibility on local authorities to develop statutory partnerships to help prevent crime. Local authorities will then be required to set targets for the reduction of crime and disorder in their area. I cannot think of a better way of extending the work of Lord Ennals and the current activities of the Divert Trust. The second element is to get 250,000 young people under the age of 25 off benefit and into work by using money from the windfall tax—which I suppose by now is common knowledge and not mere speculation. The third element is to get the unemployed from welfare to work. That may have as its primary purpose the reduction of the burden on the social services budget. But it will surely work as a powerful incentive towards the reduction of youth-related crime as work replaces idleness. I congratulate the Government on all those elements in their election manifesto.
I conclude by endorsing the Lord Chief Justice's call for the Advisory Council on the Penal System to be revived. I believe that the suggestion was referred to by the noble Lord, Lord Elton, in his speech today. I wish to echo the words of the Lord Chief Justice that the beginning of a new Parliament is the ideal moment for such an initiative.
5 p.m.
Lord Rea: My Lords, it is very good that it is an incoming Government who, through the voice of my noble friend, are answering the noble Lord, Lord Elton, today. It gives my noble friend an opportunity to outline how the Government intend to deliver that toughness on the causes of crime which, as my noble friend Lord Graham said, was the second part of that famous slogan of my right honourable friend the Prime Minister when he was Shadow Home Secretary.
Before focusing on just one of many possible initiatives—namely the role of outdoor adventure education—I want to echo the words of the right reverend Prelate the Bishop of Lichfield and re-emphasise the relationship between youth unemployment and crime and between alcohol and drug abuse and crime. All of those have increased over the past two decades—I suggest as side-effects of the basic philosophy that seeking profit and wealth for oneself is the best way to benefit the whole nation. Unfortunately, that policy has left many by the wayside. While many of us, even the majority, may have attained entry to the
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culture of contentment, others have been excluded from the party. Sadly, that is not confined to the United Kingdom. It is a worldwide phenomenon where monetarist capitalism prevails, particularly in its very raw state in those countries where state socialism has failed.
My noble friend will probably point out that today's Budget will allow a significant first step to be taken in reducing unemployment among young people. Not to have even a small, useful role in society—noble Lords should realise that, since 2nd May, there is such a thing as society again—simply confirms the low self-esteem in which many school-leavers hold themselves. I use the term "school-leavers" in a double sense, since many who are at school are also school-leavers in the sense of truantism or exclusion. The noble Lord, Lord Elton, pointed out how crime is more common among school-aged children who are truanting or excluded. Drugs and crime provide a shield against the depressed, pessimistic outlook that many young people have today. Entry into the risky but exciting way of life of crime, as the noble Lord, Lord Elton, mentioned, is a way out of that.
Unemployment, lack of occupation, is not the whole problem. Many influences play their part. Poverty and poor housing affect the mental health of parents, and thus the parental love, attention, stimulation and good example that they can offer. Those factors may result in failure at school and subsequent unemployment. Crime or drug abuse is more common in some areas with the same degree of deprivation. In their remarks noble Lords have ranged over many contributory factors.
There are things that can be done here and now, as well as attending to the underlying social problems that lead to crime. As a group, young people have a great capacity for challenging physical activities. That fearless energy has been, and still is, used by tribal and national groups to do battle with neighbouring opposed groups or to hunt for food. Participative sports also utilise this risk-taking energy. But the only opportunity to be involved in these sorts of exciting activities in many deprived communities is to become involved in the drugs or crime scene, where ingenuity and nimble footwork can outwit the enemy—which is us, the affluent society, and its protectors, the police.
However, that energy can be tapped and diverted into benign activities. National service—"Put them in the Army"—is yesterday's answer, besides which, it comes too late, missing the most receptive age group, from 12 to 18. A number of imaginative schemes are now in place which include outdoor activities in their programmes for youth at risk. The co-ordinating body for such activities is the Foundation for Outdoor Activity, whose patrons include the great mountaineers, the noble Lord, Lord Hunt, and Sir Chris Bonington, and whose director is Roger Putnam, former principal of the Outward Bound Mountain School at Eskdale. The 1991 DES report on physical education stated:
"The human need for excitement and challenge can, if unfulfilled. express itself in anti-social behaviour"—
the very topic of our debate this afternoon.
"Outdoor and adventurous activities have the potential to satisfy the need for excitement and challenge in a positive way".

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The noble Lord, Lord Hunt, and Roger Putnam produced a report, In Search of Adventure, among whose pages is this statement:
"The merit of the adventure approach may not lie so much in the activities themselves but rather in the unusual opportunity they provide for adults to work with young people outwith the normal constraints of their relationship".
I had intended to give examples of those sorts of activities but time is closing in. The Foundation for Outdoor Activity conducted a survey into the effects of outdoor adventure on young people at risk. It states:
"Where delinquency results in disempowerment, alienation and delayed or disturbed psychological or emotional development, outdoor adventure may play a significant role. It may contribute to developmental approaches to prevention, to developmental and therapeutic approaches to rehabilitation and to the alleviation of adolescent disturbance".
I see that I have run out of time. I very much hope that my noble friend and his colleagues in the Department for Education and Employment will liaise with the Foundation for Outdoor Activity as part of the widespread package of measures which will augment their priority project of getting unemployed young people back into work.
5.7 p.m.
Lord Northbourne: My Lords, I am most grateful to the noble Lord, Lord Elton, for introducing this important debate. I support the noble Lord, Lord Rea, in his advocacy of outdoor projects for young people, with some of which I am involved.
Today, however, I want to address the Government's manifesto commitment to be
"tough on crime and tough on the causes of crime".
I hope that, in replying, the noble Lord will tell us a little more about what the Government envisage as being the causes of crime.
I want to concentrate on just two of the most fundamental causes of youth crime today—young men with no hope of a job, and a society without shared values. I refer to young "men" without a job because, as I believe we all accept, after the age of 16 youth crime is mainly a problem of young men. In my experience that does not necessarily mean that girls are not involved in crime. However, they tend to switch either to prostitution, or to premature motherhood— which is perhaps not a crime.
There is a problem in relation to the role of men in our society today which needs to be examined in far more depth, for which there is not time this afternoon. I simply make the point that children, especially boys, need fathers.
Why do young men turn to crime? Is it really so surprising, if you have no hope of a job, if you are bored, as the noble Lord, Lord Elton, said, by unrestricted idleness—if you have nothing to do and nothing to spend? In our society today if you are a lavish consumer you are respected. To be poor is to be excluded. There are not many rich children involved in the kind of juvenile crime we are examining today. For a poor young man with no hope of a job, a career in
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burglary fulfils many of the roles of a job. It provides cash; it offers a respite from boredom; it is fulfilling; it offers good company; it is fun; you are a hell of a guy with your peer group; it is tax efficient. It is risky, but it is glamorous, and that perhaps makes up for the risk. When you are young, you do not, anyway, believe that you will be caught. Above all, there is a low threshold of entry, much lower than for any of the jobs that are available to many young men today.
So one of the first things we need to do if we want to reduce the rate of youth crime is to ensure that as many young men as possible have a viable and reasonably attractive alternative. We must reduce "unemployability". Employability depends on training and training depends on education. Success in both and in life depends on what is now fashionably called social and emotional literacy which, as I understand it, means building self-confidence—the ability and willingness to get on with others, to settle down, to learn and to work.
Those qualities begin to be learnt by a child from its earliest years. "A child's values are formed by the values of those around it as it grows up". They are normally learnt from parents who make a child feel secure and loved at home, stimulated and wanted, and they teach the child that there are boundaries to acceptable behaviour. Without those qualities, children, when they enter school, soon identify themselves as misfits and decide to rebel or to retreat into themselves. A lack of satisfactory early parenting and parental support is the most common cause of failure to thrive and to succeed at school and in life.
I welcome Jack Straw's paper on Parenting which was published before the election but which will, I assume, form the basis of the White Paper shortly to be published. He states:
"We have to deal with the roots of offending".
One of those roots which he identifies is lack of appropriate parenting.
Nursery education for three and four year-olds will help but there is also an urgent need for more education, preparation and support for parents. Three essentials are: first, that all children (boys and girls, girls and boys) should be taught in school about the physical and emotional needs of young children and about the responsibilities of parenthood. They should have the opportunity to explore their own attitudes and expectations about becoming parents. "Parenting should always be a commitment not an accident".
Secondly, education for parenthood should be available during the period between school and parenthood. Thirdly, there should be support for young inexperienced parents in the form of home visiting, family centres, mutual support groups and specialist services where necessary. As Jack Straw said,
"Some parents are desperate for help, others desperately need it".
The cost of those services would be minimal compared with the gigantic costs of youth crime. Again, Jack Straw said:
"Good parenting is an investment in the future which society cannot afford to ignore".

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I now wish to turn briefly to the question of values. "A child's values are formed by the values of those around it as it grows up". For young offenders, I submit that crime is usually not a moral issue. Why should it be? They have grown up in a society which claims to believe in moral relativity. I have heard noble Lords in this House declare that we do not have to be guided by "outdated moral values". Of course, we must not be guided by outdated values, but we do not want to throw away the baby with the bath water. If moral relativity is all right for the rich, it is scarcely surprising that those who are less well off think it is all right for them too, provided they can get away with it.
Dr. Nicholas Tate of the Schools Curriculum and Assessment Authority, after very wide consultation, is working out for schools a matrix of shared values— values which are accepted by the majority of people in this country in all walks of life and which are essential for the survival of civilisation as we know it. When those shared values are finally published, I hope that we shall all forget moral relativity and focus on teaching our children—as a minimum—this set of shared values.
And let us not forget that the best way to teach children is by example.
5.13 p.m.
Baroness Masham of Ilton: My Lords, I hope that the number of your Lordships speaking in the debate today helps to illustrate the concern felt throughout the country about youth crime. The other night I was talking to a magistrate from Keighley in Yorkshire who told me that people were desperate to find satisfactory solutions to cope with young people who came before the courts and were deeply addicted to drugs and involved with drug abuse. She told me that the services in Bradford were fragmented and not really geared to children. Her pleas for more action and preventive initiatives were urgent. Heroin is at a very low cost and that fact is worrying. Addicts are not injecting at the moment, which is good as regards HIV, but there is little deterrent. Such people are chasing the dragon.
On Monday night I watched the television programme "Panorama" on BBC1. If the Minister did not watch it, I ask him to do so on video. The programme was from Blyth in Northumberland where many young people had died after taking methadone mixed with other drugs. The health authority has a community methadone programme, but some of the methadone has been sold on the streets illegally so that other drugs can be bought. That has caused many deaths.
The Government are carrying out many reviews. I ask the Minister whether he will institute a review of drug addiction among young people and children, what the services are and whether methadone is safe. I feel that the mothers of the dead boys and girls would welcome such an investigation. The problem of drug abuse has become so huge that it needs everyone to come together with a network of prevention and care throughout the country, with not so much fragmentation. Drug abuse contributes considerably to youth crime.
Early experimentation with drugs and alcohol is more likely to lead to addiction and other health problems than if it is postponed until the late teens. Prevention of
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addiction must surely be the aim of any society which values its young people. As I said years ago and repeat today, I feel that life skills and health education should be part of the core curriculum for all children in all schools. What is the point of education if they are going to kill themselves and others?
With my involvement with young offenders, and as a member of a board of visitors for many years, I have seen some very worthwhile initiatives. Some time ago, I helped with some holiday camps for very severely disabled patients from a hospital, using people from a young offenders' institution who volunteered. They camped in the Lake District and looked after the patients, feeding them, washing them and taking care of all their needs. They responded to the responsibility and challenge. They took them on boat trips, to the circus and even to the pubs. At one camp, a boy absconded on the last day of the camp. When he returned he was asked why he had not gone before. He said: "I did not want to let my patient down".
I have seen young people on community service orders taking disabled people on shopping trips in Birmingham. In Liverpool there is a project called Green Bank run by disabled people. Young people on community service orders enjoy working there. They feel that they are helping, which they are. We need our young people to understand that they are needed.
Those projects work when there is correct assessment, experienced leadership and supervision. But for many young people who have turned to crime for many different reasons, working with disabled people can make some of them realise that there are other people with more problems than they have. They can build relationships and help each other to learn to respect each other as people.
I thank the noble Lord, Lord Elton, for this debate but I wish to say to him that girls as well as boys need excitement and challenges in their lives. One in three young women aged from 15 to 25 admits committing an offence at some time. I feel that girls have been rather left out of this debate. At the moment I am chairing an inquiry into young girls in prison—a worrying situation. Some are only 15, but some have babies at that age.
There is a great deal to do. I hope that the Government, with great vigour, will tackle this problem with the many voluntary organisations.
5.20 p.m.
Viscount Brentford: My Lords, I certainly agree totally with what the noble Baroness has just said. It makes a great contribution to our debate. I should like to thank my noble friend Lord Elton for his most able and skilful introduction of this subject. I also congratulate the two maiden speakers. The real life experiences, so different in different ways, which both of them introduced also made a great contribution to our debate.
We are talking today about both the prevention of crime and the prevention of re-offending by young people. My noble friend Lord Elton pinpointed the

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difference between them. At the risk of re-emphasising what has been said, I must agree that this is a very important subject.
Generally, up to 90 per cent. of young people re-offend after they have been in prison. One noble Lord told us that there was an 88 per cent. rate of re-offending in, I believe he said, Gloucestershire. The amount and cost of youth crime are appalling. Figures have already been given to your Lordships.
I am glad that there is to be a government review of the youth justice system and procedures. I shall be interested to hear what the Minister has to say in response to the call from the noble and learned Lord, Lord Bingham, for a reinvestigation of the effects of punishment, particularly as it relates to young offenders.
I should like to make a few comments on the factors which tend to turn young people to criminal activity. Many of them have already been mentioned. Let me first mention one which I have not heard before and that is the evil tendency of the human heart, because of the world in which we live. I believe that only God can change that. Those of us who call ourselves Christians have a responsibility emanating from the Church to help to change people's hearts and therefore their attitudes. I do not lay that as a burden on the Government for them to take up. It is for those of us who call ourselves Christians to bring about a change of attitude in human beings.
I turn to the importance of the family, as the right reverend Prelate the Bishop of Lichfield, presumably exercising his prophetic gift, earlier in his speech foretold that I would do. I believe that the breakdown of the family is a major cause of young people getting into a chain of action which ends in crime, probably with homelessness and unemployment playing their part along the way. I hope that the present Government will continue to support marriage and the family, as did the previous government. I believe, as has already been said quite rightly by the noble Lord, Lord Northbourne, that the cost of supporting positive institutions such as the family and preventing youth crime represents a very cheap way into achieving the aims that we all have. Many noble Lords have spoken about that and I shall not say any more on that point.
I now refer to a subject which has already been touched on; namely, education and employment, both of which are very high on the Government's agenda. There is a necessity for moral teaching, again as mentioned by the noble Lord, Lord Northbourne, and a need for positive values, which I believe will play an important part in preventing youth crime. It is valuable to improve education, as the Government intend to do and as the previous government intended also. Education needs to continue to improve. It gives hope for employment. The whole range of those who are excluded from school or out of school and need occupation to keep them from crime has also been touched on.
Drugs are another problem that we need to face. Drug misuse is responsible for a significant minority of crime, as the noble Baroness rightly pointed out. About a fortnight ago, one of my friends was mugged on her
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way home by a young man wielding a knife. The police advised her that it was almost certainly a drug related crime. Drug treatment can be available at one-third the cost of imprisonment. Does the Minister have plans to extend drug treatment and also to encourage motivation in the young to receive it?
I believe that violence shown in films and videos is also a cause of crime. Many good measures to prevent it have been mentioned, in particular by the noble Lord, Lord Judd, who spoke about the YMCA. The Children's Society provides foster placements for teenagers who might otherwise face custody in an adult prison and helps to divert them from future offending. All those initiatives need encouragement. Judge Tumim asked for positive programmes to encourage prisoners to face up to offending. Efforts to build self-esteem and to rebuild interpersonal relationships are matters which have already been touched on. All those efforts will help to prevent youth crime.
5.26 p.m.
Earl Baldwin of Bewdley: My Lords, I am grateful to the noble Lord, Lord Elton, for introducing this debate. He will probably not be surprised to hear me pursue a line of thought, already referred to briefly by the noble Earl, Lord Kitchener, which I have put forward on previous occasions and which a growing body of evidence persuades me should be kept in front of the public eye. It does not, of course, provide "the" answer to juvenile delinquency. What does, my Lords? But it does offer a route that deserves more exploration.
On Saturday I found myself behind a family at the counter of the village shop. The young boy pointed hopefully at the rack of chocolates and sweets, but the rough looking father said, "If you have that, you'll be on a high for a month. You're allergic to half the stuff there". And I remembered the headline that I had seen in one of the tabloids in your Lordships' Library just the other day:
"Sweets allergy turned my boy into a psycho".
Behind those two incidents lies a fair measure of scientific truth.
If noble Lords have difficulty with that concept, they might consider the effect on behaviour of alcohol and of certain classes of drugs, even medically prescribed ones. Why should other things which we take by mouth not also have some effect on our mental as well as physical behaviour? Given that we are all biochemically individual and that many features of the modern western diet are recognised as unhealthy, is it surprising that a sub-set of the population react violently to what they eat?
I have spoken before about the young man who was arrested not long ago, having for the fourteenth time taken and driven away a lorry between the hours of 10.30 p.m. and 3 a.m. His extraordinary pattern of eating came before the court. He had no food before teatime, absolutely no vegetables, and about 100 teaspoons of sugar a day. Given a probation order and a change of diet by the enterprising local probation service, his

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behaviour altered beyond all recognition and he did not re-offend. The extra cost of that young man's treatment was £4 a week.
In 1985, the Lancet reported a study from the Great Ormond Street Hospital which linked hyperactivity with children's diets. More recently, a group of juvenile offenders in Yorkshire were investigated in London for food intolerances. Having smashed up their minibus on the way, and the laboratory when they got there, all nine of them became reasonably docile on an altered diet with food supplements. They had caused damage amounting to over £100,000; their investigation and treatment came to less than £2,000.
Much of the evidence centres on junk diets and certain additives, which are particularly harmful at a period of peak growth, which, incidentally, equates with the age of peak offending. In formally conducted trials, a 45 per cent. reduction in anti-social behaviour was recorded among prisoners in Alabama who switched to a wholefood diet. A similar result in Los Angeles led to a city-wide ban on highly processed foods in juvenile institutions. More recent and rigorous research has confirmed those findings, although some institutions have found it hard to maintain the improvements—not because they tail off with time, but because of pressure from the food industry and unsympathetic professionals.
At a conference on this subject at the Royal Society of Medicine, which I attended last October as President of the Allergy Research Foundation, I was struck by two findings. Two-thirds of the major criminals in Britain and the USA appear to meet the criteria for hyperactivity in childhood, with all the implications for possible links with nutrition. And the cost to society— we have already heard about this—of a lifetime's delinquency is about £1 million.
Much of this is not new to the Home Office. It does raise the age-old question, however, why what is common knowledge to many families, and people in village shops, takes quite so long to filter through to the so-called experts. I believe we are now past the point where we can plead scarcity of evidence or poorly conducted studies. Resistance to new ideas plays a part, undoubtedly fuelled by a certain alarm at the implications on the part of the food industry, the criminal justice system, and the medical profession. There is also a conceptual difficulty among many criminologists in accepting that a psycho-social problem need not always have psycho-social causes.
Put at its lowest, there is a potentially valuable hypothesis here to be tested. Perhaps I may ask the Minister, when he comes to reply, to answer two questions. While grateful to his department for having made some limited funding available on this front, I should like to know whether he has plans to fund further projects. Secondly, does he subscribe to the view which I understand holds sway within the Home Office that it is unethical, as part of a trial, to offer young offenders a diet which conforms to the best possible current guidelines for healthy eating, and which might conceivably even lead them to stop offending? In bureaucratic correctness, that seems to me the very height of absurdity.
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I hope his answers will be favourable, since we have here a real chance (as I say, for a sub-set of the population) to get at some of the causes of disorder in a section of society, in a singularly cost-effective way. It could also provide a better platform for the success of the social measures of which other noble Lords have spoken.
5.32 p.m.
The Earl of Longford: My Lords, listening to the noble Earl, I could not help remembering a story told to me by the grandfather of the present Leader of the Opposition. As a young MP he approached the ancestor of the noble Earl—the Prime Minister—and said that he would like a few minutes to talk to him about co-partnership. Mr. Baldwin, as he then was, said, "My dear boy, I could talk to you about that for hours". When Lord Cranborne looked round Baldwin had vanished. I am afraid that is true of most of us. We could talk about this for hours but we have our six minutes—and I have been warned that I shall be given a warning after five, so I may leave out most of the important things I want to say.
One thing that I must say is how grateful we are to the noble Lord, Lord Elton. He is particularly well qualified to talk about these matters and speaks as a real Christian. I can only assure him that I can pay him a better compliment than any tribute I might think of. I have two guests here today; they are still with us. One is director of the New Horizon Youth Centre, which I myself had the honour of founding around 40 years ago. The other is now running a project for Camden borough which is relevant to this issue. The project is concerned with young people who are potential delinquents. They drop out of school and the project provides an alternative sort of education. They were both much struck by the speech of the noble Lord, Lord Elton, and their comments are more valuable than anything I can say.
We have to compress our remarks. Even in these few minutes I must refer yet again to the overwhelming importance of early treatment, as stressed by the noble Lord, Lord Elton, and other speakers. I shall take just two examples of the many I can offer. I can think of one young man who was 15 when he killed a policeman in the course of an armed raid. His accomplice was afterwards hanged but he was too young to be executed. He was dyslexic, though the son of a bank manager and from a good family. When he was in prison he learnt to read and write—that is when I met him—and later he turned into a good citizen. If he had been taken in hand and looked after earlier that terrible murder would never have happened.
Another case which is more up to date—he does not mind me mentioning his name—concerns a young man called Bob Turney. He again was dyslexic. I do not say that all young delinquents are dyslexic but those two happened to be. He got into serious trouble early. He was regarded as stupid and felt that everybody treated him with a certain contempt. He was in prison off and on for 17 years. Today he is a qualified probation officer and has written a book, of which I had the honour to write the introduction.

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Those are two examples where early treatment would perhaps have saved a terrible murder or half a life of crime. That is the most important contribution I want to make. I ought to say that I have had the pleasure—I hope it is a pleasure for others as well—of having won a place in the ballot, quite contrary to expectations. I shall therefore be introducing a Motion on probation a fortnight from now.
Another aspect of this matter arose when I was having dinner with a man who had been for 38 years a juvenile magistrate, and for most of that time as chairman. I am afraid he had rather a depressing message. He said that without substantially increasing funds, nothing much will happen. There it is. People who have been in the game all that time believe that we must put more resources into dealing with the problem. It cannot be solved on the cheap. I do not know what has been said in the Budget, but we cannot solve the problem on the cheap. I leave the matter there.
5.36 p.m.
The Marquess of Aberdeen and Temair: My Lords, the question of juvenile crime was debated in this House some four years ago. In that debate I emphasised that prevention was far cheaper than cure, and the noble Lord, Lord Elton, made that a key point in his opening speech. It is something we all think and others have said—"Catch 'em young".
In the previous debate I spoke about Schools Outreach, which the noble Viscount, Lord Caldecote, mentioned. I should like to say a little more about it. The charity is based in Birmingham. It makes a careful selection of young men and women and gives them rigorous training to act as what the Department of Education somewhat clumsily called, "the part of non-official adult friends of difficult schoolchildren with potential criminal tendencies".
I am chairman of the steering committee that has dealt with the Schools Outreach workers in Slough for nearly 10 years. I have come to know the girls who work for the charity, and more dedicated and highly trained people one cannot imagine. They get to know the children and the children know that the outreach worker is not employed by the local authority or the school. They are offering an open door to children who may feel isolated.
The first thing the outreach worker aims to do is to improve the child's understanding of his or her feelings and relationships. I was given an example by one of the workers. A girl was being difficult at school and the outreach worker asked what was the matter. The girl said, "I go home and I suppose I am rather disruptive and my parents send me to bed without supper". "What do they do?", said the outreach worker, "Do they work?". "Yes, they go out to work", said the girl. The outreach worker said, "In that case, when they come home from work surely they want to relax and have a happy, pleasant time, perhaps with you". The girl thought about that. She went back and the next morning was all smiles. She said, "It worked". That seemed to
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be such a simple explanation but it was achieved by the worker's insight into the child's unconscious need to find a solution.
The ethos of the outreach worker is brilliant and simple. The worker starts on a one-to-one basis and then gets a group together in co-operative friendship. They not only befriend the members of the group but the parents as well. The parents in their turn readily appreciate that here is no official visitor but someone bringing friendship and understanding from a private source. Outreach workers are trained to inspire positive attitudes in the whole family. As the noble Viscount, Lord Caldecote, said, the number of exclusions in those Slough schools has fallen dramatically and the turnover of staff has fallen too. That is all due to two attractive young girls who have sorted out so many of the troublemakers.
Schools Outreach is a charity like Crime Concern but, unfortunately, it does not have any great national fame. Furthermore, it cannot publish figures of how effective it has been because one cannot quantify crime that has not taken place.
We all know that the problem of young criminals is appalling. No one knows what to do. I make the analogy that if a man has an eruption of boils, like the prophet Job, the modern doctor does not treat each boil individually; he goes to the analytical chemist or whatever it might be to find out the root cause of the problem. That is what we have to do. By "we", I mean the whole of society.
I hope that all good people committed to the call of the noble Lord, Lord Elton, for attention to be given to the importance of youth crime prevention initiatives will take the initiative and combine to co-ordinate their work. Then we would go a long way to finding the solution to this wretched and so far unsolved social problem.
5.42 p.m.
Lord Addington: My Lords, in a debate like this there are certain duties to be performed. The first is to congratulate the maiden speakers. Both were very informed. To someone like myself who did not do very much before I came here in the way of public speaking, it seems a little of an affront to congratulate them but I nevertheless do so.
The debate is rather depressing in the fact that we have gone through some repetition. The noble Lord, Lord Elton, tangled with this problem directly and with information. The vast majority of noble Lords who have spoken subsequently have followed him. Youth crime has two causes: feelings of hopelessness and boredom. It predominantly affects the male. As the noble Lord, Lord Northbourne, said, female crime is rising but, after the age of 14 or 15, female offenders tend to go into prostitution or become mothers. The only point one can make about that is that the two states are not mutually exclusive. Indeed, the number of young mothers who find themselves turning to prostitution to support their children is depressingly high.
Part of the problem of youth crime is that many youths feel that it does not matter what they do because they will not be caught. The reason they feel that is that

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they cannot see an alternative. The average middle class child knows that if he goes to school, works hard, keeps his nose reasonably clean, does not offend anyone too much and follows the educational pattern, a pot of gold, or at least a cash dispenser card with something behind it, is at the end of it all. It is the process of education, with parental backing, on to employment and some form of financial reward. That carrot is dangled in front of huge parts of our society at various levels.
However, if you turn round to someone from an inner-city area who has no tradition in his family of education, no tradition of anything other than unskilled work within that family in a society which is rapidly shedding its unskilled workforce, who suddenly finds himself confronted by a consumer society in which one is expected to have considerable spending power, how can you wonder why such a person looks to crime? He has no great incentive to keep his nose clean. If he is lucky there is a life watching television as opposed to the option of going out at night. At the junior level, as some noble Lords have said, if you go out, crime is exciting. In a recent television programme I heard the police say that joyriders would drive up to the police station, rev up the engine, shout out the window and wait to be chased, because that was exciting. If you do not address this major problem of such people having no reason to acquiesce with regard to what society wants from them, they will never do so, and you will fill your prisons over and over again.
It has already been said that no matter how much effort one puts into catching criminals one will always have crime. I have in mind low level crime such as burglary. I say "low level", but I remember that when my own flat was broken into I could quite happily have killed the person who did it. But it is very difficult to catch the people who carry out that activity. Indeed, with the best will in the world, if they are on a spree, the police, even if they know exactly who they are, may take time to apprehend them. After a week or so they may be several offences on. It is very difficult to stop that. Furthermore, because of the legal process it takes time for young offenders to reach the level of severity where they are locked up. That will not change no matter how good the new fast-track approach is. There will still be a problem of backlog. You will always have this idea that they will be able to get away with it for a period of time.
If you take the ideas of boredom and hopelessness and the fact that there is nothing else for them, you are bound to have a level of crime. The problem of bravado also comes into this which often leads to crimes against the person. Such crimes tend to be committed by young men on other young men they know and tend to be assaults, which may be exaggerated by the fact that people are more often carrying offensive weapons in the form of knives. But such crimes have always gone on. We do not even know if in fact the number of such crimes is increasing dramatically as people are reporting them more. The same is true of other types of crime such as the abuse of children. However, we can make an inroad into solving the problem if society is prepared to bite the bullet and try to get people out of the feeling that there is nothing else for them.
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One of the main difficulties in this area is that the problem is the responsibility of no one part of government. It is not the problem of the education service exclusively and it is not the problem of the Home Office or the social services exclusively. Every department has a part to play. During my time in opposition I have often gone to the wrong department to extract the right answer for a cause. One realises just how heavy the horizontal structure of government is. Departments do not talk to each other. I hope the Government will be able to give us some assurance that a higher level of communication will take place. What I am saying is not a direct jibe at the previous government. The problem is the way we have structured our government into departments. They are competing bodies for funding and prestige. They will always have trouble in talking to each other and they will do so only when they are forced to. That is a fact and I hope that there is a degree of agreement on it.
Unless we are prepared to try to bring all these groups together we will never address the real problem. We must try to make sure that the education and social services departments work together. We should try to encourage people to believe that there is an alternative. If we are not going down the road of massive investment to create lots of jobs for the unskilled—I believe that those days are gone and it may well be that ultimately that created more problems than were solved—we have to try to make people more flexible in their approach to employment by giving them greater skills. They should be helped to become more geographically mobile. We have to reach the young people involved. It will not be easy.
I have worked in young offenders' institutions and tried to train young people in how to go about a job interview. The difficulty in reaching the 16 and 17 year-olds was incredible. They did not need to know because they knew already. They were real, hardened criminals. They were not successful because some of them were at the institutions for the second or third time.
Unless we pursue the educational idea—and I use that term in the broadest possible sense—that there is another way forward, unless the carrot is dangled and, to use the undoubtedly politically incorrect term again, we follow the traditional middle-class route forward, and unless that route is available for everyone and they are shown how that can be done—rhetoric is not enough—we will always have these problems. Ultimately, we have the ability to solve many of them, but whether we have the will is something that all of us must look to.
5.51 p.m.
Baroness Blatch: My Lords, perhaps I may start by warmly congratulating and thanking my noble friend Lord Elton, not simply for the debate today but for all the work that he has done. He has worked tirelessly for young people, not just with the Divert Trust, but when he was a Minister and in so many other ways.
I also thank the noble Lord, Lord Evans of Parkside, and the right reverend Prelate the Bishop of Leicester for excellent maiden speeches. We look forward to

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hearing from them again. One of the joys of this kind of debate is the degree of consensus on all sides of the House. I certainly welcome that.
Perhaps I may repeat a comment which I made in a previous debate and simply put the rising crime rate in context with the period since the end of the Second World War. It is of course true that there has been a rise in crime since 1979, but the rise in crime from the end of the Second World War until 1979 was far greater than the rise from 1979 to the present day. We are now happily on a downward trend and we hope that will continue.
The one thing that can be said with certainty about this subject is that there is no quick fix. Any attempt to lay the blame for the increase in youth crime throughout the post-war years at the door of any government ignores the many and complex factors which have had an impact on the lives of our young people. For example, there is the breakdown in family life resulting in considerable insecurity and too many children growing up without the security of a loving, nurturing home life. There is also the growth of television, video and films where young people are exposed to sex, violence and bad language at too young an age. In addition, there is a street-wiseness beyond their years and a fearlessness which is unnerving.
There were the years of progressive ideas in education when the rule book was discarded in favour of encouraging children to "Do their own thing", as it was called; competition was deemed to be bad; children's work was not marked objectively; and discipline was considered to be overly oppressive. Basics in education were ignored especially in reading, and there was a tendency to be non-judgmental about the behaviour of children, which left many of them very confused. There was a time when political correctness reigned and all too often self-indulgence on the part of those educationists who promoted this nonsense. The children who suffered most were those from the inner cities and more urban areas. Children who came from insecure homes suffered a double jeopardy. Learning at mother's knee was not for many of them and there was no framework within which children could grow and develop. The only anchor in their lives was school.
We live at a time when one in three children are born out of wedlock and too many children do not enjoy the stability of living with the same parents into young adulthood. Therefore, I join with many others who have spoken in this debate in agreeing that the causes of juvenile behaviour are varied and very complex.
However, much has been achieved. Education is more structured now. A national curriculum was introduced almost 10 years ago designed to address academic, physical, spiritual, social, mental and cultural education and with concentration on basic skills. There is assessment and testing to identify strengths and weaknesses in children's learning. There is also regular inspection, not simply to assess the quality of teaching and learning, but also to observe and report on the management and ethos of a school. There are expanding opportunities for routes into educational training. There are GCSEs, national vocational qualifications and
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general national vocational qualifications. There are vastly expanded further and higher education sectors with record participation. There is greater choice in types of schools in order to provide for a wider range of abilities and aptitudes.
A thriving voluntary sector has been encouraged. The "Make a Difference" initiative involved hundreds of organisations and thousands of volunteers, especially young people, actively making a difference in their own local communities. The impressive work of the Prince's Trust is only one such example.
As a Minister I was privileged to have been responsible for the voluntary sector within my portfolio and saw at first hand so many projects, especially in the field of improving local communities and crime prevention. I fondly remember a project at Applecross on the west coast of Scotland, funded by the Home Office and in co-operation—if I may say so to the noble Lord, Lord Addington—with the Ministry of Defence. One thing I did as a Minister was to talk across all departments in government. I found that there was a willingness in people to discuss across departments.
At Applecross young people who had offended or who were at risk of offending, came together with young people of the same age from cadets, the youth service and potential leaders for a rigorous three to five weeks of outward bound activities with a very disciplined programme. When they returned home follow-up programmes were managed by Fairbridge, a voluntary organisation specialising in dealing with difficult young people. All the signs are that it is proving successful. I shall be very interested in the evaluation when it takes place.
There was the introduction of national standards for the Probation Service both to improve the management of the service and the quality and effectiveness of community service. I was also privileged to have been a sponsor Minister for Cleveland and Teesside for over five years. I absolutely agree with everything that my noble friend Lord Gisborough said. During that time the area underwent substantial economic and social regeneration. Again, I saw at first hand a whole community working in partnership with the private, public and voluntary sectors, including the churches and the schools. Everybody in the community was involved. Many of the programmes were designed to increase the involvement of young people and to divert them into healthy, law-abiding lifestyles and away from crime. The approach by many in the community and the work done by the Cleveland police force is exciting and the early signs of that work are promising.
In March this year, following the work of a ministerial group on juveniles, a consultation document was published. The group was established to examine ways of intervening effectively with young children at risk of offending in order to divert them from crime. That report catalogues many measures already in place and the millions of pounds committed across government to crime prevention. Examples include the Safer Cities programme, grants for educational support and training programmes on youth action schemes; the national lottery-funded programmes, support for Crime

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Concern, which is an organisation carrying out youth crime surveys, parenting education, working with families, creating youth action groups and support for caution-plus schemes. We also produced a report to address delays in the criminal justice system.
The consultation document makes it clear that the prime responsibility for children and their behaviour must in the first place be that of the parents. I believe that it was right that the courts were given powers to involve parents in their children's court proceedings and in supervising their punishment. Parents can now be required to attend court and to pay their children's fines. They can be hound over to exercise control over their children and to ensure that their children comply with any community sentence. The document contained a new proposal which would extend those powers to include the introduction of a parental control order, but the aim always was to involve the parents in working with the children to find solutions.
It is clear from all the evidence that early intervention is the key to prevention. Wrongdoing, disruptive behaviour and disaffection are all better nipped in the bud, preferably by parents. However, I wholly concur with the point so eloquently made by the right reverend Prelate the Bishop of Leicester on the importance of partnerships between parents, schools and many of the local agencies such as the police, the Probation Service, the social services and voluntary organisations. All can work together on crime prevention programmes. The previous government proposed the creation of local child crime teams which would maintain a register of local services and programmes, identify children at risk and refer them to the appropriate schemes for help. The intention was to run pilot schemes and to test and evaluate their effectiveness.
However, when all efforts to prevent offending fail, it is important to deal effectively with those who do offend. As has already been said, a small number of people are responsible for a very large proportion of juvenile crime. Those persistent offenders are at present the greatest challenge. That is why we proposed for the most persistent offenders the establishment of secure training centres to provide highly structured periods of up to two years, to include intensive education and training within a disciplined framework. I should be interested to know from the Minister whether those centres will come into operation and, if not, what the Government's plans are for dealing with the most persistent offenders.
Making allowances for wrongdoing does no service to young offenders. It only exacerbates the work of those seeking effective solutions to preventing crime. In our consultation document, we proposed a strategy which aimed to identify children at risk of offending at an early age and to refer them to programmes designed to help them to steer clear of crime. The strategy was based on research about the effectiveness of early intervention. It was to be delivered by local agencies working together in partnership in new local organisations which the Government envisaged would be known as child crime teams. That consultation document, together with the review of delays in the criminal justice system, with a full chapter and recommendations on improving the
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youth court system, shows a constructive way forward. I should like to think that this is one subject that would benefit from cross-party support and that both reports would form the basis of this Government's response to the important issue of preventing juvenile crime.
6.13 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, I thank the noble Lord, Lord Elton, for initiating this debate. I have listened with very great care to everything that has been said. Without exception, this has been a wholly non-partisan debate and I echo entirely what the noble Baroness, Lady Blatch, said a moment ago: in a civilised society this subject ought to be the object of cross-party discussion and agreement. I for one endorse the approach which the noble Baroness set out and am most grateful for it.
We have heard two excellent maiden speeches which could be regarded as genuinely maiden speeches and one which was a quasi-maiden speech from my noble friend Lord Graham of Edmonton who was not able to assist your Lordships in the past because of the duties which he so well discharged as Opposition Chief Whip.
Perhaps I may make one small deviation from my speech to say that I noticed that our well respected friend the noble Viscount, Lord Tonypandy, was with us for a moment or two. I am sure that I echo your Lordships' views when I say—I hope that the noble Viscount will read this in Hansard tomorrow—how welcome it was to see him here if only for a short time.
I give the most solemn undertaking that I can that I shall give the most careful consideration to every syllable that has been uttered in this debate. There has not been a wasted sentence and there has been a very gratifying degree of consensus. This is not a party matter. Indeed, it would demean us all if it were and I turn my face resolutely away from trying to make this a party matter. I do not go into the history of crime since the last war because I do not think that that is our purpose this afternoon.
I echo what has been said that learning the difference between right and wrong when a child is the only fruitful start for a happy and successful life. Today's young offenders are self-evidently likely to be the adult criminals of tomorrow who will block up our prisons and penal systems. Too many young people are not being taught the lessons from which we perhaps all benefited in different times and in different social conditions. Indeed, as the noble Lord, Lord Addington, rightly pointed out, to one extent or another those conditions were privileged. I do not necessarily mean financial privilege; I mean the more important privilege of having a stable home with loving parents in whose hearts and minds was the resolution to set their child on the proper road. Many children these days do not have that; and I endorse entirely what the right reverend Prelate the Bishop of Leicester said on that.
We are firmly committed to making young people aware of their personal and social responsibilities. Preventing them embarking on crime is a key part of our strategy, but it is not sufficient on its own. We

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cannot simply concentrate all our efforts on preventing the first offence. Our strategy is twofold: first, we must dissuade young people from committing that first offence, which is capable of being exciting and which is, as has been said, seductive in that it may be the only point of interest in a rather arid life; and, secondly, we must seek to help those who have already offended to confront their behaviour and to change it. It is trite but nevertheless important that we bear in mind what the research shows. Indicators of likely criminal behaviour by young people include low parental supervision, persistent truanting and peer pressure exerted by those who are already criminals.
There was a clear measure of support for the Home Secretary's strategy as it is beginning to be developed and set out. I am grateful for that—but not on any party basis because I repeat that this issue is more important than that. As a number of noble Lords have said, the key areas of family life and school life cannot be overstressed. Too many parents will not accept responsibility for the children that they have brought into this world. We propose parental responsibility orders to ensure that parents face up to their responsibilities. However, what is just as important is that we recognise that many parents need guidance, support and possibly sympathy when they fail or fall down. A new child protection order will ensure that unsupervised young children are kept off the streets and, more importantly, out of trouble late at night.
We are encouraging the work of the School Curriculum and Assessment Authority on values education. I know that these words sound like jargon, but I am happy to echo what the noble Baroness, Lady Blatch, said because this is very important. I know that I shall be accused of using jargon and I do not care because I do believe that education in parenting skills is extremely important and should be a significant core of what we are doing. We shall be supporting local projects under the Truancy and Disaffected Pupils component of the Grants for Education Support and Training programme to the tune of £17.5 million in this financial year. If only I were Father Christmas I should be happy and your Lordships would be overjoyed as well as surprised: your Lordships are so eloquent and I am so naïve—
Noble Lords: No!
Lord Williams of Mostyn:—that I am tempted to say that £100 million is a mere bagatelle and that £25,000 is nothing. I cannot do that. We must direct our resources in the most productive way possible. We must attend to drug and alcohol abuse. It is a shock to know how prevalent hard drug use is among young people. Such drugs are readily available, and we deceive ourselves when we say that it will not be our child next.
I should like to deal with questions raised by the noble Baroness and the noble Viscount, Lord Brentford, about the "Panorama" programme on methadone. Some of your Lordships will be aware that last year the Department of Health published a report on the review of treatment services. It concluded that methadone
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programmes had a valuable role in some cases. We intend to set up a drugs tsar, if that is the right word. Doubtless I shall be in trouble tomorrow. This drugs chieftain—I bear in mind what happened to the last tsar, and I shall now be in even greater trouble tomorrow— will have as one of his or her duties an urgent review of our present strategy and will make recommendations. I can assure both the noble Baroness and the noble Viscount that that will include a review of treatment provision, including the provision of methadone.
This man or woman is to lead the fight against drugs and co-ordinate effective treatment programmes. A number of noble Lords, not least my noble friend Lord Graham of Edmonton, urged the necessity for cohesion and co-ordination. I agree entirely. I am happy to he able to state in this context that the Home Secretary will chair a ministerial group to deal with issues of this nature. They cannot be divided into individual departmental responsibilities. Welfare to work has already begun to be co-ordinated. As a matter of record, not speculation, the Chancellor in another place this afternoon announced that his Budget, if brought into law, would allocate £3.5 billion over the life of this Parliament, including £500 million from the reserve, to welfare to work projects. That means that we expect 250,000 young people to have the opportunity for skills training and work.
I firmly believe—it is a belief based on a reasonable practical experience—that what most people want as assistance to a decent life is security, order and the opportunity to work. There is virtually no one in our society who, if given a free and informed choice, would choose not to work. Work, apart from its moral component, gives structure to the day, dignity to the life and the ability that everyone wants to better himself or herself. This is not a party political point. If it takes even half that number to work, I believe that it will be an invaluable benefit to all who live in our country.
The earlier that young people offend, the worse their prospects. Therefore, we want to trigger intervention as early as possible in a potential offending career. I agree entirely with what has been said, not least by the noble Viscount, Lord Tenby, who has had so much experience of these matters over many years, that delays in the criminal justice youth system have become a cancer. The system has become much more important than the offence, the offender or victim. There is no doubt that the system is being manipulated so that delay is at the centre of it all. I deliberately mix my metaphors when I state that curiously delay is the dynamo that controls the engine. We are determined that young offenders should be dealt with promptly, efficiently and effectively. It is much better for them, for the victims and for the state of our civil society.
We want partnerships. I am most gratified to have the support of the noble Lord, Lord Henderson of Brompton, and that of the right reverend Prelate the Bishop of Leicester on the approach that we wish to develop. We intend to place a responsibility on local authorities together with the police to develop statutory partnerships. Those partnerships will have as their declared aim the improvement of community safety and the prevention of crime. Your Lordships have given

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many examples to which I have listened with great interest. There are many examples of local people coming together and jointly tackling crime and disorder. The noble Lord, Lord Gisborough, provided a number of useful examples. But that is presently insufficient. They are isolated examples. In many areas the foundations to which the noble Lord referred have simply not been laid and it is too hit and miss.
Therefore, we propose to impose this duty on authorities and hope that they recognise it will be to the public benefit. I also hope that they will shoulder the burden willingly—for burden it will be. We want that responsibility to be the co-ordination of a framework that involves all those who have relevant input. That does not involve simply the police or the local authorities but the business community. I take the point made by the noble Lord, Lord Elton. Although I am not aware of his specific example, I am aware of others. My noble friend Lord Judd spoke of voluntary organisations. One has in mind the Churches and other organisations that have been mentioned by noble Lords. Their work and purpose will be required to be complementary, mutually supportive and—this is a fundamental point— wholly focused on local problems. We believe that local initiatives and co-operation are the key to crime prevention and dealing with juvenile crime. Not all areas are the same, as a number of noble Lords have pointed out.
I hope that your Lordships agree that a certain amount of reflective thought has gone into these proposals which will be more fully set out in a White Paper to be published later this year. A crime and disorder Bill is intended to be introduced later this year. The courts will be given new powers, one of which will be a community safety order. That will be made on the application of the police and local authority and it will be addressed to a named individual. Many, many people who suffer from crime are themselves poor and disadvantaged. If one is poor one is more likely to be burgled. If one is poor and burgled it is much worse than if one is wealthy and insured. Although the distress may be the same, the well off can recover if they are insured. If one car is stolen another one may be available. A large section of our fellow citizens live on inner city estates, although we should not overlook rural crime and its problems. We find it difficult to understand or even contemplate the distress and fear that people suffer. I refer to old people who live on their own and isolated single parents without their own transport and substantial financial resources. That should not be overlooked. Community safety orders will be available to be directed to those by way of prohibition who have put innocent people in distress or fear in what should be the sanctuary and sanctum of their homes.
Those named in the orders will be told what they cannot do and where they must not go. It will be based on the balance of probabilities which is the civil law test, because it will be a civil injunction rather than a criminal penalty. However, if there are breaches of such orders there will be firm penalties. We want consistency in sentencing of young offenders as well as adult offenders. We have promised in the manifesto that we shall invite the Court of Appeal to set down sentencing
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guidelines beyond the work that it has already done. We propose to extend the powers of the Attorney to appeal unduly lenient sentences.
We fund independent crime prevention organisations. Crime Concern receives £750,000 a year towards its running costs.
I do not deal specifically, because I do not have the time in my allotted span of 20 minutes, with the many organisations which have given support, both moral and financial, to the sort of initiatives that were spoken of earlier. To deal with the remark of the noble Lord, Lord Elton, that I was somewhat startled when he said that those policies were coming too late, some of the activities which are supported relate to quite a young age. I took his rebuke in the gentle way in which it was put—Kickstart is for seven to 15 year-olds, which is pretty young; Crucial Crew is another one for nine to 11 year-olds; SPLASH activity programmes—entirely the point made by the noble Lord—are intended to keep young people out of trouble in the long school holidays when parents may be away; there is nothing to do; and the temptation to do something by way of taking and driving away or simple burglaries, becomes very, very powerful indeed. We have those schemes.
I have had to say, and I cannot repeat it with any more persuasive apology, because I cannot open my book of postal orders and donate them, that I hope your Lordships will take from me the Government's deeply felt commitment, in conjunction with many others from many other parts of the political spectrum, to attack this problem at its core to see whether we cannot be more successful in the future than all governments have been in the past.
Questions were asked about diet in prisons. The noble Earl was kind enough to forewarn me of the matter and so I have my reply reasonably composed and ready. There was a study by Dr. Jonathan Brostof from University College Hospital. It had some financial support from the Home Office. It was carried out on a sample of 100 juvenile offenders. It came to the conclusion that bad diet was not connected to delinquency. However, in answer to the noble Earl's second point about the ethical suitability of providing prisoners with different diets, there are two other studies at Aylesbury and Deerbolt young offender institutions. Deerbolt—this takes up the point made by the noble Earl, Lord Kitchener—showed nutritional deficiencies and/or high toxic metal levels in all those who were tested. The Aylesbury study is continuing to look at the question that the noble Earl raised as to whether nutritional supplements are likely to reduce violence and disciplinary incidents in young offender institutions.
I can feel the eyes of the former Chief Whip boring into my back, because the one thing I have learned in your Lordships' House is that when the Clock says "19" it really means "20". I hope that I have been able to assure your Lordships of at least the following; first, we are genuinely grateful that your Lordships have had this opportunity to debate the issue—too short in fact if I think back to the time spent on the referendums Bill last night, which might perhaps have been shaved slightly so that we might have had more opportunities

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to discuss these pressing questions. Secondly, we are determined—I believe that we have a good, fair wind of public support from all sections of the community; thirdly, we do not regard it as a party political interest. I repeat, to treat it as such is demeaning, and, ultimately, likely to be wholly non-productive. I thank the noble Lord, Lord Elton, once more. He has laboured a long time in this vineyard as we all know so well.
6.23 p.m.
Lord Elton: My Lords, I am most grateful to the Minister for that wind up and indeed for all he has said. I often wonder whether it would not be better if Ministers spoke at the beginning of debates and gave their answers first, because one's debate would be so much more relevant. We have the White Paper coming, and we can make good the deficiency then.
I, too, am under constraint of time. At the beginning there were many issues, such as the final warning, which I wanted to raise but which I had to leave out, and we must leave that for a later time. If I were to thank every participant in the debate, as I would wish, and give them 20 seconds each, I would have to take seven minutes, which is longer than many of them have spoken. So I must thank them collectively.
However, I single out the noble Lord, Lord Evans, and congratulate him on his considerable success, and his emphasis on the need to prevent crime rather than to punish it, to make punishment unnecessary. I congratulate the right reverend Prelate not just on his attention to parenting—something I have supported since the recommendation of my report on discipline in schools in 1984—but on the priority he gives to alternatives to custody.
We have ranged through the dietary with the noble Earls, Lord Kitchener and Lord Baldwin of Bewdley, to the financial. I take the point made by the noble Lord, Lord Addington, about the gap between different departments. In my experience in government, where it lies with one department to apply a cost-saving solution and the savings from that solution lie with a different department, it does not get applied. If the Minister can do anything to get the savings from a reduction in juvenile offending reflected into the Home Office, which would save staggering amounts in the Prison Service, that is something his co-ordinating committee could well do.
I shall not detain your Lordships longer, except to thank the noble Earl, Lord Longford, not just for his kind remarks but for his emphasis on the necessity of early treatment—Kickstart is a good example of that.
This is a vast problem. One dimension of it is moral or religious. It depends upon a change of heart in the community, which can start in the schools and the churches. Another part of it is financial. There is, I repeat, a vast sleeping army ready to help the Minister and his government in aims which we all share if they can only be given—"kickstart" is a good word—a small amount of money each to start their little football team, jazz band, painting club, mountaineering expedition, white water rafting, debating society, graffiti-expunging
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crew, or whatever it may be. That should be done centrally. It is a large amount of money. The money at the moment is being spent far less profitably on punishment than it could on prevention. Leaving that thought in your Lordships' mind, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Armed Forces
6.26 p.m.
Lord Vivianrose to call attention to the importance of the Armed Forces of the United Kingdom; and to move for Papers.
The noble Lord said: My Lords, it is a great privilege for me to introduce this debate and, although I have to admit that I queried whether it was timely to hold a debate on defence issues so soon after the address on the gracious Speech, I trust that its wide scope will ensure that your Lordships can speak on any defence matter.
Before I go any further, I should like to thank the Minister for his most courteous letter of 19th June setting out the way forward for the recently announced Strategic Defence Review. I am most grateful to him for offering us the invitation to contribute to the review. Perhaps he will accept parts of this debate as a first contribution. However, I have to say at the outset that I am still of the opinion that the review is unnecessary, and I shall return to that again in a moment.
I welcome the statements about defence in the Labour Party manifesto; by Dr. Clark at his recent address to the Royal United Services Institution; in the statement in the gracious Speech itself; by the Lord Privy Seal in his reply to the gracious Speech; and by the Minister in his letter. The statement commits the Government to a strong defence of the UK by collective defence through NATO; active co-operation with our allies; strong conventional forces; and the maintenance of our nuclear deterrent. However, I have been unable to detect any recent statement in confirmation of the defence of our dependent territories, even though Dr. Clark is on record as saying:
"The defence of Britain and her dependent territories will remain our fundamental task".
Perhaps the Minister will confirm that they are still part of our basic defence requirements.
I return to the defence review and why I believe that it is unnecessary. My main objection to yet another review is that in the past few years the Armed Forces have been subjected to far too many studies and reviews, two of which were major reviews resulting in dramatic and radical changes. There has been constant upheaval, with reorganisation of headquarters and garrisons, and the creation of many civilian agencies. New policies have produced new roles, and new commitments have been undertaken. The Royal Navy, the Army and the Royal Air Force have all been drastically reduced in numbers. One senior officer told me that his last three jobs, spread over the past six years, have involved him in consistent reorganisation.

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My Lords, are these new policies and new roles, which have been subjected to such careful and detailed scrutiny, now suddenly quite wrong? What has changed so recently in the world for them to be suddenly out of date? It is hard to believe that these recent reviews, taken in such depth by the Chiefs of Staff, senior civil servants and academics, can have assessed our defence policy and roles incorrectly such a short time ago. I was interested to note that the Lord Privy Seal recently referred to new strategic realities. However, an Answer to a Written Question of mine stated that those strategic realities are the proliferation of weapons of mass destruction; aggressive nationalism; international terrorism and the impact of scientific and technological developments. There is nothing new here. I do not wish to make any further comments as the review is now under way; but any review of this nature saps at the morale of the Armed Forces. The Armed Services cannot afford to lose any more personnel and yet only a few days ago a senior officer with a bright future ahead of him decided to leave. The review may turn out to be the straw that broke the camel's back.
Is there any real need to change our defence policy and roles? Currently they are to deter any threats to and to defend the freedom and integrity of the United Kingdom, its dependent territories and our allies, including the provision of military support for the civil authority in countering terrorism. It is also to contribute to the promotion of the United Kingdom's wider security interests, including the protection and enhancement of freedom, democratic institutions and free world trade. In addition to those roles, I understand that it is the policy of the Government for the United Kingdom to retain its seat at the United Nations Security Council; to retain its influence at NATO; and to be a leading member of the Group of Seven, the Commonwealth and the European Union.
We will lose our seat on the Security Council not only if we do not continue to carry out our fair share of United Nations peacekeeping, peace support and peace enforcement operations, but also if we should reduce our commitments to maritime operations with their amphibious capability and very significant carrier borne air power providing endurance and poise in support of UN interests world wide. We will no longer have any influence at NATO if we withdraw the 1st Armoured Division from Germany as that would result in the loss of the Deputy Supreme Commander Allied Powers Europe post and the loss of the Commander of the Allied Rapid Reaction Corps appointment, to which there are committed 10 different NATO countries.
I now wish to turn to high intensity operations which are conducted by all arms formations and battle groups. In the future, it is likely that all conflicts will lead to these types of operations and we shall require at immediate notice our own well-trained and highly skilled troops who can undertake these complex operations. It is a relatively simple task to carry out low intensity operations, providing that troops have been properly trained in high intensity warfare. It takes many years to acquire the necessary skills and high standards for this type of combat and without that capability battles will not be won in the future.
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I now come to the regimental system and why it is still so essential. There is one answer to this: it is the regimental system which provides the will to win in battle; that is why it is needed and will always be needed. It only now really exists in the regiments of the Household Cavalry, the Royal Armoured Corps and the infantry battalions, but here it is essential because these are the troops that get involved in close-quarter fighting. These troops are like the Scots Guards who had the will to destroy the enemy by bayonet.
The regimental system is a close-knit family from which stems loyalty; respect for each other through long years of friendship at regimental duty; and the feeling of never ever letting one another down. It is the individual commitment for the common benefit of the regiment and the possession of immense pride by all members of that very special family. It is those in-built qualities which lead fighting troops to make the ultimate self-sacrifice to ensure success in battle and defeat of the enemy. There is no substitute for victory in war: if you lose, the nation will be destroyed. These fighting troops are the guardians of our nation and must never be taken for granted. It is the regimental system, when times get tough in battle, which ensures the will to win and victory. No one, nor any government, should ever tamper with the regimental system. Whoever does so removes the will to win in battle and imperils the safety of the nation. Will the Minister give the House an assurance that the regimental system will not be changed?
I move on now to the Army in Germany. It could be asked why we still need to station armoured forces in that country. It shows our purpose, determination and dedication to NATO by living with and closely integrating with our NATO allies. Conversely, any withdrawal of our armoured capability from the heart of NATO would make it easier for the United States of America to withdraw and thus threaten the entire cohesion of NATO, resulting in a weakened and very less effective organisation playing into the hands of our enemies. At the same time, we would lose the influential command appointments which I have already mentioned and, overall, the United Kingdom would have far less influence at NATO.
The 1st Armoured Division can be rapidly deployed or provide brigade level forces for NATO operations, such as Bosnia or world wide operations outside NATO's boundaries, which threaten its interests. Apart from the United States armoured divisions, it should be noted with some care and concern that the 1st Armoured Division is the only division manned by regular troops. It should also be noted and remembered that it is only the American divisions and our own Armoured Division that have any recent armoured warfare experience. When it comes to any operational deployment and facing up to a real enemy, it is invariably the British and the Americans who have to be committed. It would not be in the interests of Britain or NATO to rely solely on the other European armoured units, who have no battle experience and are manned by conscripts.
At this stage I believe that it is timely to mention the tank. It is still, and for future years will be, an essential weapon system on the battlefield conforming to current

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doctrine with its characteristics of fire power, manoeuvrability and durability. Almost no other battlefield weapon system has this blend of characteristics. The gun of the tank has pin-point accuracy, and the introduction of Challenger 2 next year will give the British Army the most modern and technologically developed tank in the world, and our armoured regiments greater capability than ever before.
On the battlefield the tank is as effective now as it was in convincing an enemy that he is defeated; and, in peace support operations, a tank is reassuring to those keeping the peace, yet deterring to those who would break it. We have reduced our tank fleet over the past few years by 57 per cent. from 699 tanks in 1990 to 304 in 1997. Twenty eight countries in the world possess more than 1,000 tanks each. The most cost-effective way to destroy tanks is by using other tanks. New tanks are still being made by other countries, including Russia, and the former Yugoslavia still has more tanks than we do. Our armoured regimental establishment of 38 tanks is tactically unsound and urgent consideration should be applied to increase the numbers of tanks in each regiment if they are to be more effective. No one should even contemplate or query the effectiveness of that superb weapon system providing the kill factor and battle-winning agent in modern warfare.
I should like to spend the last few minutes of my speech on how our Armed Forces can become more closely integrated into our society, as they have so much to offer with their high standards and principles. There is much ignorance among the general public about the armed services. That point is illustrated by a great number of new Members of Parliament who have little if any knowledge of our service men and women. Very regrettably, there are signs of the nation taking our Armed Forces for granted, which can only be detrimental to the country. I have already cited our soldiers, sailors and airmen as being the guardians of our country. I believe that a greater recognition and understanding should be made by the public.
I am well aware of the great respect and strong feelings that are held by the civilian elements in the Ministry of Defence towards all our service men and women. But there should be a definitive and wide-reaching lead and example made by the Government to show their high esteem and respect for our defence forces. They should publicise more frequently the current activities and roles of the Royal Navy, the Army and the Royal Air Force and make greater attempts to integrate them more closely with the civilian community whenever possible. Their high standards and principles should be exposed to the general public with a view perhaps to influencing the civilian standards.
In many ways, the Territorial Army and all three reserve forces can help in that respect. Yesterday I was delighted to hear during an All-Party Defence Study Group visit to Catterick Garrison, that with great initiative careful thought has been given about how to integrate the civilian community with day-to-day garrison life. With even more initiative, planning permission has now been obtained for one of the large
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supermarket chains to build a supermarket store at the centre of the garrison. Permission has been gained also to build a fitness and leisure centre nearby. That is highly commendable and should receive the greatest support from all quarters.
Finally, it is important that no aspects of European legislation are forced on our Armed Forces with the denigrating effect of lowering their high standards and reducing their effectiveness. I expect that those matters will receive attention within the Ministry of Defence. But perhaps the noble Lord who is to reply will comment or write to me on how he envisages the integration of our Armed Forces more closely into our society.
My Lords, I beg to move for Papers.
6.42 p.m.
Lord Craig of Radley: My Lords, I very much welcome the initiative of the noble Lord, Lord Vivian, in instigating this debate, which is so timely with the Strategic Defence Review work now being put in hand.
On that, perhaps I may say that I am totally opposed to recent suggestions made that now is the time to review the Royal Air Force's single service status and to split it between the Army and the Royal Navy. That idea is as old as the Royal Air Force itself. It surfaces every so often, usually at the time of a review.
If any of the supporting arguments was logical and compelling, then there might be a plausible case for examining such a proposition. But the Army and the Royal Navy have only limited air arms; they do not have air forces. On that sort of logic, one might as well advocate, because the Royal Air Force and the Royal Navy have ground arms in the Royal Air Force Regiment and the Marines, that the Army should be split between the Royal Air Force and the Royal Navy. I do not go so far—at least not yet.
Those who advocate the demise of the world's oldest and most famous independent air force do so from the most selective of arguments: for example, that missiles and satellites are now displacing manned aircraft; or that electronics can totally replace, not just enhance, the human element; or even, in a world of multi-communication, that it over-complicates matters dealing with three rather than two services.
But let us give a moment's thought to the contribution of manned Coalition aircraft to the brilliant success of the Gulf War, resulting in the mainland battle being fought and won in a mere 100 hours with minimum casualties against a numerically much larger enemy; or to the impact of the precision manned aircraft attacks in bringing the Serbians in Bosnia to the Dayton negotiating table, which ground forces could not have achieved; or to the peace-enforcing and humanitarian operations which have been mounted by manned aircraft in both theatres and elsewhere in Africa for many months and years.
A moment's reflection on such examples surely puts paid to the idea that such diverse operations can all be done with unmanned vehicles. Duncan Sandys had that erroneous idea 40 years ago when he was Defence Secretary. Even today, when stand-off weapons and

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smart bombs are changing the way that air operations are conducted, the issue is not simply whether a man sits in a cockpit but whether he has the necessary grasp and understanding of the complexities and applications of air power.
Further questions arise. How can we best achieve, in all volunteer services, the commitment and motivation to achieve and sustain such consistent, high quality performances? It can be too readily overlooked by the armchair critics that it is the people involved in the air and on the ground, working as a team, who ensure the excellence we have all come to expect and admire. Air power is the product of that single-minded, professional determination. Does it not matter to those who would destroy the Royal Air Force that division of the air into land and sea regions would be restrictive to the successful operation of air power, which has to encompass both, and in time and space?
It might be more plausible, should there be a study about the most cost-effective application of air power in that defence review, were it to concentrate on examining what the benefits would be if all the three services' air activity, their training, support and operation were under the overall direction of experts in the application and limits of air power—the Royal Air Force. But, even for this strategic review, that might be a bridge too far. I hope that the Minister will confirm the Government's commitment to a lasting future for all three services.
6.48 p.m.
Lord Trefgarne: My Lords, I too express my gratitude to my noble friend Lord Vivian for raising this important debate. It is timely for two reasons. First, it provides us with the opportunity to acknowledge the vital role of the Armed Forces, both at home and abroad; and to express our appreciation to those in the Armed Forces for the valuable and sterling work which they do. They continue to deserve our thanks.
This debate is also particular timely because of the Strategic Defence Review announced recently by the Government. I should like to concentrate on two very different matters this evening: one of a somewhat philosophic nature and the other immediate and urgent.
I turn first to the issue which has occupied a good many column inches in the newspaper recently; namely, the importance of air power and the role of the Royal Air Force, to which the noble and gallant Lord, Lord Craig of Radley, has just referred. He speaks with a great deal more authority and experience than I do on those matters but I hope that I may add one or two useful points on the same theme.
As the noble and gallant Lord said, some have even questioned the need for a separate air force. But, however clearly foreign policy is defined and however closely defence policy is aligned with it, two major uncertainties will continue to influence defence provision. First, it is impossible to predict in advance the level of intensity and nature of any operation which may arise. Secondly, unless the crisis provokes a full NATO response, we have little idea as to who our military partners may be, whatever the scope or scale of the conflict. Of course we shall often be fighting
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alongside the United States but not necessarily always. Thus Britain's Armed Forces must be as versatile as possible. We cannot afford to invest in equipment which can be used in only one situation, especially when we cannot be certain that that situation will ever occur. Air power is inherently versatile and the impact of the IT revolution on sensors, navigation, precision delivery and communications has hugely enhanced the traditional characteristics of responsiveness, speed, reach and fire power.
There are three important reasons why air power brings such crucial strength in any joint services operation. First, it can shape an environment for the advantage of friendly forces, exactly as the allied air forces did for the Normandy landings in 1944, and incidentally, as the Luftwaffe singularly failed to do in 1940. Secondly, air power can provide traditional support for forces deployed at various levels of conflict intensity, including air cover, mobility, reconnaissance and fire power, all of which are particularly important when small numbers of friendly ground forces have been deployed. Thirdly, only air power can take independent action against targets far beyond the reach and capacity of surface forces. In recent times, precision munitions have transformed deep penetration operations from the old bludgeon of total war into a rapier which may be brandished, inserted or withdrawn under tight political control, with minimal casualties and collateral damage.
However, we must be careful. We can and do meet sophisticated weaponry at the lowest levels of intensity. Many countries already have small but well equipped air forces capable of inflicting heavy casualties on unprotected ground forces, and so all our Armed Forces must be able to depend upon air superiority.
It is inconceivable that the important tasks to which I have referred could be discharged by a branch of the Army or of the Royal Navy. I yield to no one in my admiration of the Fleet Air Arm and the Army Air Corp, but even taken together they could not remotely begin to fulfil all the vital roles of the Royal Air Force. Therefore, I hope we shall hear no more of these dangerous ideas, which serve only to encourage our potential enemies by casting doubt upon our determination.
I believe that I have a few moments left in which to speak. I wish to touch briefly on a quite different matter which greatly troubles me. I refer to the case of Guardsman Wright and Guardsman Fisher, both of the Scots Guards. Following an incident in Northern Ireland in September 1992, these two men were tried and convicted of the murder of a known IRA terrorist in circumstances which most of us would regard as no such thing. Naturally these are technical matters for legal experts but the sad fact is that the somewhat rough and ready arrangements which represent the legal processes in Northern Ireland have proved ill constituted for cases of this kind.
Wright and Fisher are not the first British soldiers to find themselves in this position. Not so long ago your Lordships expressed some disquiet over the case of Lance Corporal Clegg. I recall from my own experience

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the case of Private Thain. That latter case, in which I was closely involved, ended when Private Thain was refused leave to appeal to the House of Lords by the Northern Ireland Appeal Court. I must confess I find it impossible to dispel the suspicion that the interests of justice in these cases have sometimes been deflected by the needs of political expediency.
However, I return to the case of Guardsmen Wright and Fisher. These two soldiers have now served nearly five years—longer than any of the other cases of this kind—and in the view of many, including myself, it is high time that they were released on licence or on parole if more appropriate. I understand that this very day Mr. Justice Girvan has called for this matter to be expedited. I hope I may ask the noble Lord, Lord Gilbert, when he replies to the debate to say when he expects the case of these soldiers to be next considered by the appropriate authorities. Further, is he satisfied that proper legal advice and support are available to these men, paid for if necessary from public funds? That was the case with Private Thain and ought to be the case with these two men. I look forward to the Minister's reply.
6.45 p.m.
Lord Lyell: My Lords, I, too, am extremely grateful to my noble friend Lord Vivian for instituting this debate. Your Lordships have heard from two previous speakers about the regiment of the Scots Guards. Perhaps that is one reason that I speak so early in the batting order today because 40 years ago this week I graduated from being recruit Lyell to Guardsman Lyell with the valuable help of one Coldstream Guardsman, Sergeant Kiwi Clements, who was known to many of your Lordships and many of the staff. Those weeks at the Guards depot taught me to be a soldier before anything else.
My noble friend Lord Vivian mentioned the regimental system again and again. For me this started at the age of three when my father brought a company of Scots Guardsmen to our house in Scotland. They left for North Africa when I was three and sadly many of that company, including my father, did not come back. From 1942 onwards the Scots Guards have been part of my life. It is for that reason that I am particularly privileged to speak in the debate today.
Three weeks ago I was in the North American city of Seattle. Sadly I missed one of the high spots of my year, the Queen's Birthday Parade on Horse Guards Parade, not too far from here. I tuned in to the Komo television news in Seattle. The headlines concerned a bear that had escaped in one suburb and a bobcat that was loose in another. However, 20 seconds were devoted to Queen Elizabeth's birthday. It meant quite a bit to me to see the Colour of the Second Battalion the Scots Guards with a wreath trooped in front of the Queen in June. That may not mean an awful lot to your Lordships, but to members of the Brigade of Guards it does mean something. Why do the Scots Guards have that privilege? Fifteen years before many of those
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guardsmen were fighting and, let us not forget, winning at Tumbledown, if you can call sustaining eight fatalities and many injuries winning.
Ten days after that parade I attended a regimental dinner. There were many Scots Guards officers at the dinner. I believe that three of them were mentioned this evening by my noble friend Lord Vivian. They were particularly loyal and honest. They wondered about a word that is dear to the noble and gallant Lord, Lord Bramall; namely, overstretch. They wondered about their personal future commitment and about the men and women who serve in the British Army. Their qualities are improving year upon year but, for goodness sake, the demands that we, the Government and the country place on them increase year by year by year. At some stage can the Minister give some indication of the actual or estimated gap between tours of duty in Northern Ireland, let alone Bosnia? As the noble Lord will be aware, it is not merely a question of sending a battalion to Northern Ireland or Bosnia. Many of these battalions, certainly in the Brigade of Guards and other infantry regiments, are under-strength. Therefore one adds a company, but many of those companies are under-strength. Therefore one adds a platoon. One unit going to Northern Ireland or Bosnia comprises three separate regiments. Thank goodness for the regimental system, which breeds unbelievable and unique teamwork.
I was lucky to obtain a commission in the Scots Guards as a national serviceman. The soldiers of 1997, and I when I was a recruit guardsman, are totally different from the soldiers of 1957. The soldiers of 1997 are not Zulu or Masai warriors who fight for 20 or 30 years and then retire. They quite rightly need the home life that many of us demand. One battalion that will be familiar to your Lordships has spent three Christmases away from home in Bosnia, Northern Ireland and on an "emergency tour" of Northern Ireland. I hope that the Minister will be able to take a view on this matter, perhaps over five years or even longer. I hope that he will consider the existing demands on these soldiers. I hope that he will reject the siren voices on the peace process in Northern Ireland, and defending freedom in Bosnia, which may lead to a so-called peace dividend.
In this debate, as in every other debate, I remember Kipling's poem. We thank the Mister Atkins. But I add today: I do not know how they do it. The demands are increasing, and those people look to the Minister to adjust them.
7 p.m.
Lord Bramall: My Lords, I add my gratitude to the noble Lord, Lord Vivian, for initiating the debate at this crucial time in the affairs of the Armed Forces—Armed Forces which, I think most of the nation would agree, are a jewel in the national crown. Perhaps I may reiterate to the Minister, the noble Lord, Lord Gilbert, the congratulations and welcome that I offered him in your Lordships' House last month before his introduction. I recalled that for him it was coming home

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to a department in which he had served with distinction 18 years ago at a time when I was Vice-Chief of the Defence Staff.
I agree that the forces now need a longer-term sense of direction in defence planning which will take into account future challenges and opportunities; and I am delighted that the Government have decided to do this from the top downwards and not, as so invariably in the past, from the bottom upwards, with the Treasury firmly in the driving seat from the outset. And I keep my fingers crossed when I recognise this worthy aspiration.
But if the macro-baseline study is to be of any value, it must try to produce definitive views on, first, whether we intend to remain a member of the Security Council— that will make a considerable difference; secondly, whether, in trying to assess our weight on the international stage at which we should be appropriately punching—to use a popular phrase, no more no less— we should as well as other factors take into account the obligations, experience and expertise which this country has proudly acquired in its national and international development; and, lastly, whether any contribution, at whatever size, we decide to make to collective defence, in particular through NATO, and/or in active co-operation with allies, but perhaps particularly with our American friends as so often in the past, should be able to compete if the need arose in terms of command expertise, organisation and equipment in what I might describe as the "first division"; or at least able to compete, better still deter, opponents with first division equipment as occurred in the Gulf. If such war fighting capability is lost, it cannot be easily or quickly replaced as we should have learned from the 1920s and 1930s.
But be that as it may, only when those broad foreign policy issues and the need for the Armed Forces to support our foreign policy have been thoroughly examined, and where possible resolved, will it be possible to assess the force levels likely to be required, and to start matching those to the resources likely to be available. And when the moment comes to move from the framework baseline study to that second, more detailed stage, I hope that the noble Lord the Minister and his colleagues will not forget how much the established defence programme which the Government have inherited has been underfunded for the past four to five years.
It was not primarily the structure and organisation arrived at under Options for Change and the Defence Costs Study which were to blame (although I suggest that the Army manpower ceiling was, under Treasury pressure, set 4,000 to 5,000 too low), but the continuing cost cutting and cash flow squeezes which went on concurrently between and in the aftermath of those exercises, and are still going on at this moment, which have made it impossible to implement the force levels agreed upon in an effective way. As some noble Lords have said, the result has been under-recruiting and undermanning by at least 5,000, if not a good deal more, and thus gross overstretch, in particular in the Army, which cannot be allowed to continue because of its adverse effect on the other two; and an inability to sustain even modest forces in the field for any length of time.
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I believe that there is now a consensus that the medical services have been seriously and dangerously affected. Indeed, there are few unit establishments in the Army which, even if fully manned, which they are not, would be viable in any operation worthy of the name without ad hoc reinforcements from other units, all exacerbating that overstretch problem.
There is a good deal of ground to be made up urgently, whatever the outcome of the review. There may also be some gaps in what otherwise is a good equipment programme—as good as I can remember. Notably there is the absence of any element of anti-missile defence, without which the deployment of troops overseas may under certain circumstances be greatly inhibited.
I am not saying that there are not areas where savings can be made—if decisions are taken at the top—notably in NATO's top heavy command structure, which is wholly inappropriate now that the cold war has ended; and the implementation costs of joint staff training might be looked at again. The review may find some commitments which could be shed. That is the proper course of action; in fact it is the only way to go about these things. But I believe that the errors made in the past in the fields of manning, medical services and sustainability generally may require some extra resources if whatever force levels are decided upon are to be operationally effective and sustainable over a realistic period. It would be nice to have assurance from the Minister that those weaknesses, many of them self-inflicted, are to be corrected as a matter of urgency.
Meanwhile I wish the review well. Finally, I endorse what has been said about air power. I remind noble Lords that the late great and gallant Lord Montgomery of Alamein introduced a tenth principle of war to go with the other nine: in any operation, first win the air battle.
7.7 p.m.
Baroness Park of Monmouth: My Lords, I, too, thank the noble Lord, Lord Vivian, for this debate.
In the 1996 defence review we were told that defence spending would be down to 2.7 per cent. of GDP by 1998–99. If the defence review is, as we all fear, code for cuts, should we expect to go down to 1 per cent. by the millennium? If it is a real attempt to match resources to commitments, I welcome it, especially if it is honest and not a triple-hatting exercise. But I have to say that, of the 50 tasks grouped under the three defence roles, which were identical in both the 1993 and 1996 reviews, only one, Hong Kong, appears to be no longer a task (though in a potentially unstable area, the Far East, we shall presumably still be required to help maintain peace and stability, but now without the advantage of a base). Northern Ireland of course will not go away.
I greatly fear that any more cuts will leave us with a hollow shell consisting of 47 defence agencies, massive contractorisation commitments, budget holders with competing for quality awards, glossy management plans, all seeking PFIs, but no men and women to manage, whether front line or not. They will all have gone because they are weary of impossible tour

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intervals, perpetual turbulence, absence of effective medical back-up for them and their families, overstretch combined with inadequate training time, and a general failure to remember that they are people who joined to serve.
To take only one of many threats to morale and incentives to take early retirement, I quote the Armed Services Pay Review Body in May 1996 which spoke of,
"unprecedented low morale in the Defence Medical Services, to the extent that it is difficult to see how the MoD could meet its operational commitments",
and perceived a growing crisis over retention and morale in the services generally.
The last government have left—after many a struggle—reasonably hopeful prospects for equipment; and this Government are reassuringly committed to the Eurofighter and to Trident, and to facing the very real problems over maintenance and spares. I particularly welcome what the Minister said in that regard. The casualties have been morale and people and a growing perception that, as in the case of the Gulf War veterans, the MoD is sometimes, not economic with the truth, but even a stranger to it to the detriment of the interests of those it is there to represent.
I hope therefore that this review will make it the business of Ministers not only to identify the strategic needs of the country and to provide the resources to deliver them, but also to recognise the commitment of the country to its Armed Services, who are weary of seeing the MoD transforming itself into an inferior form of supermarket or a branch of McKinsey's—the notion of performance-related pay is part of that alien ethos; it was not proceeded with, I am glad to say—and seeing defence reviews couched in the language of the market. It is time that the forces were recognised not as an expensive liability but as a most valuable and irreplaceable asset, cheap at the price, without whose loyal and committed professionalism our strategic objectives cannot be achieved.
We must all be concerned to ensure that the country understands—for no one talked about it at the election— that the world is still a dangerous and unstable place, with new dangers such as nuclear proliferation, but with some familiar threats, too, which have not gone away. I shall not, since our recent debate covered that, elaborate on the new threat to NATO from within, except to urge the Government to recognise that Russia's aim, which the Founding Act has advanced, is to emasculate NATO from within. We are all much too anxious to turn NATO into just another political forum. It was founded to deter; and deterrence is still necessary. Russia has succeeded in ensuring that enlargement will be hobbled and it has virtually achieved a veto. It will continue to threaten the Baltic States, and will be contained only for so long as we retain both the power and the will to deter.
It is fashionable to treat Russia as a spent force in military terms. It is true that the Russians have unpaid troops, bribery and discontent; but they also have formidable and effective strategic missile troops, a navy
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with new and sophisticated atomic submarines, and more coming off the stocks, some formidable new military aircraft, including the SU 37 and the prototype of a new assault helicopter. They are also developing a long-range bomber to be in service in 2005. They are co-operating with the Chinese in military technology, and have sold and are selling them SU 27K jet aircraft, which will now be made in China, submarines, anti-aircraft missile systems, Sovreneny class destroyers and naval helicopters. I have spoken before about the near monopoly that Russia enjoys in the sale of aircraft, naval vessels and military hardware to India. It is worth noting that Russia now hopes to sell fighter aircraft to Indonesia, just as it sold MiG 29s to Malaysia.
Perhaps the three most important developments in Russia in the context of our defence review are: first, Russia's arms exports were worth 3.1 billion dollars last year; secondly, the Russians are concentrating on a new and far more selective blueprint of reform designed to produce a compact modern force, concentrating on nuclear weapons, the navy and the missile fleet, and promoting the military-industrial complex (the very thing they were supposed to dismantle) because they expect a strong demand for new high-tech research and development; and thirdly, the new defence Minister, Sergeyev, who commanded the strategic missile force, will drive through this programme, backed by Kokoshin, the experienced deputy Minister, and Baturin, the Defence Council Secretary.
So Russia is far from being a spent force. She must be taken into account while she remains politically volatile, and certainly in the context of arms proliferation.
7.13 p.m.
Viscount Allenby of Megiddo: My Lords, I, too, join with other noble Lords in thanking the noble Lord, Lord Vivian, for so ably introducing the debate today.
The importance of the Armed Forces in the United Kingdom has never been, and never will be, in any doubt whatsoever. They have been the backbone of our society for generations and an integral part of our way of life. We have always had a Royal Navy, an Army and, more recently, a Royal Air Force. I shall not join in the argument as to whether we retain the Royal Air Force. Over two world wars and several conflicts since, they have fought and laid down their lives on behalf of this country. They have served and continue to serve this country brilliantly.
If your Lordships read the Defence Estimates of the previous government issued in May last year, you may have noted a paragraph on page 4 under the objectives dealing with personnel. That in essence said that the objective was,
"to recruit, train, motivate and retain service personnel and civilian personnel".
It went on to say,
"of the quality and in the numbers needed to deliver the required defence capability".

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All the most sophisticated weapons systems in the world are useless unless the manpower is in the right place at the right time and trained to do the job. For the short time available I should like to concentrate on a few remarks on Army recruiting, training and retention. After all, the Army needs by far the most men— I believe I am right in saying 1,500 last year and a further 1,500 this year, and an overall total for all the services of some 5,000. No doubt the Minister will correct me if I am wrong, but I understand there is a big black hole in the recruiting organisation.
Recruiting over the past five years has seen constant change. Now I understand there are to be 39 Armed Forces careers offices throughout the country—an excellent move if a proper balance is achieved between the services.
For those elements of our Army which recruit on a territorial basis, there is a need for smaller, satellite recruiting offices, especially in remote areas. I do hope that these will not be swallowed up by the new Armed Forces careers offices. I hope also that the regimental recruiting teams and cadet training teams will not be lost in the interests of making savings.
Another welcome move is the reintroduction of the junior leaders' training establishment at Harrogate, albeit under a different title. That is a welcome move, as those who served in junior units will readily agree what a wonderful asset they were.
Sadly, recruiters and trainers seldom agree that the other is doing the job properly. But wastage is high—in the infantry I am told it has now risen to nearly 40 per cent. Sadly, it is caused by many of the problems that face our modern day society: unsuitability of the young to the disciplined way of life of our Armed Forces; lack of physical fitness because of the schools; loss of freedom and creature comforts of the home; and overstretch, about which we have heard a great deal.
I should like to mention one problem briefly; namely, delays in the training system. That is particularly so in the infantry, where it can take up to six months from the start of a man's training to the time he joins his unit. Surely that time could be cut.
Throughout our Armed Forces motivation and morale are generally high, particularly among those serving overseas and those with an active role to play. The service chiefs are clearly robust in relation to manpower problems. There are obviously concerns, and sometimes empty billets have to be accepted due to a lack of manpower.
I have just one question for the noble Lord the Minister. In the event of the current review identifying shortages either at unit or individual level, will the Government take urgent steps to remedy such shortages where fully justified?
We may not have the largest Armed Forces in the world, but, my goodness, we have the finest—they are well-equipped and well trained, and we are justly proud of them. They are vital to the security of our country and they deserve all the political and financial support that they need.
7.17 p.m.
Lord Mottistone: My Lords, I, too, should like to thank my noble friend Lord Vivian for this debate. Under its title, for brevity, I propose to identify the matters that are of special importance for the Government to consider. I start with the importance of all three Armed Forces, especially when threats to peace are uncertain. The noble and gallant Lord, Lord Craig, might be interested to know that my father, as a junior Minister in the War Office under Sir Winston Churchill, was one of those who founded the RAF many years ago. Indeed, I believe he was the first president of the Air Board.
My next point is the importance of helping to keep the peace, both to quieten warring factions, as in Bosnia, and to keep open trade routes as the Armilla patrol did in the Persian Gulf. To that must be added the importance of naval forces to support land and land-based air forces where they are involved, as in Bosnia, or to conduct an operation like that of the Armilla patrol.
I turn now to the importance, already mentioned by other noble Lords, of constant exercising and training for all Armed Forces, both in order that they are ready for varying degrees of offensive action and to present a convincing deterrence to potential aggressors such as was not achieved before the Falklands campaign in 1982.
As well as the necessity for exercising and training, I add the importance of keeping Armed Forces equipped at a sufficiently up-to-date strength to deter possible aggressors at all times. I now add the importance of being ready to tackle unexpected aggressors as well as likely ones, especially when the world is expected to be largely peaceful. The 19th century has many examples of that. In addition, there is the importance of never forgetting that modern fighting equipment—whether it be ships, submarines, tanks or aeroplanes—can never be produced quickly if allowed to run down in numbers below what a prudent planner sees as necessary for unexpected eventualities. So far as the Navy goes, I believe that we have now reached the rock bottom that should ever be permitted, either in what we have or what we plan to have during the coming years.
Finally, there is the importance of never forgetting that the Foreign Office tends to recommend the disposal of dependent territories, even when the inhabitants do not want it, and of never forgetting that the Treasury— and now, I see, chief constables—tends to recommend further defence economies, even when previous governments have just made more economies than many think are wise.
So I hope that when the Minister replies he will be able to reassure us on those points. I hope in particular that he will not be too much led astray, since in his letter he explained how the Foreign Office would be consulted first. There is a great deal to be said for consulting Foreign Office Ministers but not perhaps the Foreign Office itself. Its record as regards the services is, in my opinion, abysmal.
7.21 p.m.
The Earl of Effingham: My Lords, I too thank the noble Lord, Lord Vivian, for introducing this very important subject in your Lordships' Chamber.
These are exciting times for the Royal Navy. The north Atlantic dominated our thinking during the Cold War, but over the last 10 years we have built a versatile and effective force structure to support and, if necessary, fight for British interests around the world. To achieve this we have embraced a demanding period of change, not least in shaping the Royal Navy to contribute to the requirements of joint warfare, under the control of the Permanent Joint Headquarters.
Today's Navy is a force of discrete and highly capable units that are effective when operating on their own, yet able at almost immediate notice to play a significant part in a large multinational task force anywhere in the world. This gives a great deal of flexibility when deciding how to respond to crises that may affect Britain's interests.
Our role is very much to contribute towards preserving a peaceful environment in which our foreign policy and trade can flourish. To do that, we must be able to deter aggression, which means that we must have and continue to develop forces which can be rapidly adapted to changing circumstances. With a powerful, well equipped navy, consisting of aircraft carriers, nuclear submarines, amphibious forces and the rest of the supporting ships, we have the essential elements in our armoury to contribute to Britain's joint operational capability.
We are always looking for new ways to make the Navy more effective in working with potential allies and other services. Nowhere is that process more apparent than in coastal regions where developing our links into land operations could prove decisive. So we strive to make our platforms ever more compatible with those of the other services, to enhance the overall utility of joint rapid deployment force assets.
The Royal Navy deploys task groups to the Asia Pacific region about every three or four years. The current 1997 deployment called "Ocean Wave", led by the aircraft carrier HMS "Illustrious", set out last January and will return next month. The group is made up of some 20 Royal Navy warships, submarines and support vessels, together with Royal Marines and elements from the Naval Air Squadron.
The aims of the deployment are: to demonstrate the United Kingdom's continuing commitment to the region; to test the Royal Navy's ability to deploy an operationally effective and self-sustaining force out of area for a prolonged period; to underline our continuing interest in promoting regional peace, stability and freedom of international trade; and to support co-operation and joint working between military forces.
"Ocean Wave" has been a great success, with particularly warm endorsement of the Royal Navy's presence from our diplomatic missions and British firms. An example was the assessment, after the task group's visit to the Philippines, that it was an
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outstanding demonstration of Britain's commitment to Asia, underlining the importance of the Armed Forces in underpinning our foreign policy interests.
We must ensure that Britain has the forces necessary to protect itself and its considerable investments abroad. We have responsibilities for the defence of our dependent territories and the protection of British citizens abroad. As a leading member of the world community, we have responsibilities to act together with partners, allies and friends, to ensure world stability and deal with the consequences of instability.
Thus in the future our forces may be called upon to perform a wide range of tasks that extend beyond the threat of super power confrontation. The inherent flexibility of the Royal Navy has enabled a relatively smooth transition from the Cold War to the emerging challenges to the interests of this country and world peace.
The Royal Navy possesses qualities that include mobility, flexibility, reach, versatility, endurance, lift and autonomy. In practice, those qualities mean that the Royal Navy can mount and sustain operations in any of the oceans of the world. Ships do not require permission to use the high seas. Task groups can be formed that match the requirement of the operation and they can carry or protect the strategic sea-lift that is vital to mount a largescale land operation. These groups can also provide their own defensive capability to be autonomous units, free of the requirement for host nation support.
In conclusion, I believe that maritime forces are thus inherently "joint"; that is, able to operate in the three environments of land, sea or air, and capable of mounting significant operations. When combined with the capabilities of the Army and the Royal Air Force, they form a vital element of our defence capability to meet the varied challenges that we face around the world.
7.27 p.m.
Lord Astor of Hever: My Lords, one of our great military successes has been our use of armour. I was therefore alarmed to hear rumours circulating at high levels in armoured regiments that the Government, maybe encouraged by the academic lobby, is attracted by the concept of role specialisation with Britain providing a "gendarmerie army" for peace-keeping operations while allies defend our high intensity interests. The fear is that we will give up our heavy armour component of the Rapid Reaction Corp and invest in mechanised infantry and helicopters. High intensity combat is expensive, so the biggest savings are to be found here.
But no government can hold its mandate by proposing that Britain eschew such a capability. It would be a dangerous reliance to expect allies to take the lion's share of the fighting on our behalf and meet the heaviest cost burden. The capacity to defend the United Kingdom—whether by force projection in Europe as part of the ARRC or within our own shores and possibly alone—comes from the political commitment which makes defence of the realm the first order of government business.

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Capabilities flow from commitments. The defence review will consider our commitments and whatever is deemed essential must be funded. Parties engaged in conflict should not deploy force as an instrument of policy at all if they are not capable of anything more than limited operations at the lower end of the spectrum.
High intensity combat on land cannot be fought without tanks, a fact which even the impoverished Russians accept. Tanks have a part to play across the full spectrum of war fighting. Peacekeeping operations in Bosnia only succeeded when tanks were deployed. British armour had a suppressing effect on the conflict, as it denied the enemy the freedom of movement required to keep the initiative, all without exposing British troops to too great a risk.
The proposal to abandon high intensity conflict makes sense only if it is possible to assume that all future conflict in which British land forces become engaged will be limited and of low intensity. There is no indication that that is true, either in Europe or globally, and it ignores the rapidity with which war can change from one condition to another. By giving up tanks we throw away the entire capability of contributing anything but flank and rear-area troops to our allies.
And at what cost, my Lords? We could not hold on to the leadership of the ARRC with such a trivial investment; and with the loss of command, we would lose whatever political influence is gained by having it—at least in the councils of the UN, NATO and the possibly re-born WEU.
It takes years of training to perfect the complex skills of armoured warfare, skills demonstrated in Desert Storm, where 70 per cent. of ground targets were destroyed by armoured forces in just 100 hours. With those skills would disappear the technical and industrial expertise which has culminated in the prize capability of being able to design and manufacture vehicles like Challenger 2 and Warrior. Our ground forces would be barely more than a third world, low-tech force fit only for policing duties—something of which the public would quickly tire. Recruiting would undoubtedly suffer, as would the morale of existing troops.
Our soldiers want to play with the big boys. As my noble friend Lord Vivian said, giving up our tanks would be a dangerous mistake.
7.33 p.m.
Lord Wedgwood: My Lords, I join noble Lords in thanking my noble friend Lord Vivian for introducing this debate.
It has been mentioned time and again that the Army has been overstretched to ridiculous levels and now we understand that recruitment is 5,000 short of the current target. Like the noble Viscount, Lord Allenby, I believe it is urgent that recruitment is given some serious reconsideration and support.
Further, I believe that junior entry programmes should be part of the solution. Those programmes serve a number of purposes. They give young people a tremendous opportunity immediately on leaving school. Those who complete training are usually of a quality which, combined with the benefit of early training,
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means they are high achievers and an excellent investment. In the past, the ranks of non-commissioned officers have been well served by junior entrants. I do not have the percentages but a show of hands in any sergeants' mess will give conclusive evidence of this. Losing that investment will affect the quality of those important ranks.
In your Lordships' House last week, during the discipline Acts debate, my noble friend Lord Howe referred to the drug problem in the services. Soldiers, sailors and airmen will naturally reflect the society they come from and the nation's drug problems centre around youth. With a junior entry programme, the Army would have the opportunity to train recruits and bring them into military life before the problems start. It is not clear how soon training of juniors will start. Maybe the Minister could help to clarify that point during his speech.
There is a common misconception that overstretch is caused by an inability to fulfil our commitments. Despite the enormous reductions, our Armed Forces are capable of maintaining our formal commitments as determined by foreign policy, exemplified by Germany, Cyprus and the Falklands. Northern Ireland would fit into that category as well. But what happens when a regiment such as the Royal Scots, the regiment in which I was fortunate to serve, currently based in Colchester and re-training for its new role, is suddenly deployed for extra duties required because of the current concerns about the annual marches in Northern Ireland? Noble Lords will be more than familiar with my point: among many other negative consequences, vital training is disrupted and soldiers are withdrawn from specialised courses designed to educate them to higher levels of skill and ability. With recruitment at its required level, the manning margin, slim though it is, can take care of filling some gaps. But, with no flesh on the bone, regiments are required to borrow soldiers—a scheme known in Scotland as "rent-a-Jock". That, in turn, has its own domino effect, with negative results on all units.
The effects of overstretch come from additional operational demands such as in Northern Ireland, Bosnia or wherever the next bushfire erupts. Without the required intervals between tours, many wives—between 15 per cent. and 20 per cent. in infantry regiments— now decide not to follow their husbands. Their argument is that in modern society—they are a reflection of that society—they have children, jobs and mortgages; and, with the instability caused by overstretch, they might as well stay where they are. Discord and morale problems naturally result.
The Armed Forces Minister in another place, Dr. Reid, recently said about the impending Strategic Defence Review:
"We are concerned about getting the equation right".
Predicting future operational commitments that relate to defence and foreign policy is a difficult task, but there are vital elements to fit into the Minister's equation. One is definitely the military family.
Owing to successive reviews, young commissioned officers are becoming disillusioned by the lack of stability. As a result of those reviews, they are now concerned about capabilities to perform operational

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tasks. Following Options for Change and the defence costs study, orders were carried out with characteristic responsibility, in the belief that our armed services could be smaller but better. Now, officers are faced with another review. Scepticism that the Government will give in to further Treasury demands is the result.
What can be made of the two current major commitments for our armed services? The situation in Northern Ireland does not warrant much hope for even limited withdrawal in the near future. The consequences of further withdrawal from Germany was well covered by my noble friend Lord Vivian. I would add only that without Germany our training facilities are not sufficient for certain vital "live firing" practices.
Given those commitments, the current numbers and the ability to carry out operational demands becoming increasingly limited, officers have reason to be concerned about their careers. With the review months away from completion, the Government need to provide assurance of their intent. Confirmation of signed contracts, such as for Apache and EH101, would go a long way to relieving concerns about future support. Without those kinds of assurances we are likely to lose our best young officers. Without them we cannot expect our future military leaders to be of the high calibre that we demand and have today. Any strategic defence review would reflect the needs of the nation. I believe that the people of this country value our armed services and expect them to be equipped, trained and, therefore, capable of carrying out "armed" operational commitments.
The Armed Forces Minister in another place has stated that the review is:
"not a cost cutting exercise";
and,
"we will not he rushing to judgment".
For that, he can be applauded. But our military forces deserve the immediate support of the Government. I urge the Government to show determination in creating a more stable framework from which our armed services can operate effectively and to remove the notion that the Army, the Navy and the Air Force are an industry in decline.
7.40 p.m.
Lord Judd: My Lords, I must declare an interest in view of my work with the independent international security think tank—Safer World—and with other related organisations. Unlike the noble Lord, Lord Vivian, whom I greatly respect, I believe the foreign policy led defence review is long overdue. The repeated piecemeal Treasury-led cuts under the previous government have seriously damaged service morale and left the services uncertain about their role and ability to sustain in depth the range of responsibilities still currently or potentially evidently expected of them. Overstretched is a reality. We, the politicians, can no longer dodge our responsibility for that and for the dangers it represents for our men and women in uniform.
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The relative predictability of Cold War days has been replaced by the unpredictability and volatile conflict across the world. Genocide is back in business. More than 90 per cent. of war-related casualties in current conflicts are civilian as compared with some 50 per cent. in the Second World War. Conflict is more often within states than between them. Some will ask what concern of ours are far off conflicts of that sort. Michael Portillo answered that question well as Secretary of State for Defence last autumn when speaking of the Great Lakes. He said,
"Because we are a civilised nation. We can see that people are about to die in their thousands and we are one of the few nations on earth that has the military capability to help at least some of them. We recognise our humanitarian obligations".
He continued,
"We take pride in our permanent membership of the United Nations Security Council, but it carries with it clear duties".
As the noble and gallant Lord, Lord Bramall, properly and bluntly reminded us today, we have to be clear whether or not we want to be a world power. If we do, we have to measure up to that role. If we aspire to be a world power and accept the responsibility that that entails, of course we have to examine what international security requires of us in co-operation with others. The Armed Services remain a significant part of the response. But the need is for far more. It encompasses justice in global economic management and trade; fair access to the natural and mineral resources of the world, not least water and land; it includes population policy and the well-being of threatened ethnic groupings. And on top of that, acute environmental pressures have to be addressed.
It is in the midst of those challenges that the opportunistic ethnic entrepreneurs and religious extremists ply their evil trade. We must forestall them and that is one good illustration of why an integrated approach to overseas policy, including defence, is so important. Debt and insensitive structural adjustment policies, the downward spiral in world commodity prices and pressure on land have all been central to the origins of the crises in the Great Lakes region of Africa.
Economic and social policy, pre-emptive diplomacy, conflict resolution, peacemaking, peacekeeping, arms control, disarmament and firm accountability of the arms trade are all essential elements in security policy. Never again should our service personnel be faced with weapons supplied by irresponsible traders based here in Britain itself. Profits must never be allowed to take precedence over responsibility in the arms trade, which has too often fuelled the instability which in the end, directly or indirectly, involves us all.
That brings us to other major issues which the review will have to address. Among them are migration and terrorism; the relationship between NATO and the need for growing co-operation with Russia if nationalism there is not to be provoked; the relationship between NATO, the Western European Union and the European Union; the danger of proliferation of nuclear and other weapons of mass destruction and the future of our own nuclear deterrent within the context of the non-proliferation treaty. In that respect we look to my

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noble friend the Minister for specific assurance that we will not provocatively increase our nuclear arsenal as we deploy Trident.
Cynics already suggest that the review is just a cover for yet another Treasury-led cost-cutting exercise. To confound them the Government will have to ensure maximum consultation and involvement in the review; maximum dissemination of its findings and maximum debate before implementation. Understanding and ownership will be vital. The objective must surely be to achieve cross-party consensus and provide at last a convincing framework within which the services and the defence industries can plan confidently for the long-term future.
Before I conclude, there is one pressing matter on which it is important to have the Government's immediate reassurance. Last year the Office for Public Management produced a report which raised deep anxieties about the extent of racial prejudice, intolerance and harassment within the services. Such attitudes and behaviour in the services are clearly unacceptable. Indeed, there is a painful paradox when our services have an enviably outstanding record for peacekeeping across the world in the midst of ethnic tension. We should be able to hold our heads high as world leaders— one of only five permanent members of the United Nations Security Council—confident that our Armed Services in which we take so much pride epitomise the enlightenment, understanding and tolerance we advocate for the world as a whole.
We know that senior officers in all three services and many others at all levels are determined to root out all traces of racism. They deserve our full-hearted goodwill. Britain has become a multi-cultural, multi-racial society. We should be proud of that. We should strive to be a model of success to the world and the services should be in the vanguard of demonstrating that. I hope my noble friend the Minister will give us a categoric assurance that the Government will give unqualified support to the leadership and the others in the services who are determined to put right that sad blemish on our otherwise exemplary record.
7.46 p.m.
Lord Ironside: My Lords, I am grateful to the noble Lord, Lord Vivian, for wording the Motion in the way that he has, for we heard little about defence in the election campaign and have heard very little since. That point was mentioned by my noble friend Lady Park. Yet the health of the nation in defence is just as important as the health of the individual, education or social security about which we have heard so much.
The strategy review, which for so long the Labour Party has seen as one of the aces in its pack, may be the Government's way of addressing defence, but I wonder whether it will lead to better decision making and outcomes bearing in mind that the dialogue between the MoD and opinion formers in defence circles and elsewhere is extremely good already. I believe that we have reached the point where the management of defence is strong, where contractors perform well and where the accuracy and penetrating prowess of weapons
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is as strong a deterrent as the weapons themselves. The stand-off feature now required has brought that about, so Tomahawk will be a powerful addition to the Royal Navy's "golfbag" of weapons.
The impact of competition policy and throwing the responsibility of meeting performance onto contractors now means that the defence industrial and commercial base is closer to being reckoned as part of the capability of the Armed Forces because so many services are now supplied in addition to hardware. Contracting out is now the norm rather than the exception and any attempts at contracting in again will be absurd. The fact that industry is now so involved in defence business adds to its ability to provide support in emergencies and the "surge" capability is there.
The loss of in-house capability to industry is again of frontline capability to our Armed Forces and fears of losing too much support capability to industry are overdone. Competition policy has driven costs down. Quality assurance has driven performance up and devolving risk onto the contractor has driven reliability up. We are at last obtaining far better value for money.
The importance of our Armed Forces is judged by how they perform their defence roles. But that depends as much on our investments in long-term projects as on the next type of frigate, fighter or main battle tank. I should like to draw attention to the importance of two of those. The first is the long-term investment in modernising the married quarters estate through the sale and leaseback deal, which breaks new ground in defence procurement, but through transactions which are well recognised in business circles. It is interesting to note that the Australian Government now have five years' experience of getting defence housing into shape and have sold the leasehold of their three major airports— Melbourne, Brisbane and Perth. So we are not out of line in our approach to solving the problem, and parliamentary scrutiny has, I believe, helped the MoD to secure the best terms and conditions. Ensuring that the up-front money is not dependent on a spiral of pledges from downstream operators involved with property exchange in future years is a lesson we have learnt from the Australian Government. In other words, we have ensured that we get real money up front after the five-year exchange option was dropped by the bidders who won.
Secondly, the construction of the Clyde naval base is a long-term investment which is not just centred on Trident but which is linked to the strengthening of our underwater warfare capability as a whole. The new "Astute" class nuclear submarine will match the performance of new Russian submarines and they will not, I believe, need to be refuelled during their lifetime. That is a very big step forward indeed. Without this long-term investment in nuclear propulsion, deterrent design, supply and upkeep as well as nuclear submarine refit, our blue water capability would be incomplete and we would not have the ability to reach out, to react, to deter and to sustain an operation, however limited, away from our shores. Our rapid reaction forces are now being built around air mobility and amphibiosity. I hope that

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the Government will continue to invest in these long-term capabilities. My Lords, let us keep defence strong.
7.51 p.m.
Viscount Waverley: My Lords, the forthcoming defence review will establish strategic objectives for the next decade; foreign policy imperatives will determine defence commitment world-wide. A welcome and sensible approach, my Lords, which will enable the review to reflect Britain's determination to stand up for what is right and just, to reward fair play and penalise miscreants, to carve an international role for the United Kingdom that is neither accessory nor minor but one worthy of our history, our values and convictions, and one which recognises fully the countless sacrifices made by our Armed Forces.
There is perhaps scope, in this far-reaching debate, to tell of the special relationship which Her Majesty's Armed Forces maintain with a small, English-speaking, democratic Commonwealth country in central America. Belize has entertained British troops in one guise or another since 1948; they evolved from a colonial force into a defence guarantee in 1981—defending independent Belize against a century-old territorial claim by neighbouring Guatemala. Harrier diplomacy, my Lords, dissuaded the more volatile elements in Guatemala from foolhardy military interventions.
In 1993, Her Majesty's Government assured the Belize Government that the time was right for the British garrison to be withdrawn. Mr. Archie Hamilton, then Minister for the Armed Forces, said in another place:
"the changes announced … are in response to the greatly improved relations between Belize and Guatemala, and not Options for Change".
His Foreign Office colleague, Jeremy Hanley, insisted that:
"Guatemala had embraced democracy, found stability and recognised Belize",
and that the decision to withdraw,
"was not for financial reasons".
Indeed, the savings were said to be modest. The former chairman of the Defence Select Committee, Sir Nicholas Bonsor, was outspokenly critical:
"Our presence in Belize has enormous value, way beyond the military element",
and,
"The withdrawal is short-sighted".
Referring to Guatemala, he said:
"when a country is unstable, that must throw doubt on whether any assurances given by the regime of the moment can be relied upon even in the short and medium term".
A military coup rocked Guatemala shortly thereafter, defying British assessments, and announced that their recognition had been unconstitutional, premature and always without prejudice to their outstanding territorial claim. They advised the United Nations that the claim was reinstated to both land and sea areas "presently occupied by Belize". Now they insist that Britain is still a party to the dispute. Britain, however, is firm that
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Belize inherited the problem at independence and must now negotiate as best she can. Yet, my Lords, a British training presence does not confer the same leverage as the Belize Defence Force which is outnumbered by the Guatemalan army by 50 to one.
There is an obvious case to be made for an expanded British presence in Belize. Belize's inherited predicament, her unstinting support for Britain at the UN and elsewhere, her unwavering commitment to democracy, individual freedoms and good governance and her unique multicultural diversity bridging Latin America and the Caribbean, all combine to make her a special friend with special needs. But we would be remiss, if not irresponsible, if we did not also consider the "returns on our investment".
British forces preserve stability and peace in the region, bolster a wide British presence in Central America and assist with drugs interdiction. Britain would have easy access to a friendly, compact, accessible and low-cost training area of unparalleled quality. The facilities for jungle training, environmentally sound adventure training, live firing and low-flying sorties are unmatched elsewhere in the world. British Forces Belize have, in the course of their training, cleaned up offshore cays and helped to maintain and protect that fragile environment. Jungle training exercises deterred illegal logging in Belize's many conservation parks and protected important rain forest ecosystems.
An expanded British presence in Belize is of mutual benefit both in the short and the long term. Such an enhanced role combines foreign policy responsibilities with fundamental military needs and objectives. The strategic review will allocate spending to areas where our interests are best served. Our reduced Armed Forces, recognised as the standard bearers of effectiveness and efficiency, can usefully combine continued excellence and influence with practical application in an increased deployment to Belize indicative of this country's interests stretching beyond the European Union to all four corners of the world.
7.58 p.m.
The Earl of Clanwilliam: My Lords, our Armed Forces are the envy of the world in their disciplined and humanitarian approach to control of warring factions in peacetime, and particularly when the time arrives for full-scale deployment. Unfortunately, there is always a condition which falls between any of these categories, and it is then that our forces display their characteristic flexibility and resourcefulness; and for that they justly earn our debt of gratitude.
In his introduction to this important debate my noble friend Lord Vivian referred to the regimental system. I would prefer perhaps to refer to the decimation of our regimental system and the reduction in general of our Armed Forces to a very low level. There is a shortage of men in the Army which seriously affects their ability to deliver the full role that they are called upon to play. In the Royal Navy there is a similar shortage, but it is in the field of fully-trained ratings in electronics upon whom the main armament and weapons systems depend.

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These shortages are a fall-out from the Front Line First review which had the immediate effect of a typical over-reaction and which now needs to be corrected. I would ask the Minister whether the defence review will have something useful to contribute to that problem.
An example of it in the Royal Navy is the Recruiting and Training Agency which is having to learn to live with the Flagship initiative. That seems to be causing friction, especially with the decision to close existing RN training establishments and the appointment of civilians working alongside, and indeed superior to, Royal Navy officers and men. The problem can be summarised as a conflict at the interface between civilianised ex-service trainers in plain clothes and the disciplined uniformed rates. There is also the question of the acceptability by uniformed trainees of the civilian instructors. That may be thought of as perhaps a somewhat parochial point, but it is relevant to the shortage problem.
Be that as it may, the main deterrent of the United Kingdom is the Trident class boats, which was the subject of a Starred Question this afternoon. The fourth boat, HMS "Vengeance", will complete the full deployment of the flotilla, which will then provide a continuous and world-wide screen. It is to the Royal Navy that we can look with confidence to provide that protection. As my noble friend Lord Ironside has said, the addition of the A-class boats will confirm that world-wide protection.
No admiral has ever had enough frigates and now that the number of frigates is reduced to 33, we are at full stretch. While there was excellent deployment, as the noble Earl, Lord Effingham, pointed out, it is nevertheless true that the Navy has been left at full stretch. A level of 36 frigates is too low, especially when it is well established that the Russians are operating atomic powered nuclear submarines out of the White Sea in the Atlantic area. We have to be on our guard and we must be aware. For that we need the full force of the Royal Navy.
In the matter of the defence of the realm in general and its relationship to our allies, there is the problem of NATO on the one hand and the ambitions of some members of the WEU on the other to distance themselves from the enormous industrial and military strength of the United States. The association of the United States in our mutual defence is a vital element, especially in the light of its awesome power for retaliation and with the acknowledged superiority of its GPS supervision system from satellites and its ability to adjust the power factor of the satellites at its discretion. Therefore, the United States has total control of military operations conducted through satellites.
Nevertheless, we have the Conference of the National Armaments Directors studying the problem of common and compatible weapons. We are fortunate that there is agreement with Germany over the Eurofighter; the Agusta helicopter with the Italians; the combined frigate with France and other nations, but all these are diverse colleagues. I see that my time is up. We must have commonality of systems.
8.3 p.m.
Baroness Strange: My Lords, I am very grateful to my noble friend Lord Vivian for initiating this debate on the Armed Forces and for his, as always, enjoyable and interesting speech. It is always a pleasure to me to take part in a defence debate, however often we have them, because there are so many knowledgeable and eloquent speeches to savour, although by the time I get round to saying anything, everything has already been said.
Anyone who watched the handover of Hong Kong on Monday's television could hardly have done so with dry eyes—not so much because of the end of a glorious chapter of the British Empire, although that too, of course; not so much because of uncertainty of the future of the Hong Kong people, although that too; but because of our pride in our armed services—the Black Watch lowering the British flag despite the rain, the aeroplanes flying overhead and "Britannia" sailing solemnly out into the distant oceans. We at home salute our Armed Forces and in this House particularly we battle for their interests and their welfare.
Yesterday I was lucky enough to go with the Defence Study Group to Catterick—a large military garrison initiated by Sir Robert Baden-Powell and begun in 1915. It is now the headquarters of the 19th Mechanised Brigade, with Challenger I tanks, Warriors and Saxon armoured vehicles. It also has an amazing, new bridge-building machine, which we saw in action. Some of them have just come back from Bosnia. Next month they are off again on unaccompanied tours to Bosnia and Northern Ireland.
One of the many interesting things we saw was their battle training school, much of which was carried on indoors with the use of the grown-up-equivalent of toy soldiers and computers. Approximately 38 groups of 100 people each can be accommodated here throughout the year. Although the battle itself is fought inside, with enormous saving to the environment, the antagonists walk beforehand through the surrounding terrain to assess where and how the battle will be fought. This they do with support and help from the local farming community over whose land they are walking. Recently, the local farmers have been writing to MoD to inform it that, if there is any ban on hunting in the future, the military will no longer be welcome on their land.
Another very interesting development, as my noble friend Lord Vivian has said, was the interaction of the military with the local community. The military are planning to build a new supermarket in the centre of their camp, which would also be available to all the local inhabitants. The nearest town, Richmond, has no suitable space available for building a new supermarket. There are also plans for the development of a restaurant, cinema, bowling alley and an all-weather sports gymnasium for the mutual benefit of military and civilians. This rapprochement between the military and the civilian environment seems to me to be the way forward for defence in the next century.
Unfortunately, it does not seem to be happening as much as they would like in the absolutely splendid Duchess of Kent Military Hospital, which is very

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anxious to have more civilian patients. Although called affectionately "The Military" by the locals, since the advent of the dread tentacles of the Defence Secondary Care Agency, it is now called the Duchess of Kent Hospital. It is still an absolutely splendid hospital with lovely doctors, nurses, wards and a very friendly atmosphere. It just would like more civilian patients. It seems to me that the Defence Secondary Care Agency is a monumental quango. It was founded in April 1996 and we were unlucky enough to observe its effects in both Haslar and Frimley hospitals, which we visited last year.
It reminds me very much of my uncle's horse, Poulet, who lived on a lovely farm in France. In the winter he ploughed his one field. In the spring he sowed clover and alfalfa in it. In the summer and autumn he harvested it and for the whole of the year he lived off the very good hay he had grown for himself.
Everyone who has spoken in this debate has spoken passionately in defence of our Armed Forces and the maintenance of their level at the moment at least. I hope that the noble Lord the Minister, whom I congratulate and welcome to his new appointment, will carry away in his heart what we have all said.
8.8 p.m.
Lord Wallace of Saltaire: My Lords, we have indeed been discussing whether and why we need the defence review. I start from a different perspective from many who have spoken in this debate. We need to justify the current level of money spent on our Armed Forces against a sceptical public. The reason why defence was not an issue in the election campaign was because most of the electors were not thought to be interested in it. If we wish to maintain a level of defence expenditure which is considerably above the current European average, we are going to have new justifications for that which we can explain to our younger generation are as important as those which our older generation remembers.
I therefore welcome the defence review. We have had radical changes in our strategic environment in the past eight years. We have had the withdrawal of 1 million Soviet troops from central and eastern Europe; the collapse of the Warsaw Pact; the Partnership for Peace, in which British troops have become active, and within the next week the announcement of the first three, four or five candidates for the eastern enlargement of NATO.
The whole context of British defence policy has changed. That has been evident for some years. I remember during the 1992 election campaign taking the opportunity to talk to a number of senior Ministry of Defence officials about how they saw the context of British defence policy. One of them remarked that the puzzle was what British defence was now for. He said, "There is less of an evident threat to Britain now than at any time in the past 500 to 600 years".
If there is no threat to Britain, we must ask what we need our Armed Forces for, for which tasks and in conjunction with which other countries? What foreign policy objectives should Britain's defence now serve?
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As the noble and gallant Lord, Lord Bramall, said, that requires us to ask what sort of a country we think we are and at which weight we wish to punch in the world. How much do we wish to spend in order to maintain a permanent seat on the United Nations Security Council? Do we wish to get caught up in the argument over who has which NATO command and how many forces one wants to commit in order to maintain that? If the only argument for maintaining the First Armoured Division in Germany is so that we can maintain command of the Rapid Reaction Force, I submit that that is not a very strong argument. The French Government have got very badly hooked on the question of which NATO commands should be shared among which states. Indeed, their whole reintegration into NATO has now become caught up with the argument over the NATO southern command. That is not the sort of argument over which we should now be pursuing the question of what forces we need and for which tasks.
I can remember two previous major defence reviews. I can just remember the 1957 defence review which saw the ending of conscription and which made a radical change in our regimental system, taking away from most of our regiments their second battalion. I remember also the 1967 defence review, over which my late noble friend Lord Mayhew resigned from the then Labour Government—I very much miss his advice on defence matters. As a result of that review, economies were made and during the course of it, it was finally accepted that the British Government had been defending India for 20 years after Indian independence. We had continued to spend money on a task that was no longer worth while. We must ensure in this defence review that we do not continue to spend money on tasks which no longer exist. If the main function of our Navy is to keep open the transatlantic sea lanes to enable US reinforcements to reach central Europe against a Soviet threat which no longer exists, we must find another rationale for the balance of the Navy that we need.
We must ask ourselves the following questions: how far beyond Britain do we now wish or need to project force? As far as the Mediterranean? Further than the Mediterranean? On our own; or do we always assume that the Americans will provide us with the long-range airlift that will get us there? Are we really going to need aircraft carriers if we can expect to be able to use the airports of friendly powers in the Mediterranean in order to provide the air cover that we need?
The question of defence equipment also raises a number of large issues. Do we really need a long-range fighter aircraft—a long-range strike craft to replace Tornado—or is the long-range role for which Tornado was designed not necessary in the post-cold war world? Are we sure that a tank designed for heavy fighting in the centre of Europe is what we need for the very different tasks that we now face in this post-cold war world? Incidentally, before anyone defends Challenger—the areas of Britain in which I have been politically active have made bits for Vickers to use in Challenger—I should point out that the United States is now making one tank when the Europeans are making

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three. The question of what happens to our defence procurement industry is a very important part of the defence review.
I should like to focus in my remaining few minutes on the question of personnel in the services. Evidently, there are changing demands on our military personnel who are also drawn from our changing society. We face a problem with overstretch, most particularly in the infantry and the medical services. Two questions need to be posed on that: first, how do we more usefully use our reserves; and, secondly, what do we need to do about our regimental system? I know from last year's defence review that there were nearly 700 reserve personnel in Bosnia at any one time last year, with a number of others serving in the Falklands and elsewhere. That is a heavy use of reservists. I am conscious that our medical reservists have been particularly heavily used. Perhaps the Minister can tell me to what extent we shall continue to do that—or even to expand on it—as we move towards a military environment in which we can never be quite sure how many forces we need to use and in how many different peace enforcement operations abroad.
I should like to question the Minister on the regimental system, given that the current situation with single battalion regiments going through a complex arms plot over a series of years is not the most effective use of manpower. The regimental system, as designed by Lord Haldane, was a multi-battalion regimental system, which enabled reservists from the same regiment to be added to those on the front line. We could save a great deal of manpower in our overstretched infantry if we moved back more self-consciously to a multi-battalion regimental system. That is not to go all the way towards a corps of infantry, but it seems to me that the defence review must now consider that.
Given the changing structure of our society, we must also ask ourselves whether we can maintain a professional armed service in which the majority of those men are married and have families and yet are asked to serve abroad in repeated tasks for repeated three to six-month tours. We may have to move further towards having young, unmarried soldiers as the core of our active forces, with those who are married with family commitments being in reserve.
I echo the noble Lord, Lord Judd, in remarking, sadly, on how little our Armed Forces yet reflect the multicultural nature of our society. I noted the answer that was given to my noble friend Lord Harris of Greenwich last week and the information that in the six regiments of the Household Division there are currently five soldiers from our ethnic minorities. The good thing about our regimental system is that it gives a sense of belonging; the bad thing about it is that it sometimes leads to a more exclusive, clubbish atmosphere than one necessarily wants in a modern society.
We need a rethink and I welcome this defence review. We have to make changes to our Armed Forces to fit them for a changed technological and military environment and to changed demands. We are not entirely sure what those demands should be, which is
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why the foreign policy dimension of this defence review is important first, before we decide what forces we need for the tasks that we wish to fulfil.
8.18 p.m.
Earl Howe: My Lords, I too should like to express my gratitude to my noble friend Lord Vivian for tabling this debate and for introducing it so ably. If he will allow me to say this at the risk of my being assailed from behind, I have always found my noble friend, whose professional experience we all recognise, to be a very wise head in defence matters. The House is lucky to have him. I naturally associate myself with all that he has said today.
My noble friend pointed out, as did other noble Lords, that this debate is taking place under what can only be seen as the shadow of the Government's strategic defence review. A lot of us feel that a review of this magnitude is unnecessary, is damaging to morale and is liable (if the Treasury were by any chance to intervene) to lead to an extremely damaging diminution of this country's military capability. I do not want to repeat the fears that I expressed in the debate on the gracious Speech a few weeks ago, but my fears still stand.
The key questions to be asked in this review, to summarise what a number of noble Lords have said, are these: does the UK wish to step back from its responsibilities as a permanent member of the UN Security Council? Is the UK's commitment to NATO any less relevant or important than before? Are our interests overseas any less relevant or important? Are the defence roles and mission types that we have defined for the forces in need of redefinition? I am clear that the answer to all four of those questions is: no. Nevertheless, the Government, as is their prerogative, have embarked on this extended review.
For our part, we wish to impress upon them our belief, so effectively pointed out by my noble friend Lord Trefgarne in his remarks on power projection— which was in different ways echoed by many noble Lords—that it is a grave error to remove any of the fundamental building blocks of our defence and war-fighting capability at a time when international tensions and sudden crises can spring up without warning to surprise us. The fine speech of the noble Earl, Lord Effingham, about the Royal Navy and joint operations deserves close study. It was worthy of his distinguished ancestor.
I referred to morale. If the services believe, as surely they must, that changes are in prospect for them, and if they are asked to be more efficient, as surely they will be, they must continue to feel valued and not just costed. They must believe that budgets and money are not the only measures of performance but that there is an underlying wish on the part of government to give them stability in return for their service and commitment. Change for any organisation is inevitable, and the services have always recognised this. I am sure that these arguments will not be lost on the Minister of all people. Indeed, the purported aim of the defence review is to make stability possible. But after so many recent changes, however necessary those may have been, the

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risk to long-term morale is obvious. We should never forget that in the end morale is the commodity that wins battles.
The second part of my comments relates to public perceptions. The title chosen by my noble friend for his Motion may appear to be a touch formulaic:
"To call attention to the importance of the Armed Forces of the United Kingdom".
That title acts, as we have seen from this excellent debate, as a hook on which to hang a wide range of defence-related topics. But to call attention to the Armed Forces and the importance of their work is the essence of what needs to be done both inside and outside Parliament, because when in due course the Government come forward with proposals arising from the strategic defence review, it is important that everyone understands their significance for the defence of this country, for the NATO alliance and our place within it and for our wider interests overseas. My noble friends Lord Vivian and Lady Park made this point effectively.
The trouble is that I doubt whether there has been a time within living memory when the armed services have been so little seen or understood by the public at large. The reasons for this are obvious. It is 50 years since the country has been involved in a major war. The percentage of families with direct experience of the military is low. Ironically, the very circumstances that have led the forces for 28 years to play a prominent and vital role—those in Northern Ireland—have obliged them to adopt a much reduced public profile in mainland UK. For reasons of security one does not now see military uniforms on the streets, and that is regrettable.
Looking back over my time at the Ministry of Defence, I am conscious that a large proportion of the correspondence that crossed my desk involved in one way or another building bridges with the general public on the activities of the armed services. Undoubtedly, the issue most frequently complained of was low flying. When I arrived at the MoD I did not know what "Minister for Low Flying" meant. My staff told me that I would soon find out—and I did. No one pretends that low flying by fast jets is an environmentally friendly activity. It can be very unpleasant for those who experience it on the ground. But the public must understand how absolutely essential it is for the RAF to fly at low levels and for the air space over the country as a whole to be available to them. The United Kingdom is simply not big enough to allow numerous avoidance areas to be created other than over conurbations. We rely on the RAF to perform to the most exacting standards when it matters. We must allow them the scope, provided they do not utilise it more than is strictly necessary, to keep these skills sharpened.
All this underlines the importance of maintaining such simple initiatives as the forces' three presentation teams and encouraging responsible television documentaries such as the "Defence of the Realm" series broadcast last year. I hope very much that the Royal Tournament will not fall victim to budgetary cheeseparing, because that show is surely one of the best and most enjoyable ways of keeping the skills and professionalism of the three services in the public eye.
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My noble friend who so ably chairs the all-party defence study group does much to promote knowledge of service issues in your Lordships' House and in the other place. But I was not surprised to hear him acknowledge the general ignorance of defence issues that exists in Parliament, particularly among MPs. One of my more pleasant responsibilities as a Minister was for the Armed Forces Parliamentary Scheme. It was an inspired idea on the part of Sir Neil Thorne and a wonderful way of bringing service life alive to Members of Parliament. With the extent of the new intake in the other place at the election, I believe that there is a case for expanding the numbers of scheme participants during the next few years.
But let us not forget two important links that happily do exist between the services and the public: the reserve forces and the cadets. More than is now the case with the regular army, the TA maintains its regional, county-based ties. Today, 130,000 youngsters take part in the cadet movement. Upwards of 55,000 men and women from all walks of life honour a commitment to military training with the TA, some in very valuable specialist disciplines. Many thousands more serve with the RNR, the RMR and the RAF reserves. The Reserve Forces Act 1996 should give those reservists greater opportunity than before to go on active service alongside the regular forces.
A few years ago a great deal of thought was given to what the optimum size of the TA should be to meet today's needs. I believe that the current establishment of 59,000 is about right. Certainly it should not be any lower. If the Government are ever tempted to cut them I trust that they will remember that for the flexibility they give us and the centres of expertise that they embody the reserve forces are a relatively inexpensive insurance policy against the unexpected. I hope that the Minister will feel able to acknowledge their value when he comes to speak, despite the constraints under which he operates as a result of the ongoing review.
To judge the importance of the Armed Forces, look around the world at what they are doing for this country, from the Falklands to Bosnia, from the Caribbean to Iraq, to protect our interests and those of the civilised world. Look at the skill with which they do it. Look at the compliments paid to them by our friends and allies overseas, from the French President downwards. Those who look at these matters are in no doubt that the Armed Forces perform an essential role on behalf of us all—a role in which we as a country can take real pride.
8.28 p.m.
Lord Gilbert: My Lords, I have no difficulty whatever in joining all of your Lordships in thanking the noble Lord, Lord Vivian, for initiating this debate. As a very new recruit to your Lordships' House, if I ever had any doubt about the wisdom of leaving the other place and coming to this House it has been removed by being able to listen to the quality of debate that I have heard today. I say frankly and not with tongue in cheek that this evening I have learnt a very great deal from this wide-ranging debate. It has illuminated many of the questions that the Strategic Defence Review will have to consider.

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I recognise that not all noble Lords welcome the review. I also recognise that there is concern, some of it sceptical and some of it even cynical, that it will be Treasury led and just another excuse for cuts. The assurance I give is that it will be led by Foreign Office Ministers and not Foreign Office officials. The Treasury will of course probably try to get involved in it, but it is up to us, the Defence Ministers, to justify the present resources that the country devotes to its own defence. I hope that we will have little difficulty in doing so.
I thank the noble Lord, Lord Vivian, for recognising that the Labour Government have made a commitment to strong defence. That is unambiguous. If any noble Lords doubt that, I recommend, in particular noble Lords opposite that they go back to their files of the Daily Telegraph and read the article that the then Leader of the Opposition, now Prime Minister, wrote on the subject of defence. I believe that they will be satisfied with the Prime Minister's attitude to the importance of proper defence of this country.
The noble Lord asked also about dependent territories. I can give him the unequivocal assurance that he wanted: of course it will remain our policy to be responsible for the defence of the dependent territories. I am in the habit of teasing my American friends on that subject by pointing out that even though we have just lost 95 per cent. of the population of what I still call the British Empire this week, the sun still does not set upon it if we take into account our islands in the Pacific, the Indian Ocean, the north and south Atlantic and the Caribbean. One's American friends are quite teased by that revelation.
Many noble Lords have raised concerns about undermanning and over-stretch. It is no secret that that is a problem in all three services. I cannot invite noble Lords to be optimistic that those problems will be solved overnight. Recruitment is a problem; premature voluntary retirement is a problem; and retaining recruits is also a problem. In that last respect, noble Lords may be interested in an experiment that is being conducted by the Royal Navy in which, because it was so concerned by the proportion of recruits that it was losing during initial training (up to 25 per cent.), it has introduced an imaginative new scheme whereby it identifies at an early stage of the training process which recruits are likely to be slow learners, and which might need special handling because of their backgrounds. It has separated them into different streams for training, and it is finding the results encouraging. I hope that we may be able to expand such an approach to recruitment in the other services.
I recognise that there is some apprehension about the need for the review. I can assure your Lordships that it is supported by the chiefs of staff. It was at his own insistence, not that of the Secretary of State, that the Chief of Defence Staff sat next to the Secretary of State at the press conference when he announced the review. In case your Lordships are worried about the principles of these matters, I should point out that in the USA— I do not say that they do things better there—they are used to having quadrennial defence reviews, and no one becomes too agitated about them.
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The main thing about the review that I hope everyone in the House and outside will recognise is that we want everyone to be heard. I have written to many noble Lords with a defence interest. If I have overlooked any, I apologise. I extend to all noble Lords an open invitation to write to me about the defence review. Several noble Lords have already done so. I am extremely grateful to them for the contributions that they have already made. They will receive a response in due course.
Many questions have been asked about the regimental system. I cannot give unqualified guarantees that at the end of the review the regimental system will be the same as it is today because if one kept on giving guarantees that this would not be changed, that would not be changed, and something else was sacrosanct, there would he no point in having a review. I assure your Lordships that the Government recognise the value of the regimental system. I took seriously the points made by the noble Lord, Lord Wallace, in his thought-provoking speech, about the type of regimental system. Those will be matters which we shall of course be considering. I hope that the noble Lord will be contributing to the review. I do not know whether he is invited to one of the seminars.
Lord Wallace of Saltaire: My Lords, I am.
Lord Gilbert: My Lords, I am delighted to hear that, and I hope that he will be attending. The noble and gallant Lord, Lord Craig, asked whether Her Majesty's Government were contemplating the end of the RAF. I can give one unambiguous guarantee at this Dispatch Box tonight. Her Majesty's Government are not contemplating the end of the RAF. That does not mean that we may not see over the time horizon—the next 20 to 25 years—a considerable expansion in the use of pilotless vehicles, particularly for reconnaissance activities in the neighbourhood of the battlefield. But, as the noble and gallant Lord so wisely intimated, if we were to remove pilots from almost every cockpit, we would still need an air force and people who understood the flexibility and complexities of air power. That was a point echoed by the noble Lord, Lord Trefgarne.
I follow the noble Lord about the importance of the IT revolution which impinges not just on the air force but on the other services. In the time horizon—the next 20 to 25 years—it will be one of the fundamental changes in the nature of warfare at which we shall have to have a look.
The noble Lord asked about the Fisher and Wright case. The costs of the judicial review have been awarded against the NI Office. Guardsman Wright's legal costs were funded by the public purse through the legal aid system; Guardsman Fisher's costs will be met from public funds because the review awarded costs against the NI Office. I am sure that he will recognise that neither I nor the NI Office has had time to study the judgment. So I cannot answer his question as to when the next steps will be taken in that unhappy affair.
The noble Lord, Lord Lyell, is another who touched upon the gap between establishments and what is necessary, particularly in Northern Ireland and Bosnia,

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and between turns in Northern Ireland and Bosnia. I cannot answer his specific question, but I can tell him that the average operational tour interval in 1996–97 for the Royal Armoured Corps was 25 months. I am afraid that it will suffer, as we projected, for 1997–98 with the operational tour interval coming down to 19 months. On the other hand, for the Royal Artillery, the average is likely to rise from 21 months to 36 months; for the infantry from 21 months to 23 months; and for the Royal Engineers from 12 months to 20 months. The Royal Armoured Corps will be suffering so much because it will be carrying out a higher than usual number of operational tours in the infantry role in Northern Ireland to compensate the Royal Artillery.
I turn now to the noble and gallant Lord, Lord Bramall, whom I thank for his kind remarks at the beginning of his speech. If for nothing else, it is delightful to be in the House so that I can see his face again and to be able to rely on his ever-generous advice. I am delighted also that he gave a generous welcome to the review. I endorse what he said about how easy it is to lose a war-fighting capability and how difficult it is to replace it once it is lost. I can assure the House that that is something which is perfectly understood by all the defence department Ministers at this time. The noble Lord and other speakers drew attention to the fact that the medical services are particularly badly stretched. That is a matter which has our full attention and I hope that we shall be able to do something about it before too long.
The noble Baroness, Lady Park, asked whether the review was another word for cuts. I can assure her that it is not the intention of defence Ministers that it should be so. If we can justify it, we have the assurance that we will be able to spend at least as much as the previous government were committed to spend for the next two years. The noble Baroness was kind enough to confirm what I said about the importance to me personally as the Defence Procurement Minister, of the maintainability of our forces. Unfortunately, it is not quite as simple as just ringing up a supplier and asking for a lot more spare parts; indeed, it is a very complicated matter, especially as much of the old equipment has been run on for much longer than had originally been expected would be its useful service life. Many spare parts are no longer being made, or perhaps more spare parts are needed than was originally anticipated. Sometimes it is necessary to open up a production line at exorbitant cost in order to get spare parts for particular pieces of equipment. Very difficult decisions have to be taken as regards the balance of resources.
However, I can assure the noble Baroness that this is a matter of prime importance in the area for which I am responsible. I also endorse what the noble Baroness and other speakers said about Russia being far from a spent force, at least so far as concerns certain of its special capabilities. I have in mind in particular the ballistic missile threat and the submarine forces threat.
I was grateful to the noble Viscount, Lord Allenby, who made some useful suggestions about satellite recruiting offices in remote areas. I shall certainly bring those suggestions to the attention of my honourable friend the Minister for the Armed Forces. I hope that the noble
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Viscount was reassured by what I said earlier about the way in which the Royal Navy is trying to tackle the problems of wastage in recruitment.
I entirely agree with what the noble Lord, Lord Mottistone, said about the need to deter aggressors. The noble Lord cited the case of the Falklands, but I should remind him that it is not just a question of whether or not you have the resources available; the importance of having accurate intelligence is vital in such matters. Indeed, although I am not criticising anyone, from time to time we have not always had the accurate intelligence that we might have had which could have told us what was going to happen with Saddam Hussein and with General Galtieri. That might have saved much anguish for us and for the people with whom we finally found ourselves in conflict. I quite agree with the noble Lord that ships, tanks and aircraft cannot be produced quickly.
The noble Earl, Lord Effingham, referred to the Ocean Wave deployment. He may like to know that we had a carrier task group exercise with nuclear powered submarines and amphibious forces—indeed, the whole operation was initiated under our predecessors—which lasted some seven months. Altogether some 20 Royal Navy warships, submarines and support vessels were involved and we demonstrated all three of the Royal Navy's core capabilities. It was a busy programme of goodwill visits from the Mediterranean to New Zealand. Not only did we produce an extremely impressive display, but also I believe it is fair to say that we surprised some of our allies at the capability for force projection that we still retain in this country. We also comforted our friends and the whole deployment was extremely helpful with our defence sales efforts.
I can assure the noble Lord, Lord Astor, that we have no intention of going to a gendarmerie army in which there would be no tanks at all—although perhaps I should not say that and should say that that would not apply unless the defence review produces a result which I do not anticipate. On the question of tanks, I am drawn back to what the noble Lord, Lord Wallace of Saltaire, said. I quite understand the thrust of his remarks that the United States produces one tank while Europe produces three different tanks. When I was last at the Ministry of Defence, one of the things which irritated me more than anything else was the number of different people who were producing torpedoes in NATO and we were all buying them in only penny packets. However, when I returned to the Ministry of Defence, I have to say that the same story applies today. I believe that our torpedoes are much better now than possibly they were when I was last at the Ministry.
The noble Lord, Lord Wedgwood, asked for confirmation that signed contracts would be honoured. I can assure him that that will be the case. Indeed, there is no question of our repudiating signed contracts in the procurement field; nor is it intended that there should be any moratorium on procurement. However, where we are at the early stages of major projects, they will receive more detailed scrutiny under the defence review than some which are further down the procurement path.
I must be careful now because I am running out of time. Clearly, I shall not be able to reply to all the points raised by noble Lords. I hope that I shall enjoy the indulgence of

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the House if I say to noble Lords that I shall write to them about matters to which I have not been able to reply. However, I do not want to sit down this evening before confirming to my noble friend Lord Judd, and other speakers, that Her Majesty's Government will not tolerate racial prejudice and harassment in the Armed Forces. The Chiefs of Staff have our full support in such matters. Equally, we are most concerned to try to do more to integrate the Armed Forces into the community. Unfortunately I have to tell your Lordships, that, as I am briefed, the forces have not had the full support that they had hoped to receive from some of the agencies which are active in community relations in trying to explain to some of the minority groups in our society that a career in Her Majesty's Forces is a noble and worthwhile one. We hope that we can persuade them to take a more constructive view to help us along those lines.
In a few days' time, among the many hideous anniversaries that we have to go through from time to time, it will be the 80th anniversary of Passchendaele. I am sure that your Lordships will agree that the whole purpose of our having strong defence forces in this country is so that the younger generations, and those to come, will never again have to endure that sort of slaughter.
We are undertaking this review because we want to take defence out of the political firing line. I actually take comfort from the fact that defence was not a great issue in the last general election campaign, not merely because during the years when it was my party suffered very considerably due to its defence posture, with which I was never very comfortable, but because I believe that it is most important that the national consensus which I sense exists in the British public should also be extended to our national political life. That is one of the reasons why, in holding that review, we are inviting as many people as possible to contribute to it. We think that that will be the most effective way to provide our Armed Forces with the vision and direction which they must have if they are to remain successful into the next century. I wish to repeat my thanks to the noble Lord, Lord Vivian, for this debate.
8.50 p.m.
Lord Vivian: My Lords, I shall not weary your Lordships by detaining you in the Chamber any longer except to say that it has been an excellent and interesting debate. I am grateful to noble Lords who have spared time to speak in the debate today and I am glad that the Minister has found it helpful to hear our views. I thank him very much for what he has said to us this evening.
With your Lordships' permission, I add my own tribute to a magnificent and well-trained Armed Forces. They serve us daily and frequently face danger with the utmost courage. They set a shining example to us all and are more than worthy of the respect of us all. We owe each and every one of them a vast debt of gratitude and the country is justly proud to have such professional and highly skilled Armed Forces.
My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Acts of Parliament in Force
8.51 p.m.
Lord Nathanrose to ask Her Majesty's Government whether they intend during the current Session to repeal or bring into force any and, if so, which of the provisions of the 69 Acts enacted up to 1992 specified in Bringing Acts of Parliament Into Force (Cm 3595); what is their policy on bringing into force Acts enacted since 1992; and whether they intend in future legislation to limit the time within which it will be brought into force.
The noble Lord said: My Lords, this afternoon we have had two wide-ranging debates on matters of great interest and importance and it may seem that the subject of the Question which I am asking is of a somewhat technical character and of no particular importance. But I shall seek to show that that is not so and that in the context of our parliamentary system of government, issues of considerable importance arise.
At last, and for the first time, there is available to us a list of the provisions of those Acts which have neither been repealed nor brought into force. That list is limited to the period 1979 to 1992; that is a period of between five and 18 years ago. Therefore, we remain ignorant of the position in relation to Acts passed in the past five years.
Years ago we were informed that a database was in preparation which would enable easy access to that information and there was some thought that that would be available in the spring of this year. I gather now that that will not be available for use by the public or by Parliament until 1999. I hope that the Minister will be able to inform your Lordships of the current position and prospects.
In the 12½ years from May 1979 to December 1992 (the period covered by the Command Paper) 810 Bills received Royal Assent. The paper lists 69 Acts out of the 810 which had not come into force in all their sections by March 1997. That constitutes 8.5 per cent. of the total number of Acts passed during the period. It is not a negligible percentage. It relates to the position five years after the latest date in the paper. Therefore, it should not be thought that that represents at any time the percentage of Acts which contain commencement provisions unlimited in time and which have not been exercised. It seems likely that a list produced now similar to that in the paper in respect of the period 1992 to 1997 would contain entries representing a higher percentage.
The Command Paper No. 3595 stems from a recommendation of your Lordships' Select Committee on Procedure of the House (set out in Hansard of 27th March 1996 at col. 1706) that the Government should lay before the House an annual report listing all the Acts and provisions within Acts which have been neither repealed nor brought into force, giving reasons for the delay in each case.
The problem arises because with increasing frequency Acts provide that a commencement order is required to bring a provision into force without limit of time in which it shall be exercised. Indeed, there is no

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obligation to exercise it at all. Those powers introduce an option for government to implement legislation which Parliament has enacted or to render that legislation of no effect. Commencement powers usually appear last in a Bill. When earlier clauses are under discussion, reference is rarely made to their application. It should be. Parliament enacts provisions in the belief that it has made effective laws but it is only an act of government that (in such cases) makes them so, if they choose.
The Select Committee on Delegated Powers was concerned that a mechanism be found to ensure that Acts passed by Parliament are brought into operation. There is reference to that at paragraph 38 of the 12th report. The list of Acts annexed to the paper represents wasted parliamentary time.
It has been said that government are answerable to Parliament for any failure in their responsibilities as respects the exercise or non-exercise of such powers. But Parliament does not in fact exercise control and might indeed have difficulty in doing so even if it had the knowledge that part or all of an Act was not in force. That is referred to at paragraph 11 of the 12th Report of the Delegated Powers Select Committee. In effect, Parliament abdicates its responsibility for ensuring implementation of legislation.
The paper lists a number of reasons for incorporating commencement powers but there are, I submit, scarcely any instances justifying indefinite duration. None of those cited do so.
If, exceptionally, it were desired to omit a limit of time for exercise, Parliament should only accept that if it is satisfied that that is necessary for the most cogent reasons. Indeed there would be much advantage in the House being advised by the Select Committee on Delegated Powers in all such cases.
The paper refers to delays in implementation being required by supervening developments such as international conventions and unforeseen problems in implementation such as adverse changes in economic conditions. But that is a risk applicable to all legislation.
In some cases the paper explains that certain provisions remain available to be brought into force but kept in reserve. There may be cases where it is desirable for government to have reserve powers; for example, where long and difficult negotiations are in view (as in Northern Ireland). But those are exceptional cases and should be explained as such and kept under review, perhaps annually.
I turn briefly to the command paper itself—which does not inspire confidence. It refers in the preamble to "Bills" listed in the annex, which are in fact Acts, and refers to Acts "approved" by Parliament. They are not "approved"; they are enacted. No doubt this was an unfortunate slip (though the word appears not once but twice) and indicates a measure of arrogance on the part of the author.
A brief review of the annexed list indicates certain categories. There are the cases where provisions have not been brought into force but,
"there are no plans to do so at the present time although the need to do so is kept under review".
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Your Lordships will see that in a note on the Building Act 1984. That Act was passed 13 years ago. For how much longer will the possibility of implementing it remain? Is the public, is Parliament, aware that these provisions may suddenly spring into life having lain dormant all these years?
There are instances where it appears that later legislation supersedes or conflicts with provisions of earlier Acts which have not been brought into force. It seems that the opportunity to repeal the provisions in the earlier Act by the later was either overlooked or ignored. There is constant reference to the possibility of repeal but the lack of opportunity to do so. Some system of repeal could surely be devised which would enable this clutter of useless law to be removed from the statute book.
There are cases where it appears that legislation has been enacted when it was known (or ought to have been known) that it was not needed or was impossible to implement. The Charities Act 1992, Part III, is a case in point. In July 1994 a deregulation report was published which under the heading of Part III refers to "The Problem". It states,
"There is concern that the practical consequences of some aspects of the new legislation were insufficiently thought through",
and recommended further consultation. That was done. The response was published in January 1996 and proposed forming in September 1996 a working group for further consultations with a view to bringing Part III fully into force in June 1998. The working group has not yet been formed. I do not cast blame on the civil servants or others for the slippage in the time which I gather has been due to other severe pressures, but it is alarming to say the least. I speak of this at some length because it demonstrates the need for pre-legislative consultation and thorough consideration of legislation in draft before initiation of the formal legislative processes.
The relevance of this to the present discussion is that a means must be found to eliminate in all but the most exceptional instances the need for commencement powers exercisable without limit of time, for these sap confidence of the public in the parliamentary process and replace it in the public mind with control by the governing party. That indeed was in the mind of Mrs. Ann Taylor when she gave her address on reform of parliament on 14th May 1996 before becoming Lord President of the Council.
It is in this context that the establishment of a Select Committee in another place is highly relevant. Increased time spent in preparation of legislation would not only help to avoid bad legislation (of which there has been far too much) but enable the totality of the legislative package to be considered together. Indeed I hope it may consider abandonment of commencement powers of the type I have described except in the most exceptional circumstances.
I hope the Minister may be able to tell us about the thinking of Government on the various questions which arise. First, can he tell us the position about the database of legislation in force—when it will be running and available to Parliament, the public and indeed practitioners? Do the Government intend during the

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current Session to repeal or bring into force any, and if so which, of the provisions of the 69 Acts enacted up to 1992 specified in the Command Paper?
Do the Government intend to present to Parliament a similar command paper in respect of a period later than 1992, and if so what period and when? What is the Government's policy as regards future legislation as to incorporation of commencement powers and the limit of time within which they may be exercised?
9.3 p.m.
Lord McIntosh of Haringey: My Lords, I do not think I should address the House by saying "My Lords". I address the noble Lord, Lord Nathan, the noble Baroness, Lady Gould, and the Deputy Speaker, the noble Lord, Lord Lyell. Those noble Lords deserve to be addressed individually rather than collectively. I am not sure that in my 14 years in this House I have ever experienced a situation where the Opposition Benches have been completely empty. Since the 18th century there has been official recognition of Her Majesty's loyal Opposition and I am not sure it is entirely proper that they should not take part in debates, particularly debates as important as this one which has been introduced by the noble Lord, Lord Nathan.
All three of us must be grateful to the noble Lord, Lord Nathan, for the work that he has done in this area. We must also be grateful for the work of the Select Committee on Procedure, and indeed for the work of the Delegated Powers Scrutiny Committee which preceded that. It will be evident that there was a good reason for the Delegated Powers Scrutiny Committee to attack this problem when it did. The Criminal Justice Act 1988 included provision for the establishment of a criminal injuries compensation scheme which would have run in parallel to that of the law in other areas of personal injury compensation. That part of the Act was never brought into force and was never repealed. Subsequently the then Home Secretary tried to introduce a criminal injuries compensation scheme which departed radically from the provisions of the Criminal Injuries Compensation Act without seeking legislative authority for it; in other words, that was done by Order in Council. He was struck down by the courts and as a result he was forced to introduce primary legislation in the Criminal Injuries Compensation Bill which consisted of a compromise between the provisions of the 1988 Act and his original scheme. That finally received parliamentary approval but it clearly caused justifiable concern to a large number of Members of Parliament in both Houses.
No one can disagree that it is undesirable that there should be legislation on the statute book which is not implemented. That must be the starting point for our consideration of this issue. However, there are exceptions to every rule. For example, the noble Lord, Lord Nathan, has referred to the desirability of bringing legislation into force after a certain period of time. However, there are examples in the other direction. The Football Spectators Act 1989 would have required all football spectators to carry membership cards. The Hillsborough tragedy, which is now being investigated again at the instigation of the Home Secretary, led to the report from the subsequent Lord Chief Justice, Lord
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Taylor of Gosforth, whose wise report made it clear that an identity card scheme was not appropriate. It would have been a great pity if that had been implemented before the report had been produced.
A much more ancient example concerns the Easter Act 1928 which provides for Easter to be on the first Sunday after the second Saturday in April. That would have been between 9th and 15th April this year. But Section 2 of the 1928 Act states that regard should be had to any opinion officially expressed by any Church or other Christian body before an order is made. The Council of Churches in Britain and Ireland has said that it would not wish to move to a fixed date without worldwide agreement. Noble Lords who are members of Christian Churches will know that there is disagreement among them about when Easter should be. There has been no worldwide agreement; and as a result the Easter Act 1928 has never been implemented. I am not sure whether the noble Lord, Lord Nathan, suggests that it should now be repealed, but I understand that the Churches would not be pleased if that initiative were taken.
However, these are extreme examples. There are perfectly good although mundane reasons on most occasions why an Act, or part of it, should not be implemented on a fixed date. Sometimes there is a need for public consultation. Sometimes there is a need for administrative machinery. Sometimes international developments such as the ratification of conventions are necessary before an Act can be implemented. Sometimes Acts require expenditure of money which simply is not available and that may delay implementation.
We have to accept that we should not take too purist a line. We should accept that unforeseen problems could arise. Sometimes Parliament, even in passing legislation, recognises that specific provisions may never be brought into force. The Representation of the People Act 1985 contains a commencement order for Schedule 1 which states that it can be implemented only if the Secretary of State is satisfied that it is necessary to do so in order to prevent serious abuse of the system of voting by post in Northern Ireland. I cannot say that the commencement order will never be required, but I think that we should all hope it will not be required. All that leads me to say, contrary to the arguments of the noble Lord, Lord Nathan, that it would not be desirable to insist on fixed dates for implementation.
I do not believe that the problem is as serious as the noble Lord suggests. If we consider the command paper to which the noble Lord referred, we find that the record is not that bad. In most cases Acts contain only one or two unimplemented sections. Reading through them, I thought that most of them could be perfectly reasonably justified. That is not to say that nothing should be done.
Perhaps I may respond to the noble Lord's specific points. He asked me about the statute law database. He is right to say that it was originally intended that it should be available to Parliament and the public by 1997. I am sorry to have to confirm that it will not now be available until 1999. That is the nature of information technology projects, I am afraid. This is not the only one to suffer delay in that way.

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The noble Lord asked me whether, if the legislation were delayed, there should be a similar command paper on unimplemented legislation. I am certainly prepared to give him the undertaking that if it were delayed beyond 1999, there would be a second command paper during the course of that year covering Acts not only up until 1992 but 31st December 1994. In other words, we would not only update but improve the coverage of the command paper. We could go beyond that, but after a while the database and the record of unimplemented legislation would become swamped by what I believe the noble Lord would recognise as trivial examples of those which should never be implemented closer than a year or two after enactment.
The noble Lord asked me about the repeal of the 69 Acts in the command paper. I can give him the assurance that instructions will go out to departments which are producing major and wide-ranging legislation in the course of this Session: that they should have regard to two points. First, where there is an opportunity to repeal unimplemented legislation they should take it; and, secondly, that they should take good care that in commencement procedures in the Bill before Parliament they should ensure that no measures are included which would give rise to the concerns expressed by the noble Lord. I am hopeful that we will not bring before Parliament legislation of that kind. However, it is up to Parliament in the end to protest when commencement orders are vague. I am sure that what is now called the Delegated Powers and Deregulation Committee will take good care to cover that point.
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I think I have answered the point that the noble Lord raised about a similar command paper in the future by saying that we will do so if the slippage on the statute law database is any greater than it has been. I think I have also answered the point about our policy on future legislation.
It is Parliament's responsibility as well as that of the Government to see to it that our scrutiny covers those points. The President of the Council, Ann Taylor, in another place, has asked the Modernisation Committee there to consider whether Special Standing Committees could be used more effectively where they would have an effect in ensuring better scrutiny of legislation. Your Lordships have the provision for a Special Standing Committee procedure in this House. We have hardly ever used it. I hope that we shall use it more and that that will improve the quality of legislation. I hope it will reduce the number of cases when unimplemented legislation will arise.
To sum up, our strategy is twofold. We have to tidy up the existing law, and we have to ensure that new legislation is better informed than it has been in the past. I hope that the noble Lord will feel that it is the intention of this new Government to treat the matter seriously. Although we cannot accept his particular recommendation for a time limit, we are prepared, and keen, to attempt to secure that the volume of unimplemented legislation is reduced and continues to reduce.
House adjourned at sixteen minutes past nine o'clock.

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