Sitting of 13 March 1997

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  TREASURY

    Airport Taxes
    Rev. Martin Smyth: To ask the Chancellor of the Exchequer how many EU countries levy (a) higher and (b) lower airport taxes than the United Kingdom. [18519]
    The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): The total tax a passenger pays can include embarkation taxes, passenger service charges and security charges, as well as VAT-type taxes.
    On the basis of a £120 ticket for a domestic flight, the charge in Germany will be £27.61 in comparison with the £10 payable in the UK after November this year. Greece, Austria, France, Spain, Belgium, Sweden, Portugal and the Netherlands also have higher charges; France, Luxembourg, Denmark and Ireland have lower charges.
    Rev. Martin Smyth: Is not the Minister forgetting that airports in Germany and elsewhere are Government owned, so their taxes are hidden? A fair comparison shows that United Kingdom airports are charging two to three times more. In addition, does not the fuel form show the number of children? Could not that be reconciled with the number of children taxed rather than taking £5 million to £6 million in a tax on children?
    Mr. Oppenheim: I did point out that the tax in Germany is higher. Landing charges in the UK tend to be much lower than those on the continent, partly because we have privatised our airports which are therefore now more efficient. The hon. Gentleman's point concerning children is valid, and it is often made. Children under two who are carried by their parents are not charged, but anyone occupying a seat is charged. A cut-off point for children aged 10 or 12 would be almost impossible to administer because airline staff and ticket sellers would have to check children's age. However, I sympathise with the hon. Gentleman's general point.

    Privatisation Proceeds
    Mr. Jessel: To ask the Chancellor of the Exchequer what estimate he has made of the contribution of forecast privatisation proceeds in 1998–99 to the expenditure plans set out in his "Financial Statement and Budget Report". [18520]
    The Chief Secretary to the Treasury (Mr. William Waldegrave): The Red Book assumed privatisation
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    proceeds of £1½ billion in 1998–99, reflecting the Government's continuing commitment to privatisation. Privatisation reduces borrowing and secures long-term benefits for UK taxpayers and consumers.
    Mr. Jessel: I believe that £l½ billion works out at about £80 a head for every man, woman and child in the UK. If the Labour party were to attempt to stop privatisation, would not it have to increase the rate of VAT by about 1 per cent. or income tax by about 1p in the pound, or a bit of each, to raise the same amount of money?
    Mr. Waldegrave: My hon. Friend is right; the absence of the predicted income from privatisation proceeds seems to have been missed by the right hon. Member for Dunfermline, East (Mr. Brown), who says that he will stick to our plans. Unless the right hon. Gentleman has done yet another U-turn on the matter, the Opposition are £1½ billion short on this, which contributes to the £12 billion gap that they have during the first two years, which is part of their £30 billion spending gap in general.
    Mr. Stevenson: Is the Minister aware that, according to figures produced by the House of Commons Library, since the Government embarked on their privatisation policy, privatisation receipts show a shortfall of £5.7 billion compared with the share market price the day after privatisation? Does not that show remarkable Government incompetence, and that the Government are prepared to pay any price in their dogmatic pursuit of privatisation?
    Mr. Waldegrave: No, it does not show any such thing. If we cast our minds back, on each of those occasions the Labour party either said that such businesses could not be privatised or would not be sold—or it tried to talk the market down. The hon. Gentleman helpfully makes another point, which is that the Labour party's proposed so-called windfall tax is based on the idea that there was a windfall—some 15 years ago in many cases. How one taxes the present shareholders to catch up with an alleged windfall 10 years ago is rather odd.
    Mr. Congdon: Given the success of the privatised industries in reducing prices while paying more than £2.5 billion a year into the Treasury, does my right hon. Friend think that it is somewhat perverse to reward that success by imposing a windfall tax? What incentive is there for such companies to be profitable when their success would be rewarded by the Labour party plundering their profits?
    Mr. Waldegrave: The Labour party justified that policy on the basis that it thought that some of the executives in those firms were too highly paid, but the proposal makes no difference to executive pay. It is a random tax on a selection of successful businesses, such as British Telecom, which has delivered a 40 per cent. cut in real terms in its prices to the consumer. It shows Labour's real underlying approach to industry: if it is successful, Labour does not like it.
    Mr. Milburn: Do the Government intend to privatise the Post Office?
    Mr. Waldegrave: The figures in the Red Book do not include any potential receipts from the Post Office.

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    They include the privatisation of National Air Traffic Services, which has been announced, and there are plenty of other candidates in line that will continue to make the privatisation receipts flow. This is a major gap in Labour's plans to which it has not yet found any answer.
    Mr. John Marshall: Will my right hon. Friend confirm to the House whether the figures include receipts from the proposed privatisation of London Underground? Will he confirm also that, unique among privatisations, the receipts from that privatisation will be used to increase investment in London Underground?
    Mr. Waldegrave: My hon. Friend is quite right: the Red Book does not include any assumptions about London Underground.

    Taxation
    Mr. Olner: To ask the Chancellor of the Exchequer by how much the amount of tax paid by a typical family has changed since 1992. [18521]
    The Chancellor of the Exchequer (Mr. Kenneth Clarke): A family on average earnings should be around £370 better off next financial year, 1997–98, after tax, inflation and earnings growth, relative to the current financial year, 1996–97. This takes the total rise in real take-home pay for the typical family to more than £1,100 since 1991–92.
    Mr. Olner: Will the Chancellor take this last opportunity before the general election to come to the Dispatch Box and apologise to my constituents in Nuneaton for the 22 Tory tax rises that they have suffered, which have put them £2,000 out of pocket since this Government came to office? Will he join Labour in not pursuing increases in VAT on food, children's clothing, books and newspapers?
    Mr. Clarke: Untypically, the hon. Gentleman does not appear to have paid any great attention to my answer. The average family in Nuneaton is £1,100 a year better off compared with the year before the last election, after taking account of changes in incomes, tax and inflation. If the Labour party had been elected—it had pledged to increase taxes and has since opposed everything that we have done to get the recovery going—families would have been poorer.
    People face the prospect of being asked to elect a Labour Government, but the Labour party cannot explain how it would raise £12 billion in the first two years. Labour would make people poorer if they turned to it. The hon. Gentleman's constituents are better off under the Conservative Government and, to quote another occasion, he should rejoice in that fact rather than try to find ways of getting around it.
    Sir Sydney Chapman: Does my right hon. and learned Friend accept that, as the typical family is earning much more today than in 1979—it has an extra £1,000 a year in its pockets—people are quite happy to pay a few more pounds to protect our vital public services? Will he also accept their thanks for the 25 tax cuts that he has made in his last two Budgets?
    Mr. Clarke: When people are able to earn more in cash terms in a successful economy, they tend to pay more
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    in tax. We have made tax rises, tax reductions and made the economy thrive. As a result, the typical family is much better off. I am sure that that is what matters to any sensible, intelligent constituent of my hon. Friend or mine.
    Mr. Malcolm Bruce: Does the Chancellor acknowledge that living standards have risen in spite of the Government's tax increases, not because of them? Will he acknowledge that the cut in the basic rate of income tax and overall cuts in income tax have been financed by the receipts of privatisation and North sea oil and the extension of the tax base in other areas? Is that why he told The Grocer magazine that the next challenge was to ensure that VAT on fuel was put back up to 17.5 per cent.?
    Mr. Clarke: That is absolute nonsense; the economy would not have recovered if we had not tackled borrowing. That is why I had some tax increases in my first two Budgets, and thereby controlled public spending. By controlling public spending thereafter, we reduced borrowing. As my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) said, we have had 25 tax cuts as well. The lady from The Grocer who spoke to me was surrounded by other journalists, who failed to hear any reference that she says I made to tax on fuel, and what she says I said does not represent my views.
    We have had tax-cutting Budgets for the past two years because we have done what was necessary to get borrowing on course and, therefore, the economy on course. The average family is therefore becoming better off and will continue to do so for so long as we stick to my Budget plans.
    Mr. Spring: Will my right hon. and learned Friend confirm that we shall soon be having the lowest basic rate of tax for 60 years? Will he confirm also that it is his intention to move towards a 20p basic rate of tax, thus further boosting the living standards of the average British family?
    Mr. Clarke: My hon. Friend is right. In April, the income tax rate will come down to the lowest since Stanley Baldwin was Prime Minister before the war. That gives credibility to our pledge to reduce the standard rate of income tax to 20p in the pound when, and only when, it is safe to do so, and consistent with keeping the economy on the strong growth pattern that it is maintaining at the moment.
    Ms Primarolo: Will the Chancellor of the Exchequer take this opportunity to explain to the House exactly what he meant when he said to the reporter from The Grocer that
    "the challenge now is to get"
    VAT on fuel
    "up to 17.5 per cent."
    Will the right hon. and learned Gentleman deny that it is the Government's intention, if re-elected, to do that?
    Mr. Clarke: I was surrounded by other journalists and others, none of whom recalls my making that remark, which does not in any event represent my views. If we stick to my published Budget plans, in due course we shall maintain our tax-cutting agenda. If a Labour Government

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    are elected, they will have to raise £12 billion in the first two years, because a Labour Government would not follow the policies to which we are committed to deliver our Red Book projections. They would have to raise taxes and increase borrowing. It is the Labour party that has to explain its tax intentions when its figures do not add up, as it has presented them so far.
    Mr. Garnier: Is it not the case—indeed, is it not certain—that whereas dogs bark and lambs bleat, Labour Governments increase taxes? Is that not the only way in which the Labour party will be able to fill the enormous black hole that it has in its public spending plans?
    Mr. Clarke: Just so. The Labour party is already committed to raising the windfall tax, which will increase the total burden of taxation on the people of this country and raise their fuel bills. It is on top of that that the Labour party is £12 billion short in the first two years and £30 billion short over five years. My hon. and learned Friend is right: on all past and present form the Labour party will turn to taxation to raise that money and thereby make the public worse off.

    Income Tax Rates
    Mr. Simon Hughes: To ask the Chancellor of the Exchequer what recent representations he has received in respect of (a) the basic and (b) the higher income tax rates; and if he will make a statement. [18522]
    The Financial Secretary to the Treasury (Mr. Michael Jack): I receive a steady flow of representations regarding all aspects of the tax system.
    Mr. Hughes: I want the Minister to be really honest to the House. I want him to tell us whether he receives mailbags full of letters stating, "Please put income tax down and please do not put higher rates of tax up for high earners," or whether the strong balance of view is that people want better services—better education, better health, better housing and better transport—and are willing to pay a bit more income tax, and with higher earnings a bit more higher-rate tax, to fund better public services. Is not the second approach the truth?
    Mr. Jack: That question comes from the member of a party whose 1996 alternative Budget pledged it to raise public spending, by its calculations, by £4 billion. I receive representations that tell me, "Isn't it good that we can see that the basic rate of tax falls to the lowest level for 60 years while at the same time, year on year, there is a real increase in spending on the health service along with more money spent on education and public services in general, but within a Budget where controls are tight, and we have the fastest growing economy in western Europe?" That is the package that people like to write to me about.
    Mr. John Townend: Does my right hon. Friend agree that any Government could increase the overall burden of direct taxation without putting up tax rates, merely by abolishing mortgage tax relief, reducing tax relief on pensions, reducing allowances or lifting the ceiling on national insurance contributions? Does he further agree
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    that any Government who propose to spend £12 billion extra would have to put up taxes, otherwise borrowing would go through the roof?
    Mr. Jack: My hon. Friend has clearly been looking at various posters around the country. He is entirely right to give that health warning, because the official Opposition seem to be committing themselves to two of our rates of tax. Therefore, as my hon. Friend inferred, it is clear that everything else is up for grabs. His warning should be heeded by every elector.
    Mr. Darling: The House will recall that the Conservatives put up national insurance after the last election, even though they promised not to do so.
    Will the Financial Secretary clarify what the Chancellor said and, in particular, give an undertaking that the Conservatives would not seek to increase the rate of VAT on fuel during the next Parliament?
    Mr. Jack: The hon. Gentleman was not listening to my right hon. and learned Friend, who made his views entirely clear on every aspect of tax policy, and, indeed, on his policy on VAT. I have nothing to add.
    Mr. Duncan Smith: Is my right hon. Friend aware that Labour-controlled Waltham Forest council raised its council tax two days ago and that, over a three-year period, that tax has been increased by 41 per cent.? I have a mailbag full of letters from people telling me that they are sick and tired of paying increased charges. The Liberal Democrats on the council voted with the Labour party to increase that tax and now have an outraged public chasing them.
    Mr. Jack: My hon. Friend has illustrated the underlying desire of anybody in the Labour party who is in power to spend more of other people's money and to tax more. He is entirely right.

    Economic Growth
    Mr. Hall: To ask the Chancellor of the Exchequer what representations have been made to him on the rate of economic growth. [18524]
    Mr. Kenneth Clarke: I receive many representations on economic growth. Since 1992, the United Kingdom has had the strongest and longest recovery of any major European Union nation, and can expect continued, healthy growth. The Organisation for Economic Co-operation and Development expects the United Kingdom to grow faster this year than the United States, Japan and all the major European economies.
    Mr. Hall: Under the Tories, Britain has suffered two of the worst economic recessions since the war, and slower growth than any other major industrialised country in the world. Can the Chancellor tell us why we have fallen from 13th to 18th place in the world prosperity league and why we have been relegated to the European second division?
    Mr. Clarke: With respect, I think that the hon. Gentleman was not paying close attention to the reply that I gave to his main question. I could go back to the rather

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    serious recessions that took place in industrially bankrupt Britain when the Labour party was last in power. At the moment, we are enjoying the strongest growth of any major country in western Europe. We are expected to outperform other members of the G7. It is not only me who says so. It is not only the OECD that says so. The International Monetary Fund expects us to outgrow the other major European economies next year, and we are on course to be one of the most successful industrial economies in western Europe. That is the prospect. It is the result of very tough and effective decisions that we have taken over the past few years.
    Mr. Yeo: Does my right hon. and learned Friend agree that one of the reasons for our outstanding economic performance in the past few years is the enormous competitive advantage that we have enjoyed because we have escaped the onerous obligations of the social chapter? Does he further agree that if a Government ever came to power who accepted those obligations, the consequences would be the destruction of a huge number of jobs in this country and the erosion of our competitive advantage?
    Mr. Clarke: I agree with my hon. Friend. I think that the vast majority of Finance Ministers of the other European countries realise that they have now to go through the difficult structural changes in their economies and the changes in their labour markets that this country has undergone during the period of Conservative rule. We will continue to outperform them until they do—unless, of course, we have a Labour Government who plunge us back into the old-fashioned type of social democratic economy from which the rest of Europe has desperately to try to escape over the next few years.

    Finance Bill
    Mr. Salmond: To ask the Chancellor of the Exchequer what recent discussions he has had with industry representatives about clause 37 of the Finance Bill; and if he will make a statement. [18525]
    The Economic Secretary to the Treasury (Mrs. Angela Knight): My hon. Friend the Exchequer Secretary met industry representatives on 22 January. The amendments to clause 37 passed on Report now address the concerns expressed by the property industry.
    Mr. Salmond: Why did the Government back down on clause 37? Were they concerned about the legal position if they pursued the matter as they originally intended? If so, is the Minister worried about payment and prepayment traders in other related aspects of the Finance Bill? Is there not a ticking time bomb of legal action in the Finance Bill because of discriminatory treatment as between similar traders in different industries? Is the Minister worried about that, or does she think she and her colleagues will not be at the Dispatch Box, so it will be someone else's problem?
    Mrs. Knight: The hon. Gentleman is incorrect. The amendments to the clause targeted avoidance more tightly, and we are convinced that that will work. We shall keep a close eye on the matter. The important point is
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    to ensure that correct transactions can go ahead, but that avoidance is stopped. I should have thought that the hon. Gentleman would support those measures.
    Mr. Brooke: Will my hon. Friend pass on to the Exchequer Secretary and to Customs and Excise the thanks of my constituents for the hard and constructive work that went into resolving the original problems posed by clause 37? Will she, at the same time, congratulate our hon. Friend on having become this very day the owner of Westminster's top dog?
    Mrs. Knight: I assure my right hon. Friend that my hon. Friend the Exchequer Secretary has heard his thanks. It is clear that, when my right hon. Friend and my hon. Friend get together, they can resolve matters in an honourable and friendly way. I understand that my right hon. Friend came second in the top dog awards. In fact, the first three top dogs were Tory top dogs. That is a good omen.

    Interest Rates
    Mr. Hoyle: To ask the Chancellor of the Exchequer when he next plans to meet the Governor of the Bank of England to discuss interest rates. [18526]
    Mr. Kenneth Clarke: Thursday 10 April, and frequently thereafter.
    Mr. Hoyle: Will the Chancellor explain why he is keeping interest rates at an artificial level, if not for political and electoral reasons?
    Mr. Clarke: That is the first opinion that I have heard expressed on interest rates from any Opposition Member, so it is a start. With the greatest respect to the hon. Gentleman, I will not take his advice on monetary policy. We have achieved an inflation rate of below 4 per cent. for more than four years, which is the best performance this country has seen for almost 50 years. The OECD survey said
    "Inflation performance over the past 4 years has been remarkably good."
    I am determined that it will remain as good for the next four years, once we get this Government back in office.
    Mr. Legg: Will my right hon. and learned Friend explain what the impact on the public sector borrowing requirement would be if local authorities were allowed to spend all their capital receipts? What implications would that policy have for the overall level of interest rates?
    Mr. Clarke: The best estimate that I can give is about £2½ billion per year. It is clear that the Opposition are committed to such a policy, but they will not say how they would finance it. If they return to borrowing, which must be one of the methods that they are contemplating to fill the obvious gaps in their public spending plans, that will put upward pressure on interest rates, as my hon. Friend said. That is an irresponsible approach to an area of policy in which the Government are achieving remarkable success.
    Mr. Sheerman: The Chancellor cannot get away with this snapshot of the past two years. People want to know

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    why the Government have not, in the past 18 years, kept long-term interest rates low. We have had the highest long-term interest rates in Europe, which has meant low investment and poor prospects for working people throughout this land.
    Mr. Clarke: With the greatest respect, the latest authoritative figures for European Union inflation show that we are below the average. Our record has been sustained throughout the recovery. I was the first Chancellor to publish this year the International Monetary Fund's article 4 annual report, which says:
    "The inflation targeting framework for monetary policy has delivered impressive results."
    High inflation used to be an endemic weakness of the British economy, and tended to destroy our recoveries. The Government have tackled that problem successfully, which is why this recovery is so healthy.

    Private Finance Initiative
    Mr. Elletson: To ask the Chancellor of the Exchequer what has been the impact on the public finances of financing capital projects under the private finance initiative rather than entirely from public funds. [18527]
    Mr. Waldegrave: The PFI is delivering better value to the taxpayer, better services to the public sector and new business opportunities for the private sector. The PFI entails real transfer of risk and responsibility to the private sector, and on that basis has been shown to improve value for money. That is why it was endorsed by the IMF as a
    "welcome innovation that has the potential to increase the efficiency with which services are provided to the public".
    Mr. Elletson: Is my right hon. Friend aware that the private finance initiative is making a huge contribution to projects in the national health service? Does he agree that ending its use in the NHS would add substantially to public expenditure, and would that not be precisely the effect of the Labour party's policies?
    Mr. Waldegrave: Yes. There is fundamental confusion about that in the Labour party. Its document "Renewing the NHS" states:
    "We strongly disapprove of the Government's efforts to dragoon hospitals and health authorities into tying themselves up in long-term private finance contracts."
    Mr. Robert Hughes: Hear, hear.
    Mr. Waldegrave: "Hear, hear," says the hon. Gentleman, most helpfully. That is the truth. Labour Members are, and always have been, against real PFI in the health service. They always say that they are against any transfer of management responsibility, and that it is necessary for real PFI.
    Mr. Timms: Why has none of the major hospital PFI schemes yet been completed? The Government said in the Red Book that there would be £2.5 billion-worth of investment under the PFI next year, but only £1.3 billion had been committed by last December. What is the present shortfall in the amount committed to the PFI,
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    and what will the Government do to bridge the gap and provide desperately needed investment in hospitals and other public services?
    Mr. Waldegrave: The deals are big, complex and very important, but they will be sorted out. The hon. Gentleman may like to watch this space.
    Mr. Stephen: Does my right hon. Friend really believe in Labour's apparent conversion to the merits of private finance, given that, only six months ago, its deputy leader thought that PFI was a furniture store?
    Mr. Waldegrave: To be fair to the deputy leader of the Labour party, he claims to have invented the PFI. Unfortunately, however, he did not: he invented something very different. He just thinks that letting public authorities borrow is private finance. It is not; it contributes to the public sector borrowing requirement. That is the fundamental misunderstanding in the Labour party.

    European Single Currency
    Mr. Alan W. Williams: To ask the Chancellor of the Exchequer if he will make a statement on how adherence to the criteria for joining the European single currency would affect the United Kingdom economy. [18529]
    Mr. Oppenheim: The Maastricht convergence criteria of low inflation and sound public finances make sound economic sense in their own right, with or without economic and monetary union. They will continue to form the basis of the Government's policies.
    Mr. Williams: Has not the Chancellor lost the argument in the Conservative party over monetary union? Are not the Tories being increasingly driven by Euro-sceptics into supporting a complete withdrawal from the European Community, which would cost 3.5 million jobs?
    Mr. Oppenheim: As I understand it, new Labour's policy is exactly the same as ours. As soon as we changed our policy and said that we would have a referendum on economic and monetary union, Labour poodled along behind us on that policy, as on so many others. Is the hon. Gentleman also arguing, for the sake of symmetry, that the many Euro-sceptics in his party—including the 50 who signed a letter condemning Labour's policy—have driven the Labour party into exactly the same position as us?
    Mr. Forman: Under a responsible Conservative Government, would not one answer to the question be that adherence to the Maastricht criteria would have little effect on the British economy, because we are very likely to meet those criteria whether we are in or out of EMU? Is there not a strong pro-European case for saying that EMU should not go ahead on the timetable that is now being talked about unless it does so on the basis of a very small homogeneous core of countries?
    Mr. Oppenheim: My hon. Friend is absolutely right. It looks as if we will meet the Maastricht criteria. We have lower debt than any other major European Union

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    country, and our debt has been lower every year under the present Government than in any year under the last Labour Government. Our borrowing is running at half its level under the last Labour Government, our inflation is below the EU average and our unemployment is lower than that in any other EU country. We have done all that while looking very likely to meet the Maastricht criteria.
    Contrast that with the position of other countries such as France and Germany which are suffering terribly by having to meet those criteria. The reason for that is that they have not made the structural reforms that we have made in the teeth of bitter Labour opposition. Those reforms have meant that three quarters of the competitiveness gap with Germany has been closed over the past 18 years. It is no wonder that new Labour's unique selling proposition to the electorate is, "Those guys have made such a mess of things that we shall copy all their policies."
    Mr. Mike O'Brien: When the Exchequer Secretary speaks about "our" policy, which "our" does he mean? Does he mean the Foreign Secretary, who says that he is hostile to a single currency, or does he mean the Chancellor, who has always said that he is a supporter of economic and monetary union? Who now speaks for the Government?
    Mr. Oppenheim: I could ask the hon. Gentleman exactly the same question. Who speaks for new Labour on Europe? Is it the right hon. Member for Livingston (Mr. Cook), the shadow Chancellor or the leader of the Labour party? For the hon. Gentleman to suggest that there are no divisions whatever in the Labour party, when 50 of his colleagues signed a letter condemning Labour's policy on Europe, is ridiculous. He has dodged—[Interruption.] I am relieved that the hon. Member for Reigate (Sir G. Gardiner) has decided to stay on Government Benches. No doubt he recognises the success of Government policies.

    Share Dividends (Income Tax)
    Sir Colin Shepherd: To ask the Chancellor of the Exchequer what is his current estimate of the amount of income tax raised from individual investors' dividends on shares in the privatised utilities. [18530]
    Mr. Jack: We estimate that more than 5 million individuals may have a taxable dividend entitlement arising from their shareholding in privatised companies, but we do not keep records of the amount of income tax derived from dividend payments made in respect of anyone company.
    Sir Colin Shepherd: Does my right hon. Friend agree that the tax derived would be much less if there were a windfall tax? Would not the 5 million shareholders who would pay for that tax through reduced dividends also have the value of their shares reduced accordingly?
    Mr. Jack: My hon. Friend is entirely right, and his assertion was supported by Professor Littlechild when he gave evidence to a Select Committee. He said that shareholders would be the first in line if there were a windfall tax of whatever amount. Whether it was £3 billion, £5 billion or £10 billion, it would be a dawn raid on the shareholder-owners of this country's privatised companies.

    Public Borrowing
    Sir Irvine Patnick: To ask the Chancellor of the Exchequer what representations he has received from the Chartered Institute of Housing regarding his policy on the level of public borrowing. [18531]
    Mr. Waldegrave: The chief executive of the Chartered Institute of Housing wrote to my right hon. and learned Friend on 3 March asking for a large increase in Government spending on housing, and my right hon. and learned Friend will reply shortly.
    Sir Irvine Patnick: As my right hon. Friend will be aware, some organisations, including the Labour party, advocate the spending of capital receipts. What effect would such spending have not only on the public finances but on cities such as Birmingham and Sheffield?
    Mr. Waldegrave: That same chief executive of the Chartered Institute of Housing recently secured what I take to be an unbreakable pledge from Labour that it would release the accumulated receipts of local authorities. On a phased basis, that would probably amount to about £2.5 billion a year of additional net borrowing in the economy. That ends up as nonsense because, as my hon. Friend hints—I suspect that as a former local authority leader he knows—in Birmingham, for example, there are no accumulated receipts. Therefore, there would be no gain at all to Birmingham. In Surrey, there would be huge additional spending. That would be an extremely odd and foolish way to deal with housing policy.
    Mr. Fraser: Has the Minister made any calculation of the extent to which public expenditure would be reduced by not having to place so many families in private accommodation at exorbitant rents, with 100 per cent. housing benefit?
    Mr. Waldegrave: Any such calculation, which would be difficult to make, would be dwarfed by the increasing borrowing and spending to which the hon. Gentleman's colleagues on the Labour Front Bench are committed. They have found no answer. They have pledged themselves to an additional minimum £2.5 billion—it might be more—net borrowing.

    European Single Currency
    Mr. David Atkinson: To ask the Chancellor of the Exchequer when he next expects to meet his EU counterparts to discuss the introduction of the single currency. [18532]
    Mr. Kenneth Clarke: The forum in which EU Finance Ministers meet to discuss economic and monetary union is the Economic and Finance Council, which is known as ECOFIN. The next ECOFIN meeting is scheduled to be held on 17 March 1997.
    Mr. Atkinson: What assessment have my right hon. and learned Friend and his European Union colleagues made of the overriding need to ensure that the computer systems involved in the introduction of the single currency are millennium-compliant? Is he aware of the

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    growing concern among information technology experts that, because those are the two largest information projects ever to be undertaken, it will prove impossible to meet the deadline of introducing a single currency on 1 January 1999? Even Brussels would be unable to keep the clock back at five minutes to 12 at the turn of the millennium. Will my right hon. and learned Friend ensure that the matter is on the agenda of the forthcoming intergovernmental conference in Amsterdam?
    Mr. Clarke: It would be more suitable to raise the matter at ECOFIN in due course and in the Monetary Committee, where all such practical matters are addressed, but at this stage the European Commission obviously should be consulting as widely as possible about all these practical problems. I think that the date of 1 January 1999 is looking surrounded by doubt in many other ways, but certainly the problem of computer compliance is complicated by the important millennium problem, which my hon. Friend points out.
    Mr. Winnick: When the Chancellor meets his EU counterparts, will he consider the possibility of taking the hon. Member for Reigate (Sir G. Gardiner) with him? If he does so, should the Chancellor not explain that, on the issue of the single currency, the hon. Gentleman, who is now in the Referendum party, represents far more of his former Tory colleagues than the Chancellor does?
    Mr. Clarke: I have known the hon. Member for Reigate (Sir G. Gardiner) for many years and I remember him as a passionate supporter of the European Movement. He and I held similar views on the whole question until five or six years ago. He seems to have wandered away from my views a little, but I always hold hopes that one day he will return.
    Mr. Bill Walker: My right hon. and learned Friend will be aware that I am not a member of such an organisation and never have been. Will he also recognise that the important thing about structures of any type is that they must be sound, they must be based on what can be delivered and they must last? In the present circumstances, it looks unlikely that any dates will ever be met.
    Mr. Clarke: I share my hon. Friend's approach. One of the British contributions that we can make to the discussions is to be sensible, to concentrate on the practicalities and to insist that all decisions are taken on the clearest possible basis of a judgment of what is in the interest of the European economy and then of what is in the interest of the British economy. It is absolutely essential that no economic and monetary union should take place unless there are genuinely convergent economies. Convergence matters more than any artificial timetable.
    Mr. MacShane: In any consideration of the single currency, the level at which the pound enters to promote British interests is important. This soon-to-go Chancellor is presiding over a yo-yo currency. Why is he refusing to meet British Steel and other businesses, which want to discuss with him the fact that the rise in sterling that we are experiencing will cost dividends, reduce profits and have an impact on jobs? His final gesture of goodbye will be to hurt British manufacturing industry because of his incompetence in handling our currency.
    Mr. Clarke: We have a floating exchange rate at the moment and, for that reason, I do not control its level.
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    Finance Ministers do not control the level of exchange rates in today's deregulated foreign exchange markets. We are pursuing strong, stable economic policies aimed at keeping inflation down, keeping the public finances healthy and maintaining the fundamentals of the economy, but thereafter the markets make their own judgment. The consequences of that cause people to keep addressing the question whether to have a single currency in the European Union, but it remains at the moment quite uncertain where we are going to go on that great issue.

    Income Tax
    Mr. Harry Greenway: To ask the Chancellor of the Exchequer how many people (a) are paying income tax in the current financial year and (b) would have been paying income tax if the tax regime had been indexed and maintained since 1978–79. [18534]
    Mr. Jack: There are 25.6 million income tax payers in 1996–97. If we had maintained and indexed the 1978–79 tax regime, 1.8 million more people would pay income tax.
    Mr. Greenway: Do not those figures say it all?
    Mr. Mackinlay: Last time, Harry.
    Mr. Greenway: We are the party of low taxation, and it is time that the hon. Member for Thurrock (Mr. Mackinlay) learnt that. He supports a party of high taxation—individual, collective and every other kind. That is the Labour party and the Liberal Democrats, and it always will be.
    Mr. Jack: My hon. Friend is right. He knows that people are better off under the Conservatives because of our tax policies. He knows that we have one of the lowest tax burdens in Europe. The burden is 39 per cent. of gross domestic product in Germany and 45 per cent. in France, but only 35 per cent. in the United Kingdom. He also knows that, with £30 billion-worth of spending pledges attached to their name, the Opposition would raise taxes to fill their black hole.
    Mr. Pike: How many people in Tory Britain work full time, but still do not earn enough to pay tax?
    Mr. Jack: I refer the hon. Gentleman to today's Financial Times, where he will see a demolition job of Labour's attempt to deal with that problem. The minimum wage is described, effectively, as a tax milch cow for Labour

  PRIME MINISTER

    Engagements
    Mr. Chidgey: To ask the Prime Minister if he will list his official engagements for Thursday 13 March. [18548]
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had

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    meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Chidgey: No doubt the Prime Minister will join me in condemning the leaking of the Select Committee report on nursery vouchers. Does he share the Committee's concern that nursery vouchers appear to be failing to provide parental choice, failing to improve standards and failing to provide more places? Does he accept that there is great folly in pressing ahead with a national scheme before the pilot schemes have been properly tested?
    The Prime Minister: I share the hon. Gentleman's dismay that someone has chosen to leak a report. I have not yet read it, so I am unable to comment in detail on what may or may not be in it. As a matter of principle, rather than on the specific issue raised by the Select Committee report, parents have choice because of the voucher scheme. Without the voucher scheme, the only way to obtain a free nursery place would be to send one's child to a state school. There was no choice or opportunity and the half a million parents who have taken up the option will be indicating that they believe that choice is right. The voucher scheme has also led to an increase in the number of places.

    Ministerial Visit (Kent)
    Mr. Dunn: To ask the Prime Minister what plans he has to visit north-west Kent. [18549]
    The Prime Minister: I have, at present, no plans to do so.
    Mr. Dunn: Is the Prime Minister aware that the people of north-west Kent are glad to be part of an independent nation state and to play their part in our dynamic enterprise economy? They want nothing to do with those who spend their time selling Britain out or who would like to spend their time selling Britain short.
    The Prime Minister: I agree with my hon. Friend that the people of north-west Kent are glad to be part of an independent nation state. I agree that they and the rest of the United Kingdom have benefited enormously from the economic improvements of the past few years. They, like everyone else, enjoy the benefits of much lower inflation than we have had for many years, the lowest mortgage rate for 30 years and the lowest unemployment rate of any major European country. We intend to continue to pursue the policies that will ensure that they can continue to enjoy those things for many years to come.

    Engagements
    Mr. Stewart: To ask the Prime Minister if he will list his official engagements for Thursday 13 March. [18550]
    The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.
    Mr. Stewart: Does my right hon. Friend agree that the policy of central Government control of non-domestic
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    rates has yielded immense benefits to industry and commerce, especially to small companies? Does he also agree that placing decisions on business rates under local control would add billions to industrial costs in the United Kingdom, undermine our inward investment efforts and threaten the very existence of huge numbers of small firms throughout Britain?
    The Prime Minister: I have no doubt that my hon. Friend is right about that. The non-domestic rate set by central Government for England and Wales has never risen faster than the rate of inflation, and in Scotland the rate has been reduced in real terms. That is in sharp distinction to what occurred when local authorities set the business rate, often by attempting to hold down the domestic rate and pile costs upon business. That is one of the significant reasons why so many companies were forced out of inner-city areas, leaving the problems that we have been attempting to deal with.
    Mr. Blair: I have given you, Madam Speaker, and the Prime Minister notice of my question. Will the Prime Minister join me in recalling that it is a year to the day since the terrible events in Dunblane? We remember the little ones who died, and we grieve with their parents and their friends. They will not be lost to the nation's memory. We all say to the people of Dunblane that our thoughts and prayers are with them today and in the years to come.
    One year ago, the House stood united in shock at the senseless and appalling tragedy in Dunblane. Today, whatever our differences are on any other matter, we are united again, this time in sorrow and in commemoration of those who died.
    The Prime Minister: I have no doubt that the right hon. Gentleman has spoken for everyone in the House, and for millions beyond it. We all remember with great clarity the horror we felt when we heard of those appalling events. I remember visiting the school and the gymnasium with the right hon. Gentleman, and I do not believe that either of us will ever forget the scenes that we saw there; neither will anyone else who visited the school. Clearly, this will be a very difficult and emotional time for the bereaved and for the entire community of Dunblane. I am sure that the thoughts not only of the House but of the nation are with them today.
    Mr. Harris: May I raise with my right hon. Friend another tragic matter—the loss of two fishing boats, the Westhaven, from Arbroath, and the Gorah Lass, from St. Ives in my constituency? Will he express the sympathy of all hon. Members to the relatives of the seven men who are feared dead? Will he also honour the debt that we all owe to the fishing industry, and ensure that the investigating authorities have the resources to conduct speedily and thoroughly the urgent task of investigating the cause of that double tragedy?
    The Prime Minister: Seven fishermen have lost their lives this week, in two separate incidents. I am sure that the House will join my hon. Friend in extending every sympathy to the family and friends of those involved in those tragic accidents. I understand that both incidents are being investigated by the marine accidents investigation

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    branch. I will attempt to ensure that that occurs as speedily and as comprehensively as possible, and of course the findings will in due course be made public.
    Mr. Jamieson: To ask the Prime Minister if he will list his official engagements for Thursday 13 March. [18551]
    The Prime Minister: I refer the hon. Member to the reply I gave some moments ago.
    Mr. Jamieson: Has the Prime Minister seen the written answer to me from the Secretary of State for Defence on 20 February 1997, which confirmed that most of the "British beef consumed by Her Majesty's armed forces is purchased from Spanish-speaking South American countries? Does he not think it more likely that the ban on British beef would be lifted by the European Union if it saw that the British Government were backing British beef?
    The Prime Minister: I have not seen the particular answer to which the hon. Gentleman refers, but I assure him that the British Government back British beef. That has been apparent in the resources that have been put into supporting the beef industry during the difficult past year or so.
    Sir George Gardiner: My right hon. Friend will have read of the campaign being waged by the British section of the European Movement to persuade the voters to scrap the pound and to move towards a federal European state. In view of the vast sums being given by the European Commission to that movement, will he say how much British taxpayers' money is being laundered through the Commission for that rather dubious exercise?
    The Prime Minister: I am not entirely sure that without notice I can give a figure to my—to the hon. Gentleman on that particular matter. I would add that, from all that I read and understand, there is quite a lot of money available to both sides of the argument.
    Mr. Fraser: To ask the Prime Minister if he will list his official engagements for Thursday 13 March. [18552]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Fraser: As this is probably the last opportunity I shall have to ask the Prime Minister a question, may I, as one ex-Lambeth councillor to another, wish him a long and happy retirement? It might have been otherwise—because does he realise that when he was running a housing department in Lambeth, under a Labour Government, he started more municipal homes to rent in one year than every single housing authority in England and Wales is now starting in the current year, and that the shortfall is by no means made up by housing associations?
    The Prime Minister: The reason for that, of course, was the dereliction and despair that I inherited from the Labour council, which had spent 30 years damaging the quality of life in Lambeth and has continued to do so whenever it has managed to persuade the people of Lambeth to re-elect it.
    Mr. Dykes: If my right hon. Friend has the chance during his busy day, will he reconsider the strange question
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    of the hon. Member for Reigate (Sir G. Gardiner)—a man of unshakeable principles for many years, as we know—whose description of European Movement funding is a travesty of the truth? The sums involved are extremely modest compared with the millions spent by Sir James Goldsmith on his own campaign, which is triumphantly scoring 0.3 per cent. in the opinion polls?
    The Prime Minister: I believe that my hon. Friend has made his point very clearly and forcefully.

    Sanctions (Libya)
    Mr. Dalyell: To ask the Prime Minister if he will discuss with President Clinton the impact on sanctions against Libya of the legal actions by the United States authorities against (a) Juval Aviv and (b) Les Coleman. [18553]
    The Prime Minister: I have no plans to do so. Mr. Aviv's acquittal has no bearing on the case against the two Libyans accused in respect of Lockerbie. Legal proceedings against Mr. Coleman are pending in the United States, and it would not therefore be appropriate for me to comment on them.
    Mr. Dalyell: Have not the American courts driven the proverbial coach and horses through the case of the American Government on Libya? Does the Prime Minister realise that many serious people in legal Edinburgh doubt whether the Crown Office now has a substantial case to provide the basis for sanctions against Libya? Given the view of the families, could there be another fatal accident inquiry into these tragic events to get the truth?
    The Prime Minister: It is not for me to say whether the Crown Office has a case or not; it clearly believes that it does. I have made inquiries in the light of the question that the hon. Gentleman tabled, and I am advised that all the theories about responsibility for Lockerbie, including those of Mr. Aviv and Mr. Coleman, were thoroughly investigated. The evidence supports charges against the accused Libyans, and not against anybody else. The hon. Gentleman asks for a further inquiry of some sort. As he knows, there have been a number of inquiries already—a fatal accident inquiry that was held in public, a police inquiry, a Transport Select Committee inquiry, an air accident investigation branch inquiry, and the US presidential commission. In the light of those, I do not believe that a further inquiry would be productive.

    Engagements
    Mr. Patrick Thompson: To ask the Prime Minister if he will list his official engagements for Thursday 13 March. [18555]
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Thompson: Does my right hon. Friend deplore, as I do, the increasing tendency for Government policy to be discussed as a result of leaks in the media and elsewhere? Does he share my increasing concern about that trend?
    The Prime Minister: I certainly do. It means that policies that are legitimately a matter for discussion in the

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    House are often discussed and misunderstood before the details of the policies or the Select Committee report have been made public. That is damaging. I believe that the leaking of Select Committee reports, as happened last night, is an abuse of the procedures of the House. On that matter, I entirely share the views of my hon. Friend.
    Mr. Barnes: To ask the Prime Minister if he will list his official engagements for Thursday 13 March. [18557]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Barnes: It is probably seven weeks to the general election. Will not many people get a shock to find that their names are not on electoral registers? Why cannot we be told how many people are on the electoral registers in England and Wales, which should have been available for a month, before the House dissolves for a general election?
    The Prime Minister: As the hon. Gentleman knows, electoral registers are published at the appropriate time. I believe that when he raised the matter about three weeks ago I told him that the full count is likely to be available towards the end of March.

Business of the House
3.31 pm
Mrs. Ann Taylor: May I ask the Leader of the House for details of future business?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows:
MONDAY 17 MARCH—Committee and remaining stages of the Building Societies Bill.
Remaining stages of the Merchant Shipping and Maritime Security Bill [Lords].
Proceedings on the following Bills, which are consolidation measures: the Architects Bill [Lords], the Lieutenancies Bill [Lords], the Nurses, Midwives and Health Visitors Bill [Lords], and the Justices of the Peace Bill [Lords].
Motion on the Church of England Pensions Measure.
TUESDAY 18 MARCH—Remaining stages of the Transfer of Crofting Estates (Scotland) Bill [Lords].
Remaining stages of the Social Security (Recovery of Benefits) Bill [Lords].
Remaining stages of the Birds (Registration Charges) Bill.
WEDNESDAY 19 MARCH—Until 2 pm, there will debates on the motion for the Adjournment of the House.
Motion relating to the Northern Ireland Grand Committee.
Motion on the Northern Ireland (Entry to Negotiations, etc.) Act 1996 (Cessation of Section 3) Order.
Motion on the Northern Ireland (Emergency and Prevention of Terrorism Provisions) (Continuance) Order.
THURSDAY 20 MARCH—Debate on jobs and inward investment on a motion for the Adjournment of the House.
FRIDAY 21 MARCH—The House will not be sitting.
MONDAY 24 MARCH—Opposition Day [8th Allotted Day].
There will be a debate on an Opposition motion, subject to be announced.
The House will also wish to know that on Wednesday 19 March there will be a debate on structural funds and cohesion policy in European Standing Committee B.
Details of the relevant documents will be given in the Official Report.
In view of the interest in the House, I should say straightforwardly, albeit with regret, that I am not yet in a position to make a definitive statement about recess dates.
[Wednesday 19 March:
European Standing Committee B—Relevant European Community documents: 11382/96, Structural Funds; 12614/96, Cohesion Policy. Relevant European Legislation Committee report: HC 36-xi (1996–97).]
Mrs. Taylor: I thank the Leader of the House for the limited information that he has been able to give us. Before I come to the business that has been announced for next week, will the Leader of the House tell us what is happening about the privatisation of the Building
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Research Establishment? He has been asked for a statement or a debate on that for several weeks. Today, there is further evidence that all bidders were not operating on a level playing field.
This appears to be yet another case of Ministers misleading Parliament. As time is running out for this Session of Parliament, what guarantees can we have that the Minister of State at the Department of the Environment will explain the apparent contradiction between his parliamentary answers and reality, or will that Minister behave like his colleagues at the Ministry of Defence on Gulf war syndrome and at the Ministry of Agriculture, Fisheries and Food on bovine spongiform excephalopathy and abattoir safety? Do Ministers really believe that waiting for the election will provide them with an escape route to avoid answering to the House on those important matters?
On future business, the House will have noted that the Leader of the House was, in his words, not able to give "a definitive statement" about dates for the Easter recess. We can only speculate as to why that might be. The Leader of the House has announced that Monday 24 March will be an Opposition day. Will he guarantee that that day's debate on an Opposition motion will take place, or does he anticipate it being overtaken by other events? Will he confirm that, in 1992, the then Leader of the House announced on Thursday 5 March the business for the following 10 days, only to return shortly afterwards to cancel most of it because the Prime Minister had been to the palace?
I know that the Leader of the House would not wish to mislead hon. Members with regard either to the business statement or to the recess date. He is an honourable man. Is there any other information that he would wish to share with us?
Mr. Newton: I am grateful for the final remarks of the hon. Member for Dewsbury (Mrs. Taylor), which I imagine were intended to be complimentary and which I shall certainly accept as such. I am not, however, in a position to join her in the speculation in which she invited me to engage.
I should make it clear that I do not accept the allegations of the hon. Member for Greenwich (Mr. Raynsford) about the Building Research Establishment. In my view, my hon. Friend the Minister for Construction, Planning and Energy Efficiency has dealt in a factual manner with his questions on matters of fact. Moreover, I do not accept what the hon. Lady said about the Minister of Agriculture, Fisheries and Food, my right hon. and learned Friend the Member for Grantham (Mr. Hogg), and the Minister of State for the Armed Forces, my hon. Friend the Member for Crawley (Mr. Soames), who came to the House and dealt very effectively with the points on which the House could expect information.
Sir Patrick Cormack: May I echo the compliments of the hon. Member for Dewsbury (Mrs. Taylor) to my right hon. Friend on the way in which he has acted as Leader of the House? In view of the high excitement of the fare that he has placed before us for next week, will he find time for a crucial debate on an affirmative motion on how the House has dealt with, and should in future deal with, constitutional matters?
Mr. Newton: It is certainly an attractive thought—[Interruption.] I mean that a debate, not constitutional

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change, is an attractive prospect—but I cannot promise a further opportunity for debate beyond the opportunity that we had a couple of weeks ago.
Mr. Archy Kirkwood: Will the Leader of the House acknowledge that there was much consternation north of the border about the Government's decision to allocate the contract for the Ministry of Defence auxiliary fleet vessel to VSEL and not to Kvaerner? Will he find time at an early stage for a discussion about the working assumptions that the Ministry of Defence has in mind when it procures surface vessels for the Royal Navy?
Will the right hon. Gentleman acknowledge in passing that the Easter recess has always traditionally been the 10 days immediately after the Easter weekend? What could possibly happen in the next 10 days to interfere with that perfectly reasonable assumption?
Mr. Newton: It looks to me as though I am being invited to engage once again in the speculation on which I resisted the blandishments of the hon. Member for Dewsbury. I find myself even more ready to resist the hon. Gentleman's blandishments. On his first point, I hope that he will accept that the Ministry of Defence carefully evaluated bids against its normal technical and value-for-money criteria, in accordance with well-established procedures. As I understand it, he was questioning whether those procedures should not be looked at. I shall of course bring that to the attention of my right hon. Friends.
Mr. Harry Greenway: May we have a statement next week on the possible contamination of water by Cryptosporidium, especially in the Three Valleys water company area, and the failure of that company to notify people in Northolt, Greenford and other parts of my constituency that they should be boiling water? My constituents have undergone the whole crisis without receiving proper notification from the water company. That should be discussed in the House, with a view to bringing the water company to task and addressing my constituents' legitimate concerns, worries and fears.
Mr. Newton: I cannot promise a debate, but I can certainly promise to draw my hon. Friend's concerns to the attention of my right hon. Friend the Secretary of State for the Environment.
Mrs. Ann Clwyd: May we have an urgent debate on the crisis in higher education in Wales? Is the Leader of the House aware that, this morning, all the heads of higher education institutions in Wales met Members from both Houses to complain about the lack of parity in funding between England, Scotland and Wales? Is he aware that spending on students in England is £200 a head higher than in Wales, and that in Scotland it is even higher? Is he aware that there is a real crisis? Is it not yet another example of the Secretary of State for Wales failing to fight the corner for Wales in the Cabinet?
Mr. Newton: As a member of the EDX public expenditure committee, which is public knowledge, I certainly refute the suggestion that my right hon. Friend
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the Secretary of State for Wales does not vigorously present his case. I should perhaps make the point that my right hon. Friend is due to answer questions on Monday.
Mr. Bill Walker: Will my right hon. Friend give the House an early opportunity to debate early-day motion 639?
[That this House notes that the honourable Member for Cunninghame North during a speech on Monday 11th March, failed to declare an interest as a director and shareholder of a political socialist newspaper company; further notes that the company had a bespoke factory built by Highlands and Islands Development Board at a cost of £127,000 and that the company received loans and grants to the value of over £95,000 from the HIDB and a local enterprise company within the Highlands Enterprise network; and believes that the honourable Member who has made a political career out of attacking other honourable Members with links with companies which have received loans and grants as well as ordinary Scots who have received grants from public bodies, should note the Speaker's comments about his conduct and resign his position as a shadow front-bench spokesman.]
My right hon. Friend will be aware that the motion draws attention to the fact that hon. Members who make a career out of attacking other hon. Members do nothing for the standing of the House when they fall well below the standards that they asking others to follow. Does he agree that people who live in glass houses should not throw bricks?
Mr. Newton: I am aware of the point to which my hon. Friend referred. I understand that you, Madam Speaker, have already given an indication that the particular interest that my hon. Friend has in mind should have been declared by the hon. Member whom he has in mind from Monday's debate.
Mrs. Helen Jackson: The Leader of the House will recall that I raised in a previous Question Time the need for a full statement on the disposal aspect of the BSE crisis, which relates to both the Minister of Agriculture, Fisheries and Food and the Secretary of State for the Environment. It transpires that there has never been a report on the best overall environmental disposal option—either by landfill or by incineration methods. There is continuing confusion about how the crisis will be satisfactorily resolved. In the short time left in this Parliament, will he ensure that a full statement is made on that matter so that such scientific and public health problems can be sorted out?
Mr. Newton: I am sure that my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food and any others involved in the matter, including my right hon. Friend the Secretary of State for the Environment, will carefully consider the point that the hon. Lady has raised.
Mrs. Elizabeth Peacock: During the last few weeks of this Parliament, could my right hon. Friend give serious consideration to arranging a debate on the prescribing of a contraceptive pill for children? Yesterday, Mrs. Jenny Bacon and her husband, together with some colleagues, presented a petition of 10,000 signatures to my right hon. Friend the Prime

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Minister in Downing street. Their daughter was prescribed the pill when she was 13 years old. She suffered a brain stem stroke, was paralysed for an entire year and died aged 16. I believe that many more parents have similar concerns.
Mr. Newton: The first thing to say, without commenting further on an individual tragic case, is that I am sure that everyone in the House would wish to express their sympathy for the circumstances about which we have all read. It follows that my right hon. Friends the Prime Minister and the Secretary of State for Health will wish carefully to consider the petition and what my hon. Friend has said.
Mr. Andrew Faulds: The right hon. Gentleman will appreciate that I have been a long-time admirer of his admirable Quaker character. He will appreciate that I have always been among the mildest of his inquisitors. Because of the real dangers to peace in Israel, in Albania and over Cyprus, it is essential that the House has a chance to debate those matters, even in a one-day debate, before the recess. Will he give serious consideration to giving us a one-day debate before the Easter recess or, hopefully, after the Easter recess?
Mr. Newton: Of course, I always consider what the hon. Gentleman suggests in the conciliatory and moderate way in which he puts questions to me. I cannot lay claim to a Quaker character, whatever that is, merely to a Quaker education.
Mr. Andrew Rowe (Mid-Kent): My right hon. Friend, like the rest of us, will have been subjected on every conceivable occasion to the Liberal Democrats' assertion that education is at the top of their priorities. However, in Kent, the Liberal Democrat-controlled council has chosen to take £10 million of the Government's grant and spend it elsewhere. May we have a debate to demonstrate that that fact may reflect the difference between being in power in Kent and having no chance of power at Westminster?
Mr. Newton: I would make a slightly different point without differing from my hon. Friend. On a range of matters, there is a marked discordance between what is said by Labour and Liberal Democrat Members and what happens when their friends are in power in town and county halls.
Mr. Ian Pearson: Is the Leader of the House aware that the Government propose to allow taxpayers' money to be spent on training chartered accountants from some of the biggest and wealthiest chartered accountancy practices, when they have provided the training for donkey's years at no cost to the public purse? Is that not a clear waste of public money? May we have an urgent debate on the misuse of training funds?
Mr. Newton: I imagine that the hon. Gentleman was referring to the recently published Select Committee report. If so, it will be considered in the normal and appropriate way. In any case, I cannot promise an early debate.
Mr. Richard Tracey: Will my right hon. Friend consider making time for a statement by my right
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hon. Friend the Secretary of State for Education and Employment on the primary school league tables, in view of the request from Opposition Members for an added value component? My right hon. Friend may be interested to learn that the Labour-controlled Association of London Government has done such a calculation, adding in the socio-economic added value, and the top-performing local education authorities are, first, Richmond upon Thames; secondly, Kensington and Chelsea; and, thirdly, the City of Westminster. The ALG has asked for extra funds to be given to those deprived areas, and I am sure that my right hon. Friend the Secretary of State for Education and Employment would wish to consider that.
Mr. Newton: My hon. Friend's question was whether I would be interested in that information, and the answer is yes. I am grateful to him for making such a telling point.
Mr. Dennis Skinner: Will the Leader of the House arrange for a statement or a debate before the general election is called so that we may ascertain precisely where parties get their money from to fight the general election? [Interruption.] In America, they are having a wide debate about where the money comes from for elections, especially the foreign sources. May we have a statement so that we can challenge the Tories to tell us how their party funds managed to move from a debt of £19 million last year to a £40 million surplus this year, when the public sector borrowing requirement is £20 billion or more and the national debt has doubled? How come the same people can run the country into a hole, but at the same time manage to find large sums for their own ends? The public have the right to know.
Mr. Newton: The hon. Gentleman will have heard a number of points—made from what I hope were sedentary positions behind me—which he might care to weigh. I will not follow that line for reasons relating to recent answers that I have given to the hon. Member for Linlithgow (Mr. Dalyell)—that is to say that I am the Chairman of the Select Committee on Standards and Privileges.
Mr. Nicholas Winterton: While fully supporting the request made by my hon. Friend the Member for South Staffordshire (Sir P. Cormack) for a debate—which has been attended to by my right hon. Friend—can I bring matters closer to home? Is it not time that this House debated its own integrity and the leaking of documents, such as Select Committee reports, long before they are published? The recent problem is not the first. Could my right hon. Friend find time to allow the House to debate the issue, indicate its view to the institutions of this House—which, sadly, too often are not prepared to act, even when the individual responsible for leaking the report is identified—and give instructions which would help the next Parliament?
Mr. Newton: I am aware of the reasons why my hon. Friend has raised this matter over the past five or six years. I must make the point that an established set of arrangements for examining the source of a leak and, in certain circumstances, reporting to the House is set out in the second report by the Committee on Privileges from Session 1984–85.I refer my hon. Friend in that direction.
Mr. Tam Dalyell: Would the Leader of the House go and tell himself as Chairman of the Select

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Committee on Standards and Privileges that some of us are indelicate enough to ask when the statements of Mr. Mohammed Al Fayed, while producing rolls of money, to the effect that we can be hired like London taxis will be addressed? Does he understand that it would be totally unsatisfactory to let this matter go unaddressed before there is a general election? Whatever cloak the right hon. Gentleman is wearing, what does he have to say about this matter?
Mr. Newton: I am not using any kind of cloak to put myself in a position where I have to be cautious with the hon. Gentleman. He knows that I am Chairman of the Committee and that the Parliamentary Commissioner is investigating matters closely entwined with those to which he refers. Many people would be appalled were I to start making comments against that background.
Mr. Nigel Forman: In view of the breathtaking and awesome significance of some of the recent scientific capabilities in the sphere of cloning as it relates to animals, does my right hon. Friend agree that there would be a strong case, if time were available, for the House to have an early debate on the full ethical and practical implications of that emerging technology, since aspects of genetic engineering which are now applied to animals could, alas, at some future stage in certain circumstances be applied to human beings? Will he consider this matter carefully, because if it is good enough for the United States and President Clinton to consider a moratorium, surely this House can debate it in an appropriate spirit?
Mr. Newton: My hon. Friend will be aware that the Select Committee on Science and Technology is taking a close interest in the matter and is conducting a brief inquiry into the recent cloning of sheep at the Roslin institute. I will not rule out the possibility of a debate on this important and sensitive subject, but I am not in a position to promise one from the Dispatch Box today.
Mr. Paul Flynn: When may we have a debate on early-day motion 646?
[That this House demands international action against the dumping of medicinal drugs in Third World and Eastern European countries which resulted in the deaths of 100 children in Nigeria in 1991 and 60 in Haiti in 1996, who used contaminated paracetamol syrup, and the blinding of 11 pregnant women in Lithuania who were prescribed a medicine intended for animal use; and notes that some pharmaceutical companies enjoy tax and other financial benefits by avoiding disposal costs in their countries and thus profit from the irresponsible and often lethal dumping of medicines on unsophisticated communities.]
The motion draws attention to a growing world scandal resulting from the donation—sometimes for good reasons—of medicinal drugs to third-world and east European countries. As a result of those donations, 11 pregnant women in Lithuania were blinded when they took a drug that was intended for animals because they could not understand the labelling and 100 children in Nigeria and 60 in Haiti died after taking a form of paracetamol that had been mixed with the wrong form of
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glycol. Many of those donations are made for humanitarian reasons, but others are made because American companies refuse to bear the costs of dumping the drugs—legally, but expensively—in their own country and are gaining a tax advantage by sending them to third-world and eastern European countries. As a result, children are given adult doses, and dangerous and lethal drugs, which should be taken under strict control, are taken as though they were sweets. Huge numbers of people have been damaged by the irresponsible dumping of drugs. When will Britain take a stand and introduce regulations in an area where there is none now?
Mr. Newton: I understand that my right hon. and learned Friend the Foreign Secretary may have commented on those matters to the hon. Gentleman only yesterday and I am not in a position to add to that. However, I understand that the UK has supported the work of relevant organisations, such as the World Health Organisation, in promoting guidelines on drug donations, and I can assure the hon. Gentleman that we shall continue to work with other countries to try to improve standards of safety in health which are obviously a matter of concern.
Mr. Edward Garnier: May I have some information on behalf of my rural constituents? First, when will the provisions for rate relief on village shops and rural sub-post offices under the Local Government and Rating Bill come into force? When will the hedgerow regulations, which were laid before Parliament on 3 March, be debated? Furthermore, will my right hon. Friend ask a Minister from the Ministry of Agriculture, Fisheries and Food to come to the House in the near future to make a statement explaining the Ministry's policy on the enforcement of the regulations controlling rabbits under the Pests Act 1954? A number of my constituency farmers are suffering the depredations of rabbits on farms adjacent to railway embankments and I should be most grateful for some guidance on that.
Mr. Newton: There were three questions. First, the Local Government and Rating Bill has not yet received Royal Assent, although I hope that that will not be too long delayed. Various parts of the Bill when enacted are due to commence at different times, but if I understand my hon. and learned Friend aright, although no specific date has been set for the commencement of the part of the Bill which relates to rating—part I—we hope that the rating provisions will commence no later than 1 April 1998.
With regard to the draft hedgerows regulations, which, as my hon. and learned Friend rightly said, were laid recently, I clearly have not been able to announce a debate in the course of this statement and I cannot give him a specific undertaking on that, but I shall bear his representations in mind.
Lastly, I am well aware of the problems of rabbits since they caused serious difficulties between Braintree and Witham in my constituency, foraging out from the railway line into the neighbouring fields. I shall draw my hon. and learned Friend's concern to my right hon. Friend's attention. I wrote to Bob Horton, the chairman of Railtrack, and received what I regard as a positive response.
Mr. Harry Barnes: Twice at Prime Minister's Question Time the Prime Minister has

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promised me and the House that electoral registration figures for England and Wales will be made available to the House by the end of March. The problem is that the end of March falls during Easter and there is a distinct possibility that the House will not return after Easter. Will the Leader of the House make a commitment that those figures will be available to the House before Dissolution and in sufficient time for hon. Members to raise through the procedures of the House any matters that arise from those figures?
Mr. Newton: A number of answers have been given to the hon. Gentleman in recent weeks by both the Prime Minister and me. It is not for me to make commitments on behalf of the Office for National Statistics, but my information is that the last of the forms that it needs have just been received and when the data are checked, the office plans to publish the figures on 26 March as agreed.
Mr. Jacques Arnold: May we have a debate next week on grant-maintained schools, such as St. John's Roman Catholic comprehensive school in my constituency, during which we could highlight the considerable dangers to such schools of up to 15 per cent. of their education funds being clawed back by the local education authority and the possibility of the appointment of political governors on the governing bodies of such schools were Labour's policies to be implemented?
Mr. Newton: That sounds like an extension of, or an addition to, the question asked by my hon. Friend the Member for Mid-Kent (Mr. Rowe). I am tempted to suggest that my hon. Friend the Member for Gravesham (Mr. Arnold) might seek another Wednesday morning debate on these matters, as the last one was very effective—even if it has not produced the necessary changes that he would like to see. However, that is not a matter for me to determine.
Mr. John Gunnell: When the Select Committee report on ministerial accountability was debated in the House, the Chancellor of the Duchy of Lancaster said that he would attempt to bring to the House a resolution on ministerial accountability that was agreed by all parties before Parliament dissolved. Can the
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Leader of the House report what progress has been made in that regard, and what prospect there is of the resolution being put to the House?
Mr. Newton: I understand that that remains my right hon. Friend's hope, and that he has made further progress in consultation with the authorities in this place and with those concerned with such matters in another place. I shall bring the hon. Gentleman's question to his attention.
Mr. John Marshall: Will my right hon. Friend arrange for a debate on crime and sentencing, during which I could welcome the fact that crime on the London Underground has decreased by 20 per cent. in the past year? If those trends are mirrored nationally, 1996 will see the fourth year of recorded reductions in crime in Britain—the first four-year reduction since records began. I would also condemn the weasel way in which those who were afraid to oppose the Crime (Sentences) Bill in the House have sought to sabotage it in another place.
Mr. Newton: I share my hon. Friend's views on the latter point. As to London Underground, I was not aware of those encouraging statistics, but I am sure that the whole House will find them heartening.
Mr. Stuart Bell: As my hon. Friend the Member for Dewsbury (Mrs. Taylor) said, the Leader of the House is an honourable man and he has not misled the House by not announcing the dates of the Easter recess. However, would he agree that the way is now open for the announcement of a general election on the 20th of the month? The business of the House could be tidied up on 24 and 25 March, there could be a Royal Proclamation on 1 April, and a general election on 24 April. I do not ask the right hon. Gentleman to speculate: I simply ask him to agree that this is a valid scenario.
Mr. Newton: From where I sit, it sounded perilously close to asking me to speculate. I have no more intention of doing so with the hon. Gentleman—despite the fact that he is a quite reasonable man—than with anyone else. As he well knows, there is a little green book in the Library that sets out all the dates of every possible occurrence from last October until the end of May.

Points of Order
4.2 pm
Mr. Harry Greenway: On a point of order, Madam Speaker. Bearing in mind the serious discourtesy to the House displayed by a Member of Parliament in leaking the report of the Select Committee on Education and Employment about nursery education—even before it was completed last evening, judging by the inaccurate representations that have appeared in the press—I ask you to protect the standards of the House by having each member of the Select Committee interviewed with a view to establishing who leaked that very important document so that that hon. Member may make her apologies to the House.
Madam Speaker: As I am sure the hon. Gentleman is aware—he may recall the wise words of the Leader of the House at the Dispatch Box a few moments ago—the issue is a matter for the Committee to investigate. The Committee has full authority to investigate the matter itself, and it can proceed to do so at any time. The Committee may then wish to report the matter for action to the House.
I fully support the comments made by the Prime Minister today at the Dispatch Box. Speaking for myself, I have nothing but disdain for individuals who give our working documents and unpublished reports to the press before they are available to the House.
Mr. Michael Brown: Further to that point of order, Madam Speaker.
Madam Speaker: I have just given a ruling.
Mr. Brown: It is a different point.
Madam Speaker: No. The matter is concluded. I have said absolutely everything that I needed to say. I gave the hon. Member for Ealing, North (Mr. Greenway) an opportunity, and I have now made my ruling.
Mr. Clive Soley: Further to that point of order, Madam Speaker. My point arises from the procedure of Select Committees. I understand that it is always open to an hon. Member who is serving on a Select Committee, even if he or she is out of the Room when a decision is reached in that Committee, to express dissent in the ensuing report, as long as he or she does so—
Mr. Brown: I did.
Mr. Soley: That is as long as he or she does so before the report is finally published and before it is recorded in the report.
Mr. Brown: I did, and I want that recorded now.
Mr. Soley: I do not raise the matter in relation to the hon. Member for Brigg and Cleethorpes (Mr. Brown), who is calling out from a sedentary position. I am not referring to the hon. Gentleman. The House will know that some comments have been made on the radio to the effect that Members who have been outside the Room and
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have not voted on a particular issue have not been able to dissent from the ensuing report. As a Chairman of a Select Committee—I think that what I am about to say applies to any other Select Committee—I take the view that every member of the Committee has the right to record dissent before the Committee finally approves the report.
Madam Speaker: The hon. Gentleman, who is very experienced, is absolutely correct. Reports that we read in the newspapers and hear on the radio are not always as accurate as we are in the House.
Mr. Brown: Further to that point of order, Madam Speaker. The point of order that I wish to raise follows directly from the point of order made by the hon. Member for Hammersmith (Mr. Soley). I wish to place it on record that I voted against the report. That is why I wonder whether it is possible for the Select Committee to print the report now so that I can assure the nation that I voted against the report.
Madam Speaker: I think that the hon. Gentleman has done very well in informing the nation of his views on the subject.
Mr. Tam Dalyell: On a point of order, Madam Speaker. This point of order is not about informing the nation but concerns your unfulfilled expectations. When responding to points of order on 11 March you said:
"The Minister said that he would respond as soon as possible".
You added,
"and I expect him to do so."—[Official Report, 11 March 1997; Vol. 292, c. 145.]
I was a parliamentary colleague of Bernadette McAliskey. I was not one of her greatest admirers by any means, but I think that in addressing our first woman Speaker of the House I should say something about Bernadette McAliskey's daughter, who is pregnant, who is being held in prison in unacceptable conditions. The House should be told about the matter. To treat pregnant women in prison like this—
Madam Speaker: Order. The hon. Gentleman is trying to have a debate on an important issue that is not before the House. I made my position clear the other day when I said—I repeated what the Minister had said—that the Minister would reply to the question as soon as possible. I expect him to do precisely that.
Mr. Harry Greenway rose—
Madam Speaker: Mr. Greenway is getting ready for yet another point of order.
Mr. Greenway: In terms of procedure, Madam Speaker—I am grateful to the hon. Member for

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Hammersmith (Mr. Soley) for his point of order—is it a fact that a Member who is out of the Room when the final decision to approve a Select Committee report is taken—
Madam Speaker: I have nothing further to report on that matter. It has all been done.
Mr.Greenway rose—
Madam Speaker: The hon. Member for Ealing, North (Mr. Greenway) has been in the House for a long time and he knows our procedures. We have all been through the matter only recently.
Mr. Graham Riddick: Further to that point of order, Madam Speaker. I, too, want to make it clear to the nation that I, like my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown), voted against this dog's dinner of a report.
Madam Speaker: Thank you very much.

BILL PRESENTED
  PENSIONER TRUSTEES
  Mr. Brian David Jenkins presented a Bill to give pensioner members of occupational pension schemes the statutory right to be member-nominated trustees of such schemes: And the same was read the First time; and ordered to be read a Second time on Friday 2 May, and to be printed [Bill 137].

  Pensions
  [Relevant documents: Minutes of evidence taken before the Treasury Committee on Wednesday 5 March (HC355) and on Monday 10 March (HC381.]
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ottaway.]
  4.8 pm
  The Secretary of State for Social Security (Mr. Peter Lilley): Every serious commentator now recognises that only the Government are committed to improving the lot of present and future pensioners. The comparatively empty Opposition Benches show that Labour has literally abandoned the pensioners. Most Opposition Members are not in their places because they are too ashamed of their record on pensions to defend it. They are ashamed of the Labour Government's inflation, which wiped out a quarter of people's savings in a single year. They are ashamed that Labour failed to uprate the state pension properly, stealing £1 billion from pensioners. They are ashamed that Labour failed to pay the Christmas bonus. They are ashamed that, over the entire lifetime of the last Labour Government, pensioners' incomes rose little more than they have on average every single year under the Conservative Government.
  Today Labour members are ashamed of their Front Benchers' reaction to our basic pension plus. Even commentators who are not unsympathetic to Labour, such as Peter Riddell of The Times, have said:
  "Labour's reaction was a depressing example of knee-jerk opposition politics at its worst".
  Today Labour members are giving the hon. Member for Peckham (Ms Harman) a chance to redeem herself and to come up with some positive response. Some hope, it would appear.
  Mr. Frank Field rose—
  Mr. Lilley: I give way to a more promising prospect.
  Mr. Field: I congratulate the Secretary of State on his non-partisan stance, and hope that that will be the temper of the whole debate.
  Mr. Lilley: I understand that the hon. Gentleman has been under some pressure to be less non-partisan. I congratulate him on his objectivity.
  Conservatives, of course, have long been the party of the property-owning democracy. It was Conservatives who encouraged the spread of owner-occupation—two thirds of all families now own their own homes. It was Conservatives who gave council tenants the right to buy their own homes. It was Conservatives who encouraged the spread of share ownership, so that more people now own shares than belong to trade unions. It was Conservatives who encouraged two thirds of those in work to build up second pensions. The plans that I announced last week to give everyone, over a generation, their own funded investments in their own guaranteed personal fund will be the biggest extension of personal ownership ever.
  Mrs. Jane Kennedy: It was the Conservatives who encouraged people to opt out

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  of occupational pension schemes and the state earnings-related pension scheme and take out personal pension plans. How many of those who were sold inappropriate pensions have been compensated?
  Mr. Lilley: The hon. Lady knows that everybody who was missold such a pension will receive restitution. They have the assurance of the regulators. That process is being accelerated by the vigorous action of my hon. Friend the Economic Secretary, and nobody will lose as a result—unlike the 1 million council tenants who would have been unable to buy their own homes if the Opposition had had their way.
  Our proposal will extend to everyone rights previously enjoyed only by the better-off. It will give everyone the right to share in the success of our economy; the right to own their own personal investments; and the right to a better and more secure pension.
  The Labour party, of course, has opposed every extension of personal ownership. In 1982, the right hon. Member for Sedgefield (Mr. Blair), who is now leader of the Labour party, said:
  "Labour would ban the sale of council houses. That is for perfectly sound reasons of political principle."
  In 1983, the hon. Member for Peckham and her party voted against extending the right to buy. Throughout the 1980s, Labour opposed workers, customers and savers being given the right to own shares in the former nationalised industries, so it was no surprise that, last Wednesday, the hon. Lady instantly attacked the next big expansion of personal ownership in this country. She made such a mess of it in the morning that the shadow Chancellor had to take it out of her hands in the afternoon, but he still sounded too old Labour, so the leader of the Labour party had to take it out of his hands the next day. However, even he got it wrong, so the hon. Member for Birkenhead (Mr. Field) had to come along and heap praise on our scheme.
  I am happy to pay tribute to the hon. Gentleman and his Select Committee for pointing the way to basic pension plus. In their report last October, entitled "Unfunded Pension Liabilities in the European Union", they wrote:
  "our concern is to ensure that there should be no misunderstanding about the hard choices which will have to be faced when future generations of elderly people come to claim the rights to income in old age which they believe they have earned and for which the younger working generations are no long willing or able to pay."
  The Committee urged us to consider
  "ways in which unsustainable and unfunded pension promises can be replaced by sustainable pre-funded pensions in the individual ownership of the employee."
  That is precisely what basic pension plus will do.
  Mr. Peter L. Pike rose—
  Mr. David Shaw rose—
  Mr. Lilley: I give way to the hon. Gentleman.
  Mr. Pike: The Secretary of State keeps referring to basic pension plus. Will he confirm that a third of the people will almost certainly receive only the basic pension guarantee, and that there will be no plus for them?
  Mr. Lilley: Everyone in work will have rebates paid into their scheme, so there will be potential if the investments do well. People will be guaranteed at least as good a pension as under the present system.
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  Our proposal has three key elements. The first is a personal fund for every young person starting work. They will choose an approved firm to manage it, and they will own it, so they will be able to pass on to their spouses or heirs any assets that are not used to pay their pension.
  The second element is the rebate. Everyone will get a rebate from their national insurance. The Government Actuary calculates that £9 a week will generate a fund sufficient to pay the basic pension. A £9 a week rebate, rising with inflation, will be paid into people's funds over their working lives.
  The third element is the basic pension guarantee. The state will guarantee that everyone will receive a pension at least equal to their basic state pension, increased in line with inflation.
  Mr. David Shaw rose—
  Mr. Geoffrey Clifton-Brown: Will my right hon. Friend give way?
  Mr. Lilley: My hon. Friend the Member for Dover (Mr. Shaw) first indicated an intention to intervene.
  Mr. Shaw: My right hon. Friend has referred to the report of the Select Committee on Social Security on unfunded pension liabilities. It recently hosted a seminar for parliamentarians from Parliaments across Europe. We invited them to the House of Commons to talk about their unfunded pension liabilities and our pension funds. They were full of admiration for what my right hon. Friend's policies have achieved, and they will no doubt be following very closely the basic pension plus proposal, which I am sure all European countries will want to copy.
  Mr. Lilley: I am sure that my hon. Friend is right: there has been much comment to that effect. We have led the way on most issues, from privatisation to labour market reform. Our reforms have been copied worldwide.
  Ms Angela Eagle: The Secretary of State referred to labour market reform. Does he agree with me that, as a result of such reform, many men are now leading similar working lives to those that women used to lead? They are on low pay, in temporary jobs, and they change from one job to another, so they cannot build up an adequately funded pension. With basic pension plus, the right hon. Gentleman is offering the pension that the Conservative party has always said it wanted to let wither on the vine. Do not the calculations show that, by 2040, that pension, if it is increased merely in line with inflation, will be worth only 23 per cent. of average earnings?
  Mr. Lilley: The hon. Lady seems to be attacking the policy of her own Front-Bench team, so she should address her remarks to them.
  Mr. Clifton-Brown: Will my right hon. Friend give way?
  Mr. Lilley: I shall give way to my hon. Friend, and then perhaps I can make some progress.
  Mr. Clifton-Brown: My right hon. Friend's scheme is visionary, because it gives people ownership of savings

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  for pensions in their old age. More important, it is a basic pension plus, because, even on fairly conservative figures, it provides the possibility for the ordinary youngster starting out today to double the present rate of state pension. Does my right hon. Friend agree with that?
  Mr. Lilley: I entirely agree with that. My hon. Friend is one of the people who first had the vision of moving in this direction, and I am happy to pay tribute to his contribution to the thinking that has led to this proposal.
  Under the proposal, each fund should grow to provide the basic pension. If, for any reason, a person's fund is insufficient, the state will top up the pension that it provides, so he will still get his basic pension. Everyone will be protected by the basic pension guarantee. No one will do less well than under the present state scheme. Everyone stands to do better if, as we hope, the economy and people's investments do well. If returns are 1 per cent. higher than assumed by the Government Actuary, people will receive a pension 30 per cent. above the level of the basic pension. If yield is 2 per cent. higher, the pension will be some 70 per cent. better than the present state pension.
  During the past week, I have been challenged to say what pension people will receive not on the basis of an actuary's assumptions, but if investments do as well or as badly over the next 50 years as they have over the past 50 years or so. Of course, they may do better or worse in the future. If they under-perform, people know that their basic pension is guaranteed.
  Since 1950, equity investments have grown at a rate of 7.7 per cent. a year on top of inflation. The Government Actuary calculates that if, over the next half-century, pension fund investments grow a little less—let us round it down to 7 per cent. a year—the basic pension that will be received under our scheme will be double its present value.
  We are determined that the new generation should have the opportunity to share in the potential growth. Basic pension plus extends that right even to the less well-paid. We call the scheme "basic pension plus" because it is the basic pension, plus a fund, plus a rebate, plus a guarantee, plus the prospect of growth.
  In the 1980s, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) and my right hon. Friend the Prime Minister, as he now is, paved the way for more funded provision by allowing people to opt out of the state earnings-related pension scheme into their own funded personal pensions. Two thirds of those eligible now opt for private schemes, but a third do not, mainly because their SERPS would be too small to make it worth their while to set up a personal fund.
  That problem will not exist when everyone has a basic pension plus fund. Everyone in the new generation will also be contracted out of SERPS, and, in addition to the £9 a week rebate to fund their basic pensions, employees will receive a rebate worth 5 per cent. of their earnings on which they pay national insurance. That will fund an earnings-related second pension.
  A person on average wages will build up a fund that should—on the Government actuary's cautious assumptions—be worth £130,000 when he or she retires. That is sufficient to provide a pension of £175 a week at today's prices. If investments do as well over the next half-century as they have, on average, over the last, the
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  person on average wages stands to receive a pension of around £350 a week. That is based on the assumption that that person has made the minimum contributions over most of his or her working life. Once all those in work have their own funds, however, they and their employers will be able, and encouraged, to save more in those funds.
  Ms Eagle: Will the Secretary of State give way?
  Mr. Lilley: The hon. Lady has already had one bash, which turned out to be directed towards the wrong side.
  Mr. Clifton-Brown: It was helpful.
  Mr. Lilley: I suppose that it was helpful to me, but I do not think that the hon. Lady is helping herself.
  Mr. Jeremy Corbyn: Will the Secretary of State give way?
  Mr. Lilley: I will happily give way to the hon. Gentleman.
  Mr. Corbyn: According to the Secretary of State's assessment of the contributions that will be made under the proposed new scheme, what would be the cost to the individual of paying into, in effect, a compulsory private scheme, as opposed to paying through taxation and national insurance contributions during his or her working life?
  Mr. Lilley: Clearly, a scheme that relies on taxation and charges rather than on savings and investment costs more, because people do not receive the benefits of the return on the investments that have accumulated over a lifetime. That is the advantage of what we are proposing, and I am grateful to the hon. Gentleman for pointing it out.
  The response to our initiative across the board has been overwhelmingly positive. The Times said:
  "These reforms are a radical solution to a huge problem; they show a willingness to think far beyond this Parliament or the next; and they prove Britain to be an innovator ahead of its European partners. In sum, they are an example of good government."
  But support did not just come from friendly newspapers.
  "And even the ranks of Tuscany Could scarce forbear to cheer."
  The Guardian acknowledged:
  "Like the concept of a shareholding democracy, it could also be empowering a new generation, which will have much more control over its own retirement arrangements."
  The Independent put it succinctly when it stated:
  "the Conservatives are trying to address the problem of how to provide a decent pension for all; Labour is not."
  Of course, the only root-and-branch opposition to the proposals came from Labour, and that tells us all we need to know about the party. It still has a knee-jerk hostility to personal ownership. When the Labour leader wanted to launch his big idea, or his medium-sized idea, of stakeholder pensions, he flew off to Singapore. His model was a massive, centralised, state-controlled investment fund. The only trouble is that Governments, even the authoritarian kind that new Labour seems to admire, are not good at investing money.

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  The return on the Singapore state scheme for its population since 1980 has been just 2 per cent. a year more than inflation. Over the same period, the average British pension fund has earned nearly 10 per cent a year more than inflation. That was the last we heard about stakeholder pensions, at least until last week.
  The second thing that Labour's reaction to our initiative demonstrates is that its pretensions to be able to reform the welfare state are a sham. The pretence lies in ruins. Labour cannot reform the welfare state, not because it has no ideas, although it does not, but because it is wedded to keeping people dependent on the state.
  Labour hates the idea of people building up their own pension provision, owning their pension funds and even passing on capital to their children. The Opposition do not mind opting out of the state earnings-related pension scheme, any more than they mind opting out of the local authority education system for their children. Which Opposition Front-Bench spokesman has not opted out of SERPS? But what is good enough for them is too good for the rest of us. They cannot stand the thought of millions more ordinary people escaping the grip of the state, ceasing to depend on it, and no longer beholden to Governments for generously handing out taxpayers' money.
  I shall examine in turn the three criticisms that the hon. Member for Peckham has levelled against basic pension plus. First, she says that the value of the rebates going into investment will be too great. But we are phasing this in over a generation, and more than halving the impact by switching the timing of tax revenues for that generation. Therefore, the net revenues forgone will rise by just £160 million a year on average. Moreover, even at its peak around 2040, the impact on public finances will be less than the peak cost of rebates from SERPS, which we have already taken in our stride. It is a fraction of the £13 billion annual savings which will result from our Pensions Act 1995 reforms.
  Mr. Robert Ainsworth: The right hon. Gentleman will forgive us if we are a little cynical about this Government move. He says that he will phase this in over a generation. Will it take him any less than a generation to compensate those people who have yet to be compensated because of the misselling of personal pensions which occurred the last time he dabbled in this area?
  Mr. Lilley: I have explained that my hon. Friend the Economic Secretary is accelerating that process. The hon. Gentleman will recall that we have already rescued pensioners from the depredations of Robert Maxwell. Our Pensions Act, to which I have referred, was introduced to restore confidence in pension funds which had been damaged by Robert Maxwell.
  Ms Diane Abbott rose—
  Mr. Lilley: Perhaps I may be allowed to make some progress.
  It is a bit rich for the Labour party, which opposed the £13 billion of savings that we made in the Pensions Act, to complain that part of that would be absorbed by the
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  scheme, especially as all the rebates will be invested. That will not only pay for future pensions, but strengthen our economy.
  When the Labour leader was extolling the virtue of Singapore's scheme, he said:
  "It is a way of encouraging savings and investment … The idea of raising investment and savings is very important. We"—
  in Britain—
  "need to increase our investment significantly".
  Precisely so. Basic pension plus will produce a massive flow of extra funds for long-term investment in this country.
  The Labour party has argued that more investment is the key to faster growth. If the extra investment boosts our growth by just a 20th of 1 per cent., the whole scheme will be self-financing. The extra revenues generated by that growth will exceed the net value of rebates. We are not counting on that, but Labour is surely not suddenly denying that investment is good for growth.
  Mr. Michael Stephen: Will my right hon. Friend give way?
  Mr. Paul Flynn rose—
  Mr. Lilley: If I decline interventions from both my hon. Friend and the hon. Gentleman, I will make a little progress; I have given way quite a lot.
  The second criticism made by the hon. Member for Peckham is that basic pension plus will, allegedly, be insecure. That is the reverse of the truth. We will underpin the basic pension with investments. We will guarantee the basic pension, should those investments be insufficient. I simply ask the hon. Lady which is more secure: her promise to pay the basic pension in future with no investments to fund it, or our guarantee to pay the basic pension with investments to fund it? She is welcome to come to the Dispatch Box and tell us which she thinks is more secure. I note that she does not.
  Last year, the hon. Lady and her party voted to make companies invest even more to underwrite the pensions they promise their members, yet now she thinks that the state can be relied on to keep its pension promise without investing a penny to pay for it. As the hon. Member for Bath (Mr. Foster) said on "Question Time", Labour is defending the pyramid selling principle as the key to the future provision of Labour's state pensions.
  The hon. Lady has made a lot of misselling. As I have said, the misselling in the late 1980s was wrong. It is essential that everyone who was missold a pension be reimbursed or reinstated into their old scheme. None of them must lose. The regulator's assurance to that effect is welcome, and so is companies' resolve, following a meeting with the Economic Secretary to the Treasury, to accelerate the process of compensating those affected.
  Ms Abbott: Will the Secretary of State give way?
  Mr. Lilley: I want to make some progress.
  Needless to say, any company that failed to compensate for past misselling would not be eligible to manage a basic pension plus fund. However, that sort of misselling is not directly relevant to basic pension plus, and could not recur under this scheme. It occurred when people were

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  persuaded to opt out of their occupational schemes into personal pensions that they did not need. It did not involve people opting out of SERPs into personal pensions.
  A recent study by the actuaries Alexander Clay showed that as many as 99 per cent. of those who have opted for a personal pension and out of the state system were well advised to do so. Indeed, on average, their pensions will be nearly three times as large as if they had stayed in SERPS, and they could be nearly £1,000 a year better off on today's prices, if they continue to pay into their funds.
  Ms Abbott rose—
  Mr. Lilley: Nevertheless, it will be essential to have effective but simple regulations for basic pension plus to keep costs and charges low, to prevent churning, and to prevent over-risky investment exploiting the pension guarantee.
  Ms Abbott: Is the Secretary of State aware that, of the 500,000 people who were missold pensions, in two and a half years only 1 per cent. of them have received compensation? Is not the likelihood that, at that rate of progress, most of them will have died before they are compensated for the misselling? What confidence can the general public have in the private pension industry, given that poor regulatory record?
  Mr. Lilley: The hon. Lady was obviously so anxious to get out her scripted question that she did not realise that I was replying to it as she was jumping up and down.
  Mr. Stephen Timms: Will the Secretary of State give way?
  Mr. Lilley: I will make some progress.
  Mr. Robert G. Hughes: The hon. Member for Newham, North-East (Mr. Timms) has the other scripted question.
  Mr. Lilley: It is probably the same one; he just was not listening.
  The third criticism made by the hon. Member for Peckham was that our reforms do nothing for current pensioners. Of course basic pension plus itself does not, but our Pensions Act reforms protect today's and tomorrow's occupational pensioners against the likes of Robert Maxwell, about whom Labour Members are singularly unconcerned. The House will remember that he was the only Labour Member of Parliament ever to take a serious interest in private pensions. It seems that his principle of providing pensions with a fund with no investment in it to meet them has now become official Labour Front-Bench policy.
  Mr. Stephen: Will my right hon. Friend give way?
  Mr. Lilley: I should like to make some progress.
  Our success in curbing inflation is one of the key advantages that the current generation of pensioners has gained from the Government. They remember the damage that Labour's hyper-inflation inflicted on pensioners' savings when it was last in government. The extra £1.2 billion we have pumped into higher income support
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  premiums is helping the less well-off pensioners, and, above all, we are not threatening them with the double whammy of a utilities tax, which would be paid for in the gas, electricity, telephone and water bills of pensioners and others, and which would hit the value of utility shares, the bulk of which are held by pension funds.
  Mr. Timms: I should like to bring the Secretary of State back to the subject of pensions. If I understood him correctly, a few moments ago he said that the companies that have been involved in misselling personal pensions will not be able to be involved in basic pension plus. That includes many of the biggest insurance companies in the country, such as Prudential, Legal and General and others. Is he telling the House that those companies will not be able to be involved in basic pension plus?
  As I understand it, the right hon. Gentleman is proposing that the Personal Investment Authority should regulate this matter. Is he aware that, on the day of his announcement, it produced its future strategy, in which it says that it does not want
  "to get involved in any form of direct approval of products or product design"?
  Mr. Lilley: The hon. Gentleman should have listened carefully to me and to Colette Bowe. We both said that the companies that failed to provide restitution for those to whom they missold pensions would not be eligible to run basic pension plus. Colette Bowe also said that the report did not apply to basic pension plus.
  We should not let the inadequacy of the Opposition's response to our proposals for basic pension plus obscure the threat posed to pensioners by Labour's pension policies. First, Labour is casting doubt on its ability to protect the state pension against inflation. In an attempt to demonstrate his fiscal rectitude, in a speech in January, "Responsibility in Public Finance", the shadow Chancellor said that, in order to control the cash totals of departmental spending,
  "there cannot be an assumption that totals will be automatically adjusted upwards in the event of changes in inflation."
  Does that mean that he is not promising to uprate pensions and other benefits, or, in view of the press release rushed out at midday by the hon. Member for Peckham, is the so-called iron shadow Chancellor proving rather ductile as soon as the heat is on, and running away from the pledge he made in January?
  Secondly, Labour's policy of letting people draw their pension at age 60 will either cost the taxpayers £15 billion a year or involve cutting the basic pension by £20 a week. Labour's so-called flexible decade of retirement is identical to reducing the state pension age to 60. People are already free to defer taking their state pension, and for each year they delay, they get a 7.4 per cent. increase in their basic pension for the rest of their life.
  In practice, 98 per cent. of people choose to take their pension as soon as they are permitted to do so. The Labour party does not propose to give them any extra flexibility, or incentives to exercise such flexibility. It proposes only that they can take their pension from 60 instead of 65. There is no reason to doubt that roughly the same proportion as now would draw their pension at 60 if allowed to do so, but that would cost £15 billion more than retirement at 65, unless the basic pension were cut.

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  Imagine my surprise when the hon. Member for Peckham wrote to me last year criticising me for saying that the Labour party's policy of retirement from the age of 60 would cost £15 billion a year.
  Mr. Kevin Hughes: Boring drivel.
  Mr. Lilley: It may be drivel, but I am quoting the words of the hon. Member for Peckham. She wrote
  "the taxpayer should not be expected to fund this personal flexibility. In government we will protect the public purse from any increase in expenditure arising from"
  allowing people to retire at 60. She continued:
  "we anticipate … a lower level of basic state pension."
  She also wrote that she would ask the Government Actuary how much that would cost.
  The Government Actuary calculates that, to avoid extra taxation, Labour's plan would require cutting the basic state pension by £20 a week for the rest of people's lives, or by £37 a week for a couple, and that it would plunge up to 2 million more pensioners below the income support level. The Opposition have said that they would not spend any more money under the plan. They would therefore not be able to top up incomes even to the income support level.
  There is a third new danger from new Labour: its plans for a pension entitlement, which would mean a new means test for all pensioners. Labour plans to test all pensioners to determine whether they are eligible for pension entitlement. Moreover, I am not the only one who calls it a means test. Baroness Castle attacked Labour's
  "vague concept of a pensions 'Entitlement' which is clearly a means-tested guarantee by another name, with all the drawbacks".
  Apparently Labour intends that every new pensioner, and presumably all existing pensioners, would undergo a once-for-all means test. If their total income fell below some unspecified level—presumably set at least at the income support level—they would be topped up to that level by a pensions entitlement. It is not clear, to say the least, whether all pensioners would like to be means-tested, however generous the Labour party's intentions might be.
  However, once Labour had established the system to means-test all pensioners, it would certainly not stop there. It would be the start of a slippery slope; and how long would it be before Labour used the means test to claw back the basic pension from prudent pensioners who had saved enough for a decent private personal pension? Does anyone imagine that the Opposition would be able to fund their £30 billion of spending pledges without taking advantage of their means-testing regime for pensions?
  Mr. Flynn: Will the Secretary of State give way?
  Mr. Lilley: No; I will make some progress.
  The Government have a fine record of raising pensioners' living standards. Pensioners' incomes are now 60 per cent. higher in real terms than they were under the previous Labour Government. On average, pensioners' incomes have increased every year by nearly as much as they did in all four years of the previous Labour Government.
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  In 1979, only 43 per cent. of retired people had an occupational pension of their own. Today, 63 per cent. have one, and the figure is over 70 per cent. among the newly retired. The average size of occupational pensions has doubled in real terms over that period, and, as a result of encouraging people to opt out of the state earnings-related pension scheme, we built up £650 billion of funded provision. That figure is not only greater than that in any other country in Europe: it is greater than the amount that all the other countries in the European Community combined have bothered to save and invest to meet their future pension bills.
  The next Conservative Government will build on that strength. Our plans for basic pension plus involve the most radical improvement in pension provision since Beveridge. It is the biggest enhancement of pensions and the greatest extension of personal ownership. Labour has discredited itself by its knee-jerk opposition to the changes. Its plans would leave pensioners vulnerable to inflation, cut the basic pension by £20 for life, and subject all pensioners to a means test. Our plans will give the United Kingdom secure pensions, high investment and low taxes.
  4.43 pm
  Ms Harriet Harman: The debate on the future of pensions is one of the most important political issues facing us. Unlike the Secretary of State, I shall attempt to point to some common ground between all hon. Members on the issue. We all agree that we have an aging population, that we need long-term planning for changes and that we need to encourage people to save more for their old age by giving them a stake in their own pensions.
  In this debate, I will explain the principles that must underpin any change in pensions policy, why the pension system needs to change after 18 years of Tory government, why we believe that the Government's proposals fail to match up to those principles, and how Labour's approach will provide security in retirement. Those are the principles on which any change to pensions policy must be based.
  Pensions policy must strike a fair balance between the generations, and it must fairly balance the responsibilities of the state and the individual, and of the public and the private sectors. It must provide a secure retirement for people on all incomes, and it cannot leave out those on low and modest incomes. The proposals made last week by the Government fail all those tests.
  The Government's proposals are costly and risky. They give nothing to today's pensioners and they leave tomorrow's pensioners without adequate income in retirement.
  Mr. Lilley: The hon. Lady refused the opportunity during my speech to answer the question of which is more risky—a basic pension promised by her with no investments to fund it, or a pension guarantee with investments to fund it.
  Ms Harman: It is more risky to be blinded by dogma and to say that everything must be in either the state or the private sector. We are saying that we want a partnership between public and private provision. That is how one spreads the risk and provides the greatest future security. People understand that.

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  The challenge of achieving fairness for all generations will be met by striking a balance between today's pensioners, today's people at work and tomorrow's people at work. I shall deal first with today's pensioners because the Secretary of State talked at length about pension liabilities, but he did not say anything about today's pensioners. A quarter of all today's pensioners are on the poverty line or below and must rely on income support. Today, 1.6 million pensioners must rely on income support to top up their basic state pension. Another 1 million of them completely fall through the safety net, because they are entitled to income support but do not claim it, losing an average of £14 a week. It is a scandal that so many pensioners who have spent a lifetime at work or in caring for their families are among the poorest people in Britain.
  The Secretary of State's pension plan will cost taxpayers a massive £312 billion over the next 40 years, but not a penny will be available for today's pensioners.
  Mr. Stephen: How could pensioners have any confidence in a state pension scheme administered by Labour? When Labour was last in power, it so mismanaged the economy that it could not pay even the Christmas bonus.
  Ms Harman: Pensioners' income has always been better under Labour Governments than under the Tories. Pensioners in the United Kingdom remember that the Tories promised them that they would not impose VAT on their gas and electricity but that, as soon as they got into government, they did exactly that.
  Secondly, I will deal with today's work force. Millions of today's workers face financial hardship when they retire because they do not have an adequate second pension. Occupational schemes provide good second pensions, combining the employee's contribution with that of the employer. It is therefore worrying that the number of people in occupational pensions has been falling in recent years. Now, 12 million people in the work force have no access to occupational pension schemes.
  Sir Norman Fowler: If the hon. Lady is encouraging occupational pension schemes, will she assure us that if—it is a big if—there were a Labour Government, the present tax relief on pensions would remain the same as it is today?
  Ms Harman: The right hon. Gentleman seems to be unaware that the National Association of Pension Funds, which is the organisation that represents the large employers that run occupational pension schemes, said that the Secretary of State's proposals would spell
  "the demise of the occupational pension system".
  Therefore, the right hon. Gentleman cannot say that the Government's proposals would protect occupational pension schemes when such schemes have shrunk under this Government and the NAPF says that the proposals would spell their demise.
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  Twelve million people—
  Sir Norman Fowler rose—
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse):Order. Is the hon. Lady giving way?
  Ms Harman: No. I have given way and answered the right hon. Gentleman's question.
  Mr. Deputy Speaker: The Secretary of State was given a reasonable hearing; the hon. Lady has a right to the same.
  Ms Harman: Now, 12 million people in the work force have no access to occupational pension schemes. They have to choose between the state earnings-related pensions scheme, which the Government have halved in value, and personal pensions which, as the Consumers Association pointed out, can be poor value for money because of high charges and low contributions. People on low and modest incomes may find that the fees and charges associated with personal pensions can consume up to a third of their hard-earned savings—the money goes to the financial services companies and is not available for them when they need it in retirement.
  Nearly 6 million people have no second pension provision whatsoever. Basic pension plus will give no help to today's work force who are destined to retire on means-tested benefit, having paid higher taxes to finance the Government's privatisation of pensions. The cost of the transition to basic pension plus will be borne by the current generation of workers who will have to pay twice through their taxes: they will have to pay for the pensions of the retired and for the pension funds of the rising generation.
  The cost of privatising pensions over the next 40 years would be £312 billion. The Secretary of State said that he will get £160 billion from abolishing tax relief on pension contributions, but he may not be able to raise that amount. The NAPF warns that a new tax on contributions would cause a drop in contributions and so reduce the base and the yield for the new tax. As I said in response to the right hon. Member for Sutton Coldfield (Sir N. Fowler), the NAPF today said that the Secretary of State's scheme threatens the occupational pension system. How can people benefit from increasing prosperity and have security in retirement if the Government's plans are undermining their occupational pension schemes?
  The Secretary of State has not even tried to explain how he will raise the other £150 billion and who will pay it. It will mean either increased taxes or increased borrowing. He has offered nothing to today's pensioners and nothing to today's work force except extra taxes and a threat to their occupational pensions, but has he put the public finances on a sounder footing for the future? No, he has not.
  The Secretary of State claims that his plans deal with the so-called demographic time bomb but, as Andrew Dilnot of the Institute for Fiscal Studies points out in The Guardian today, he has got his timing wrong. The cost of introducing basic pension plus will peak at £14 billion a year at the very time when the demands of an aging population will be greatest. Pension costs and extra costs for long-term care and health care will be at

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  their highest between 2020 and 2030, but during that decade billions of pounds will be spent privatising pensions. The public purse will be less able to meet the extra demands for health and long-term care—there will be less available to spend on the elderly just when the number of the elderly compared with the number in the work force is at its greatest.
  Mr. Iain Duncan Smith: Will the hon. Lady give way?
  Ms Harman: I will not.
  The Government's plans also fail to provide a secure retirement for all, whatever people's income. The Government have claimed that everyone will get £175 when they retire, but this morning the Government doubled that figure to £350, not at the suggestion of the Government Actuary because, as the Secretary of State admitted at his press conference this morning, he wrote it on the back of an envelope.
  The £175 is not guaranteed, as my hon. Friend the Member for Wallasey (Ms Eagle) said; only £61 is guaranteed. The £175 is available only for people on average earnings, but three quarters of all employees earn less than average earnings. Today, £175 is worth half average earnings, but in 2040 it will be worth only 21 per cent. of average earnings.
  If a private pension company fails to warn that the markets can go down as well as up, it is guilty of breaching the Financial Services Act 1986. If a private pension company fails to warn that one can lose the money that one puts into savings, it is guilty of breaching the Financial Services Act. If a private pension provider promoted £175 promises, as the Government have done, it would be found guilty of breaching the Financial Services Act. When the Government behave worse than the worst cowboys in the private sector, the regulatory system is wholly undermined. The regulators ought to give the Secretary of State a call—the Government have made false claims.
  Mr. Robert G. Hughes: The hon. Lady is right to talk about regulation and making sure that people understand the figures. It is clear that her plan for a flexible decade of retirement would cost £15 billion, but she has said that a Labour Government would not raise that money. The alternative is that the basic pension would have to go down by £20 a week. I am perfectly prepared to accept in good faith what she told my right hon. Friend the Secretary of State in her letter to him last August—she said that she would not raise the extra money—but will she now confirm that her plans would reduce most pensions by £20 a week?
  Ms Harman: There is absolutely no question of Labour cutting the basic state pension. That is a scurrilous suggestion which the hon. Gentleman knows is untrue; it is unworthy of him—[Interruption.]
  Mr. Deputy Speaker: Order. The hon. Gentleman asked the hon. Lady a question. She is having great difficulty replying because she is not being given the opportunity to be heard. There is too much noise.
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  The House must settle down and allow the hon. Lady to get on with her speech, just as the Secretary of State was allowed to do.
  Ms Harman: I think that the hon. Gentleman's intervention was a case of the same old Tories making the same old Tory—what we have to call in this House—misrepresentations.
  Mr. Lilley rose—
  Ms Harman: It looks as though we are going to get another one.
  Mr. Lilley: I received a letter from someone purporting to be Harriet Harman which said:
  "We will have to consider what level of basic state pension should be paid. … we anticipate … a lower level of basic state pension."
  Is the hon. Lady denying that it came from her?
  Ms Harman: Some people describe the Secretary of State as an intellectual. He knows that we are not proposing to means-test all pensioners, although that is what he said this morning, and that we are not proposing to—and will not—cut the basic state pension. We will protect the basic state pension. He also knows that we are considering some additional flexibility and choice for a flexible decade of retirement. At present, some people are able to draw their pension later and take it at a higher level. We are against the idea that we are inevitably stuck with a one-size-fits-all welfare state. We shall continue to put forward proposals to modernise the welfare state to give people more choice and more flexibility. There is no suggestion of forcing anybody to retire early and take a cut in their basic state pension. If the Secretary of State wants to continue with his leadership bid, he had better build on his credentials. The main one is supposed to be his brain.
  I should like explain the £175. The Government's proposals will not guarantee the full £175-a-week pension that they claim that someone on average earnings will get on retirement in 2040. The basic pension guarantee will cover only the basic pension element, not the 5 per cent. earnings-related element or any additional savings that an individual might make. The basic pension guarantee guarantees only £61 a week, which will be worth just 7 per cent. of average earnings in 2040. It is not a guarantee of £175.
  The new second-tier additional earnings-related element will not provide a generous or adequate pension either. The £175-a-week pension that the Secretary of State claims that someone on average earnings will get in 2040 will result in pensioners falling further behind the living standards of people at work. A man on average earnings who retired last year, solely dependent on the basic state pension and SERPS, got a pension worth 36 per cent. of his earnings. By 2040, when living standards will have risen significantly, under the Government's plan a man on average earnings would retire on only 20 per cent. of his earnings.
  Mr. Edward Garnier: Will the hon. Lady give way?
  Ms Harman: I shall not give way to the hon. and learned Gentleman. I have given way six times. Each

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  time, I have been asked questions that were not sensible and each time Conservative Members have not listened to the answer. [Interruption.]
  Mr. Deputy Speaker: Order. What is going on in the House this afternoon? I repeat, I hope that the hon. Lady will be given the same hearing and the same courtesies as the Secretary of State was. She has made it clear that she is not giving way, so I advise hon. Members to take that on board.
  Ms Harman: The £175 guarantee, which is not a guarantee, does not apply to everyone, but only to those on average earnings. Three quarters of the work force earn less than average earnings.
  Some 2.6 million pensioners live on the basic state pension, topped up by income support. In 2040, after spending £312 billion on their privatisation plan, the Government predict that 3 million pensioners will be living on the basic pension guarantee, topped up by income support. Mervyn Kohler of Help the Aged has said that under the Government's proposals, a poor worker will progress to become a poor pensioner. Basic pension plus would be a guarantee of poverty in old age for more than 3 million people. After more than £300 billion has been spent, 3 million pensioners will still be struggling on the bread line.
  Basic pension plus fails to strike a fair balance between the generations. It fails to give people on all incomes a decent standard of living in retirement and it increases risks because it abandons the partnership between public and private provision, putting every penny of every pension into the private sector basket. Every part of every pension will be at the mercy of the market and every taxpayer will have to stand by to bail out failed schemes. The Secretary of State has made reassuring noises today, telling people not to worry about misselling because it is all sorted out and will not happen again. The Government have a bad record on protecting people from the risk and cost of their ideological forays into personal private pensions.
  In the mid-1980s, the Government's policy, backed by hundreds of millions of pounds, was to encourage people to opt out of occupational pensions and SERPS and go instead into personal pensions. Labour warned at the time that many people would wrongly be lured out of good value for money occupational pensions and would lose out. The then Under-Secretary of State for Health and Social Security, now the Prime Minister, swept our concerns aside. He assured Parliament that the Government would
  "safeguard people against unscrupulous overselling of personal pensions."—[Official Report, Standing Committee B, 4 February 1986; c. 27.]
  That was the Prime Minister's promise. He did not safeguard people and 1.5 million lost out. There are 500,000 urgent cases awaiting compensation. Only 7,000 have received compensation. At least 18,000 will never receive their compensation. The Personal Investment Authority told me last night that 18,000 people have died before they could be compensated. Why should the public trust the Government's reassurances this time when they got it so badly wrong last time? They are forcing everyone into the schemes that have failed so many.
  Mr. Nigel Forman: Can I clarify what the hon. Lady has said, which is open to
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  misunderstanding? If people tragically die before they can be compensated, their families, their estates and their relatives get the compensation.
  Ms Harman: It will be too late for them. As a direct result of Government policy, they will have had a lower standard of living in retirement than they were entitled to. The Secretary of State and the Tory Government have shown no remorse about the personal loss and hardship that they have caused so many people. Far from it: they are trying to sweep the issue under the carpet and press on with their dogmatic and ideological proposals to get rid of all state provision and privatise all pensions.
  The Government say that under their new scheme costs will be held down. Under the Financial Services Act 1986, they have always had the power to cap charges and have never used it. Their track record is to allow charges to soar. Why should we believe them now when in recent years they have allowed people's savings to be eaten up in costs and charges?
  Mr. Clifton-Brown: One of the planks of my right hon. Friend the Secretary of State's proposals is that the market will drive down charges. This lunchtime, I was with one of the major mutual companies, which reckons that it can provide one of my right hon. Friend's pensions at about 0.5 per cent. of the fund value each year. Moreover, the top-up could be provided free of charge, so I do not know how the hon. Lady gets the idea that those private pensions will cost more.
  Ms Harman: The Secretary of State asserted that, under the new scheme, charges will be lower than under existing personal private pension schemes because marketing costs, which form the greater part of the costs and charges that eat up so much of people's savings, will be brought down. As people will have to invest in those private pensions, the companies will not have to spend so much on marketing. The problem with that is that the Secretary of State fails to recognise that the system still offers a choice between different private providers. The advertising and marketing costs will be not a response to try to increase the market but a response from each personal private pension company to try to increase its market share. With more funds in play, it will be even more worth while to spend more on marketing and advertising, and to offload the charges on to people trying to save for their retirement.
  Several hon. Members rose—
  Ms Harman: I shall not give way.
  Mr. Flynn: Will my hon. Friend give way?
  Ms Harman: I shall give way to my hon. Friend.
  Mr. Flynn: I congratulate my hon. Friend on how she has coped with the bad-mannered interruptions of Tory Members, who are all suffering from bad cases of pre-defeat hysteria.
  What assessment has my hon. Friend made from the nonsensical replies that she and many other hon. Members had to our questions printed in Hansard in the past few days, on how the Government reached the figure

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  of £175? Conflicting answers printed on the same day say that the Government have worked on the assumption of an annual earnings increase of 1.5 per cent. and of 2 per cent. That will make a difference, as a percentage of average earnings in 2040, of between 18 and 26 per cent.—an enormous difference. The Government are confused. What assessment—
  Mr. Garnier: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Newport, West (Mr. Flynn) to make a speech instead of an intervention when the hon. Member for Peckham (Ms Harman) refused to give way to perfectly reasonable Conservative Members?
  Mr. Deputy Speaker: Interventions should be brief and to the point, but it is not uncommon for hon. Members to stray from that in this House.
  Ms Harman: My hon. Friend the Member for Newport, West (Mr. Flynn) is absolutely right. Although the Government's proposals are barely a week old, they are already unravelling. The Government contradict their figures on the costs and benefits day by day.
  The Government have made it clear that their pensions priority is to spend 40 years and more than £300 billion privatising state pensions. Labour does not share those priorities. We agree with the Secretary of State, however, that we cannot go on as we have for the past 18 years because it leads to poverty and insecurity for too many. Our approach, however, is different. There is not one type of provision that is right for everyone. People have different lives and different family and work patterns. We cannot have a one-size-fits-all pension privatisation. Everyone should have access to a pension that offers security in retirement and the largest number of people should have a stake in their own pension scheme and be encouraged to make further savings.
  We shall do that through partnership between the public and private sectors. We shall keep the basic state pension not means-tested. We shall keep SERPS as a choice, particularly for the low-paid and for carers. We shall protect occupational pension schemes and provide a new low-cost stakeholder pension for those who do not have an occupational pension and for whom a private pension is simply too costly.
  Those fortunate enough to be in an occupational pension scheme will have the benefit of employers' contributions as well as their own, but the Tories have encouraged more than 1 million people to opt out of occupational pensions. Basic pension plus will undermine them further. We want occupational pension schemes to be strengthened and, where possible, extended. We shall keep constantly under review the issue of regulation brought in by the Government. We shall aim to reduce the burden on employers in terms of the cost of compliance while continuing to protect the public interest. We shall introduce an investors in pensions award to recognise and encourage employers who make excellent pension provision for their employees.
  However, millions of workers cannot join an occupational pension scheme because they are in a small firm and are more likely to move between jobs. For them,
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  the current choice is between SERPS and a private pensions but the benefit of SERPS has been halved and the costs and charges of private pensions are too high. There is clearly a need for a value-for-money, funded pension scheme that gives those people both flexibility and security at low cost. That is why we have been working with the financial services industry to formulate a new funded second pension—the stakeholder pension.
  Stakeholder pensions will help to provide decent income in retirement for people who currently fall through the net. We want to encourage new partnerships, for instance between insurance companies and groups of small businesses in one industry or with employee organisations to provide stakeholder pensions. People in those new schemes will get a better pension because of reduced costs due to economies of scale. They will be able to take breaks in employment without being unfairly penalised.
  Our approach to SERPS is based on choice. No overwhelming case has been made for ending SERPS as a choice, which is why we shall keep it for people who want to be in it and want to use it as a benchmark by which to judge second pensions. SERPS can also play a role in providing pensions for those—usually women—who care for elderly or sick relatives. Many of those people face retirement on means-tested benefits, but crediting them into SERPS could help to ensure that they gain a pension in their own right in recognition of the work that they do, which is unpaid but important to the community. Together with our proposals to ensure equal treatment for women, that could greatly reduce reliance, and hence public expenditure, on income-related benefits for those in retirement.
  I wish to outline our proposals for today's pensioners. We shall defend the basic state pension from the Tories. Under Labour, it will not be means-tested and it will rise no less than prices. Our first priority, however, will be the poorest pensioners. One million pensioners do not receive the income support to which they are entitled. We shall examine how to help the poorest pensioners through our plans for a pension entitlement in addition to the basic state pension—replacing not the basic state pension but income support. It will ensure that people receive what they are entitled to without having to fill in a 35-page form.
  The Government have failed 1 million people. Among the poorest are retired people who are too proud to have to jump over all the hoops and hurdles which the Government place before them in order to get the income support to which they are entitled.
  Mr. Edward Leigh: Will the hon. Lady give way?
  Ms Harman: I will not give way.
  We shall get rid of the stigma of income support, replacing it with a pension entitlement. We shall make it easier for pensioners by making it possible to claim at a far wider variety of outlets.
  Mr. Robert G. Hughes: How much will it cost?
  Ms Harman: The hon. Gentleman asks how much it will cost. We are talking about an entitlement for the poorest pensioners, which the Government have failed to allow them.

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  We shall use the information that pensioners have already given to the Department of Social Security and to their local councils to help identify those who are entitled to extra help and do not get it.
  Mr. Lilley: How?
  Ms Harman: The Secretary of State asks how. We pressed the Government to amend the fraud Bill to allow cross-matching of data to help pensioners as well as catch fraudsters, but they refused. The Secretary of State says that pensioners choose not to have their income support; somehow a million pensioners are choosing to lose out on £14 a week. We are clear that our approach and our framework of policies are affordable and will address the needs of today's pensioners, and tomorrow's.
  Under Labour's plans, the proud 78-year-old woman in St. Albans who does not claim her income support and who was afraid to turn up her heating last winter will get an extra £14 a week pension entitlement and a cold-weather payment—her entitlement. Under the Tories' plans, she will shiver with cold next winter and the winter after that—£300 billion for privatisation, but nothing for her under the Tories.
  Under Labour's plans, the man on low pay will find that it is worth his while to put aside a bit extra for his retirement in a good-value stakeholder pension. Under the Tories' plans, he will pay more tax now to finance privatisation and will retire on to means-tested benefits. We will listen to the voice of pensioners, not ignore them as the Government do.
  People of all ages need a far greater understanding of pensions. That presents a great challenge to any Government due to the view often held that pensions are too technical and too complex for people to understand. We want to be sure that people in their 20s are as familiar with AVCs—additional voluntary contributions—and IFAs—independent financial advisers—as they are with Sega and Nike. We want them to understand that OPRA—the Occupational Pensions Regulatory Authority—is not just a chat show.
  Mr. Leigh: Will the hon. Lady give way?
  Ms Harman: Clearly, the trouble with that joke is that it is too complicated for Conservative Members. We shall have to start earlier.
  Mr. Clifton-Brown: Will the hon. Lady give way?
  Ms Harman: I have already given way to the hon. Gentleman. I am about to conclude my remarks. I will not give way.
  The Government can and should play their part in promoting a national debate on the future of pensions. The debate about pensions and their reform can be led only by a Government whom the people can trust—and no one can trust the Tories on pensions.
  Mr. Flynn: On a point of order, Mr. Deputy Speaker. There have been several discussions in the past few days about declarations of interests. Would it not be helpful to the House and the country if, during this debate,
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  all hon. Members who have a financial interest in the pensions industry declare it—although it may well be registered—at the beginning of their speech?
  Mr. Deputy Speaker: The Chair—and I hope everyone else—always expects hon. Members to know the rules of the House regarding declarations of interest. I assume that all hon. Members adhere to them.
  5.22 pm
  Sir Norman Fowler: The House has listened to the hon. Member for Peckham (Ms Harman). I have been listening to speeches by Labour Front Benchers for, I guess, more than 20 years. I have heard the speeches of Baroness Castle, those of the late Brian O'Malley, for whom I had the greatest respect, and even those of my old sparring partner, the hon. Member for Oldham, West (Mr. Meacher). I have seldom heard a worse speech than the one that the hon. Lady has just made, above all because it was inadequate to the challenge of pensions policy before us. Its inadequacy was underlined by her failure even to attempt to reply to questions about tax relief in connection with pensions. The public will draw their own conclusions from that.
  Clearly we shall have to go through the speech very carefully. Indeed, I suggest that during the coming election campaign it might be circulated in its entirety to Conservatives and to the public to show the complete vacuousness of what the Labour party proposes. The only new thing that I found in the hon. Lady's speech was the idea that we are to have an investors-in-pensions competition of some kind. I do not think that that quite amounts to a pensions policy or meets the challenge.
  I congratulate my right hon. Friend the Secretary of State on his plans. I believe that many in the pensions industry, and many who observe it, think that his proposals are among the most imaginative to have come from the Government in this Parliament. It is good for public finances—that is certain—but, above all, it is a tremendous investment for the public. I also congratulate my right hon. and learned Friend the Chancellor of the Exchequer, as it is only with his approval, and through the Treasury and the Department of Social Security working together, that such imaginative proposals can be made.
  Mr. Frank Field: Will the right hon. Gentleman give way?
  Sir Norman Fowler: Not for a moment—
  Mr. Field: I am very grateful to the right hon. Gentleman for giving way.
  Sir Norman Fowler: Well, as I have not—
  Mr. Field: What happened to his proposals?
  Sir Norman Fowler: I hope that, with his normal courtesy, the hon. Gentleman can contain himself for 30 seconds.
  Mr. Field: What did the then Chancellor do to his plans?
  Sir Norman Fowler: The hon. Gentleman is uncharacteristically over-excited. If he can contain

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  himself for 30 seconds, I shall give way. Before his uncharacteristic intervention, I was saying that the proposals before us follow changes that have been made over the past decade, which can fairly be described as a revolution in pensions.
  Improvements affecting occupational pensions have hardly been mentioned. We tackled such issues as transfer rights—the scandal of the frozen pension—and put them right. The Labour Government did nothing about that. We have given the public new options—notably personal pensions, which have been taken up by millions of people. We have cut the emerging cost of the state earnings-related pension, to the undoubted benefit of future generations. On that fact, I know that the hon. Member for Birkenhead (Mr. Field) and I stroll arm in arm, through the Chamber, if not through the Lobby. I shall now give way.
  Mr. Field: I wanted to pick up what seemed to be the right hon. Gentleman's coded message to the Secretary of State, when he congratulated him on having the Chancellor of the Exchequer on his side over the proposals. Does the right hon. Gentleman recall what happened to his proposals, which in many ways were far more radical than those proposed by Ministers in this Parliament? Very late in the day, the then Chancellor of the Exchequer publicly destroyed his proposals for reform. Would it not be right to conclude from what he has said that today's Chancellor has not woken up to the proposals' long-term costs in terms of public expenditure?
  Sir Norman Fowler: I would put a different interpretation on history. It has been established over the past decade that my proposals, on which I admit I encountered a certain local difficulty with the Treasury, were correct. I am glad that the Treasury has caved in with enthusiasm and is backing my right hon. Friend the Secretary of State for Social Security. That is excellent, and I am well content.
  The criticism made by the hon. Member for Peckham centred on the misselling of some personal pensions. I do not dispute for a moment the need to put right the misselling that took place. No one feels more strongly about that than me. I do not defend it; it must be put right—and quickly. However, it is being put right—too slowly, yes, but it is certain that it will be put right. What is important about today's debate is the assurance that has been given not only by the industry but my right hon. Friend the Secretary of State that no one will lose out. Mr. David Prosser of Legal and General, one of the biggest companies involved with pensions, is calling for greater speed, and is saying that the company has the resources to deal with the matter.
  Ms Abbott: Conservative Members, including the Secretary of State, have been insisting that the problem of compensating the 500,000 people who were missold pensions is being sorted out. Is the right hon. Gentleman aware that the chief executive of the Personal Investment Authority appeared before the Treasury Select Committee only this week, and was unable to give a timetable for
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  compensating 99 per cent. of those people? The fact that there is no end in sight must undermine public confidence in a wholesale move towards privatised pensions.
  Sir Norman Fowler: I hope that it will not. We will have to see what happens, but no one will push harder than me to see that the problem is sorted out. There is public and Government pressure, as well as pressure from inside the industry, to solve the problem.
  I challenge the Labour party on the issue, because unfunded state schemes do not offer a miraculous improvement. The opposite is true, because mistakes made in the unfunded state scheme have never been put right—we need only turn our minds back to 1976 to recall that. The biggest pension scandal in this country was not personal pensions or Robert Maxwell's behaviour, but the action of the Labour Government when they deliberately fiddled the uprating system in 1976.
  Until then, pensions had been uprated historically. In other words, we validated past inflation. Mrs. Castle and Denis Healey decided, when inflation was falling from astronomic levels, to forecast future inflation instead. The result was that they missed out the figures for inflation between March and November 1975. That decision meant a saving of £1 billion by the Labour Government—£4.5 billion in today's money. The Labour party never put that right, and it never will. That was a fiddle, a scandal and a swindle, and we all knew it.
  Mr. Frank Field rose—
  Sir Norman Fowler: I shall give way for the last time.
  Mr. Field: Will the right hon. Gentleman compare the £4.5 billion cut with the cut that was achieved by decoupling pensions uprating from earnings?
  Sir Norman Fowler: I would not mind making that comparison, but it is not the Labour party's policy to restore the link, so it is an academic point. I will come to the point on earnings, because it underlines the peculiar and strange policies that the Labour party is pursuing.
  Labour Members cheered the announcement of the £4.5 billion cut in pensions spending. We know that because we have the benefit of Mrs. Castle's diaries. Diaries are a great help to the public debate. We have the diaries of Alan Clark, although they are not always read for the politics, and the Opposition have the diaries of the right hon. Member for Chesterfield (Mr. Benn) and of Baroness Castle. She describes the Budget that contained the uprating statement as follows:
  "I slipped back on to the front bench in time to hear Denis"—
  Denis Healey—
  "deal with social security. All ray officials' valiant efforts to make him stand up and be counted on the change from the historical to the forecasting method for the pensions uprating have failed. He skimmed over it and so got a cheer from our side for the amount of the increase, whose relevance they did not understand."
  Labour Members may not have realised the significance at the time, but the people who lost out did not have the opportunity to ask the Personal Investment Authority for their money back. The cut was permanent and it has never been paid back. That is a real difference between the public and the private sectors, and it is a real plus for the private sector that mistakes are dealt with.

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  I now come to the point that the hon. Member for Birkenhead—I almost called him my hon. Friend, but that would embarrass him—made about uprating and earnings. That is another issue that cannot be taken to the Personal Investment Authority. Labour's promise to uprate pensions in line with earnings was made more solemnly and more often than any promise I can remember. It was made in the 1983 election and in the 1987 election.
  Before the 1992 election, when my right hon. Friend the Leader of the House and I were responsible for social security, we were frequently attacked for not uprating pensions by the increase in earnings. What has happened? Much to the dismay of the hon. Member for Islington, North (Mr. Corbyn), who is in his place, Labour Front Benchers have decided to abandon the earnings-related uprating. They talk about the misselling of pensions, but the public would not be well advised to buy a pension policy offered by the Labour party, given its record in the past few years.
  Mr. Corbyn: Will the right hon. Gentleman give way?
  Sir Norman Fowler: I suppose I should give way, because I referred to the hon. Gentleman.
  Mr. Corbyn: The right hon. Gentleman will recall the halcyon days of 1986 when we were members of the Standing Committee that considered the legislation to introduce the personal portable pension scheme. I am sure that he will also recall the warnings by my right hon. Friend the Member for Derby, South (Mrs. Beckett) about the inherent dangers and consequences of misselling. He brushed all those warnings aside. Does he now have even one iota of remorse about the legislation that he and the Prime Minister introduced?
  Sir Norman Fowler: I do not feel remorse about it, and I have just dealt with the point. I thought that the hon. Gentleman might say something sensible about earnings and uprating, but I will not embarrass him further.
  In the past 18 years, the Government have tackled two of the central problems of pensions policy. They have tackled some of the basic dishonesty in the pay-as-you-go system, and exposed the errors in it. I remember when Mr. Kinnock was Leader of the Opposition and intervened in a debate—when my right hon. Friend the Leader of the House was winding up—under the misapprehension that the national insurance scheme was a funded scheme. He was the Leader of the Opposition, but he did not know that, of course, it is not.
  National insurance contributions are, in effect, a tax. Today's contributors pay for today's pensions in the hope that when their turn comes, others will pay for their pensions. The trouble with that system is that Governments can make promises knowing that the bill will not be presented for 10, 20 or 30 years. That is the dishonesty in the pay-as-you-go system, and that is why France, Italy and Germany have enormous pension debts and will struggle in the future. Thanks to the courage of the Government, we have tackled that problem and we will be able to manage the future pension debt. That is an immense advantage for public finances.
  Our policies also have immense advantages for the individual. All the evidence suggests that the public value a pension that they can call their own. Personal pensions
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  are so popular because people have a personal fund, and that is what they want. SERPS is unpopular because it is complex and badly understood, and people do not recognise the pension as their pension. My right hon. Friend the Secretary of State for Social Security, to his credit, has moved the argument on. He has tackled not only the second-tier pension, but the basic pension.
  Furthermore, the fund offers the prospect of a startlingly better deal and a bigger pension than one would have received under the present basic pension scheme. The entitlement that goes up in the fund cannot be altered, swindled or fiddled by the Government, as happened in 1976. We are using the tax system to encourage occupational provision, and that is important. The public and the pensions press will draw their own conclusions from the failure of the hon. Member for Peckham to give any assurance on tax relief.
  I wish to make two final points. First, this is clearly a new scheme that, inevitably, is for the future. We cannot go back to the period after the second world war, when mistakes were made. Beveridge proposed a funded scheme—an idea that we never took up. Instead, we adopted a pay-as-you-go system, and we must not make the same mistake again.
  We also need to concern ourselves with today's pensioners, including people who never had the opportunity of entering an occupational scheme—not because they did not want to, but because none was available—and people who were badly affected by the restrictive rules that existed in occupational schemes before the Government's reforms.
  Those people did not have the opportunity to build up a pension of their own. Therefore, I advocate the development of family credit into a system of pension credit to give help where it is most needed—that is, to people in their 70s and 80s. We should not give a general pension increase for everyone, irrespective of income, but we should try to add to the income of those who need it.
  Secondly, I hope that both sides will agree that we need to examine how we can improve the advice that we give to individuals in the public and the private sector. I have constituents who have lost out on their state pension entitlement because they were not provided with sensible advice. One constituent has lost about £10 a week because of that lack of advice. That has nothing to do with private advisers, and everything to do with the local DSS office and the information provided.
  If we are to expand personal provision further, good advice is essential. We must learn the lessons of the past. The advice that companies provide on their products is reasonably good, but I want to see more independent advice on all companies' products. There are such advisers, but there are not enough of them.
  The Government have introduced a series of reforms that promise to provide this country with the strongest pensions system in Europe. That is an enormous achievement. But we have done more than that: we have extended the options open to the public. The Government have extended the concept of property ownership and provided people with the chance to own a home of their own. We now offer them the promise of a good pension of their own. I believe that that record and that promise will stand us in good stead in the contest ahead.
  5.43 pm
  Mr. Frank Field: One should not always believe what one reads in the newspapers, so what I am about to say may be unfounded in fact. Most of the newspapers reported that, when the proposals were first put to the Cabinet, the Secretary of State's slide show and introduction lasted 17 minutes. I noticed that he spent three times that long with us. I was not sure whether that was because he thought we would understand more than his Cabinet colleagues, and it was therefore worth spending longer with us, or because he felt that we would understand less and needed more time.
  I welcome the debate, although I do not entirely agree with its temper—perhaps that is inevitable as close as we are to an important general election. I wanted to say—I hope that my comments will not be misinterpreted—that I welcome the proposals from the Government, but I register some surprise at the debate, which is developing as if we were debating a Bill. The Government have rightly suggested that we debate the proposals that were outlined last week, but they are merely proposals. Nevertheless, the proposals help to change the debate in a way that I believe to be constructive, and it is in that context that I want to make my contribution. The announcement last week so changed the debate that it has become necessary to rewrite so much of the Select Committee on Social Security report, which was ready to present, that we are not sure whether we can present it this side of a general election, if at all. The Government have influenced and opened the debate, and questioned areas that some people thought one should never question. The roof has not fallen in, and one hopes that, as the months progress, the lead that the Government have given will be accepted and that the proposals will become one set of a series which future Parliaments and the country will debate in trying to find the best way forward.
  On one area in which I am interested—the extension of compulsion—there was a great divide between the parties until last Wednesday. The Secretary of State always used to suggest that nobody would understand such a move and that to extend compulsion would be read by the country as increasing taxation, as people could not see the difference between compulsory savings and compulsory taxation. Since last Wednesday, we have moved on, and so dead is that part of the debate that it is hardly worth mentioning.
  I stress that the proposals are for the long run. The proposals that the Secretary of State put to his Cabinet colleagues for the first time last week, and to the nation a day later, are addressed to a world that is as far in the distance as Beveridge is in the past to us now. If we look back on all the changes that have occurred in the world since the Beveridge proposals were implemented by the House—and if we look at how wrong most people were in that debate in prophesying what the world would be like—we should be cautious in thinking that our generation can read the stars better than our predecessors or that we can address with certainty a world 40 years hence with only one set of pension proposals.
  It is with those long-term proposals in mind that I want to pick up one point made by the right hon. Member for Sutton Coldfield (Sir N. Fowler). I hope that the debate will provide us with an agenda of the issues for which we need answers in the context of the Government's major proposals. The right hon. Gentleman touched on one
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  issue, which was that we must think seriously about the sort of financial advice that people can get. That will be an important part of the agenda.
  I wish to add another issue to that agenda—trust. We have touched on that. My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) has referred to one aspect of trust, or lack of it, to which I shall return in a moment. If we are talking about pension reforms that will not take effect until as far in the future as Beveridge's reforms are in the past, they stand little chance of being successful if they are not operated with a degree of trust that does not exist now.
  There is not only the issue of the security of pension funds, which was raised vividly by the case of Robert Maxwell, but yesterday, in the Chamber, another pension fund affecting the Chester, Ellesmere Port and Wirral area was debated—H. H. Robertson—where something similar may have happened. That has occurred despite the introduction of the minimum solvency requirements of the Pensions Act 1995 in an attempt to give extra security to funds. The minimum solvency requirements may help with the better running of well-run occupational schemes, but hon. Members representing Chester, Birkenhead and elsewhere are seeing that they produce no funds for those pension schemes where funds appear to have gone missing.
  Therefore, if we are to rebuild trust, we may have to reopen that aspect of the debate in the new Parliament and consider whether we need an industrywide insurance scheme to ensure that those who are unfortunate enough to lose their assets are compensated. It is extraordinary that such a scheme exists for those who lose their holiday, but not for those who lose the whole of their income for the rest of their retirement. That is one aspect of trust.
  My hon. Friend the Member for Hackney, North and Stoke Newington, in quizzing the Personal Investment Authority before the Treasury Select Committee last week—
  The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): As I understand it, the scheme about which the hon. Gentleman was talking was an occupational pension scheme and the matters complained of relate to a period before the introduction of changes under the Pensions Act which, of course, provides for compensation.
  Mr. Field: The main thrust of ensuring that the money is there to pay pensions is in the solvency requirements; in other words, the funds must be there to acquire the policies to pay pensions if the scheme has to be wound up. That works for well-run funds, because that is what they aim to do anyway, but it clearly will not work for funds where large parts of the assets have disappeared. As I say, that will be part of an on-going pensions debate in the new Parliament. There will never be a single pensions Act that deals with all the problems.
  Mr. Forman: Does the hon. Gentleman, in his analogy with the travel industry and a failed holiday, mean to suggest that the pension providers should chip in collectively to compensate, or the taxpayer should do so?
  Mr. Field: I mean that, just as the travel associations run a scheme to cover the cowboys they do not want as members, so one would propose cover in occupational schemes.

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  The second aspect of trust, or a lack of trust, is the question of mis-selling. The Government's embarrassment in dealing with that issue is noticeable. It is intolerable to think that, in the next Parliament, we would seriously consider extending the scope of privately funded pension arrangements without that issue being satisfactorily cleared up. If the PIA does not have the necessary authority, the next Parliament should give it such authority so that it can set a time limit of a number of months within which it expects all the compensation schemes to be complete and, if they are not, interview the various companies and personally fine the directors of those companies that have not made proper settlements. In those circumstances, the arrangements may well be speeded up.
  I am not blaming only the private providers of pensions, because a number of people have great difficulty in getting replies from the occupational schemes. The inability of some of those schemes to respond is becoming as serious as the misselling was in the first place. I am not saying that one side is guilty and the other not. If we are to fine companies that will not quickly come to an agreement on compensation, we should be talking about the directors of private companies and occupational schemes.
  The third aspect of trust is whether Governments are believed any more. This week, the Government have introduced long-term care proposals. That will not make much impression on an important and growing area of concern because large numbers of people who will be considering the Government's proposals are unsure whether future Governments will keep the pledge that this Government are making on behalf of future Governments. That is a point that the right hon. Member for Sutton Coldfield presented in another way. In the new Parliament, we shall have to address the issue of how to ensure that our behaviour is such that it increases people's belief that Governments, now and in the future, will keep their word.
  There is the long-term issue of reforms way into the future which, despite all the technical points which will be put forward, have to be debated within a framework of growing trust if they are to be successful and reach the finishing point of those reforms. The working and pensionable life of just the first cohort of people means a reform over an 80-year period.
  Ms Abbott: On pension misselling, does my hon. Friend agree that, if there is to be a move towards funded pensions, more serious attention must be paid to the regime of financial regulation than Conservative Members so far seem to think necessary? For example, one reason there was so much misselling in the past was the commission-driven nature of product sales. The Government's proposals have more far-reaching ramifications in regard to financial regulation than any Conservative Member has considered this afternoon.
  Mr. Field: I hope that my hon. Friend will take heart from the fact that, as she was making that intervention, a number of Conservative Members nodded. I hope that they were nodding in agreement rather than in the manner of those little toy dogs in the back of cars who nod according to the movement of the car. That is an important point.
  The next Parliament will consider the Financial Services Act 1986 and will perhaps go for fewer rules that are more clearly understood and so easier to enforce than
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  the complexity of rules enacted during this and previous Parliaments. When looking to that future, part of the debate must be about the most sensible way in which to advance given that the Government are now inviting the country to address itself to that long-term prospect.
  My response to the reforms is that, although I see a greater role for funded pensions, I also see a role for a basic state pension within those arrangements. I accept, as my hon. Friend the Member for Peckham (Ms Harman) did when she was allowed to in her contribution this afternoon, that it is sensible to share risks in a world where, while one or two countries have gone down the path that the Government say they wish to go down, we have no experience of a Government going down that path and seeing how the policy works out in practice. It is a matter of sharing risks rather than being ideologically for or against the proposals.
  The right hon. Member for Sutton Coldfield politely drew the Government's attention to the fact that this was a debate about pensions policy, not only basic pension plus. He centred our attention on one of three issues with which future Parliaments must deal before basic pension plus or other proposals are implemented.
  The first issue is what immediate action we should take on behalf of the poorest pensioners. My hon. Friend the Member for Peckham addressed that problem. It is crucial that we try to ensure that entitlements are tailor-made individually and die with the pensioner. They should not be built into the basic rates which we will all draw in time, irrespective of our particular needs. The new Parliament might address that issue by crediting into SERPS the oldest, poorest and frailest pensioners, and automatically paying them their pensions.
  The second issue, which has not yet featured in this debate but will be addressed in the next Parliament, is long-term care. We need to increase the basic rate of retirement incomes so that, as people become more dependent on others, they can meet the associated costs quite normally without having to trigger something different in order to secure the income that they require for long-term care. We must decide how we shall pay for the one in five or one in six people who, under current arrangements, will need long-term residential and nursing care. We must consider that issue when debating the development of pension policy.
  Mr. Heald: Does the hon. Gentleman agree that, because only one in six people require long-term care, we should look at proposals involving insurance? That is the classic way of spreading the risk, and the Government are doing that.
  Mr. Field: I do not think that the Government's proposals will take, because taxpayers will wonder whether future Governments will honour pledges about the release of funds implicit in those schemes. It is crucial to centre on insurance. If we had been debating pensions at the turn of the century, we would have said that it was totally proper to view them as insurance policies. At that time, most people did not survive to draw their pensions, so it was absurd to make most people save for that eventuality. Thankfully, the vast majority of people today do not require long-term care. I think that the Government have made the correct division: it is not sensible to suggest that everyone should save, when we know that five out of six people will not require those savings for long-term care.

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  Thirdly, long before we can put basic pension plus into operation, we must consider the adequacy and the payment of pensions to the large number of people who were born after the second world war. There is the immediate issue of helping the poorest pensioners now; the big issue of paying for long-term care; and the future prospect of providing for the generation of baby boomers when they take their places in the ranks of the retired. We must address those issues before we can think about very long-term provision, such as basic pension plus.
  Nevertheless, I welcome the Government's focusing attention on 45 years hence. It is sensible to have a long and detailed debate about the next stages of pension policy in this country. I am confident that that debate will be conducted in a more rational manner than the Secretary of State displayed in his contribution today. I am sorry that he is not in the Chamber to hear my criticism. During this Parliament, the Secretary of State has shown real distinction in leading the social security debate, and his performance today was a sad conclusion. I put it down to a loss of nerve as the election approaches: he felt obliged to indulge in the sort of knock-about to which we were treated today.
  I shall stretch my linguistic powers and try to bring my final point within the debate's terms of reference. The Government have moved quickly on a counter-fraud measure that is yet to go on the statute book. Advertisements have been placed for the three key positions in the inspectorate that the legislation would establish when it became an Act. The advertisement that appeared on Sunday lists the skills that those three individuals will need, but it does not mention experience in counter-fraud work. It appears as though the Department has already decided which individuals will get those jobs. I plead with the Government not to fill any of those posts until after the general election.
  6.4 pm
  Mr. John MacGregor: It is a real pleasure to follow the hon. Member for Birkenhead (Mr. Field) in the debate. He has made a substantial, thoughtful, constructive and mainly non-partisan contribution to the discussion of pension issues. I shall return to his position in a moment.
  I must declare an interest in the debate as I have just become a non-executive director of the London and Manchester insurance company. That appointment reflects my much wider life-long interest in the encouragement of individual savings, especially long-term savings and pensions. I was not able to express my interest when I was in the Government because, apart from spending some time in the Treasury, I did not have direct responsibility for such matters. Since leaving the Cabinet, however, I have been able to address those issues. I wrote a pamphlet, "Pensions in the 21st Century", for the Centre for Policy Studies last year, which covered many of the issues that we are debating today.
  Mr. Deputy Speaker, you were critical of a number of Conservative Members for constantly seeking to intervene during the speech by the hon. Member for Peckham (Ms Harman). I am sorry that she has left the Chamber. I have rarely heard a speech that was so vulnerable to criticism, which is why we tried to intervene. She must
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  have been very much aware of that, because she failed to give way. I only hope that the shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), saw her speech in advance as it was typical of many Labour Front-Bench speeches.
  By criticising the current pension provisions, the hon. Lady implied that, if returned to government, the Labour party would give pensioners much more through either higher pensions or greater income support. However, she did not mention how Labour would pay for it. When asked how much her policies would cost, she replied, "We are talking about an entitlement." Like her other responses, that did not answer the question. It was old Labour writ large: make promises, pretend to be able to make provision, and claim that the issue of cost does not need to be addressed.
  There is a big bill attached to the hon. Lady's remarks today. I draw attention to two points that she failed to answer. First, she criticised the fact that a number of pensioners who are entitled to income support are not receiving it. She argued that Labour would introduce measures to ensure that they did so. The Anson report, which was commissioned by the National Association of Pension Funds, discusses that issue. The operation would clearly involve a big bill—somewhere between £1 billion and £2 billion at present—and the hon. Lady did not say how it would be paid for. There would have to be corresponding cuts elsewhere if the shadow Chancellor's pledges were to be realised.
  Secondly, and even more significantly, the hon. Member for Peckham refused to answer the question from my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler). I had intended to raise exactly the same point in my speech. I was much struck by the fact that when my right hon. Friend asked his question, the hon. Lady retreated into a woolly answer about basic pension plus and the criticism of it by the NAPF. Basic pension plus is a completely different scheme for future generations: it looks ahead 45 years. My right hon. Friend inquired about the position of existing occupational pension schemes and personal schemes, which are separate from basic pension plus. I suspect that the hon. Lady realised that because when my colleagues and I tried to intervene to repeat the question, she refused to give way.
  What is the Labour party's position on encouraging occupational pension schemes? Does it intend to change the tax arrangements? That is extremely important, for reasons that I shall explain later in my speech. Although the shadow Chancellor said that Labour would not increase the basic or higher rates of tax, there are many other reliefs and allowances that could be tackled to meet the bill that a Labour Government would undoubtedly face. Are we talking about one of them? If so, we face an extremely serious position which means that the Labour party is flying in the face of everything that it has been saying about the encouragement of occupational pensions.
  It is clear that the hon. Member for Peckham cannot come to terms with new Labour. The hon. Lady utters the old phrases but cannot explain how new Labour would fit in with the commitment that Labour would not spend more. That shows the pressures that the right hon. Member for Dunfermline, East would face as Chancellor if Labour ever took office.

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  My tribute to the hon. Member for Birkenhead was genuine. It is important and increasingly encouraging that the debate about long-term pension issues is becoming a cross-party issue. Indeed, among all those interested, we are beginning to arrive at the same sort of conclusions. That is because we all recognise the nature of the problems and challenges that we face. There is general agreement about those and I need not repeat them. I have in mind the demographic challenge and the inability of the state to meet the bill. We all seem to agree that the United Kingdom is much better placed than the rest of the European Union. I am glad that we are coming together on the issues. The hon. Member for Birkenhead has made a notable contribution in bringing that about.
  It seems that basic pension plus is not so much a switch to compulsion—because it will be replacing a state pension scheme and state earnings-related pension scheme which are compulsory unless the person has opted out—but is instead a funded contribution. It is the funding switch that is so significant, but up to now it has eluded us in most of our thinking. I hope that the hon. Member for Birkenhead will agree that that is a major element in the proposed change.
  Those of us who are engaged in the debate are beginning to agree on the problems, along with the background and the challenges, and on the solutions. I hope that the hon. Member for Birkenhead will agree and forgive me for saying that that is a tribute to Conservative policy over many years, and to the extension of wider ownership and personal responsibility in which we Conservatives have always believed and encouraged in so many ways.
  I so much agreed with my right hon. Friend the Member for Sutton Coldfield when he referred to basic pension plus as the latest in a series of measures designed to respond to longer-term problems in a Tory context. He made a notable contribution to those measures. Indeed, a long-term approach is significant when evaluating basic pension plus as politicians are frequently accused of thinking only in the short term.
  The Government have done much in the long term, not least with the measures that we have taken to equalise the state pension age. We now have a classic illustration of a Government who are prepared to think really long term in addressing the problems that will face future generations unless we act now—and if things are to be done properly, we must act now. That is a notable feature of what is now being proposed.
  The proposal may not be of major excitement and significance to many people in the forthcoming general election, but in the long term it will come to be recognised as a significant step forward. I therefore pay tribute to my right hon. Friend the Secretary of State and to those who work with him for producing what I regard as thoughtful, objective and far-seeing proposals which are skilful in their solution of the double-funding problem that was facing future younger generations. We have not always known how to tackle that problem, but my right hon. Friend has arrived at an ingenious way of responding to it. Some details are outstanding, but basic pension plus offers a hopeful way ahead.
  There are three packages of issues to which I shall refer. First, I have two questions about basic pension plus. I do not want to take up many details because we are all beginning to become familiar with them. These details
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  may well be taken up in later and wider consultation. I was struck, however, by a response to questions and answers about "whether my spouse will still be okay if I die". Part of the answer to that question was that the funds of those in the new scheme who died before drawing any money purchase benefits would be inherited in full by the surviving spouse, or by the estate where there is no spouse. That is interesting and significant. The response tells us that some or all of the funds would have to be used to purchase an annuity, or that income could be withdrawn.
  I hope that that thought will be developed. As we look ahead to the need for pension flexibility, it will an important element of basic pension plus and may lead to a reconsideration of what we are doing about personal pensions.
  The editor of Financial and Tax Planning Through Pensions—a journal which I have never read and did not know of—wrote a letter which appeared in The Times to which one of my constituents drew my attention. At the end of the letter, the writer suggested that anyone who took a similar view should write to their Member of Parliament and an assiduous constituent of mine did so. The letter in The Times stated:
  "Whilst annuities can remain as the ultimate income provision for those who are security conscious there is no real reason in these days of investment sophistication why pension holders should ever have to annuitise their funds … The legal and practical objections to eliminating compulsory annuity purchase are quite slim. A tax adjustment could be made on the ultimate passing out of the pension fund to the family of a deceased member, if this were thought appropriate."
  We can all identify some of the difficulties and we can all understand that as tax reliefs were given on pension contributions it is important that there is some assurance that the funds are used to fund pensions and not merely frittered away with the result that the individual goes on income support or whatever. It is clear that there must be some conditions. On the other hand, we must consider how there can be greater flexibility in the provision of pensions.
  That is the interesting feature of basic pension plus. The proposal acknowledges the possibility that some of the funds may be passed on to the family when the owner dies. If that is accepted in that context, can it not also be accepted in considering personal pensions? I fully recognise the flexibility that has now been given to everyone with a personal pension in that it is not necessary to take a decision on the annuity on immediate retirement—the decision can be taken up to 75 years of age—but why not have some of the fund invested in equities from which the pension holder could draw, which at the end of the day would leave him with something to pass on to his heirs? Why should everything go to the insurance company in the annuity settlement?
  That is an example of the issues that are opened up in basic pension plus. I do not know whether my hon. Friend the Minister realised that I would pick up that point out of basic pension plus, but it seems that it is one that we must all take up.
  Mr. Bernard Jenkin: My right hon. Friend's remarks are fundamental. We need to refocus our minds on the nature of savings for retirement. The debate has been hijacked by the insurance industry by an historical accident. There is no tax relief unless

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  there is some form of insured vehicle. We need to do away with saving with insurance because now there can be virtually no difference in the risk between, for example, a good unit trust personal equity plan and an insured life policy.
  Mr. MacGregor: My hon. Friend makes an interesting point, which I shall take up in a different context. If we wish to encourage—as we Conservatives do—families to build up resources for themselves that they can pass on to their children, there is another element to be considered. I hope that that will be reflected in the consultation on basic pension plus.
  It has been made clear in basic pension plus that an individual will be able to invest additional money of his or her own in the new investment account. It is argued that one of the strengths of the scheme is that it will give everyone a fund to which he or she can add additional savings. The issue was elaborated on in response to the question whether it will still be possible to take out a personal pension. The answer read:
  "You will be able to add your own savings to the new personal accounts or indeed a separate account with a different pension provider."
  Will the additional savings that will be added to the account have to come from net relevant earnings as at present for any contribution to the pensions? I hope not. That is important when account is taken of the life styles and life patterns that we shall all have in work and generally. I hope that it will be possible for additional savings not to be related directly to earnings. Those are my two questions about basic pension plus.
  I move on to groups who will not be affected by basic pension plus because they are too old, starting from 25-year-olds plus or whatever the age is—in other words, the issues of future pensions policy for the next 40 years for those not covered by basic pension plus.
  We know that the whole occupational and personal pensions movement, which we as a Government have so strongly encouraged, has made a major contribution to the fact that pensioners now retire in a much more comfortable situation on average than was previously the case, and that there has been a 60 per cent. increase in real terms in their income during the period of the Conservative Government. However, in the next 20 to 30 years—in fact, almost immediately—we shall face two different challenges, the first of which is that of changing life patterns. People will change careers more often, for which personal pensions are clearly well attuned. Men and women—not just women bringing up families—will move in and out of work, by choice, at various periods during what would have been regarded in the past as their working life.
  The second issue is that defined benefit schemes are declining, as a proportion of occupational pension schemes, in favour of money purchase schemes. I have predicted for some time that that would happen, but it is happening increasingly, particularly in companies with big occupational pension funds, which now say that all new employees will have a money purchase scheme. That pattern will develop not just because of pressures on companies but because it suits more correctly the career patterns and the movement in employment of future
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  employees. However, it is likely that money purchase schemes will not provide the same benefits as occupational pension schemes have where, traditionally, people were fortunate enough to be in one occupation or company for most of their working life.
  That leads me to a number of conclusions, but I shall mention only one or two today. The first is the need to continue to persuade people—particularly young people—of the importance of investing for their pensions at an early age. Most hon. Members will recognise that anybody who waits until he or she is 35 will have a much bigger challenge in providing enough for their retirement.
  Mr. Frank Field: If the right hon. Gentleman is serious about getting people to save for their retirement, why do they have to wait until they start work before they start pension savings? Why cannot parents, godparents, aunts, uncles, and so on make contributions to such accounts? They need not be substantial, but it would start a saving habit.
  Mr. MacGregor: Not for the first time, I agree with the hon. Gentleman. I am glad of his suggestion, because my next point is that we need to continue to encourage the investment of personal pensions and occupational schemes by means of up-front tax incentives. There is no up-front tax incentive for basic pension plus, but it will continue for voluntary occupational pension schemes. We need up-front tax incentives to encourage people to make provision for themselves. That is what was so worrying about the failure of the hon. Member for Peckham to answer the question, because that is what we need to continue to do.
  Mr. Stephen: If there is not to be an up-front tax incentive, people will be making provision out of taxed income throughout their lives. Some people will not live long enough to enjoy their pensions and the fund that they have built up will have to be passed on—in many cases to somebody other than the surviving spouse. In those circumstances, is it not particularly important that more progress is made on eliminating inheritance tax, which is an iniquitous tax because it is a charge on resources that have already borne tax during life?
  Mr. MacGregor: That is a separate argument from the one that I am trying to pursue. Therefore, I shall not go down the route of inheritance tax.
  In the short time that I have studied basic pension plus, I have been persuaded that the skilful element in it is the change in the tax regime to overcome the double funding point. Although I accept it for that reason, it is important to have up-front tax incentives for occupational and personal pension schemes, because given the disincentive to so many people to start long-term savings while bringing up a family or whatever, such an incentive is needed to encourage them to do so. Changing the tax regime for those people along the same lines as basic pension plus would not work because the fact that they will get a tax-free pension at the end of their lifetime is no big deal when they are aged 25. The difference is that those schemes are voluntary and therefore people need encouragement, whereas basic pension plus will be compulsory.
  Given people's life styles and the fact that they will be moving in and out of work—the hon. Member for Birkenhead pressed me on this point—it is important that

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  we break the link between pension arrangements and net relevant earnings. Of course a ceiling is needed, as there is with net relevant earnings, but there can be many situations in which the top-up can come for occupational pension contributions and personal pensions outwith earnings. It could be inheritance, a windfall, grandparents, investment income—a whole range of things. People might want to save very thoroughly for their pension and therefore eschew current spending and put any savings that they currently have into their pension.
  We need to break that link if we are to ensure that adequate provision is made. That is why we should move towards something like a provision for retirement account that incorporates not only earnings but other income contributions. To keep it more tax neutral, I should have been perfectly happy to see the incentives for tax-exempt special savings accounts and personal equity plans withdrawn because they do not have the long-term nature that a provision for retirement account would have and which we need.
  My last point relates to the European Union. It is widely acknowledged—I was glad to hear that the seminar that the hon. Member for Birkenhead and his Select Committee organised with European contributors recognise this too—that the United Kingdom is far ahead of nearly all our other European competitors in this context. The only country that might be a little ahead of us is the Netherlands. Other members of the European Union have massive, unfunded state pension liabilities. They have not taken the action that we have taken and which basic pension plus proposes, and their state liabilities would take them miles beyond the Maastricht criteria in terms of debt and so on.
  It is always argued that under the treaty of Rome other member states do not have to contribute to the public expenditure provisions of other member states and therefore countries like the United Kingdom are protected from having to contribute to the massive unfunded state liabilities of Germany, France, Italy and elsewhere. If a single currency were to be introduced—I am a strong pro-European but a great cynic in regard to a single currency and will oppose it in the next Parliament—with the increasing movement towards single fiscal and expenditure policies, we would face a very serious issue in relation to the funding of those liabilities. I hope that that point will be addressed in the debates on the single currency in the months ahead.
  My right hon. Friend the Secretary of State deserves the greatest credit for this major contribution to long-term thinking about pension policy.
  6.27 pm
  Mr. Archy Kirkwood: It is a great pleasure to follow the right hon. Member for South Norfolk (Mr. MacGregor). His knowledge and experience were ably demonstrated in his speech, and we will all rush out now to order copies of his pamphlet. No doubt it will repay careful study.
  This has been a good debate. Like the hon. Member for Birkenhead (Mr. Field), I think that the Secretary of State judged the tone rather inaccurately at the beginning. In my experience, Adjournment debates often give people a chance to listen carefully to what we are saying to each other and to learn from what is said. What other people can bring to bear in these debates is very important and informs our views about how we can make progress in this very important subject.
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  I was a bit scared when I first saw these proposals, because they are so very far reaching. The only party political thing that I will say in the next 10 minutes is that I wondered why they were being introduced in this way and at this time. There was much suspicion, which has not yet been totally assuaged, that the Government were desperate for something to say and so introduced these plans almost overnight. It is important to me that I get some reassurance about that in the Minister's winding-up speech. The last thing that we should do is to rush precipitately into making these changes. If we get them wrong, the consequences could be terrible.
  I support hon. Members who have said that we cannot go into a general election campaign talking only about the year 2030. It is right that we should consider the development of pensions provision and pensions reform in the middle to longer term, but we must be fair to the pensioners who are struggling to make ends meet today and make proper provision for them now before we start to provide for the middle to longer term.
  Through my casework and from other experience I have lots of evidence that many of today's pensioners feel betrayed and let down. Previous Governments of both parties have made promises, but many pensioners' perception is that the "cradle to the grave" provision has casually been withdrawn whether that is true or not, it is how they perceive it. The basic state pension was always considered to be a settled right available through national contributions to the state pension plan that has existed for many years. People are concerned that it will now be withdrawn without proper consideration.
  In these debates, the Government always refer to the fact that the average income of pensioners has improved, and so it has. It has improved dramatically, and we know why. Occupational pensions have improved, which is good. If I have any criticism of the Government, it is that they always deny and run away from the fact that not everyone has enjoyed those average increases in the past five to 10 years. We must consider the problems facing current pensioners before we do anything else.
  The right hon. Member for Sutton Coldfield (Sir N. Fowler) made an interesting speech. He rightly came to the conclusion that a much better system of information is required for future provision of private pensions, so that people know what is facing them and can make informed choices.
  Information should also be available to the one third of pensioners—about 1 million of them—who are currently eligible for income-related benefits but do not claim all the money to which they are entitled. About £1.2 billion of benefits does not get into the purses and wallets of current pensioners. Those people miss out on council tax benefit, income support, housing benefit and, when the weather is severe, as it usually is in Scotland during the winter, they also miss out on cold weather payments. Individually, they may be missing only small sums, perhaps £1 or £2 a week. Other pensioners may be determined not to claim income-related benefits because of the stigma attached to them, and I understand that.
  Much more could be done to inform the 1 million pensioners who are missing out because of a lack of information, and because the process of claiming benefit is too difficult. If we do nothing else in this debate, we should at least recognise that that problem should be dealt

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  with as a matter of urgency. That would be a positive approach, and would deliver extra benefits to which people already have a legal entitlement.
  I come across pensioners in my constituency who are struggling. They are over 75 or 85, usually single and the majority of them are women. Some of them face dire circumstances. Come the election, I anticipate that the Liberal Democrat manifesto will refer to a top-up pension for pensioners on income support premiums. We want to target provision in a way that is affordable through public expenditure, so as to give extra help to pensioners who are entitled to extra consideration, which is more than they are getting at the moment.
  The hon. Member for Birkenhead rightly refers to the importance of trust, and to the bond of trust that should be established between the pensioner population and Governments. A recent example of a breach of that trust was the Government's handling of war pensions. Some terrible cases will result from the change to the rules on hearing loss. Many people with a serious hearing loss will no longer receive a war pension. There have been arguments about that. The people who really lose out are those who just fail to meet the criterion of a loss of 50 decibels. I do not believe that there was any case for changing the rules.
  If the Government are so certain that what they are doing is right, they should listen to the Royal British Legion and the Royal National Institute for the Deaf. They both want a full scientific and medical review of the entitlement of war pensioners. Such issues chip away at the trust between pensioners and Governments.
  We should not exaggerate the need for precipitate action. We are not in such a bad position as some other nations. I was interested in the final comment of the right hon. Member for South Norfolk. I know that his European credentials are—I nearly said as good as mine. If he believes that there is a problem with unfunded pensions, I am willing to reconsider the matter. Some other European countries may require to deal with the problem urgently, but there is no immediate panic for us to do so.
  A graph in the recent edition of The Economist shows percentage pension costs in relation to gross national product. The trend demonstrates that there is no great problem in Britain in the middle term. Indeed, the graph is headed, "No problem for Britain". We should not be complacent, but we do have a little time to sort out some of these problems. It is a frightening thought that, if basic pension plus were implemented, Britain would be the only country outside Latin America with a pension system entirely privately funded. We must be a bit careful about getting from where we are now to where we want to be.
  I do not deny that the proposals have some merit, and we shall examine them in greater detail. But how can we be certain that the basic pension plus scheme will lead to an increase in savings? The Government seem to argue in their documentation that, by personalising pensions, the habit of saving will be encouraged. However, the fear is that the tax changes that are part of the plan could discourage savings. The basic rate taxpayer would get, roughly speaking, £24 from the Exchequer for every £76 contributed. Pension contributions would come out of taxed income, but pension payments would not be taxed. Someone aged 20 or 30 may be tempted to boost
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  his pension contributions by tax relief available to him today, but it is much harder to persuade a 20-year-old—my children are not yet 20—or any young person getting into the system that tax relief in 2030 is an attractive prospect. That is a problem.
  I am also concerned about the impact of the tax changes. By switching the tax system, we could—I put it no higher than that—be directing tax relief at people who are at the richer end of the pension income group. People might retire better off, while managing to pay almost no tax. That is one of my key worries, not just in this context but generally. I am worried about the way in which the position appears to be skewed to the benefit of those with more rather than those with less.
  My third concern relates to the way in which private pension schemes might behave under the new regime. We have had interesting exchanges today about past pension misselling, and I understand all that; but how can we be certain that the administrative charges for basic pension plus can be driven below the 20 per cent. of contributions that is typical of some existing personal pension schemes? If they do not fall by enough, will the Government be able to find ways of driving those high costs down?
  A further difficulty is that the Government are creating what I understand economists call "moral hazard" in the introduction of a minimum pension guarantee. How will the Government discourage investment managers from making riskier investments than they would otherwise make, safe in the knowledge that the Government will bail them out? The technical note accompanying the basic pension plus pack states that the Government will discuss with the pensions industry any appropriate restrictions to guard against exploitation of the Government guarantee. Moreover, we are told that legislation might have to be introduced to require scheme managers to publish, and to be responsible for adhering to, a statement based on prudent investment principles. Investors would be expected to disregard the existence of the Government guarantee in investment decisions.
  Drafting such legislation, let alone enforcing it—trying to prove in court that someone has acted improperly in making an investment decision—would be a difficult if not impossible task. I understand that I am going into the small print, but, in the case of some of these schemes, the devil is in the detail.
  Finally, I am worried about the stance that the National Association of Pension Funds has taken. Like everyone else, I am determined to encourage the future development of proper occupational schemes with a "final salary" element. Such schemes are invaluable. They have served the nation well in the past and have stood the test of time, and I do not wish to do anything—certainly not under these basic pension plus provisions—that would strike at the heart of those schemes. The Government will have to deal with the issue. If the objections of the National Association of Pension Funds were sustained, my view of what the Government's scheme means in the long term would be prejudiced.
  The Government have a duty to try to persuade people like my hon. Friends and myself that the scheme will not lead to retirement incomes becoming inordinately vulnerable to the vagaries of financial markets. I am thinking of the whole issue of money purchase, and the risks involved. The stock market can go up or down. We have seen the background papers, and we know some

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  of the Government's working assumptions, and I am certain that it will have to be studied further before final conclusions can be made; but I believe that there is a real risk that the Government's plans will lead to more inequality in pension incomes.
  The gap between rich and poor pensioners has widened significantly in the past 10 or 15 years, which is worrying. I do not think that the position of part-time and low-paid workers, and the issue of means testing, have been explicitly and properly addressed, and I feel that all these matters will have to be examined in far more detail before we can be persuaded that it would be right to abandon the universal state retirement pension scheme, occupational pension schemes and the other schemes that have benefited people to date.
  I am certainly willing to enter into a debate about the issues. I think that we must all put our party political ideologies aside when we are discussing the mid to long-term future of pensions reform. We need a system that will stand the test of time and survive changes of Government—a scheme that will take us into the next 15, 20 or 30 years. We are willing to take part in a debate in that spirit, as long as we secure a system that can deal with the problems in the mid to long term, and a political consensus that will survive. That is the most important goal that we must strive to achieve in the weeks and months of debate that will rightly follow the publication of the Government's plans.
  6.44 pm
  Mr. Nigel Forman: I shall try to be fairly brief, in order not to trespass on others' time.
  I welcome this timely and interesting debate. Having sat through all of it so far, I have found all the speeches interesting, and have learnt a great deal already. It is good for the House as a whole to have effective opportunities to influence the development of long-term policies, and I hope that the usual channels in both this Parliament and the next will strive to ensure that we have many more timely debates on pensions policy.
  I will not comment in detail on many of the interesting points that have been made, but I shall make a couple of comments. My right hon. Friend the Member for South Norfolk (Mr. MacGregor) said many fascinating things, but I was particularly struck by what he said in passing at the end of his speech about the strong case for tax neutrality in the encouragement of all forms of personal savings. A simple tax-free allowance of, say, £10,000 per person per year should be introduced, about which, under the law, the taxman need not know anything, provided that the saving was made in the full range of approved savings—personal, institutional or of any other kind. Such a scheme—which has been suggested by many people who are wiser than me—would encourage an aggregate approach to personal savings, rather than displacement from one category to another. That would also be useful in the context of self-assessment.
  Listening to another interesting speech, that of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), I could not help thinking that one of the dilemmas involved in the whole area of pensions policy is that many people who are retiring now are either asset-rich and income-poor—hence all the schemes for reverse mortgages to help people meet the cost of long-term care
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  by exploiting the capital value of their principal asset, the family home—or, in the case of the poorest 30 per cent., both assetless and income-poor. The House should be concerned about such people, and never forget their needs, as well as the needs of the more prosperous section of the population. The challenge for the longer term is to bring about circumstances, by the middle of the next century, in which those who retire have both assets and adequate income. That ideal should be the benchmark for any longer-term schemes.
  I want to ask three main questions. First, how can we best look after the interests of today's generation of pensioners? A number of speakers have made that point. Secondly, how can we best address the needs of pensioners in the middle decades of the 21st century, in view of the demographic projections and the outlook for public finances? As we all know, much of the problem is due to the difficulty of persuading taxpayers to part with enough money to finance a pay-as-you-go system. Thirdly, how can we organise the transition from where we are now to where we hope to be between 2040 and 2060?
  Over the past 18 to 20 years, we have had a coherent strategy for pensioners, based on three main pillars. First, we have maintained the real value of the state pension in relation to prices overall. Secondly, we have encouraged younger people to make their own provision for retirement, with the result that the majority of existing pensioners have done so. Thirdly, we have focused extra financial help on the poorest pensioners, and those in the greatest need. Those happen to be Conservative principles, but I am glad to say that they command widespread support on both sides of the House.
  The strategy has had successful results. Between 1979 and 1994–95, the average incomes of pensioners have risen by nearly two thirds from all income sources. Almost nine out of 10 recently retired pensioners have incomes in addition to the state pension, and nearly two thirds of all pensioners have incomes from occupational pensions. That compares with about two fifths in 1979. In view of my earlier remarks, it is gratifying to note that the proportion of pensioners in the poorest decile has fallen from about 35 per cent. in 1979 to about 18 per cent. in 1991–92, the latest full year for which I have seen figures.
  Despite the achievements there is a strong case, which I have put to my right hon. and learned Friend the Chancellor several times, for a well-targeted increase in the state pension for the oldest pensioners who form the cohort that is most likely to be poor and in need and who may be too proud to claim means-tested income support to top up their low incomes. My proposal, which I shall briefly outline again, is that everyone born in or before November 1921—to take the example that would have applied at the last Budget—should have a sizeable increase in the state pension. For example, in round figures it should be £90 a week for a single person and £120 a week for a couple.
  The attraction of such a proposal, apart from its simplicity and its natural justice, is that it would be a limited public expenditure commitment which, by definition, would decline over time. Clearly, if it is linked to the date of birth, the scheme has a diminishing impact on public finances. I asked the Library to supply figures and yesterday I was told that the net cost rather than the gross cost—obviously in such a calculation, one must

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  look at the net cost because of the impact on income support—would be £3.3 billion in the first year. For the reasons that I have given, it would decline in subsequent years.
  Secondly, the scheme that I have sketched would be a sensible recognition of the fact that the most elderly pensioners tend to be those who are most likely to depend solely on the state pension and/or income support. Thirdly, I know from my mailbag that it would be much appreciated and that it is truly needed by the cohort of pensioners to whom we all owe so much. They are the people who participated on the home front or in the forces in the second world war and, relatively speaking, they feel that they have been left behind compared with the younger cohort of pensioners who came after them. There is a legitimate sense of concern and grievance which in natural justice we need to address.
  Mr. Leigh: What research has my hon. Friend carried out on pensioners who were born in or before 1921 who are relatively well-off? Apart from the high initial cost of the scheme, there is surely no point in spending £3 billion or a large proportion of that amount on people who are already well looked after and well funded because they were able to provide for themselves in their old age.
  Mr. Forman: I am not sure what proportion of the age cohort that I have mentioned is well-off according to my hon. Friend's definition. We would need to have a long discussion about what constitutes being well-off. In the context of large sums of public expenditure, I would prefer to see this approach to looking after a deserving cohort in our population in preference to some other uses of comparable amounts of public money. We should need to examine the matter further to see how many super-rich people there are in that category. Of course, if the extra pensions that I have mentioned went to people such as Lord Hanson, as the pension is taxable, the state would claw some back. However, I do not want to spend too much time on that I prefer to rush to the second part of my contribution and speak about the principles underlying the excellent scheme that has been proposed by my right hon. Friend the Secretary of State for Social Security.
  I welcome the Secretary of State's initiative for a basic pension plus. It is an example of the way in which the Government are still generating all the most constructive ideas in British politics. They are still following a Conservative agenda and, as the Secretary of State has said, Ministers are responsibly and thoughtfully directing their attention to the longer term. The challenges that lie ahead derive essentially from demographic projections of an aging population. In a sense, those problems are to be seen in the figures and the only consolation is that the projections suggest that we are likely to be affected less seriously than some comparable countries.
  Secondly, as the House knows, the worsening nature of the dependency ratio suggests that whereas five working people were contributing to the support of one pensioner in the late 1940s when the present arrangements were introduced, by the year 2030 it is projected that five working people will have to support three pensioners. Plainly, that is a significant change in the dependency ratio.
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  Those factors also need to be considered alongside the significant changes in the labour market to which hon. Members have referred. Those seem likely to make it more difficult to sustain pensions based on traditional assumptions, which could classically be described as people working a 45-hour week for 45 years in full-time employment. That pattern of the labour market is disappearing fast. In such future circumstances it must be right to move away from the precarious basis of intergenerational transfers based upon the pay-as-you-go system to a funded system that is similar to the one proposed by the Secretary of State. That is the approach that was originally advocated by William Beveridge at a time when most people lived no more than three to five years beyond state retirement age. Therefore, how much more necessary will it be to have a funded personal system in the decades to come when the average length of retirement will be about twice or thrice as long as it was in the late 1940s?
  In principle, the Secretary of State is right to pursue the line that he has suggested. I hope that it will have all-party support in the years ahead because that is essential for such a system to work satisfactorily.
  Lastly, I should like to speak about how to organise the transition. In such matters the devil is often in the detail, but another form of devil is often found in negotiating the difficult transitional arrangements. It is vital to ensure that the transition from one system to the other is comprehensible, fair and affordable. That is especially important because the transitional generation, if I may call it that—those entering the labour market in the early years of the next century—will have to pay twice once on the current basis to support the pensions of those of us who will then be pensioners, and again on the funded basis to pay for their own new pensions.
  I stress the importance to those people of three factors. The first is the long and gradual phasing-in of the new scheme, which is essential. The second is the degree of burden sharing that will be involved in the role of taxpayers in helping to finance the shortfall in national insurance contributions, which is implied in the promised rebates and in the ingenious switch in the tax treatment of pension contributions. That will make it easier to finance and to offer the benefit of pension income, which will be tax free to the recipients. All that has not been sufficiently brought out in the debate or in earlier debates. We are debating a partnership to help to finance the transition from one system to another.
  The third essential element is rigorous and reliable regulation of the pension providers to prevent the risk of misselling on which we in the Select Committee on the Treasury recently took evidence. We must also try to work against excessive charging, which has been such a bane of the pensions industry in recent years.
  The Secretary of State's proposals will need to be subjected to a great deal of further debate and consultation in the months and years ahead. They are an admirable start to what will need to be a long and sustained transition to a new, funded system which, when fully in place, will prove to be more generous and reliable and a real asset to the nation in terms of investment, economic growth and real security in old age.
  6.58 pm
  Mr. Jeremy Corbyn: I welcome the opportunity to take part in a debate about future pensions policy, but, of course, we can look at such matters in

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  different ways. The debate, which has been promoted by the Government, has so far been about the continuing destruction of the universal welfare state and the promotion of the interests of private insurance companies and pension providers.
  That systematic theme has run through Government policy for the past 18 years, and I hope that 1 May will bring some liberation from the gobbledegook of market economics that has dominated this country throughout that period. [Laughter.] Conservative Members may laugh, but of course they may not be here after 1 May, anyway.
  Yesterday afternoon, I had the great privilege of attending the Greater London Forum for the Elderly annual meeting. Members of Parliament from three parties were there the hon. Member for Harrow, East (Mr. Dykes), a Conservative Member, the hon. Member for Southwark and Bermondsey (Mr. Hughes), a Liberal Democrat, and myself. We were joined later by my hon. Friend the Member for Peckham (Ms Harman), who gave a speech.
  At the meeting, which was large and extremely representative of pensioner forums in every one of the 32 London boroughs, the forum put forward its manifesto for London's pensioners. Those people have given their working lives in all sorts of areas, including working at home caring for people, working in factories and administration. They are seriously concerned about the lot and plight of pensioners, so they argued for a new Greater London authority, which they thought would at least give some opportunity for promoting pensioners' interests. They argued specifically for the restoration of the link of the state pension with earnings, which I support, for the preservation of the state earnings-related pension scheme, and points relating to cold weather payments, zero rating of domestic fuel and concessionary television licences.
  There was much discussion about the problems of community care, hospital services, travel permits, environmental planning, housing, leisure facilities, education and the need for pensioners to be able to lobby effectively to achieve their aims. Pensioners need to be able to put forward their case and demands.
  What ran through the manifesto was a revulsion at the consensus among so many broadsheet newspapers and on television that all that matters is getting rid of the existing state pension scheme and bringing in a private scheme. The forum's voice was unreported yesterday, so I am using this opportunity to convey the sense of anger and outrage among older people about the way in which they have been treated—they the generation who brought in the welfare state.
  Mr. Heald: Does the hon. Gentleman accept that he should not try to put forward a case which is not true—that the earnings link would be restored and SERPS rebuilt under Labour? He talks about people being liberated in May. That is not the policy of his Front-Bench team, is it?
  Mr. Corbyn: I said that we would be liberated from the Tory Government on 1 May, and that we shall be. However, the Minister should be aware that the Labour party is committed to a process of statutory consultation with pensioner organisations, which the Government have never done. Indeed, I understand that they have often refused to meet the National Pensioners Convention or to
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  have serious discussions with it. The idea of giving Jack Jones just 10 minutes in an office somewhere is outrageous.
  Mr. Heald: I have met Jack Jones.
  Mr. Corbyn: I am sure you have met him and I hope you learned something from it, or I hope the Minister learned something from it—I exclude you from that, Madam Speaker.
  May I quote from figures produced by the Department of Social Security on pensioner poverty? In 1979, after housing costs, 21 per cent. of pensioner couples and 12 per cent. of single pensioner households had incomes that were less than half the UK average. In 1993, the comparable figures were 25 per cent. of pensioner couples and 33 per cent. of single pensioner households. Those figures are from the households below average income statistical analysis produced by the Minister's Department. They demonstrate what has happened in past years because of Government strategy.
  In 1975, Labour Government legislation linked the state pension with earnings or prices, whichever rose the higher during each year, and every April an increase came through. The same legislation also brought in SERPS, which meant that everyone either was in an occupational pension scheme in work or had access to SERPS, which credited people who were in part-time work or whatever else. It meant that pensioners could look forward to some security in retirement and a share in any rising national prosperity, to the extent that, by 1980, the state pension was around 24 per cent. of average earnings. The SERPS formula meant that many others coming into retirement, then and later, would get some decency in retirement.
  In 1980, the then Chancellor of the Exchequer broke the link with earnings and substituted instead the retail prices index. In his autobiography, he called that measure his greatest single achievement. I do not know how he measures his own achievements, but to call breaking the link with earnings an achievement is wrong. Had the link been kept, the current state pension would be £82.25 per week, or £21 per week more than at present.
  The Government claim that their legislation has ensured that pensioners are better off. I sat through the miserable experience of the 1986 legislation, which was promoted by the right hon. Member for Sutton Coldfield (Sir N. Fowler), by the Prime Minister and the hon. Member for Selkirk and lots of other places.
  Mr. Kirkwood: Roxburgh.
  Mr. Corbyn: Sorry—Roxburgh and lots of other places.
  Mr. Kirkwood: Berwickshire.
  Mr. Corbyn: Indeed, and many more besides, I am sure.
  The hon. Gentleman was also on that Committee, and he will remember two features about it. One was the highly questionable actuarial evidence that was put forward for reducing the value of SERPS. My hon. Friend the Member for Oldham, West (Mr. Meacher), who was leading for the Labour party, pointed out that that nonsense was being put forward to promote the private

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  pension industry and that it would cost us all dear in the end. Many people have suffered from missold pensions as a result of that legislation. I would like them to hear the warnings that were given by my hon. Friend the Member for Oldham, West and my right hon. Friend the Member for Derby, South (Mrs. Beckett) during consideration of that legislation.
  By reducing the value of SERPS, the Government have created a market for the private pension scheme and their policies have led to the misselling of pensions. We come therefore to the legislation that is being proposed—it is not legislation but a policy, because there is no opportunity for such legislation to be introduced. Indeed, come 1 May, I sincerely hope that the proposal from the Secretary of State for Social Security will be consigned to the dustbin of history. Someone doing a PhD in the next century might dredge up this debate and discover that someone actually proposed privatising the entire pension industry.
  That concept has its origin in Jose Pinera, who was a Minister in the fascist Government in Chile, which privatised the national insurance system, and who now goes around the world making a great deal of money for himself addressing seminars on the promotion of the private pension industry. As my hon. Friend the Member for Peckham has said, private pension schemes, oversold and heavily sold, increasingly rely on heavy management costs, huge commissions for those that sell them and, above all, huge advertising budgets to compete with other pension schemes. Call that efficiency? Call that an effective use of resources? Call that a guarantee for the future? It is the opposite of that and Conservative Members know it.
  Mr. Heald: Is the hon. Gentleman aware of the Alexander Clay report that showed that 99 per cent. of those people are better off than in SERPS?
  Mr. Corbyn: Some of those people may temporarily be better off in those schemes than in SERPS. The reason is that the Government devalued SERPS to create the market for such schemes in the first place. The Minister knows that and he knows that that actuarial evidence, put forward in 1986, was deeply flawed.
  May I quote from an interesting letter that appeared in The Guardian on 7 March from Professor Peter Townsend of the university of Bristol? It said:
  "According to a report on privatisation by the United Nations Conference on Trade and Development, there is little evidence that promises have been delivered"—
  this is in relation to privatising pensions as proposed by the Adam Smith Institute.
  "In Chile the privatisation of pensions has resulted in only 52 per cent. of the workforce being covered for benefits. And many of these 'will end up with acquired benefits less than the guaranteed minimum'."
  There is heavy selling of the idea of privatising pensions throughout the world by the International Monetary Fund and the World bank. Many people will rue the day that they agreed to go down that road.
  The arguments for the privatisation of pensions are fundamentally flawed. One is that the promotion of a private enterprise market solution to the so-called
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  pensions problem creates security, prosperity and a beneficial society. The compulsion element in it means that, in effect, everyone becomes a compulsory shareholder in a lottery, rather than a payer of tax and national insurance, with a guarantee, through a properly run welfare state, of the elimination of poverty in retirement. Having created poverty among pensioners by devaluing SERPS and the state pension, the Government are forcing people to choose a market solution, in which they know there is no guarantee whatever of the elimination of the poverty that the Government themselves have created.
  The argument that the welfare state and the pension system are no longer affordable has been exploded by many people. For example, the recent article by Malcolm Crawford, a consultant economist and former business editor of The Sunday Times, talked about the "big pensions lie". It points out that the demographic time bomb is not that huge or serious—that has been well documented by many people. Behind all that is something more sinister.
  Mr. Flynn: I wonder whether my hon. Friend, in his wide reading, has read the book by the hon. Member for Havant (Mr. Willetts). It is called "The Age of Entitlement". The hon. Member for Havant may need to be reminded that the book describes the vast exaggeration of the demographic time bomb by a Government who wish to change pensions policy and were taking advantage of it.
  Mr. Corbyn: I do read very widely, but not that widely. I often visit the bookstalls at stations such as Waterloo or Euston, and I am always looking for remaindered copies. I am sure that it will not be long before there is a pile of that book selling for £1 along with non-pulped copies of Charles Dickens's novels. I will get both and see which is the most interesting.
  To return to the cost of pensions, there is a moral argument. The generation that is now in receipt of the state pension or an occupational pension is the generation that campaigned for and achieved the principle of a universal welfare state in the post-war period. There was the Beveridge report, and the idea of full employment and the elimination of poverty. The people of that generation achieved perhaps the single most important landmark piece of legislation in this country when they introduced the National Assistance Act 1948. It essentially worked on the principle that society as a whole is responsible for the welfare of each and every one of the people in it.
  There was the idea of universal benefits, a universal welfare state, a universal education system and the provision of housing to ensure that there was an end to homelessness. It was a brilliant concept and a fantastic achievement. People of that generation ask me and others of the age group of many hon. Members how we can allow those achievements to be destroyed on the altar of market economics.
  Mr. Leigh: The hon. Gentleman will recall that Beveridge proposed a funded system. Is his objection to a funded system, or to a privatised system? For example, would he accept a proposal from the Labour Front Bench to do away with the pay-as-you-go pension, which is not

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  providing adequate support for our pensioners, and to proceed to a properly funded system which is not run by private companies? Would he support that?
  Mr. Corbyn: My objection is that we will all pay more for less security to promote the interests of private insurance companies, as has happened in Chile. That is the basis of the Government's proposals. We have a pay-as-you-go system in this country which it has been misclaimed is no longer sustainable or affordable. The work by John Hills of the London School of Economics and many others has pointed out that it is affordable if we are prepared to accept the moral issue, which is that we should pay for it.
  Germany has a national pensions scheme, independent to some extent of central Government. As a result, pensions are much higher. Many other European countries have much higher pensions as a result of more enlightened social policies. We are heading for what I can describe only as the worst of all worlds. I do not believe that the present system is unsustainable. It is made unsustainable by the principle that one charges so little in taxation at a corporate level and to the richest in society that it becomes unaffordable. We are then blaming the poorest people for the lack of affordability of the pensions system. We should accept the principles surrounding the welfare state.
  A number of themes run through social security debates. First, there is the applicability of benefits. This Government more than any other have gone against the principle of universal benefits and moved towards means-tested benefits. The state pension costs 1.1 per cent. of its value to administer. It is universally applied and universally payable and is welcomed by those who receive it—it should be considerably higher. Income support, which is means-tested, costs 10.2 per cent. of its value to administer. A funded pensions scheme costs at least 25 per cent. of its value to administer. I cannot give the figures for every private scheme, but they are all somewhere of that order.
  The most ludicrous of all benefits is the social fund, which costs 61 per cent. of its value to administer. In other words, two thirds of its value is spent telling people that they cannot have anything from it. We should think seriously about the effectiveness of benefits such as pensions as well as the efficiency with which they are administered.
  We are told that, in the proposed Valhalla of private pensions, we will end up with market efficiency in which a quarter of the entire value goes in commission and administrative charges.
  Mr. Clifton-Brown: I do not know whether the hon. Gentleman was here earlier when I intervened on the hon. Member for Peckham (Ms Harman), but I said that one of the main advantages of basic pension plus is that the market will drive charges down. As I said earlier, I was with one of the main pension providers at lunchtime today. It estimates that it can provide pensions at 0.5 per cent. of the fund's value—nowhere near the 20 per cent. to which the hon. Gentleman referred. What is more, it estimates that the top-up element can be done for nothing.
  Mr. Corbyn: In the interests of transparency in public debate, the hon. Gentleman should tell us with whom he had lunch, where he had lunch, who paid for it and what
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  he ate, as well as any relationship he may have with that company in the future. There are serious concerns that Government policy is heavily influenced by the wishes of the private pensions lobby.
  Mr. Clifton-Brown: I have no interest in the company whatsoever. It specifically said that it wanted to remain anonymous because a commercial interest is involved. The company does not wish its competitors to know who it is.
  Mr. Corbyn: That sounds like a very anodyne and anonymous lunch. I should like to hear a little more about it because we need to know about the pressures being used.
  Ms Abbott: Conservative Members talk about market pressures forcing charges down. Does my hon. Friend agree that does not apply to any other aspect of the financial services market? Market pressures have not forced down the cost of mortgages or any other such product. Is not that just wishful thinking on the part of the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown), or is it moonshine?
  Mr. Corbyn: I think "moonshine" would be an appropriate description. There is no evidence that a plethora of pension companies competing with one another, with lots of people in little offices doing the same work, is an efficient use of human resources.
  One of the colleagues of the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) once tried to tell me at a radio station that the most efficient thing that could happen to the Post Office would be the introduction of competition, so that, instead of one person delivering letters in a street, there would be two or three. I do not think that that is an efficient use of resources, any more than having dozens of pension companies. Surely it would be better to have a more rational system which would ensure that everybody gets a pension. What we have is a plethora of companies ensuring that not everybody gets a pension.
  The arguments about the cost of pensions are set out in the Organisation for Economic Co-operation and Development report. Under the Government's current policy, with which I do not agree, pension expenditure in 1995 was 4.5 per cent. of GDP. By 2030 that would rise to only 5.5 per cent. If wage indexation was introduced, it would rise to 7.8 per cent. and only if there was later retirement would it fall to 3.4 per cent. Those are not particularly big increases when one looks at the social benefit of eliminating poverty among older people within our society as opposed to the ideology of the market.
  Other countries have much higher pensions and will be spending more, but in Germany, with wage indexation, the percentage of GDP would rise from 11.1 per cent. to 16.5 per cent. I believe that the argument that there are huge unfunded pension liabilities all over Europe, which has been promoted by many people, is part of the promotion of the private pensions industry. It is heavily suggested by quasi-academic journals, which claim that the current welfare state is unaffordable because they all have a vested interest in proving that to be the case.
  There are arguments across Europe over the welfare state. The Maastricht criteria on the single currency require public expenditure cuts and an attack on the

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  welfare state, and promote the type of privatisation policy that we have been debating today. Many people in the United Kingdom—such as those I was with yesterday, at the Greater London Forum for the Elderly—benefited from the principles of a universal welfare state, and they will not allow the issues to fade away or the welfare state to be destroyed.
  Consider the disputes, demonstrations and opposition to cuts in Germany, Italy, Spain, France, Belgium and the Netherlands. Those demonstrators were in the generation that lived through the second world war and saw the destruction it caused, and they wanted to ensure a secure social future—hence the development of the welfare state. They are now demonstrating and trying to defend that principle. If we go down the road of privatising pensions and other aspects of the welfare state, exactly the same debate will occur here, although much more keenly.
  The public mood dictates that poverty should be eliminated among all our citizens. Many people find it offensive to see older people in supermarkets late on a Saturday afternoon waiting to buy cheap, out-of-date food. No one should have to live like that, but in modern Britain they do. It is wrong, and it is immoral. I for one am prepared to stand up for the principle of a universal welfare state.
  7.20 pm
  Mr. David Lidington: I do not think that anyone could argue that the hon. Member for Islington, North (Mr. Corbyn) does not demonstrate a consistency and a coherency in his argument that are lacking in Opposition Front Benchers. However, I cannot agree with his faith in the virtues of monopoly provision or in the beneficence of the state's organisation of services, because the history of the United Kingdom and of comparable European countries has shown the folly of doing so.
  In his peroration, the hon. Member overlooked the fact that people are out on the streets in Italy, Germany and elsewhere in western Europe because their Governments are, belatedly and with great difficulty, trying to grapple with the problems anticipated a decade ago by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) and his colleagues in government. We are able to cope better than our European neighbours with the demographic and social trends we share with them, because my right hon. Friend and his colleagues were ready to take the difficult decisions then and did not try to postpone them, hoping that they would somehow go away and not have to be faced.
  I agreed with the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) about the sense of betrayal felt by some elderly people. They feel that they have been contributing through their national insurance contributions for many years, but that the contract which they believed was in place is not being honoured. One of the chief arguments in favour of a shift towards a fully funded pension system, as advocated by my right hon. Friend the Secretary of State, is that it would place pension funding on an honest basis for the first time since the second world war.
  As the hon. Member for Roxburgh and Berwickshire said, both parties have led people to believe that they would receive something that was entirely dependent on
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  the readiness of future Governments and generations of taxpayers to deliver. I do not think that Governments of either party have acted in a spirit of malice, but they did not anticipate future demographic trends or the attitudes of future generations of taxpayers. They also did not anticipate the rising expectations of generations of pensioners, who saw the higher living standards that their contemporaries at work gained through their earnings
  Today, hon. Members on both sides of the House have said that, with such an important reform, it is critically important that we get it right, and that we do not rush to legislate before the ground has been carefully prepared. I agree, and I welcome the fact that the Secretary of State's announcement presaged a Green Paper later this year and full consultation of all interested parties before we move on to a White Paper and a Bill.
  I hope that we can achieve the greatest possible cross-party agreement on any eventual legislation, as we did when passing the Pensions Act 1995, after the disaster of the Maxwell scandal. If such reform is to last for the length of time that we envisage it will, it is important to have that agreement among hon. Members, regardless of party affiliation.
  The basic pension plus scheme is good, because it is an honest way of funding pensions. It is right for the Government to continue to guarantee the safety net of a minimum pension, and it is right to have an element of compulsion in saving.
  I was sorry to hear the hon. Member for Peckham (Ms Harman) criticise the Government's statement that, under the scheme, there would be choice in pension providers. An element of competition will breed a desire to attract customers, and therefore to provide a better service—including lower charges, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) said. In our history since the second world war, there have been too many examples of monopolies that have been established for very well-intentioned reasons but which have ultimately delivered fifth-rate services and been operated in the interests of the organisation itself rather than in the interests of those they were created to serve.
  Whereas our European neighbours are still grappling with how to trim their pledges and to deal with their taxpayers' readiness to finance such pledges in future, we are attempting to ensure that future generations receive higher and more adequate retirement income levels than those currently provided under the basic state retirement pension.
  Although I welcome the principle of the scheme announced by my right hon. Friend the Secretary of State, I should like to raise a couple of issues that I hope will be addressed in the Green Paper and afterwards.
  The hon. Member for Birkenhead (Mr. Field) and my right hon. Friend the Member for South Norfolk (Mr. MacGregor) raised the first issue, which is how we can ensure that both the current generation of workers and those who take part in the pension plus scheme save at levels that are adequate to ensure themselves a relatively comfortable retirement.
  If we are not careful, there will be a risk that new entrants to the pension plus scheme who sign up in their 20s will complacently assume that that is all they have to do. They may assume that their compulsory contributions will be put to one side and invested on their behalf,

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  and will consequently guarantee sufficient retirement income to support the life style that they expect at the end of their working lives.
  People taking part in pension plus will probably need to be encouraged to make additional provision for their retirement on top of what is invested on their behalf through the state scheme. I agree with my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) and others that it would be helpful if we introduced a simplified tax treatment of long-term savings products so that people could be encouraged to make such provision, and in a way that best suited their circumstances throughout their working life. That might provide a solution which would assure the new members of the work force of the standard of living they would want.
  The present generation of workers is going to have to pay twice. The hon. Member for Peckham said that in terms of horror, as if it was a wicked Government plot. In fact, it is a statement of the obvious. If we are to move towards a funded pension system, it is inevitable that at least one generation of workers will have to pay twice. If that key decision is taken, the political debate needs to focus on how we phase in the new arrangements and try to ensure that adequate provision is made for the current generation, who will, by definition, not be participating in the basic pension plus scheme.
  The question-and-answer brief issued by the Department refers to the possibility that the basic pension plus scheme might be extended beyond the category of newcomers to the work force for whom it is intended. One question reads:
  "Can I join this new scheme?"
  The Department's answer is:
  "Our plan is to phase the scheme in gradually so that it is affordable. However, it may prove possible, if finances and growth permit, to extend the scheme up the age range."
  I would be interested in anything that the Under-Secretary of State can say later to throw greater light on that matter.
  Above all, if we are to look after the current generation of workers, we need to make sure that we keep in place the tax incentives for saving, particularly for contributions towards occupational pension schemes to which my right hon. Friend the Member for Sutton Coldfield rightly drew the House's attention. I, too, was very disturbed to hear from the hon. Member for Peckham what I interpreted as an implicit threat that a putative Labour Government would seek to trim, or even withdraw altogether, existing tax incentives for pension contributions.
  As many hon. Members have said, as well as trying to make sure that people save over and above what is provided by the compulsory element of the proposed new scheme, we need to look carefully at the quality of regulation and advice available. I have read the minutes of the evidence given recently by the Personal Investment Authority to the Treasury Select Committee. I found the PIA's performance and attitude unsatisfactory.
  While it is certainly true that rules are in place to ensure that anyone who is proved to have been missold a personal pension is properly compensated, the PIA and other organisations with responsibilities in this sphere seem to have been going about their work far too sluggishly. I am therefore pleased that my hon. Friend the Economic Secretary is now knocking heads together and trying to get action taken more speedily.
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  When the new system is set up, there will clearly need to be rules covering investments by approved organisations. We do not want to end up repeating the mistakes of the United States, where the Government's guarantee underwriting the savings and loans schemes led to silly, risky decisions being taken by some of those organisations because they knew that, at the end of the day, the taxpayer would step in and mop up the mess.
  Some framework of regulation will clearly be needed. It could relate to the balance of portfolios held by the approved organisations. I am attracted by the proposal of the hon. Member for Birkenhead for a reserve fund, financed by the institutions, to guarantee against loss.
  Perhaps we could also consider some guaranteed minimum level that would be promised to pensioners over and above the basic pension underwritten by the Government. Perhaps the institutions themselves could guarantee at least a minimum level of bonus pension, so that we could not only assure pensioners of a decent standard of living in retirement but protect taxpayers against too many people falling back on that ultimate Government safety net.
  The quality of advice also needs to be improved. As a newly elected Member of Parliament in 1992, I was faced with many constituents who were victims of the Maxwell scandal. I vividly recall how difficult it was to explain to men and women in their 70s and 80s who were not accustomed to dealing with financial institutions how this disaster had come about, and what the Government and the various regulatory authorities were doing to try to recoup their pensions.
  I shall give one example of the problems. Every month, the trustees of the pension funds would write to pensioners and, in accordance with their legal duty, say that, because of the uncertainties about the fate of the Maxwell empire, there could be no guarantee that they would be able to make further pension payments after that month. In fact, Members of Parliament who were talking to the trustees of the institutions knew that there was enough money in the bank to ensure that pensions could continue to be paid for a reasonable period, at least while things were sorted out, but the law insisted that such a statement was made by the trustees every month.
  That placed elderly people under the most appalling stress. People came to see me who did not know how to cope with what they feared would be the removal, at the drop of a hat, of their chief source of income other than the basic state pension. We therefore need to ensure that people are given advice in language that they can easily understand, so that they can make well-informed decisions.
  My final comment relates to Europe. I agree with every word that my right hon. Friend the Member for South Norfolk said. If there were to be a currency union in western Europe, which would imply common rules on borrowing and a single Union-wide rate of interest, the additional borrowings needed to cover the cost of unfunded pension liabilities on the continent would inevitably have consequences in this country, even if they were experienced only indirectly, in the form of higher interest and mortgage rates than would otherwise be the case. The Government need to consider that carefully and in detail.
  7.38 pm
  Mr. Paul Flynn: We were delighted to hear what could well be a new Tory slogan for the forthcoming campaign—"Vote Tory and Pay Twice". That would be at least as effective as the lion with conjunctivitis and the handsome photographs of Labour's best asset—our leader—that the Conservatives are kindly putting on posters throughout London. Both pictures have the words "New Labour" above them. Most people conclude that both posters are paid for by the Labour party. The hon. Member for Aylesbury (Mr. Lidington) has told us frankly that the Government's proposals mean that to vote Tory is to vote for paying twice.
  I appreciate the reasonable nature of the debate, but it is extraordinary how rare it is for us to be debating pensions. Four of my hon. Friends and I put down a motion when we debated our salaries recently suggesting forging an unbreakable link between our pay and the level of the basic pension. It seems reasonable that the pay of the poorest in the land should be linked to the pay of those in this House, where I understand that there are 200 millionaires. If we had established that link, it would have been impossible to fund the unreasonable pay rises that the House voted itself recently, but it would have had the beneficial effect of concentrating the attention of the House on the level of the basic pension. If our income were tied to that of the poorest pensioners, instead of a debate caused by a death-bed move by the Government, we would have constant, lively interest in the issue.
  It is difficult to take the Government's proposal seriously. The subject is enormously serious and we must tackle it, but the Government's proposal is another death-bed gasp from a Government who have had a lifetime of sin. We do not expect them to be experienced in virtue in their dying days. This incompetent proposal will shortly be forgotten. What can we expect of a guarantee from a party that will be in opposition for a long time?
  I have an example of how hopelessly confused the proposal is. The Government are contradicting their own words, not over a period of years, months or even days, but in one day. The proposal hangs by the thread of the great promise headlined in many papers of a £175-a-week pension in 2040. A written answer appeared today from the Under-Secretary of State for Social Security, the hon. Member for North Hertfordshire (Mr. Heald), making the basis of that figure clear to me and to my hon. Friend the Member for Peckham (Ms Harman). The Minister said that it would represent 26 per cent. of average earnings in 2040. A similar answer was printed in Hansard a few days ago.
  I have collected my late mail in the past two hours and received a charming letter from the Minister, saying:
  "I am sorry that, in the haste to answer the large number of Questions"—
  poor man—
  "you tabled … about the Government's proposed new scheme … one of my Written Answers … was not as clear as I would like it to have been."
  That is a grand understatement. His answers were grossly misleading and the figures were untrue by a large amount. I do not want to burden the House with the full details unless hon. Members want to hear them, but the Minister confesses to having—inadvertently, of course—misled the House in recent days on the crucial issue of the sum that the Government were promising in 2040.
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  The Minister confesses in the letter that the amount will not be 26 per cent. of average earnings. It is almost impossible to believe, but in their answers, some of them printed alongside one another, the Government have used two different measures, one assuming a 1.5 per cent. increase in average earnings and one assuming a 2 per cent. increase. The final sentence in the letter is:
  "Using 2 per cent. per annum real earnings growth, £175 represents 21 per cent. of average earnings in 2040."
  That is a monumental mistake. After all the wonderful reforms of the marvellous new scheme praised by hon. and gullible Conservative Members, in 2040 a pensioner is likely to have a pension worth one fifth of average earnings. That is pitiful compared with what Governments of both parties have been able to pay for the greater part of the century. It is extraordinary that we are expected to believe that, although we could afford pensions worth one third or more of average earnings in the 1940s and 1950s, when the country was a great deal poorer, in future the best that we can manage is one fifth of average earnings.
  The fact that the Government had still not got their sums right even two hours ago shows that the scheme has been cobbled together. We have heard several other extraordinary ideas recently and many of us are becoming seriously worried about the lean, mean electioneering machine that we have admired and been in awe of for so long. The Conservatives have come up with gimmicks such as the royal yacht, to be paid for by taxpayers, which was denounced by 75 per cent. of the population, the scheme for privatising the underground, which was denounced by 92 per cent. of the population and the extraordinary idea announced yesterday of privatising care, which has struck fear into the hearts of all those who might one day be in residential care—which is all of us. What the Government are offering goes against the reality that people know of private residential care, particularly where cost is the main factor. People know that services are often cut, diets become poorer, people share rooms and there is increasing degradation and indignity. The scheme has been produced by a Government who know the cost of everything and the quality of very little. Yesterday's stunt proves that and the people will rightly treat the privatised pensions scheme with the same suspicion.
  This was a lively issue in the House back in the 1980s, before the hon. Member for Aylesbury was here. I commend to him Andrew Marr's book "Ruling Britannia", in which he goes through the speeches made on the Social Security Act 1986. The then hon. Member for Ashfield, Mr. Frank Haynes, made prophetic speeches about what would happen when the Conservatives decided to scrap SERPS. The Conservatives promised to get rid of SERPS. They did not fulfil that promise because of the might of the pensions lobby, which wanted it cut but not abolished. Insurance firms did not want the lower, poorer end of the market dumped on them. They preferred to keep the cream. That is why SERPS was not abolished, as promised before the 1986 Act.
  The hon. Member for Aylesbury talked about consensus. Nothing will come from the nonsense before us tonight, but there will be major reform from a consensus among all parties. I remind Conservative Members that SERPS was set up by consensus. It had the agreement of all parties. The destruction of half of SERPS was fought tooth and nail by Labour.

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  The Government's excuse for abolishing the state pension is that by 2030 there will be three pensioners for every five working people. The book by the hon. Member for Havant (Mr. Willetts) includes a chapter entitled, "The myth of the demographic timebomb", in which he describes how the Government deliberately exaggerated the effect of the demographic time bomb for their own ends. He justifies that because he is against SERPS anyway. It will be a time bomb, but not a series of time bombs that go on for ever—the baby boom generation will reach pensionable age in 10 to 13 years' time and the problem will then diminish. We know that because the people in that generation are alive now.
  It is nonsense, therefore, to distort all our policies for that period. Whatever Government are in power, a larger proportion of our national wealth must be paid to pensioners during that period than before or after it, but that must not determine the shape of our policies.
  The hon. Member for Gainsborough and Horncastle (Mr. Leigh) mentioned Beveridge, who wrote that the most inefficient aspect of pensions that he knew of was where men—they were usually men—went around collecting 1s 11d from one house and 2s 7d from a house in another street, mostly for industrial policies and insurance. It was a highly inefficient, wasteful system. Beveridge said that 50 per cent. of the premiums paid in those days were lost in commissions, administration and the inefficiency of the system. We replaced it with a system that has less than 2 per cent. administrative charges. It is an efficient system in that respect. We also avoided the main problem with money purchase schemes they are a gamble. Few people have mentioned that.
  The hon. Member for Aylesbury referred to the Maxwell case. Although it affected a relatively small number of people, it should not have happened and the system must be strengthened. I hope that the reforms will work.
  What about the people in money purchase schemes, who took their pensions on the basis of annuity in 1994? They would have received 35 per cent. less than they would have had in 1990 because of changes in the value of the annuity rate between those years. Nobody expected or forecast that, but those whose scheme was with the Norwich Union saw the value of their pension drop by 35 per cent. For others, the drop was even greater. If we cannot work out what will happen to annuity values within the space of a few years, how can we say what they will be in the future? Naturally, money purchase schemes are popular with firms because they represent less risk.
  The Government's proposed scheme is nonsense because only people now aged 20 or less will lose their state pension under it, and none of them will have reached pension age by 2040. At that point, the proposal's effect will be to reduce the income of the national insurance fund by some £15 billion a year—a figure contained in a written answer to my hon. Friend the Member for Peckham a few days ago—while leaving its expenditure unchanged. It is absurd, but that was the answer from the Government about their cobbled-together scheme. The full effect of the proposals will not be seen until 2070, when no one has the slightest idea what the demographic circumstances will be.
  Whatever the proposal's purpose, it has nothing to do with demography but everything to do with presenting a plausible scheme that is transparently unworkable before
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  the election. There is no room anywhere—in this House or in any party—for those with an ideological view on this matter. We shall soon move away from the politics of ideology to the politics of reason under a new Government—[Interruption.] The Under-Secretary of State for Social Security, the hon. Member for North Hertfordshire, is chuntering away on the Front Bench. He cannot get his figures right in the course of a single day, but has the cheek to have a go at me.
  In 1989, I took Barclays bank and the Midland1-bank to the advertising authorities for misselling and misadvertising personal pensions. I went to one of the biggest pension providers in the country—one of the famous names with a good reputation—which assured me that it had never missold personal pensions. Almost every question that I asked Baroness Thatcher at Prime Minister's Question Time was about the misselling of personal pensions. Many people knew what was happening when that wicked misselling was going on. It was fuelled and encouraged by the Government through their ideology and belief that everything that is private has a halo around it and everything that is public bears the mark of the devil. We must escape from that ideological nonsense.
  My hon. Friend the Member for Peckham said that there is a place for SERPS and that we should continue with it. People on average male earnings, who were on SERPS from its introduction in 1978, would now have been enjoying double the state pension—an extra £70—from that scheme, which is good value and has paid out some of the best pensions. Many people who joined other schemes in the private sector have lost out and have little hope of receiving compensation in their lifetime.
  The scheme that I support is a reformed SERPS, which would be partially funded and run independently of the national insurance scheme so that no Government could get at it in future and raid it, as the Government did when they tried to get rid of SERPS and use the scheme as a bribe to get people out of it. I propose that the managers who run it should be independent of the state and free to invest on a wide scale. The scheme should be kept as free-standing from Parliament and politics as possible. A reformed SERPS, which would have the security of being a state scheme and of not seeking to make profits, would be a far better proposition for pensioners in the future.
  All the parties in the House would agree to such a scheme. When we decide on the scheme, which will work for many years into the future, we shall have forgotten the cheap, opportunist nonsense of a scheme that we have before us tonight.
  7.56 pm
  Mr. Geoffrey Clifton-Brown: I am delighted to catch your eye, Madam Deputy Speaker, because I believe that my right hon. Friend the Secretary of State's proposals for a pension plus scheme are extremely far reaching and visionary. As the hon. Member for Birkenhead (Mr. Field) pointed out, the first tranche of pensioners will, over a 40-year working lifetime, build up a substantial fund, but they may live for a further 40 years. The first tranche of pensioners under the scheme will therefore live until almost the 22nd century, so we are looking at a long time scale for this scheme.

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  I wholeheartedly agree with my hon. Friend the Member for Aylesbury (Mr. Lidington) that there must be a consensus in the House on how we proceed on pensions. Over such a long time scale it is essential, if the scheme is to last and prosper, that there should be all-party agreement on it.
  My right hon. Friend the Secretary of State has produced a complete plan to transform the state pension scheme over a long time scale. According to a leader comment in The Economist:
  "The Tories have produced a plan that is workable, attractive and takes account of the undoubted difficulties that confront the project."
  Last summer I wrote a paper entitled, "Privatising the State Pension Secure Funded Provision for All", published by the Bow Group in November 1996. I am delighted that many of the proposals in that paper are similar to the Government's proposals.
  Last week, The Economist commented:
  "Reforming the welfare state is one of those nettles that politicians on all sides privately agree have to be grasped—so long as somebody else does the grasping."
  For many of us, it was a complete surprise when the proposals were announced. The silence from the Opposition Benches at the end of last week spoke far louder than words. The best that the instant rebuttal unit could manage was that the plan represented "a chilling prospect"—so much for the desire of the right hon. Member for Sedgefield (Mr. Blair) to think the unthinkable on welfare policies. Many of my constituents might reflect that the unlikely advent of a Labour Government would offer a really chilling prospect.
  Before moving to the detail of the scheme, I should point out that we are able to consider fundamental reform of the system in a manageable and careful way only as a result of the work undertaken by my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary. The decision to equalise the state pension at the age of 65 and the work that has been done to contain the state earnings-related pension scheme will be a key factor in constraining the future cost of the state pension over the next 40 years or so as we move towards the new system. Those two measures combined are likely to save about £45 billion at their peak. Therefore, the proposals are very far reaching.
  It is important to put the matter in the context of our very well-performing economy. From a study of pension systems throughout Europe, the Organisation for Economic Co-operation and Development recently estimated that the United Kingdom should be able to pay off its national debt entirely by 2030—so much for the Labour party's continual carping about how we are increasing the national debt. In contrast, it is estimated that the national debts of France and Germany will double.
  The key question in moving from an insecure funded system to a secure funded system has always been how to fund the transitional burden how to meet new funded pension contributions while simultaneously meeting the burden of the pay-as-you-go liabilities. The breakthrough that my right hon. Friend has made in drawing up the scheme of reversing the tax treatment of pensions—abolishing the tax on contributions while at the same time allowing the trading status of the pension fund to be tax
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  free—is an ingenious and workable solution, which means that the cost to current taxpayers in meeting not only their future pension but the pensions of existing pensioners is manageable. I have not seen similar proposals anywhere else that meet that problem in such an admirable way. I wholly agree with my right hon. Friend's proposals.
  The Labour party has been particularly disingenuous about the fact that the new scheme will include credited contributions for everybody, including non-working mothers, disabled people and the unemployed, so that from about 2040 everyone will be able to retire with a properly funded pension. Much more fundamental and far reaching is that, if privately managed funds perform anything like the way they have over the past 10 years, everybody from 2040 will be able to retire on a substantially better income than they do at the present time, with the consequent improvements in the standard of living.
  In criticising the proposals, the Labour party is absolutely bankrupt of ideas. All that it comes up with are pension funds managed collectively by the trade unions. The Singapore system, on which I gather the right hon. Member for Sedgefield was so keen, was simply a cheap way for the Government to borrow money. All pensioners got in that system was roughly a 2 per cent. real return. By contrast, in the Chilean system, on which much of the proposals are based, the return was roughly 13 per cent. Indeed, the returns from privately provided pensions in this country over the past 10 years have been about 10 per cent. Everyone therefore has the prospect of retiring on a pension that will provide a substantially better standard of living.
  The new scheme will also eliminate the question of whether a person should opt out of SERPS. That has been a difficult problem with which the Government have had to grapple. By creating a funded pension for all, the charges will be low enough to allow even modest earners to gain from the initial earnings-related contributions being paid into funded schemes. I have already made the point twice that charges on pensions can be driven down greatly—unlike the problem regarding personal pensions. The benefit of that has not been brought out in the debate. The compounding effect of high charges over a person's working life of 40 years makes a substantial difference to the amount of pension that one gets at the end of the day.
  Among the greatest benefits of moving to a personal funded system will be that it will focus the minds of our young people on thinking about retirement the moment that they start to work. As other hon. Members have said, that is an extension of the share revolution that we in the Conservative party have brought about over the past 18 years. Not only will young people's minds be focused on the need to save for their old age, but the fact that private providers will have to produce a statement of how the pension has performed each year will begin to get young people to think about investments, how they perform, whether their company is performing any better than another and whether they should switch to another company to get a better performance. That is an important step forward in the savings culture, and one that we need to encourage.
  Under the Chilean system, for example, there will be not only an annual statement but the possibility of using the latest technology, such as video display unit terminals in supermarkets. Once all the security measures are in place—one will have a personal identification number on

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  a plastic card—one will be able on any day at any given time to find out what the pension is worth, how it has performed over the past year and how much one has contributed to it. More important, one will be able to ask questions such as, "What would happen if I retired two years early? How much extra contribution would I have to make for the same level of pension?"
  Ms Abbott: Under such a wonderful new system with its smartcards, I wonder whether people will be able to see how much commission the salesman who sold the pension took and how much of their contributions are going on administrative charges.
  Mr. Clifton-Brown: Absolutely. That is part of the regulations of the Financial Services Act 1986. I cannot imagine that the Act would in any way need to be weakened by the scheme. In fact, we may have to strengthen, but simplify the regulations. I envisage that the pensions regulator will want to keep a very close eye indeed on private providers.
  Mr. Robert G. Hughes: The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) has made a very valuable point. In the Chilean scheme, which is not the same as that introduced by my right hon. Friend the Secretary of State but which the Social Security Committee looked at last year, all such things are completely transparent. One cannot possibly have transparency with an unfunded scheme—and we do not have it. From the details announced by my right hon. Friend, it is already clear that the scheme will be even more transparent than that in Chile.
  Mr. Clifton-Brown: I am extremely grateful to my hon. Friend for that very constructive intervention. He is absolutely right. The Chilean system has a very simple way of being able to portray to everybody exactly how their pension fund is performing, what the additional contributions are, and yes, what the initial and management charges are. I have always said, I shall repeat it and I will keep repeating it, that the compound effect over 40 years of even a small reduction in charges will make a huge difference to the total value of the fund.
  I welcome the Government's proposal to make it possible to switch from one manager to another if they do not perform. The market will sharpen up management performance of all the funds that the Government allow to participate. I welcome the fact that the Government are to introduce a Green Paper so that all the detailed matters can be examined. The pensions regulator will need to look very carefully at the type and range of investments in which providers can invest. One thing that we want to be absolutely sure about is that, if we encourage huge numbers of young people to invest in a scheme—even though the Government are doing it on their behalf—none of the schemes goes bankrupt. As I suggested in my paper, we need to be very careful that the ownership of a scheme and the ownership of fund managers are kept totally separate.
  We will also need to prescribe the range of investments, because we would not want people to invest in Peking bonds that would leave their pensions worth little in the end. We will need a wide range of investment instruments, so that pensioners can benefit from the performance of this country's economy and the worldwide
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  economy. That will be one of the benefits of the scheme. In Chile, the economy almost doubled in six years because of the huge funds that were invested.
  The Government will be able to implement imaginative ideas. For example, it may be possible for one of the financial instruments that I have mentioned to be invested in a Government private finance initiative fund. That would greatly extend the scope of the PFI. The fund would be a quasi-Government bond, as long as we could guarantee a realistic level of return.
  I warmly welcome the scheme, and the fact that the Government Actuary has come up with figures that are similar to my own. A mere £9 a week, flat-rate contribution, plus a further 5 per cent. rebate from earnings below the national insurance ceiling, would produce a substantial fund. The Government's figures suggest that such a contribution would produce a pension, on a conservative estimate, of around £170 a week. That is more than double the current state pension. When I produced my paper, the media were intrigued by my figures and wondered whether they were correct. I welcome the fact that the Government Actuary has reached similar conclusions.
  The scheme will encourage young people to think about investing for their old age at an early age, because they will own their schemes. As I said in my paper, they will
  "be forced to think about retirement income at the point when they first started work. Everybody would then learn the discipline of saving and how good the long-term return on those savings could be."
  We may even be able to take a more radical approach. It may be possible, when the funds start to perform better than is currently envisaged—I am sure that will happen—to add bolt-ons, such as sickness and unemployment insurance. I have obtained some figures today that suggest that a one-year protection against unemployment would add just £4 a month per £100 of cover. Even more worth while, one-year cover against illness and accidents would cost a further £2 a month per £100 of cover. Somebody on average earnings of £300 a week would be able to cover himself fully against a year's unemployment and all sickness or accidents for about £24 a month for the rest of his life. To avoid selling a false prospectus, we would have to announce such schemes from the start. It would be unfair to bring youngsters into a scheme and then change the rules. If the scheme did not start with such insurance cover, we would have to introduce it for the next tranche of youngsters who entered the scheme.
  Our proposals contrast sharply with the vacuum in the Opposition's thinking. They want something called a "flexible decade of retirement"—whatever that means. My right hon. Friend the Secretary of State has pointed out repeatedly that if people wanted to retire at 60 instead of 65, the state pension would have to be reduced by £20 a week. I do not know whether that figure is right, but the Government Actuary has checked it. [Interruption.] The hon. Member for Peckham (Ms Harman) should listen carefully, because I am about to make an important point. If the state pension is reduced and if people are to live on it, it will have to be topped up by income support. The hon. Lady has not told us how much that extra income support will cost. When she does her calculations, she will find that the cost will be substantial.
  I welcome the Government's visionary proposals. Many details need resolving, but the scheme has many benefits. As my hon. Friends have pointed out, the scheme

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  would enable wealth to cascade down the generations. I also welcome the fact that everybody, from 2040 onwards, should be able to retire on a better income. That must be the right way forward, and I hope that my right hon. Friends will introduce the scheme as soon as possible, at least by the turn of the century.
  8.15pm
  Ms Diane Abbott: I am glad to have the opportunity to speak about the Government's proposals. I wish to speak briefly on an aspect of the proposals that has not had enough attention in the debate—the implication of a privatised pension regime for financial services regulation. I shall also speak about the experience of pensions misselling and shall make three points: first, the size of the pensions misselling problem has been underestimated; secondly, we are nowhere near solving the problem; and, thirdly, we must recognise that pensions misselling is not merely a past aberration which must be cleaned up, but raises issues for financial services regulation in the future.
  Figures on the number of people who might have been affected by pensions misselling have been bandied around. In any debate about increased privatisation of pensions, it is important to stress that more people have lost money than most people imagine. The issue first came to light in 1984, when KPMG, one of the leading City accountants, reviewed the files of a sample of 735 clients who had been sold private pensions. Only 9 per cent. of the files showed evidence of substantial compliance with the regulations. The firm classified 37 per cent. of the files as suspect.
  In my view and that of many members of the Treasury Select Committee, the 500,000 people whose cases the Personal Investment Authority is reviewing are the tip of the iceberg. The problem arose not just with pension transfers; similar bad advice was given on opt-outs and to people who left SERPS. Of the 5.2 million who left SERPS, 200,000 were paid so little that they did not even qualify for a rebate. Leaving SERPS could have had no possible value or benefit to them.
  The problem is greater than we believe. We may never know its full dimensions, because many tens of thousands of people may die before they receive any compensation. I understand, from the evidence given by the chief executive of the PIA to the Treasury Select Committee earlier this week, that the industry's letters to people asking them to come forward do not even mention compensation. People are getting letters from financial services providers, with other junk mail from the financial services industry, with nothing to suggest that it would be in their interest to respond. The problem goes wider and deeper than anyone on the Tory Benches will acknowledge.
  Mr. Clifton-Brown: The hon. Lady is making a serious and thoughtful contribution. Many of her hon. Friends have majored on pensions misselling this evening, but will she accept that the elimination of misselling in every circumstance would involve more regulation? In that context, what does she think of supermarkets selling pensions without giving any advice?
  Ms Abbott: As a member of the Treasury Select Committee, I have studied all aspects of financial services
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  regulation, from Lloyd's of London, to home income plans, to pensions misselling. What we need is not more regulation but more effective regulation—which may, in some circumstances, mean less form filling and less bureaucracy. We must get away from what I believe to be a system of regulatory catch-up by the institutions. The board of the PIA is dominated by people who are in the same institutions that are accused of misselling. We need regulation that has the confidence of the consumer, and current regulation does not have that.
  Mr. Bernard Jenkin: Does the hon. Lady think that misselling is continuing on the same scale as during the period to which she referred? What proportion of those million or so cases would be eligible for compensation? In many cases, there might have been some technical non-compliance, but whether people finished up with the wrong product is another question. I see a smile on the hon. Lady's face, and I am genuinely interested in her answer.
  Ms Abbott: I love the phrase "technical non-compliance", and the financial services industry and its lackeys are keen on this type of euphemism. What we had were salesmen, almost all of whose income came from commission, scouring local newspapers for information about firms going bankrupt or coal mines closing. They then targeted the former employees and coal miners and sold them pensions, although even someone like me—with no expertise in these products—would know that, once those people lost their employers' contributions and the guaranteed benefits of an occupational scheme, they had to be worse off with private pensions. It was not, as the industry insists, a technicality. Salesmen were driven by the bonus system and by commission knowingly to sell people products that could not have left them better off. The problem was not a past aberration, but one of structure.
  Mr. Jenkin: The hon. Lady has not answered my questions.
  Ms Abbott: I hope to answer them in the final section of my remarks. Tory Members have said that the problem is being dealt with, but I want to know who is dealing with it. The Treasury Select Committee took evidence from the PIA this week, and we have said over and over again that it has taken two and a half years to deal with 1 per cent. of cases. On that time scale, we will reach the millennium without clearing the backlog. We asked how long it would take to clear up the problem, but the PIA could not answer.
  Pensions misselling is tragic; but, when the pensions misselling review was set up, the Government, the PIA and the other regulatory authorities set their face against finding out what had gone wrong, to what extent it was a technical problem and to what extent there had been real fraud. They sought co-operation from the industry to get the matter cleared up as quickly as possible, but the industry has been let off the hook and still has not co-operated. The biggest names in financial services—including the Prudential and Legal and General—are some of the worst offenders. There is no evidence or information from the relevant regulatory authorities to suggest that we are in sight of clearing up the problem.

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  I believe that many of the institutions are simply waiting for the grim reaper to do his work before they have to cough up compensation.
  Some Tories have said that this was a technical problem, and asked whether misselling is still going on. The pensions misselling of the 1980s and 1990s goes to the heart of what is wrong with the financial services industry and the retail sale of its products. Far too many salesmen depend on commission for almost all their salary. When someone is commission-driven and has to pay his mortgage and pay for his shopping, it is only human nature for him to sell people products on the basis of how much commission he can earn rather than whether the product is what the customer needs.
  I agree with the Consumers Association, which has said over and over again that we need to move towards a transparent system for independent financial advisers, and towards a fee-based system where people pay for genuine and clear advice, rather than having people posing as independent financial advisers. The implications of pensions misselling for financial regulation in the future are great, and we have to look at the commission and bonus system and at the continuing lack of transparency.
  The industry has dragged its feet on this issue. People who try to buy financial services products will be deluged with paper that they do not want to read and that is unreadable, even if they try. The real information about commission, bonuses and administration charges is hard to winkle out.
  As the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) said, we may need to limit the types of investment that pension advisers can make. We do not want to go the way of the United States savings and loans companies, which attracted investment from millions of ordinary Americans and, free from serious regulation, were able to throw their investors' money away on junk bonds. It cost the American taxpayer billions of dollars to bail them out.
  As the Consumers Association said in 1994,
  "It is very difficult to have confidence that every single individual who has been affected and has been given what we would class as bad advice is necessarily going to be identified let alone given full compensation".
  The PIA has acted poorly on this issue. It is no coincidence that the chairman of the PIA, Joe Palmer, was previously the head of Legal and General, one of the companies most heavily implicated in pensions misselling. We have to get away from self-regulation of the financial services industry, as it means that the regulators are unwilling and slow to act against their friends and colleagues.
  As we move to an era in which many of the benefits that would have been provided by a welfare state—pensions, unemployment benefit and sickness benefit—will be the province of the financial services industry, we need a different, clearer and tighter system of regulation. When I was a schoolgirl, many ordinary people did not have a bank account or a mortgage. Twenty or 30 years ago, a person had contact with the financial services industry because he or she chose to do so. We are now moving into an era when most of us—whether we choose to or not—will depend on the financial services industry for pensions, unemployment benefit and care for the elderly.
  We do not need more bureaucracy, but we need a more effective system of financial services regulation than we have had hitherto. The speeches in the debate so far have
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  glossed over the grave issue of misselling. Unless it is cleared up and unless the lessons are learned, nobody—neither my hon. Friends on the Opposition Front Bench nor the Government—will carry any confidence with the public when trying to press on them private pensions as a way forward for security in old age.
  8.27 pm
  Mr. Edward Leigh: I declare an interest, in that I am a consultant for Pinnacle Insurance, which deals primarily with creditor insurance, not pensions. I am also a member of the Select Committee on Social Security. As such—and with some of my hon. Friends who are in the Chamber—I have taken a long-standing interest in this problem under the able leadership of the hon. Member for Birkenhead (Mr. Field).
  The interesting thing to emerge from the debate is that something must be done. Some doubt has been thrown on the demographic time bomb, particularly by the hon. Member for Islington, North (Mr. Corbyn), but nobody has denied that, when the welfare state was set up in 1945, there were five workers for every pensioner there are now only 3.4 workers for every pensioner, and in 2030 there will be 2.4. When Beveridge considered this matter, people were, on average, living up to five years beyond retirement age by 2030, people will, on average, be living 15 to 20 years beyond retirement age. We can argue the toss backwards and forwards and ask how serious the demographic time bomb is, but people on both sides of the argument accept that there is a problem. That is the first point.
  Secondly, hon. Members on both sides of the House accept that we have broken the link between state pensions and earnings. The hon. Member for Islington, North lives in a socialist past or pantheon, a glorious age which probably never was, but those on the Front Benches have broken the link if we rely solely on a state pension, the amount that will be available to us when we retire will be derisory. We must be honest and accept that. We can promise that we will keep the state pension and uprate it in line with inflation, but it will form an ever-declining proportion of average earnings. Something must be done.
  The interesting feature of this debate, which others may not have noticed, is that the hon. Member for Peckham (Ms Harman) seemed to accept that point. Of course, we are close to a general election and she must play party politics. We realise that she cannot accept what a Government propose a few weeks before a general election. I do not blame her for that; she has to criticise the scheme. She was a bit coy about what she proposed, but she seemed to accept that we had to create a new system. What she said was interesting—we have to create a system based on a partnership between the private and public sectors. I welcome that comment.
  There was an even more interesting speech from the hon. Member for Birkenhead, who spoke immediately after the hon. Member for Peckham and who has acquired great knowledge of the subject over many years. He made it absolutely clear what those of us who sit on the Select Committee on Social Security know—that the present system is unsustainable, and that we must move towards a funded system.
  Despite all the enjoyable partisan politics that we have naturally had across the Dispatch Box during the past three or four hours, both sides now accept that, to all

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  intents and purposes, the present system is dead for the next century and, in a spirit of consensus, we must move to create a new system. It has to be done in a spirit of consensus, for the obvious reason that creating any new system will take a long time.
  It is said that bad ideas are not claimed by anybody and that good ideas have many fathers. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) has written an interesting pamphlet and, three or four years ago, I wrote one on the same subject. The Chileans introduced a funded system in 1980. The truth is that many people in the Government think tanks, civil servants, politicians, pamphleteers and other Governments have been working on the problem for a long time. All their ideas revolve around something close to what my right hon. Friend the Secretary of State for Social Security proposed.
  The ideas that I put forward a few years ago were somewhat different. It is important that we accept that Britain has the most successful private pensions industry in Europe, with £650 billion in investments, and we must do nothing to put that at risk. I was thinking in terms of a kind of top-up scheme, so that people with occupational pensions remained in those schemes but, instead of paying a fixed amount in national insurance to a pay-as-you-go system, were required under a compulsory saving scheme to pay the money into a separate fund. Whether we talk of those ideas, or of what my hon. Friend the Member for Cirencester and Tewkesbury talked about in his pamphlet, or of what the Chileans have done, we are all going in the same direction.
  The only purpose of my brief remarks is to try to stress, through all the partisan politics that have gone on this afternoon, that we must find a way forward that both sides of the House can accept. We realise that the pay-as-you-go system is not sustainable into the next century and we want to create a funded system, but there is a basic philosophical divide between Conservative Members, who believe that a compulsory savings system should be based on private insurers, and the view held by the hon. Member for Birkenhead and, I suspect the hon. Member for Peckham, that private companies, influenced by the profit motive, should not be involved and that we should consider the building society and friendly society concepts, or perhaps the Singapore concept.
  I should have thought that there was a simple way forward through the jungle. We must create a consensual point of view because, however confident the Labour party may be about winning the next general election, it surely is not confident that it will still be in government in 40 years' time. Surely we can give people a choice. After all, we are talking about whether the compulsory savings system should be based on private insurance companies or on friendly societies or building societies—that sort of concept. I do not see why people should not have that choice.
  If we achieve a consensus on that basis, we shall be talking about something very exciting. Young people will be building up a large sum of money. It may be held in private companies, which will be highly regulated. Many of the comments that we have heard today have been misplaced. Those of us who, earlier this year, visited Chile with the Select Committee know that the private insurance companies enjoy little freedom in how they invest the
  578
  money: they have to invest in Chilean companies; the competitive pressure is based not on the nature of those investments but on the efficiency with which they deal with administration; and they are highly regulated. Therefore, to quote the hon. Member for Peckham, the Chilean system is a partnership between the state and the private sector. It is a highly regulated state system.
  Let us dismiss many of the false hares that we have seen running across the Chamber tonight—that people's savings will be at risk and that insurance companies will put that money in schemes that will lose their funds. If we consider what is going on in the world and the countries that have introduced such a scheme, we see that funds are highly regulated.
  Let us assume that we have achieved such a consensus and that, at some time during the next five years, we move to a funded system. The next point which we must address is for whom will the system operate? We must be honest—we are talking only about young workers. It is all very well to talk in glowing terms about Chile, but it has a remarkably different economy from our own. It has a much younger economy, and it has funded the changeover with privatisation receipts which are no longer available to us because most of the potential recruits for privatisation have already been privatised. Therefore, the changeover costs to a new system in our far more sophisticated economy, with a much older population, will be far greater in Britain than they were in Chile.
  Having said that, Chile has achieved a remarkable consensus. All parties in Chile, across the political divide, including the Communists and the Christian Democrats—Chile now has a fully functioning parliamentary democracy—accept the principle of a funded system. It has achieved a remarkable renaissance in the Chilean economy because it has provided many new opportunities for funding Chilean industry. Those ideas are quite attractive, whether one is a socialist or a Conservative. Regardless of our position in the political debate, we all want to create a system some time in the next century that provides decent pensions. We want to create a system that allows young people to acquire a real stake in society. I thought that the Labour party believed in a stakeholder society, as I do. What greater stake in society is there than accruing a personal fund of £130,000? That is what the Government propose.
  I do not know whether the Government scheme is perfect, but it is a very interesting idea. Instead of rubbishing it and reducing it to a footnote in an increasingly acrimonious general election campaign, we should congratulate the Government on coming up with bright new ideas after 18 years in power. Labour Members should say, "That is very interesting. We want to create a stakeholder society and we realise that you were forced to break the link between pensions and earnings. We realise that young people who are entering the labour market now will not be able to enjoy satisfactory pensions in 20, 30, 40 or 50 years. Let us therefore have a good debate about these ideas." We should not simply rubbish the ideas coming from both sides.
  Whoever wins the next election should commission the Select Committee on Social Security, and others who have a particular interest in the subject, to conduct an in-depth study and produce a Green Paper on the subject. I predict that, whoever wins the general election, something very like the scheme that we are discussing will be introduced. Regardless of who becomes Secretary of State for Social

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  Security, I believe that people will look back and agree that the present Secretary of State deserves much credit for the careful way in which he has thought through the problems and come up with a bold and imaginative scheme, on which I congratulate him warmly.
  8.40 pm
  Mr. Robert G. Hughes: It is a pleasure to follow my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), as I agree with the tone and the content of his remarks.
  One of the most interesting speeches today was by the Chairman of the Select Committee on Social Security, the hon. Member for Birkenhead (Mr. Field). I think that he deserves a prize for acrobatics. He did not want to criticise those on his Front Bench—we understand that, as there is an election coming up—so he tried not to say what he really thinks. He serpentined around the issues, but his views were clear to those of us who are familiar with them and who have read the excellent books and papers that he has published over the years. He recognises that this is precisely the way that we will go and that we must go, for the reasons that my hon. Friend the Member for Gainsborough and Horncastle advanced.
  I am certain that my hon. Friend's prediction will come to pass regardless of who wins the next election and the one after that, this scheme—under whatever name and in whatever form—will be introduced. Why is that so? I refer again to the speech by the hon. Member for Birkenhead. He asked whether we could be any more knowledgeable about the future than those who took decisions following the publication of the Beveridge report. The answer is no; we are bound to do no better than they did. However, we know now that a funded pension scheme should have been introduced following the Beveridge report.
  If that had occurred, this country's economy would be in a better state, and people would be stakeholders in society. They would have power over their lives and power over the methods, and perhaps the timing, of their retirement. We would not now be talking about the pain that the Government endured when we broke the link between incomes and pensions, or the pain that the Labour party is suffering—and no doubt will continue to suffer—now that it has made it explicitly clear that it does not intend to reinstate that link. That would be the correct decision for a Labour Government to take a link between incomes and pensions simply does not make sense.
  This scheme is right. It does not matter who is correct—whether it is the hon. Member for Islington, North (Mr. Corbyn) or Conservative Members who have spoken in the debate—about the demographic time bomb. Plainly, the demographics are going in the wrong direction, and schemes will become more expensive.
  However, it is not a question of whether the scheme is affordable if the political will is there, anything is affordable—within reason. We could afford to continue with a pay-as-you-go pension scheme. The question is: is it desirable? Most commentators who have examined my right hon. Friend the Secretary of State's scheme and those who have spoken in this debate on both sides—apart from those who have adopted a purely party political approach—agree that it is undesirable to continue with the old scheme. I hope that we may have the sensible debate to which my hon. Friend the Member for Gainsborough and Horncastle referred.
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  I agreed with the tone of some of the remarks by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) about regulation. We should not look backwards—I think that the misselling of pensions is irrelevant to this debate. I hope that my hon. Friend the Minister will take note of the pleas for tight regulation. We met the regulator of the AFPs in Chile, who is very powerful. He can tell the AFPs how to invest, he can direct their actions, and he can threaten them. He can close down schemes—which he has done—and require other schemes to take over their customers. We need someone to act in precisely the same way. There can be no scope for the wrong practices of the pension industry.
  We must regulate the industry tightly enough to enable everyone to benefit from the marvellous achievements of our private pensions industry. People should not think that the only achievement of the pensions industry is the misselling of pensions. The industry has guaranteed incomes to a majority of pensioners that were beyond their wildest expectations. After a few years, many retirees receive income in excess of their salaried income.
  People did not expect that. There has been expenditure of £600 billion. I am told that people cannot comprehend the difference between a million and a billion. As Ronald Reagan said, "A billion here, a billion there, and very soon you are talking real money."
  Mr. John Denham: Will the hon. Gentleman tell me where I can buy a policy that will allow me to retire on more than I earn?
  Mr. Hughes: I was talking about the period under the last Labour Government, when they held down incomes, and pensions increased. Because of inflation proofing and the Labour party's dreadful record on inflation, retirees received more cash than when they were working.
  Mr. Leigh: I can give a practical example. My late father was Clerk of the Privy Council, having succeeded the previous Clerk, Sir Godfrey Agnew. Three years after my father took over the Privy Council Office, he was earning less than the previous Clerk, who had retired on an index-linked civil service pension. That was the absurd situation in the mid to late 1970s.
  Mr. Hughes: It bankrupted the Labour Government, and it nearly bankrupted this country. However, it did not bankrupt the remarkable pension schemes. We should pay tribute to them. We must recognise that some people do not benefit from the economy's vitality, and this scheme will put those people in touch with it so that they may share in its benefits.
  I welcome my right hon. Friend's announcement very warmly. It is a very good start. It embodies many of the characteristics that my right hon. Friend has always demonstrated: a cautious and detailed approach, testing the water as he goes. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) was correct when he said that there could be bolt-ons. Once the scheme is up and running, there may be scope for other groups to join it.
  I return to the Labour party's position, and its proposal for a flexible decade of retirement. I shall be happy to give way to Labour spokesmen as I try to proceed point by point. It is common ground—I am sure that the

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  hon. Member for Southampton, Itchen (Mr. Denham) will correct me if I am wrong—that most people take their retirement pension immediately it is on offer. They do not defer payment, although everyone understands that there can be deferral so as to obtain a greater pension later. Nearly everyone, however—I think 98 per cent.—takes his or her pension immediately it is on offer.
  Therefore, if we have a flexible decade of retirement, or at least an arrangement whereby people can retire early, the likelihood is that the retirement pension will be taken at the first opportunity that it is made available. I hope that I am still on common ground. If the hon. Member for Itchen disagrees, he can intervene. It seems to be accepted that those who retire will take their pension at the first opportunity that it is available to them.
  It is also common ground, therefore, that first-opportunity retirement pension has a cost. Indeed, it is bound to have an extra funding cost, and it will be £15 billion. If the Labour party, if it is in government, is not to raise £15 billion in taxation—the spokesperson for the Labour party wrote to my right hon. Friend the Secretary of State on 30 August 1996, angrily making it clear that that was not Labour's intention—the only alternative is to seek the advice of the Government Actuary.
  It seems, however, that Labour would say that it is anticipated that those who retired early would receive a lower level of basic state pension. Is that common ground? If Labour is not to raise the necessary money from taxation, there must be a lower state retirement pension.
  Mr. Bernard Jenkin: When we have a good point that we put directly to those who occupy the Opposition Front Bench, they always chat to one another and pretend not to be listening. When the hon. Member for Southampton, Itchen (Mr. Denham) replies, he probably will not respond to my hon. Friend's point.
  Mr. Hughes: I regret that my hon. Friend is right.
  I am making an important point, and the Labour party has been caught out. The hon. Member for Peckham (Ms Harman) blushed when she tried to deal with it. Indeed, she became terribly ratty when anyone sought to challenge what she was saying. We know that either expenditure of £15 billion must be raised by taxation or, as the Government Actuary has made clear, pensions will decrease by £20. The reason—[Interruption.] Does the hon. Member for Itchen wish to intervene? I shall be happy to give way.
  Mr. Denham: No.
  Mr. Hughes: I bet that the hon. Gentleman does not. I am sure that the hon. Gentleman would rather hope to find gin or whatever in the carafe on the Opposition Dispatch Box. I am sure that my argument is embarrassing to the Opposition. At least the hon. Gentleman is blushing.
  There is a choice between increasing taxation and reducing pensions. As the hon. Member for Peckham has made it clear that a Labour Government would not increase public expenditure by £15 billion, pensions for newly retired pensioners, all taking their pension at the
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  earliest possible opportunity, which is common ground between us, would decrease by £20. That becomes Labour party policy. It is clear—[Interruption.] I am sorry that the hon. Member for Tyne Bridge (Mr. Clelland) thinks that my remarks are funny. Those who are approaching retirement will not consider them amusing. If the hon. Gentleman would like to intervene to tell me that any of my facts are wrong, I shall be happy to give way.
  I can only conclude from the giggling, schoolgirl attitude of the hon. Members for Itchen and for Tyne Bridge, who occupy the Opposition Front Bench, that we Conservatives are right, and that we have caught out the Opposition. It would seem that £20 off the state retirement pension is Labour party policy, and we must ensure that everyone knows it. The Labour party cannot deal with the basic point, which is the gap between what it says and the reality of its policies.
  Mr. Clifton-Brown: Is not the reality that we shall probably see an increase in public expenditure and a decrease in state retirement pensions? As I made clear earlier, we are likely to see a reduction in the state pension. If, however, we are not to see people retiring in misery, there will have to be an income support top-up, which in itself would have a substantial extra cost.
  Mr. Hughes: My hon. Friend is correct. Doubtless the Labour party will huff and puff to try to explain what it is talking about during the election campaign.
  The debate has been useful in clarifying the basic pension plus and in flushing out the Labour party's policies on state retirement. It has also been useful to discuss other dangerous Labour party policies. For example, the Labour party does not talk about contributions to a stakeholder pension. It does not wish to discuss by how much national insurance contributions would have to increase. It does not talk about whether there would be a new category of contributions. We hear not a word from the hon. Member for Peckham about how money would come in to pay for the extra pension.
  We know, however, what the Labour party plans, and I shall quote from its handbook. It refers to the stakeholder pension as
  "a new better-value-for-money framework for second pensions to redeem red tape and improve competition."
  I do not know what "redeeming red tape" means. I assume that the meaning is the same as addressing problems. It is another term that has no meaning in the context in which it is used by the Labour party. At the same time, it is designed to sound quite good.
  We know, however, that the Labour party's approach would allow political interference in pension funds rather than those funds being invested in the best interests of members. A BBC news release, which paraphrased what the BBC had been told by a previous Labour spokesman, read:
  "Chris Smith was particularly interested in Australia's Industry-wide superannuation funds, which are administered jointly by employers and Trade Unions, giving the Unions power over how they are invested."
  That is what we shall see in future if there is a Labour Government. The funds that are delivering such good occupational and private pensions would be put into the hands of trade union barons to invest. It is—[Interruption.] It is no good the hon. Member for

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  Itchen moaning from a sedentary position. He is entitled to intervene to explain how the previous Labour spokesman, the hon. Member for Islington, South and Finsbury (Mr. Smith), was wrong. I suspect that he will not bother to do so.
  The fact is that the Labour party would put people's pensions at risk. The 20 million who are members of private pension schemes would have their futures put at risk by the Labour party. The Labour party talks about side issues and uses electoral scares. It talks about privatising pensions rather than using private pension and personal pension funds. In so doing, it has done itself no service or credit this evening. Instead, the Labour party has revealed that its words are empty. At the same time, the threat of what it would do in government is real to every pensioner and potential pensioner.
  8.56 pm
  Mr. Bernard Jenkin: I am grateful to be called, Mr. Deputy Speaker, even towards the end of the debate. I regret that I had to leave the Chamber for an hour or so, and thus missed one or two speeches. It has obviously been a most interesting afternoon and evening.
  I am grateful to be called after my hon. Friend the Member for Harrow, West (Mr. Hughes), who performed an excellent and deft demolition job on the Labour party's position. It is clear that Labour has become impaled on a number of its positions, which are either expensive or damaging to pensioners. It has failed to address fundamental pension problems.
  I would, however, caution hon. Members about drawing too many parallels with Chile. I visited that country as a member of the Select Committee, and although some of us went there open-minded and enthusiastic about what the Chilean system might teach us, the differences between the systems were striking; the biggest being that the Chilean system is miles behind what we have established in this country—the very substantial pension funds for investment and for future pensions.
  However, the rate at which Chile is catching up is staggering. On coverage and the standard of living of the majority of pensioners, Chile is miles behind. Indeed, it will face many of the problems—pensioner poverty of certain sections of the pensioner population—that provoked my right hon. Friend the Secretary of State to present these proposals to the House today.
  I wish to address the comments of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) about misselling. In an intervention, I asked her two relevant questions, the first being whether misselling is continuing on the same scale as that recorded in the earlier period. She failed to answer.
  We are still able to advance the case for private and personal pensions, because the problem was one of transition and of market growth and immaturity. That problem has been dealt with. Of course the cases of misselling that have not yet been addressed must be cleared up. Even though this is not an interest that I am required to declare, I was a former employee and adviser of one of the major insurers. As someone who has a connection with the industry, I see that more evidently, perhaps, than many other hon. Members. For the credibility of the industry and for future schemes of this nature, the problem of misselling must be cleared up.
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  The second question that the hon. Lady would not answer was: in how many of the cases where non-compliance has been recorded has the client ended up at a financial disadvantage, with the wrong product? Until all the cases have been looked at, it is not possible to know. The evidence of the cases that have been looked at is that, although there may be not have been all the crossing of the t's and the dotting of the i's in the paperwork, and that information required by the regulator before contracts are signed may not have been exchanged, the client has not necessarily ended up with the wrong product.
  I would guess that, in the majority of cases, there has not been a miscarriage of financial justice, only a failure on the part of people selling pensions to observe the proper regulatory requirements, but that does not excuse it. The problem has to be cleared up, and it should have been cleared up much more quickly. I clearly heard my right hon. Friend me Secretary of State say that companies that still have that hanging over them will not be eligible to take part in what will be an opportunity for huge growth for the industry. That was a good warning shot to fire across their bows.
  I would add that much of the problem, as the hon. Lady amplified, comes from fees and commissions. I agree that it is much better for advisers to charge fees rather than percentage commissions. As soon as the transparency of commissions was discussed, it was obvious that it was an issue that the pension salesman had lost from the outset.
  Commissions should be declared in all cases. The industry is struggling with a tax problem: that it is possible to get tax relief on the commissions or fees charged if they are netted off from the investment being made. It is not possible for the client to get tax relief on the fees and commissions if they are added on. It is a problem of taxation, and perhaps one that the House should address.
  The problem is also one of VAT. Fees netted off from the investment being made are not liable for VAT, but fees charged for advice over and above the investment made are, so it becomes instantly more expensive for the client.
  An instructive lesson from Chile is that, as a matter of course, the fees are added on to the investment made, and are not chargeable for sales tax. When the client is looking for a provider to make his investment, it is obvious which one is offering the cheapest deal for the client. We should have a simple transparent system of that nature that is not open to abuse. We should not be taking people's tax-relieved money away from them in charges and fees, because it gives a false impression of how much they have saved if some of it has been taken away in that manner.
  I agree with the hon. Member for Birkenhead (Mr. Field) that the exploration that pensions buffs enjoy to make in such debates sits ill alongside the party political battle. However, I cannot ignore the speech of the hon. Member for Peckham (Ms Harman) and her usual tirade against anything to do with the private sector, although she paid homage to a mixed economy.
  The right hon. Member for Sedgefield (Mr. Blair), in an article in The Times, made it clear that he wanted to keep SERPS. On the "Today" programme, the hon. Lady said that the Labour party had agreed
  "that SERPS is not financially sustainable."
  Such conflicts do not help the political debate.

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  The hon. Lady offered the idea of stakeholder pensions, which, as my right hon. Friend pointed out, originated in Singapore, where pensioners receive a 2 or 3 per cent. uplift over inflation, instead of the proper investment returns that they deserve. That is not because the Singapore Government are such bad investors, but because they cream off the profits from the central provident fund for their own purposes. That shows the danger of a state-controlled scheme rather than individually owned privately provided schemes.
  The hon. Lady's speech denigrating the Government's proposals contrasted sharply with the comments that the right hon. Member for Sedgefield made in his article. He said that the proposals
  "give whoever forms the next government the chance to conduct the debate more sensibly."
  We certainly all agree with that. It implies that he does not think that his own party has conducted the debate very sensibly up until now, and he is learning fast from my right hon. Friend's proposals.
  The key issue is the problem of pensioner poverty in middle England. The hon. Lady laid that at the Government's door, but we are dealing with people who retired before 1979, and before the huge growth in pensioner incomes. The problem is not that people in full-time work throughout their lives tend to finish up in pensioner poverty: that section of the population has done particularly well. Nor is there a problem with people who have dropped out of the system, because the safety net catches them, however unsatisfactory it may be to live at that level. The problem is with the people between the safety net and pensioner prosperity: the people who move in and out of work, carers, housewives and people on the edge of the job market in part-time work.
  The modern flexible labour market that this country needs to be competitive is not conducive to traditional forms of employment, such as long periods of employment with one employer and an occupational pension scheme to see retired people into their old age. What is so clever about the Government's proposals is that they make far better use of the cash flows that are invested in the existing state scheme.
  The return for the average United Kingdom pensioner from investing the cash flows under the present scheme, taking account of redistribution, is virtually negative. The basic pension plus scheme maintains the redistributive nature of those cash flows by handing out the £9 rebate, but by investing them privately gets a realistic commercial return, and ultimately provides a much better pension for the pensioner.
  Mr. Clifton-Brown: My hon. Friend is absolutely right. The current national insurance tax system is our biggest tax-free distributive system. During a working lifetime, a person on average earnings makes £95,000-worth of national insurance employers' and employees' contributions, whereas he receives a state pension value of about £25,000. Does my hon. Friend agree that that is an extremely negative return?
  Mr. Jenkin: Obviously it is a negative return for someone in the circumstances described by my hon. Friend. Moreover, if we hypothecate an aggregate amount
  586
  of national insurance income that is invested in the basic state pension and then eventually collected by pensioners, we find that the return is almost negative. That is because the national insurance system is not a funded scheme: national insurance is not invested in anything.
  The appeal of the basic pension plus scheme is that it preserves the redistributive nature of the basic state pension, while replacing the unreliable promises of politicians, who are generally long gone by the time that those promises must be redeemed, with personal ownership of capital in proper investments. It is extraordinary—well, not extraordinary; in fact, entirely predictable—that the gut reaction of a party that opposed the sale of council houses, and at one stage thought that property ownership was evil, is to oppose our proposals.
  I agree with my hon. Friend the Member for Harrow, West that Labour Members will eventually realise that this is a major reform that will be irreversible, and that letting the cat out of the bag and discussing it will in itself create a momentum that, even if the Labour party became the Government, it would have difficulty in stopping.
  What we are achieving is not an extension of compulsion, which is what the stakeholder pensions proposed by the Labour party are about. They are based on the Australian model.
  Mr. Denham: Singapore.
  Mr. Jenkin: I refer to the model from Singapore, adjusted by Australia. We are substituting a compulsory savings scheme for taxation, and turning a confiscation into the building up of an asset. That is something that no one can take away.
  What the Government must get right, however, is the nature of the vehicle through which people will be saving, and the simplicity of the regulatory regime that will oversee the providers of the new pensions. As I said in an intervention on my right hon. Friend the Member for South Norfolk (Mr. MacGregor), we do not need to go into all these insured products. It is a hangover from the way in which the insurance industry developed the pensions industry over 150 years that insurance plays such a huge part in personal pensions.
  There is no difference between the risk to the man in the street posed by a personal equity plan provided by a major financial institution and the risk posed by a life assurance policy. The only difference is that the man in the street generally understands what a PEP or a TESSA—a tax-exempt special savings account—means, while he does not understand what a life assurance policy means.
  Another of the lessons that we brought back from Chile was that the simplicity of the product hugely increases the attraction of the whole scheme for the individual. Why do life assurance policies require so much selling? Because they are not easily understood. PEPs and TESSAs have not required nearly so much selling, simply because they are easily understood.
  It is important for us to create a separate product regime, a separate tax regime and a separate regulatory regime, so that we can keep things simple and insulate the new pensions system from the huge complication of the tax and regulatory regime that currently surrounds pensions. Few people realise, for example, that there are several different tax regimes even for occupational

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  pensions. It depends when they were set up or closed, or when people joined or left them. The system is very complicated, and that example refers to only a tiny proportion of it. Half the people are being taxed on what they put in and half on what they take out. The tax system limits what some people can put into their pensions, while others are limited in terms of what they can take out. It is an extraordinarily Byzantine structure.
  The commencement of a completely new system, basic pension plus, gives us the opportunity to establish a completely fresh regime. New people entering the scheme need never become entangled in the mess of the present regime that has been created over hundreds of years.
  A threat may be presented to the successful occupational schemes, but the great disadvantage of final salary occupational schemes is that it is difficult, even for actuaries, to decide a person's worth at any one time. One of the sources of the misselling misunderstandings is that it is almost impossible to give a fair assessment of an individual's rights in a final salary scheme because its terms, its uprating policy or its contributions may change. All sorts of alterations can make a huge difference to a person's rights, because the schemes are based upon final salary.
  I agree with the hon. Member for Birkenhead that we are at the start of a much better savings structure for families. Members of a family should be able to talk about different schemes, and limits are not important. People should be allowed to pay as much as they want into a scheme, and by the time we have got rid of capital gains tax and inheritance tax, the distinction between being in a pension scheme and not being in one will be reduced. Instead of buying grandchildren premium bonds or lottery tickets, it would be marvellous if at Christmas granny's £5 could go into the child's pension scheme, which could have been established on the day the child was born.
  I shall now deal with incentives and costs. Any funded scheme will cost more in absolute terms than the state scheme. Under our state scheme, quarterly statements of how much has been put in and how much the fund is worth are not required to be sent to clients. No investment uplift is provided on each quarterly return. Of course it is cheaper to collect tax than to provide an investment service. The issue is what that should cost. The Chilean lesson is instructive. Even with some problems, the Chilean costs as a percentage of the managed funds are competitive by any standard.
  If people are allowed to choose whether to give their money to the Government or to put it in their own account where it can build up for the future, there is no doubt that they will adopt the latter course. Rather than welcoming the scheme, for a time Labour will continue to say that people like paying national insurance contributions, just as they said that people liked to live in rabbit hutches whose front doors were all the same colour, and which were owned and managed by councils.
  9.18 pm
  Mr. John Denham: We have had a thoughtful debate and I should like to continue in that mode. However, I will first deal with a contribution which did not meet that standard—that of the hon. Member for Harrow, West (Mr. Hughes). The hon. Gentleman knows that there is no way in which the basic state pension will be cut by a Labour Government.
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  No future pensioner and none of today's pensioners will be forced on to a basic state pension lower than the present one, whatever the future retirement age or upratings. There is a despicable campaign that is designed to scare the elderly into thinking that something might happen to the basic state pension, and that has lowered the tone of the debate.
  Mr. Robert G. Hughes: There is no need for the hon. Gentleman to get nasty just because he cannot answer the point, which is very simple. I am not making those allegations: his colleague the hon. Member for Peckham (Ms Harman) is. I did not write the letter in which she says:
  "We would seek the advice of the Government Actuary, but we anticipate that those who retire early would receive a lower level of basic state pension."
  The Government Actuary has been consulted and we know that the figure is £20. If that is wrong, instead of insulting me and my hon. Friends, why does the hon. Gentleman not simply tell us why it is wrong?
  Mr. Denham: The Tory campaign throughout this country to frighten elderly voters into believing that their pension will be cut or that people will not be able to retire on the full basic state pension is disgraceful. If hon. Members cannot understand a simple letter, that is their problem, not mine.
  The other claim, put forward as though it were fact—that Labour will put investment funds into the hands of trade union barons or, alternatively, into a Singapore-style fund—also exists entirely in the imagination of Conservative Members. I am under no illusion that merely pointing out the truth to them will change what they say, but it is useful to put it on the record.
  Mr. Heald: What was the hon. Member for Islington, South and Finsbury (Mr. Smith) doing in Australia telling the BBC that he admired the Australian industry wide scheme and that he wanted it to be a template for Britain, with central or industry wide funds? He said that those funds would most likely be invested in a mix of the markets and job-creating schemes and would be administered jointly by employers and trade unions.
  Mr. Denham: My hon. Friend was doing what any sensible person would do in that job—learning from international experience, as we have done. He has been abroad and we have studied the schemes in many different countries to find out not how one picks up a model from another part of a world, but how to develop a system that will apply and work in Britain.
  Mr. Bernard Jenkin: Will the hon. Gentleman give way?
  Mr. Denham: With respect, the hon. Gentleman spoke for a great deal of time and I should like to proceed with the summing up.
  There is just one reason for this debate: the Conservative party's proposals, just before an election, to privatise the state pension system over the next generation. Conservative Members have had their debate; they have had their chance to set out their case and to put their big idea to Parliament. Let me summarise where we are now. Their case is already in a shambles.

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  As a result of the debate, despite Conservative Members' comments about occupational pensions, we know that the demise of occupational pension schemes will be brought about by these proposals. The best schemes in the past for providing pensions will no longer be with us if the Government proceed with the proposals.
  It has been made clear, not just by Labour Members but by Conservative Members, that people will have to pay twice to fund the huge costs of privatising the state pension system. Despite calls from Conservative Members that more should be done for today's elderly poor, we now know that that means that nothing will be done for them because of the cost of privatising the pension system.
  It is clear that the policy is the pursuit of dogma for the sake of dogma, but I do not reject it simply on that basis. Let us analyse it, take it apart and find out what it really means because, by and large, Conservative Members have not done that; their speeches have been about theoretical constructs, not what would really happen. Let us consider, therefore, what the policy will cost, where the money will come from, who will go without, who will pay out without any payback and whose needs will not be met because of the cost.
  We are told that some people, some time, when my children's children are born, will benefit, so let us consider the benefits. How good are they? Are they so good that the case for the policy is overwhelming? Are the problems of the future so insurmountable that we are forced by events beyond our control to adopt such a policy?
  We know that the scheme will cost £312 billion over the next 40 years before there is any reduction in public expenditure. The Government claim that half of that will come from higher taxes on people saving for their pensions over those 40 years. However, as we now know and as the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said, because the proposals strike at the heart of occupational pensions, the Government cannot be sure that they can raise their funds from those higher taxes. The people who contribute to pension schemes will not benefit from those higher taxes.
  We do not know where the rest—£150 billion—will come from. We do not know who will pay or how much they will pay, but we do know that someone will have to pay. The Government say that they have taken those costs in their stride before, but we have had 22 tax increases since 1992 as they have taken those costs and others in their stride.
  Who will pay now? Will it be today's pensioners when the Chancellor puts VAT on fuel up to 17.5 per cent. or puts VAT on their food bills, or will it be the people in work today who do not have the pension scheme that they would like? What will they pay for no benefit? It is a high cost. There has to be an overwhelming case for spending such a huge amount before any returns can be gained.
  The hon. Member for Aylesbury (Mr. Lidington) said that it is inevitable that today's working population will have to pay twice, but it is not inevitable that such a huge cost has to be paid in the way proposed by the Government. It comes about only if the Government choose to privatise the pensions system in this way, and the case for doing that has not been made.
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  We have an aging population. Enabling that population to enjoy a secure and active retirement and care in years of frailty will demand more of the country's resources. The right hon. Member for South Norfolk (Mr. MacGregor) said that we must act now. The pay-more, get-less policy makes the problem worse, not better, and no Conservative Member has addressed that issue. From 10.3 million today, the number of pensioners will rise to 12.4 million in 2010, 14.7 million in 2030 and 15.7 million in 2040. The hon. Member for Gainsborough and Horncastle (Mr. Leigh) said that today two pensioners are supported by five working people, but by the year 2030 three pensioners will be supported by five working people. That is when the crunch will come.
  What are the Government proposing to do to make the problem worse? When those extra 5.5 million people retire they will want security and an active life and they will want to know who will care for them, but that is when the Government want to maximise the cost of privatising the pension scheme. My hon. Friend the Member for Birkenhead (Mr. Field) said that the Government have to tackle the problem of the retiring baby boom generation before they can go ahead with the proposals. In the next 40 years, the Government plan to spend £312 billion on privatising the state pension system—about £11 billion a year between 2020 and 2040, which is when the number of pensioners will rise most sharply. That is twice what is spent by the Government today on residential care, and there is not a penny for pensioners or for long-term care over that time.
  The message from the Government to today's pensioners and to those who are to retire in the future is clear: "There is nothing for you in this—go away and stop complaining." However, I heard the calls from the right hon. Member for South Norfolk and the hon. Member for Carshalton and Wallington (Mr. Forman) saying that something needs to be done for today's elderly poor. I heard the call from my hon. Friend the Member for Islington, North (Mr. Corbyn); it is no surprise to hear it from him, but it is interesting to hear it from Conservative Members. Despite those calls, the Government's message is that nothing will be done for today's elderly because the Government's priority is to spend the money privatising the state earnings-related pension scheme and the basic pension system. There is no fairness in the plans—it is simply Conservative policy.
  Are there any other reasons for the policy? Is the existing state pension scheme about to go bankrupt? According to the Secretary of State for Social Security, the answer to that question is no. In his Politeia lecture he said that SERPS was affordable, so that cannot be the reason. It is the pursuit of dogma without any care for the cost or the consequences.
  Of course we must look to future generations. I must look to the interests of my children's children's children because if any benefits materialise, they will be born at the time when those benefits may arise. What sort of pensions will those generations enjoy? As my hon. Friend the Member for Peckham (Ms Harman) so clearly stated, under the Government's proposals, rising generations will receive pensions that are dramatically smaller relative to earnings than those enjoyed by today's pensioners. A man on average earnings who retires in 2040 will receive 18 per cent. of average earnings, and someone who was out of work for 10 years will retire on 15 per cent. of average earnings. Moreover, as we have heard in this

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  debate, there will be no occupational pension scheme to top up those amounts, because the Government's proposals would result in the demise of occupational pensions. It is a pay-more, get-less policy intended to privatise the pension system.
  The Secretary of State held out the prospect of higher investment growth. I may be the only hon. Member in the Chamber to have been missold a personal pension, but even the man who sold me my pension did not try to pretend that investments only go up and never come down, as the Government have tried to tell us in the past week. The conduct of the Secretary of State and his colleagues is irresponsible and feeds the very type of behaviour that so blighted the financial industry—behaviour which the industry is now working so hard to put behind it.
  In reality, at best the basic part of the Government's scheme will produce no more than the basic state pension; at worst, the taxpayer will pick up the bill. In short, the privatisation of the pension system offers the rising generation only a poor pension and a less certain or insecure future. They will pay more and get less in order to privatise the pension system for narrow ideological reasons.
  The Government have had their chance today, but they have failed to make their case: their big idea is a bad idea. Isay that more in sorrow than in anger because, as the hon. Members for Gainsborough and Horncastle and for Cirencester and Tewkesbury (Mr. Clifton-Brown) said, nothing would be better for the United Kingdom than a new consensus on pensions policy. A 20-year-old starting work today will vote in about 20 general elections before they have retired and ultimately no longer need their pension. Their pension planning cannot be chopped and changed every few years. However, one cannot build consensus by badly thought out pre-election stunts which have damaging consequences.
  I shall repeat the features of a sound pensions policy—an affordable and sustainable policy—for the future. First, there are clear strengths in funded, invested pensions. Secondly, many people want their savings to be invested in cost-effective pension schemes. The trouble is that too many people who are in work today—not only those in the rising generation—cannot join a cost-effective pension scheme. There are millions of such people today, and they have been ignored for the past 10 years.
  The most striking feature in the speech made by the right hon. Member for Sutton Coldfield (Sir N. Fowler) was his lack of shame over misselling. We have been told, "It just sort of happened like that—it was a problem of market growth." However, not the industry but the Government issued advertisements stating that
  "soon employees will be able to choose their own Personal Pension scheme instead of staying in … an employer's pension scheme."
  The Government issued that advertisement, which encouraged misselling and opting out of occupational pension schemes, and they should take responsibility for it.
  Over the past 10 years, women involved in typical rebate-only personal pensions have had 30 per cent. or more of their savings eaten up in fees and charges. They have been ignored. What about all those people on low incomes who in the space of a few years gave up their personal pensions? Within the first five years or less, 2 million low-paid people stopped paying into their pension schemes. According to Money Marketing,
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  someone on about £9,000 a year can lose between 50 per cent. and 87 per cent. of their savings if they keep their policy for only five years.
  The Government have done nothing to meet the needs of people who would like to be in an approved value-for-money, cost-effective pension scheme which ensures that high minimum standards have been set. They would like a scheme that offers them flexibility so that they are not unfairly penalised if they are out of work for a time, and one that is operated in the interests of its members. They want a scheme that recognises the different types of working lives—with periods in and out of work, changes of job, self-employment—and the demands of balancing work, child care and looking after older members of the family.
  Today many people lead lives which make such demands. That is why we have been working with the financial services industry to develop our plans for stakeholder pension schemes—to make value-for-money pensions available to people who cannot join them today, and to create new opportunities to establish individual savings.
  I suppose that in one way we should be flattered because in launching basic pension plus the Government have been forced to acknowledge much of the truth of what we have been saying. They talk about controlling charges, approving providers and about benchmarks, but those are merely warm words for tomorrow: there is nothing for today and no one will trust a Government who have failed every test for the past 10 years.
  The Government have failed to protect savers from high charges and from misselling, as my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) said. More people who were missold personal pensions have died than have been compensated. The Government have failed to protect the taxpayer because the cost of opting out of SERPS has been far greater than the saving that will be made in coming years.
  The right way forward lies in addressing in practical terms the real needs of people in work today, and that is to be found in Labour's approach. The way forward lies in developing value-for-money funded pension schemes and in encouraging savings, but also in retaining choice. The Secretary of State tells us that SERPS is affordable, so why remove that choice? It is still the choice of millions. Let us keep the benchmark that SERPS provides and against which alternatives can be judged.
  Let us keep a sensible balance between state and private provision and a fair balance between the needs of today's pensioners and those of tomorrow, not an ideologically driven dogma which means privatising the pension system no matter what the cost and no matter who has to suffer and go without in the coming years. Nor, however, do we want an ideologically driven dogma according to which the state must pay for everything: we need a sensible, practical approach that balances the needs and demands of different generations and the strengths and weaknesses of different types of pension provision and which recognises the needs of today's pensioners who have been so hard hit by the Tories.
  We should not be stealing from today in the hope of better things tomorrow, but defending the basic state pension and looking after the needs of the million pensioners who do not get the income support to which they are entitled. The hon. Member for Colchester,

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  North (Mr. Jenkin) said that the safety net catches people, but the problem is that it does not—1 million people are not caught, and we need to do something about that. The sensible approach lies in cutting the fuel bills of pensioners who are paying VAT at 8 per cent. and in helping them to have warm homes. That is Labour's approach.
  We would seek consensus, but the Government's approach is not designed to generate consensus. We need a sustainable pensions policy. I do not know whether that is a big idea or merely a good idea, but I am sure that it is the way the people of Britain will want the next Government to govern—in the interests of the retired people of today and of future generations. In a few weeks' time, they will have the opportunity to decide.
  9.37 pm
  The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): This debate has provided a welcome opportunity to consider future pension policy. Parts of the debate have been extremely thoughtful and adorned, if I might say so, by the expertise and wisdom of my right hon. Friends the Members for Sutton Coldfield (Sir N. Fowler) and for South Norfolk (Mr. MacGregor), both of whom speak with the benefit of having wrestled with these issues for many years. Likewise, my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) made a thoughtful contribution about which I shall say a little more in a moment.
  We heard contributions from my hon. Friend the Member for Aylesbury (Mr. Lidington) and from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown), who did so much in his pamphlet to influence the debate. There were also contributions from my hon. Friends the Members for Gainsborough and Horncastle (Mr. Leigh), for Harrow, West (Mr. Hughes) and for Colchester, North (Mr. Jenkin), all of whom are members of the Select Committee on Social Security, which spent many months considering the matter although its report is not now to be published.
  The Opposition Members from whom we heard included the hon. Member for Birkenhead (Mr. Field), who seemed to welcome much of what the Government are proposing, and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who gave our proposals a cautious welcome. The three musketeers of real Labour—the hon. Members for Islington, North (Mr. Corbyn), for Newport, West (Mr. Flynn) and for Hackney, North and Stoke Newington (Ms Abbott)—were predictable, but the hon. Member for Southampton, Itchen (Mr. Denham) was not as predictable as I thought he might be. In the past, he has tried to engage in a sensible and thoughtful debate on these matters, but he seems to have been taking lessons from the hon. Member for Peckham (Ms Harman).
  I shall come to some of the hon. Gentleman's points in a moment. To suggest that nothing has been done to accommodate the costs of basic pension plus is nonsense. The Pensions Act 1995 makes savings rising to £13 billion a year. The cost of basic pension plus is a fraction of that. The hon. Gentleman need only think for a moment about the impact on the economy of a huge extra investment through basic pension plus to know that it must strengthen the economy and lead to growth.
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  My right hon. Friend the Member for Sutton Coldfield mentioned the Government's achievements over many years and the partnership between the private sector, the public sector and the individual that has been built on since 1979. We have enabled more people to contract out of SERPS to money purchase schemes through what are known as the Fowler reforms. Those reforms have led to this country having £650 billion invested in pensions assets. There has been a 60 per cent. rise in pensioners' average incomes.
  It is easy to say that there has been nothing in the changes for the poorest pensioners, but that is not true. The bottom 20 per cent. of pensioners have had real-terms increases in their incomes of 28 per cent. In 1979, 31 per cent. of the bottom decile by income in Britain were pensioners. Now, just 7 per cent. of that group are pensioners. That is a tribute to the work of previous Secretaries of State, members of the Treasury team and my right hon. Friend the current Secretary of State, who outlined his plans earlier. Our step-by-step approach has put this country in a better position than almost any other country in the world—certainly far better than any other European country.
  We must consider regulation and the advice available to people. An important part of the technical note that came out with basic pension plus highlights those issues in some detail and says that when the working group, made up of representatives of the industry and other concerned bodies, looks at the issues in detail, we must ensure that all aspects are carefully considered and properly regulated. All three members of the Select Committee who have spoken were right to point out that in other countries where a similar approach has been adopted, regulation has been a key feature. The Government are not shy in saying that there will have to be effective regulation and we shall have to consider the issue of proper advice.
  Several hon. Members have spoken about misselling. Everybody has agreed that misselling should not have occurred, that it must and will be sorted out and that compensation must and will be paid. It is right that there should be a timetable for settling the issue. My hon. Friend the Economic Secretary is pressing for that. In her evidence to the Treasury Select Committee this week, Colette Bowe said that she is willing to give it quarterly progress reports. The issue is being pushed forward hard.
  My right hon. Friend the Member for South Norfolk pointed out that the hon. Member for Itchen was not prepared to address the issue of tax relief for occupational pensions, which is one of the factors that has enabled them to grow. Is the hon. Gentleman prepared to give the House a commitment that there will be no change in tax relief for occupational pensions? The hon. Gentleman does not seem keen to address that issue, although I should be happy to give way to him.
  My right hon. Friend the Member for South Norfolk also asked about compulsory annuity purchase schemes and whether those should continue into the future. The income withdrawal arrangements, which allow people to defer until the age of 75, were introduced in 1995. It is therefore right to see how those measures work because they are very much in their infancy. Once that is clear, the rules will have to be reviewed, at which stage we can better judge whether it is right to allow deferral to the age of 75 or whether something more imaginative might be possible. I shall certainly look at all the issues that my

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  right hon. Friend raised with great interest. He has been very much part of the debate on pensions, the future of funding and related issues. The pamphlet that he issued last year was well received by the industry and by all parties in the House as a major contribution to the debate.
  The hon. Member for Newport, West said that a major weakness of money purchase schemes was that people were vulnerable to fluctuations in annuity rates. That is one reason why the income withdrawal arrangements are such an important measure, and why they were introduced. We have now extended those arrangements to money purchase schemes. They deal with many of the concerns that the hon. Gentleman raised.
  The hon. Member for Roxburgh and Berwickshire said that this all seems precipitous. We have been working on the proposals for a year, going through the issues in detail to ensure that we could produce proposals—[Interruption.] The hon. Member for Peckham is interrupting because she does not like to hear this. We worked solidly for a year, looking at all the issues and flagging up the main issues that needed to be addressed. If he has had an opportunity to read the detailed technical notes, the hon. Member for Roxburgh and Berwickshire will agree that most of the concerns, such as regulation, how the proposals can be funded, and so on, are addressed in detail. I agree with him that this is the starting point and that we need to work towards a Green Paper. We need a working party to work the proposals out so that they not only address the issues but address them correctly.
  The hon. Member for Roxburgh and Berwickshire asked how we could be certain that the scheme would lead to an increase in savings. One cannot be certain but, if there is a massive increase in the sums being invested, it is likely to lead to such an increase in savings. Many commentators would say that that was almost inevitable, but the hon. Gentleman is right to say that it is not certain. He asked why charges would be lower. At present, the main elements of charges are acquisition costs, persuading people to save and fact finding to ensure that the product in question is better than another. Those exercises are not needed in basic pension plus because those comparisons are not to be made. The basic cost of the scheme will be that of managing the fund, so it is inevitable that the charges will be lower. If, for some reason, the industry was not prepared to volunteer the right levels of costing, the Government would not hesitate to cap the charges to ensure that the beneficiaries had a reasonable deal.
  Much has been said today about the National Association of Pension Funds. Listening to Labour Members, one would never have thought that the first line of that body's parliamentary briefing says how much it welcomes those proposals.
  Ms Harman: The Minister should turn over the page.
  Mr. Heald: I do not need to turn over the page. I had a meeting with the association last night to discuss those issues. It wants to be involved in the consultation because it has thoughts about the tax arrangements. We welcome that. We had a long and constructive relationship with the NAPF during the passage of the Pensions Bill and before that, and we know that it can contribute to making the proposals work. We therefore welcome its input into the debate.
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  The hon. Member for Roxburgh and Berwickshire also asked about better-off pensioners not paying tax. Contributions made at the beginning have been taxed. They are taxed at that end and, concerning the new proposals, that would be there. [Interruption.] The hon. Member for Itchen may laugh, but it would be there.
  My hon. Friend the Member for Carshalton and Wallington raised an issue about how we help the wartime generation—the poorest pensioners in the oldest group. It is worth pointing out that many Opposition Members raise such issues but forget that older pensioners are in difficulty because of the high levels of inflation in the 1970s. People who had saved all their lives were suddenly subjected to average inflation of 15 per cent. a year. We often hear far too much from Opposition politicians about such issues.
  The Government have a good record on the poorer pensioners. I cited some of the figures earlier. In addition, since 1988, it has been possible to target help on pensioners who are most in need—an extra £1.2 billion a year. The oldest pensioners receive premiums in income support, which for those aged over 80 and for couples is £38 a week. I shall obviously continue to debate the matter with my hon. Friend the Member for Carshalton and Wallington, who I know takes a different view. Targeting is a way of ensuring that those who really need the money get it.
  Most of the points made by the three musketeers—the hon. Members for Hackney, North and Stoke Newington, for Islington, North and for Newport, West—have been well covered in the remarks that I have already made or in contributions from my hon. Friends.
  My hon. Friend the Member for Aylesbury asked whether it would be possible to extend basic pension plus up the age range. With the growth in the economy that could result from the extra investment, there could be scope for that. If finances allowed, the Government would like the scheme to operate up through the age range. Initially, however, it is right to propose something that is fixed, certain and covers a younger age group. Certainly over time, extending it could be possible.
  Other hon. Friends made various points about regulation, and it is right to take that into account. We must have a proper regulatory regime. I certainly welcomed the news conveyed by my hon. Friend the Member for Colchester, North, with his knowledge of the industry, that pension misselling is not now occurring. I agree with him that the matter is important. One of the benefits of funding is transparency, which is not otherwise available.
  The strengths of basic pension plus are that the money is invested, there is a fund, it is a personalised account and there is a guarantee to it. It gives the opportunity to build pensions awareness for the future, with each individual being able to save on top of the basic pension to meet their own expectations of retirement.
  Mr. Kirkwood: I appreciate the thoughtful way in which the Minister is replying to the debate, but I am still very nervous and sceptical about the position of part-time workers and the low-paid under the plans. Will he take a moment or two of the time left to address that?
  Mr. Heald: The whole purpose of having the basic pension guarantee is to be able to reflect the sort of

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  national insurance credits that we have at the moment to help people who are out of work, disabled or are carers. The system of home responsibilities protection will also be replicated in the new scheme. Turning from the basic pension element of the package, the 5 per cent. of earnings-related contributions will also remain while people work and will build as a fund with a yield over the years. I would argue that that protects all the interests of the groups that the hon. Gentleman mentioned. Nobody would be disadvantaged in any way. Indeed, many people in those groups may be considerably better off.
  I will end with three points about Labour's plans. First, Labour will not guarantee to uprate the basic state pension in line with prices. Whatever the hon. Member for Peckham says, the shadow Chancellor has made it clear that it cannot be assumed that totals will be automatically adjusted upwards in line with inflation. Secondly, Labour would cut the basic pension by £20 a week. Its plan is to equalise the state pension at 60 with a reduced pension. The hon. Lady cannot get away with it. She used the words:
  "we anticipate … a lower level of basic state pension."
  She said that she would consult the Government Actuary about how much the cut would be. We did so, and it would be £20 a week. Thirdly, Labour's plans for pension entitlement would mean a means test for everybody before they received the state pension entitlement. Its plans would be a disincentive for saving, because the more people saved, the less state pension they would receive.
  Those ideas may have come from Australia, because the hon. Member for Islington, South and Finsbury (Mr. Smith) visited that country to get some ideas. It is
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  wrong to say that stakeholder pensions are no threat. What is a stakeholder? It is Labour code for a trade union. John Monks said so in The Times on 17 January 1996. He answered a criticism that stakeholding was about the unions, because it will help them to rebuild their positions, by saying yes. He went on:
  "Independent unions are the means for individuals to … realise their stakes".
  The right hon. Member for Sedgefield (Mr. Blair) went to Singapore to examine its scheme, and the hon. Member for Islington, South and Finsbury went to Australia. The schemes they praised were industrywide and operated by trade unions and employers. The investments were influenced by trade unions. Most people in this country would prefer British pensions to be run by the private sector providers, who have put £650 billion of assets aside, than by sticky-fingered trade union barons.
  We have had a good debate. The Government's policies will continue to mean that pensioners in the future will have a better income in retirement and a better life.
  Mr. Roger Knapman (Lord Commissioner to the Treasury): I beg to ask leave to withdraw the motion.
  Motion, by leave, withdrawn.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Mr. Tony Newton relating to Northern Ireland Business not later than one and a half hours after their commencement, such Questions including those on any amendments to the Motion which she may have selected which may then be moved; and the said Motion may be proceeded with, though opposed, after Ten o'clock.—[Mr. Knapman.]

  St. Cross Hospital, Rugby
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]
  9.57 pm
  Mr. James Pawsey: Rugby's St. Cross hospital has a catchment area of around 110,000 people. I wish to reassure immediately all those of my constituents who are watching and listening to this debate that St. Cross hospital will not close. Recently, however, serious concerns have surfaced about the quality of some of the clinical services. That has resulted in the board of the Rugby NHS trust, at its meeting on 3 February, recording that it
  "agreed in principle to merge with Walsgrave Hospitals NHS Trust and the North Warwickshire NHS Trust."
  Since then, the chairman and the chief executive of the Rugby NHS trust have resigned.
  The West Midlands NHS executive was asked to chair a project team to review the provision of services. Given growing fears about clinical safety, some of the royal medical colleges were invited to visit St. Cross and some of their recommendations were highly critical and far reaching and had serious implications for certain services. For example, the Royal College of Surgeons said in its report:
  "To provide comprehensive 24 hour cover, and develop site specialisation, a minimum of 4 consultant posts are necessary.
  Rugby's catchment area is not large enough to provide either adequate clinical depth or sufficient opportunities for practice to enable clinicians to maintain skills.
  College approval would not be forthcoming for four consultant general surgeon posts given the low work load and the lack of variety of work. By combining with Walsgrave, it would be possible to increase sub-specialities and to offer an improved service to both populations. A 5 day elective surgical service should be possible if merged with Walsgrave, providing an on-site resuscitation team and appropriate levels of post-registration junior doctors working in Rugby on an agreed rotational basis. A full accident and emergency service cannot continue without adequate support services particularly in intensive care and advanced imaging. Consideration could however be given to a casualty or minor injuries unit possibly on a GP-led basis."
  It being Ten o 'clock, the motion for the Adjournment of the House lapsed, without Question put
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]
  Mr. Pawsey: I am able to confirm, following a meeting between my hon. Friend the Minister of State and the chairman of the West Midlands NHS trust, that a casualty and minor injuries unit will operate 24 hours a day.
  It was interesting that the Royal College of Anaesthetists' report stated:
  "Rugby NHS trust lost recognition for training in March 1995. There are currently no trainees in anaesthesia in Rugby. Since the time of derecognition, there has been a change in training patterns which requires modular anaesthetic experience in various surgical sub-specialities. These would not be available at Rugby.
  The consultants service 19 out of 27 operating lists on the weekly schedule. The remainder, and cover for absences, are serviced by the 4 non-consultant career grade staff. There are, therefore, insufficient consultants for the routine operating and this situation will worsen due to retirements."
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  The report added that anaesthetists in Rugby are not core members of the cardiac arrest team, although they attend if they are not in theatre.
  The Royal College of Paediatrics and Child Health commented:
  "Children should not stay as in-patients overnight. Children requiring admission should be directed to Walsgrave and bypass Rugby. There should be a fully comprehensive children's daytime service to offer acute assessment and both general and specialist clinics. All consultants would work out of the Coventry and Warwickshire paediatric consortium on a rotational basis. There would need to be a back up consultant on call to cover out of hours calls in order to stabilise cases before transfer."
  In addition to the visits made by the royal colleges, the regional postgraduate dean, Professor John Temple, visited the hospital on 20 February. He endorsed the comments made in the reports. That is a clear indication of the critical and developing position at the hospital of St. Cross.
  Clearly, certain of the clinical—that is to say, surgical—services are unsafe. My hon. Friend the Minister will no doubt agree that it is the clear duty of the health service to provide treatment that is both safe and effective. Increasingly, it would seem that there is a move in the NHS towards increasing specialisation, and it would appear that treatments are being concentrated at a smaller number of sites. This is necessary to ensure that surgeons maintain clinical skills and that they see sufficient patients to prevent their skills from becoming outdated or rusty through limited use. In addition, those surgeons require effective support and back-up from junior doctors, skilled technicians and the high-tech equipment that is increasingly demanded by those in the medical world. It would appear that the day of the old general surgeon—the Sir Lancelot Spratt of mythology—is now coming towards an end. It would also seem that the day of the smaller—and local—hospital is fast changing. It is my view that what is currently taking place at St. Cross will, over the next few years, be repeated up and down the land, perhaps even, Mr. Deputy Speaker, in your constituency or one similar to it.
  One has to ask how many smaller hospitals are even now in a similar position to St. Cross with services coming under scrutiny and with services likely to move to larger hospitals. That is an issue which should have a much greater public debate than has so far occurred.
  An article in the Coventry Evening Telegraph quotes a leading expert on health care organisation as saying that Rugby could become a role model for other small trusts facing similar difficult decisions. It continues by quoting Brian Edwards, professor of health care development at Sheffield university, as saying that Rugby could become a very interesting role model for the rest of the country in developing really imaginative first-class local services.
  I am certain that you, Mr. Deputy Speaker, would agree with me that it is desirable to maintain services as close to the host community as possible. But at the end of the day, the paramount consideration must be the provision of a safe and effective service. We must provide patients with the greatest opportunity for recovery and extended life.
  One of the areas which causes me particular concern and real anger is the threatened closure of the maternity unit. Five of my grandchildren were born there, so I know it well. But unfortunately that unit sees fewer than 1,000 births each year. It is argued that the minimum number for a consultant-led service is about 2,500.

  601
  However, I must say to my hon. Friend the Minister, who is listening, as I can see, intently to the debate, that we still undertake births at home where there is no consultant and where conditions will clearly be much worse than, or certainly not as good as, those in a maternity unit. In the maternity unit there will be other midwives able to provide help and advice. That is all obviously lacking with a home birth. If it is considered safe to deliver some women at home, why is it considered unsafe to deliver the same women in a purpose-built maternity unit when other staff are on call and able positively to assist?
  I recognise that there may be some difficulties with legal liability should mistakes occur. But women are seen by consultants before the birth. The consultants should, therefore, clearly know which births are likely to be difficult and should be handled by a consultant-led team, so enabling ordinary births to take place in the surroundings with which women have become reasonably familiar.
  My hon. Friend will recall that at the last meeting that I had with him I specifically asked whether the maternity unit could remain open for at least a period of consultation, and that was readily agreed by the chairman of the West Midlands NHS executive. That was a helpful gesture. However, I should be grateful to hear my hon. Friend's comments on the substantive point that I have raised regarding the maternity unit itself.
  Another area that causes me concern is the accident and emergency department mentioned by the Royal College of Surgeons. It is proposed that the A and E be closed and replaced by a minor injuries and casualty department supervised by a staff grade doctor. I am happy to confirm to the House and to my constituents that that department will remain open for 24 hours a day. However, to pursue one of the points made by the Royal College of Surgeons, I believe that we need the additional high-tech equipment that would facilitate the treatment of those who are brought to the casualty department.
  I welcome the assurance that the chief executive of the combined trusts, Mr. David Loughton, has given that 90 per cent. to 95 per cent. of services will remain at St. Cross, and that certain services may be enhanced. I am advised that some elective surgery that is currently undertaken at Walsgrave may be transferred to St. Cross. That is welcome news. It confirms that the hospital will not close, and will continue to serve my constituents. I also welcome the statement by Mr. Loughton that there will be no redundancies at St. Cross—a fact that will reassure both staff and public alike.
  I am grateful to my hon. Friend the Minister, who will respond to the debate, for the five meetings that we have had so far about the hospital. That is a clear indication that he understands my anger and that of my constituents about events at my local hospital. I have also met members of the St. Cross board, the chairman of Warwickshire health authority, and many others involved in this matter. In addition, I shall lead a delegation, comprising the leaders of the Conservative and Labour groups on Rugby borough council, to see the Minister next Wednesday.
  However, something has gone wrong at St. Cross, and it would be helpful to know precisely what has gone wrong and why—if only to prevent other hospitals from
  602
  making the same mistakes, as mistakes have clearly occurred. I want to know what might be done now to sort out matters. I want assurances that St. Cross will continue to provide high-quality care for my constituents. I want assurances that that high-quality care will be available for the foreseeable future, and not simply for two years. I want assurances that there will be no further downgrading of our hospital. I want an assurance that resources are not a problem and that adequate funding for St. Cross will continue.
  My hon. Friend will be aware that I have referred the issue to the Health Service Commissioner because I believe that there are some powerful lessons to be learnt from this affair. I am genuinely angry about what has taken place. My constituents are angry too, and some of them—particularly the elderly—are afraid. It is dreadful when the elderly are worried about where they will receive treatment. I urge my hon. Friend to assure me that my constituents and all those who use the services at St. Cross will continue to receive the best and the safest service available.
  In conclusion, I take this opportunity to thank the St. Cross hospital staff for their work and for their dedication. There will be no redundancies and they will, therefore, be able to continue caring for patients in the future, as they have done for so long in the past.
  10.13 pm
  The Minister for Health (Mr. Gerald Malone): I am delighted that my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) has secured the opportunity of an Adjournment debate on a vital issue in his constituency. First, I set on the record my thanks to him for all that he has done so far. Since problems with the trust first emerged he has, as he has said, had five meetings with me apart from all the other meetings that I know that he has had in his constituency on a continuing basis with all those concerned as matters have developed. As he also said, he will lead a local delegation to meet me next week. I look forward to welcoming the members of that delegation.
  At an early stage, my hon. Friend asked that he be involved in events as they unfolded. I have been happy to respond, I hope, in a fulsome way. I repeat my pledge to him that his leading role in what is bound to be a lengthy process to secure the best-quality patient care for his constituents, delivered where possible from their local hospital, will be sustained by immediate access to Ministers should he require it. In short, my door will always be open to him as he represents the interests of patients in Rugby—in other words, his constituents.
  It might be helpful if I, too, turn to recent events. At the beginning of the year, the trust realised that, with the forthcoming loss of its last general surgeon in April, steps to secure the best possible services for local people, which had already been discussed with others, would need to be taken within a short time frame.
  On 3 February the trust board concluded that it would not be possible to continue alone and sought to reach agreements with other hospitals, principally Walsgrave in Coventry and the North Warwickshire National Health Service trust, with a view to merging services. As my hon. Friend has said, a project team was established, which invited expert clinical advisers from the royal colleges to visit St. Cross and advise on the way forward.

  603
  The royal colleges were set short-term and long-term agendas. The short-term agenda was to assess the immediate state of clinical services being provided. My hon. Friend has rightly set out the concerns that existed about that extremely important matter. He and all those who had been involved have rightly sought to represent the great interest of ensuring that the safety of clinical services was considered to be paramount in what has taken place. The long-term agenda will be to consider options for future delivery of services. That issue, too, has been considered.
  The five royal colleges covered the specialties of surgery, obstetrics and gynaecology, anaesthesia and paediatrics and child health. My hon. Friend is well aware of the series of recommendations that were made. Indeed, he quoted them in some detail this evening. The recommendations were required to underpin essentially the quality of clinical services being delivered at St. Cross. It was not only the colleges that were involved. The results were endorsed by the regional postgraduate dean, Professor John Temple.
  Much of what was happening in the hospital was associated with the ability to provide teaching facilities there. That is something that always underpins the delivery of high-quality clinical services. I use this opportunity to thank both the royal colleges and Professor John Temple for their rapid and thorough work, which has illuminated certain issues. Although many of them are unwelcome, I know that at the end of the day my hon. Friend, who understands these matters extremely well, would far rather they had been illuminated at a stage when steps could be taken to address them in the interests of his constituents than they had not been addressed at all.
  Following the recommendations, immediate arrangements were put in place to ensure that they were implemented. Some of the recommendations have been uncomfortable for many who have been involved, but they have been taken on board and put in place extremely quickly, again with the primary purpose of securing a quality of clinical services for those who use St. Cross hospital.
  Warwickshire health authority has announced that, as rapid changes have had to be made to secure clinical safety, a full retrospective public consultation on changes that have been made immediately on grounds of clinical viability will begin on 8 May and conclude on 4 September.
  The health authority and local general practitioners will also, as purchasers of services for Rugby residents, look closely at the longer-term plans for the development—I stress the word "development", as my hon. Friend sought assurance on that point—of services. Again, there will be full and formal consultation with the public on any changes that would have a significant impact on the people of Rugby. The second consultation will begin on 4 September and report on 8 January 1998. I anticipate that my hon. Friend will play a leading role in both consultation processes. I remind him that, in the event of a failure to resolve matters locally in a satisfactory way, decisions, ultimately, come to Ministers to be made.
  I now deal with some of the specific concerns raised by my hon. Friend. He referred to the long term. Let me refer, as he did, to the comments of the new acting chief executive, who expects to see some 90 per cent. of the
  604
  services that local people have come to expect at St. Cross continue under the new arrangements for clinical supervision and to be available locally in Rugby.
  In view of some of the doom-laden reports that appear in the press at difficult times such as this—I have read some of the irresponsible things that have been written about the future of St. Cross—I can tell my hon. Friend that the agenda set out by the acting chief executive sounds very much like a firm basis on which to build a flourishing hospital that will enjoy a long-term future.
  Let me say a word of thanks to all who have been involved locally in a series of difficult and complex decisions. I include, among others, those at St. Cross hospital—my hon. Friend referred to the fact that those who are there can be assured that there is no immediate prospect of redundancy—those at Walsgrave hospital and also members of the national health service executive, who have worked tirelessly to secure benefits for patients in Rugby. In short, the actions that they have taken mean that the future of the hospital in Rugby is secured.
  My hon. Friend asked for an assurance about adequate funding. I am happy to be able to tell the House that I can give him that assurance tonight. Let me remind the House that, in this case, funding is not the issue; it is the ability to provide quality clinical services. That is the issue that confronts those delivering services in Rugby. It is being dealt with.
  I am happy to go further than that. My hon. Friend referred to the fact that perhaps there needed to be some change to provide some of the services. He alluded in particular to what would happen to the reshaped accident and emergency service now envisaged. I am happy to tell him that I have listened carefully to all that he has said, particularly at the last formal meeting that we had on this matter, and understand that securing needed change sometimes requires investment. For example, new technology, to which he alluded, can often support an improved quality and range of care that could not properly be provided before. Should such opportunities emerge, I expect those responsible locally to do all in their power to secure them for the benefit of people in Rugby. If my hon. Friend feels at any moment that that is not taking place, I expect him not to hesitate and to knock at my door again.
  My hon. Friend referred to maternity services. As Minister for Health, I travel across the country looking at the ways in which services are delivered in a range of contexts. He was right to point out the Government's policy, which was set out in "Changing Childbirth". People can have their children in an appropriate setting where proper clinical attention can be given. We must remember that childbirth is not an illness; it is a natural process. Should people wish it, they should be encouraged to have their children in a setting of their choice. The underpinning of maternity services, for which my hon. Friend expressed gratitude, is a step in the right direction. The document "Changing Childbirth" and the associated developments in maternity services must be borne in mind by those who commission services for people in Rugby.
  Faced with such a problem, which touches the lives of all our constituents, hon. Members have two choices: the cheap and easy shot, or the tougher choice of taking the

  605
  difficult high ground. I say to my hon. Friend and to the House in all sincerity that he has chosen the difficult high ground. He has battled from the start to secure the long-term future of his local hospital, which I believe is in prospect, while also supporting difficult decisions required to safeguard the standards of care that his constituents expect.
  It is all too easy to take the simple way out and join the madding crowd, who see more in these developments than meets the eye, and who presage disaster when no disaster is to be seen. My hon. Friend has not taken that
  606
  course. He has understood his responsibility to his constituents, which, particularly in this period, is primarily to secure for them a safe clinical service. I congratulate him on that.
  I hope that those who listen to or read these words will understand the major contribution that my hon. Friend has made to securing progress so far. His continuing contribution will be crucial for his hospital and for the local constituency that he represents in the months and years to come.
  Question put and agreed to
  Adjourned accordingly at twenty-seven minutes past Ten o'clock

HOME DEPARTMENT

  Roisin McAliskey
  Mr. Deva
  To ask the Secretary of State for the Home Department if he will make a statement on the conditions in which the Prison Service is holding Roisin McAliskey. [20510]

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

  Letter from Alan Walker to Mr. Nirj Deva, dated 13 March 1997:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question about the conditions in which Roisin McAliskey is being held at Holloway prison.
  Following a routine review of her security status Roisin McAliskey remains a Category A prisoner but has been downgraded from high risk to standard risk within that category. As a result some of the security arrangements which have been in operation have been relaxed.
  The number of strip searches to which Roisin McAliskey had been subject has already been reduced and she is no longer being strip searched before and after every open visit within the prison. She is now only being strip searched on the same basis as all other prisoners at Holloway. This means before leaving the prison for court appearances and on return to the prison; as part of a cell search and drug testing procedures; on a random basis; or if there were reasonable suspicion she had secreted something about her prison.
  Further relaxations as a consequence of the security review will take effect from now on. She will be able to attend chapel, to use the gym and the swimming pool, and to attend ante-natal classes with other prisoners. The number of overnight security checks will be reduced so that the light in her cell can be extinguished for most of the night.
  Separately from the review of her security status, Roisin McAliskey applied on 14 February to be located on the Mother and Baby Unit at Holloway with her baby after it is born. Her application was considered, following the normal processes which apply to all expectant mothers, by the Admissions Board at Holloway, who considered the views of independent experts in the development needs of babies, as well as logistical issues.
  The Assessment Board has now advised the Governor that Roisin McAliskey's application should be approved, the Governor has recommended approval and I have accepted this recommendation. She has been told that she may keep her baby with her after the birth. She will, as do all other mothers, have to sign a compact agreeing to be of reasonable behaviour and to co-operate with the ethos and regime of the Unit. Babies in the Unit normally remain with their mothers until the age of nine months.
  Both the reduction in security classification and the decision to allow Roisin McAliskey to keep her baby have followed the standard procedures and processes that would apply to any other prisoner.
  274

  Tote
  Mr. Rendel
  To ask the Secretary of State for the Home Department if he will make a statement about the future use of Tote profits. [18533]

  Mr. Kirkhope
  The Tote's role is to provide pool betting on horseracing and to raise money for racing. Maintaining its contribution to racing is central to Government policy; it is for the Tote to decide how to distribute the money.

  Prison Staff (Drugs)
  Sir Ivan Lawrence
  To ask the Secretary of State for the Home Department what procedures and guidelines exist for the random or routine searching at prisons with a significant drugs presence of(a) prison officers, (b) other prison staff and (c) other persons visiting in an official capacity. [19761]

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

  Letter from A. J. Pearson to Sir Ivan Lawrence, dated 13 March 1997:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question about the searching of staff and official visitors.
  Guidelines for searching staff and visitors to prisons are contained in the Prison Service Manual on Security, copies of which are held in the Library of the House. These require the governor, in consultation with the area manager, to draw up a local searching strategy, including provisions for searching staff and visitors, to meet the particular security needs of the prison and to combat particular risks such as the illicit passage of drugs into the prison.
  In addition, following recommendations by Sir John Woodcock, visitors and staff seeking to enter dispersal prisons (including Belmarsh) are searched on each occasion of entering the prison. This will be extended to the five local prisons at which we plan to hold category A prisoners in future, once building work has been completed to allow the necessary space and equipment to be installed at the gate.

  Prison Visits (Recording)
  Mr. Dalyell
  To ask the Secretary of State for the Home Department, pursuant to his answer of 27 February,Official Report, columns 288–89, if he will review the use of video-recorded closed circuit television in the legal visit facilities at special secure units. [19909]

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

  Letter from A. J. Pearson to Mr. Tam Dalyell, dated 13 March 1997:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question about video recorded CCTV in the legal visits facility in Special Secure Units.
  There are no plans to review this arrangement.
  275

  Staff Assaults (Ranby Prison)
  Mr. Madden
  To ask the Secretary of State for the Home Department how many reported incidents of staff assaults were recorded at Her Majesty's prison, Ranby from 1 January 1996 to date; and if he will make a statement. [19924]

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

  Letter from A. J. Pearson to Mr. Max Madden, dated 13 March 1997:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question about the number of reported incidents of staff assaults recorded at Ranby prison from 1 January 1996 to date.
  Six assaults on staff have been recorded at Ranby prison since 1 January 1996. This figure represents less than two assaults per 100 population.

  Wheel Clamping
  Mr. David Atkinson
  To ask the Secretary of State for the Home Department if he will introduce proposals for the registration and regulation of wheel clamping; and if he will make a statement. [20081]

  Mr. Maclean
  My right hon. and learned Friend has no present plans for legislation in this area. We are considering whether further legal measures are needed to regulate wheel clamping.

  Child Abuse
  Mr. Sheerman
  To ask the Secretary of State for the Home Department (1) what steps he is taking to ascertain the whereabouts of Rosemary Iredale, a convicted child abuser recently released from prison but since disappeared; [19160]

  (2) what steps he is taking to ascertain the whereabouts of Terry Valrona, a convicted child abuser recently released from prison but since disappeared. [19159]

  Miss Widdecombe
  [holding answers 10 March 1997]: I will write to the hon. Member.

  Remand Prisoners (Voting Rights)
  Mr. Madden
  To ask the Secretary of State for the Home Department what assistance is given to remand prisoners, detained in prisons in England and Wales, to register to vote and to apply for a postal vote; and if he will ensure that all such prisoners are advised of their right to vote and assisted in securing their vote. [19740]

  Miss Widdecombe
  [holding answer 11 March 1997]Responsibility for this matter has been delegated to the Director General of the Prison Service, who has been asked to arrange for a reply to be given.

  Letter from A. J. Pearson to Mr. Max Madden, dated 13 March 1997:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question about the voting rights of remand prisoners.
  276
  Those in Prison Service custody eligible to vote in Parliamentary, local Government and European elections are: unconvicted prisoners; convicted but unsentenced prisoners; prisoners imprisoned for contempt of court; and those serving a term of imprisonment in default of payment of a sum of money adjudged to be paid on conviction. Eligible prisoners must have been registered as electors at their home address even though they may have been in prison on the qualifying date. Decisions on the eligibility of prisoners to be included in the electoral register are for the Electoral Registration Officer who decides if the person was normally resident at a particular address prior to their imprisonment.
  Establishments are required to notify eligible prisoners of their eligibility to vote and to inform them of the deadlines that are set for applications for a postal or proxy vote. They are also required to ensure that ballot papers sent to prisoners reach them unopened, that staff witness prisoners' declarations of identity, and that completed votes are posted back uncensored.

  Casino Deregulation
  Mr. Hargreaves
  To ask the Secretary of State for the Home Department if he will make a statement on casino deregulation. [20446]

  Mr. Kirkhope
  The information is as follows:

  The Deregulation (Casinos Order) 1997

  I am pleased to report implementation of the first deregulation changes to the casino regime since the 1968 Act.

  Following approval by Parliament on 6 March, I made the Deregulation (Casinos) Order, which comes into force on 3 April.

  This will allow casinos in England and Wales to provide alcohol after midnight, until 3 am in London, and 2 am elsewhere.

  In casinos in Great Britain, it also reduces from 48 to 24 hours the waiting period before new members may take part in the gaming.

  The Deregulation (Debit Cards) Order 1997

  The order has now been cleared by the Deregulation Committees and awaits parliamentary approval. It would allow acceptance of payment by debit cards.

  The Second Casino Consultation

  Advertising, group and postal membership and slot machines:

  Following initial consultation earlier in 1996, we went out to consultation on 12 November on a package of measures to relax certain other controls on the operation of casinos. The proposals were as follows:
  Relax the total ban on advertising to allow casinos to give their name, address, telephone number and limited factual information about their facilities in non-national publications, including newspapers and magazines;
  Allow group membership and postal applications;
  Permit a maximum of three slot machines per gaming table subject to a discretion for the licensing justices to substitute a lower number on grounds of demand and suitability of the premises;
  There would be a power to regulate the size of stakes and prizes, although this would not be used initially;
  Make a number of detailed requirements including certification of manufacturers and agents by the Gaming Board and a monitoring and testing regime.
  277
  There was broad support for the advertising proposals. A few organisations were against any relaxation in the controls. However, this is a very modest relaxation, allowing casinos merely to give out information about themselves. I do not believe that necessary protection for the public would be removed by this measure.

  Most respondents also supported the proposals for group membership and postal applications. A few were opposed but most were content with the detailed safeguards proposed.

  We will prepare draft proposals in the form of a deregulation order.

  I am still considering the more extensive proposals for slot machines in casinos. Some concerns have been expressed about the nature of such machines. However, they are common in casinos throughout the world, usually in substantially greater numbers than we propose. But I consider that such machines must be strictly regulated. More detailed work would be required on the technical specification, monitoring and other arrangements before we could introduce legislation. We will continue our discussions with the Gaming Board and the industry.

  Permitted areas

  We proposed to allow casinos in 21 new locations, including London docklands and a special category of seven conference towns.

  Outside London, most of the proposed new areas attracted support or neutrality from their local councils and reasonable support from other local interests. I propose to remove Peterborough from the list; its council remained opposed and there was also significant other local opposition.

  In the London area, most local authorities have welcomed our proposals. Slough is considering its position. I am in further contact with Croydon council, which has recently sought more information about the implications of permitted area status and its role in the regulatory regime for casinos.

  I have taken account of representations in favour of greater casino provision in east London. In addition to Dartford and Redbridge, I intend to designate a permitted area within docklands, which will put it on a par with other urban development areas within Great Britain.

  On the basis of up-to-date information provided by the British Association of Conference Destinations, I propose to add Milton Keynes and Weston-super-Mare to the category of conference towns to be designated as permitted areas.

  I also propose to redefine existing permitted areas to reflect local authority boundary changes.

  The changes that I wish to make could be implemented by secondary legislation. Before any new areas are introduced, however, I will need to address the resource, timing and other practical implications.

  Asylum Seekers
  Mr. Gerrard
  To ask the Secretary of State for the Home Department how many of the asylum seekers currently held in detention(a) are awaiting a decision on
  278
  their asylum application, (b) are awaiting an appeal following a refusal of their asylum application and (c) have had an appeal rejected. [19561]

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

  Number of people recorded as being detained1.2 on 31 January 19973 who had sought asylum at some stage, by stage of application and immigration status

  Stage of application

  Port

  Illegal entrant

  Subject to deportation action

  Total

  Awaiting an initial decision

  103

  57

  15

  175

  Awaiting result of an appeal

  203

  144

  29

  376

  Awaiting removal after refusal

  86

  144

  17

  217

  Total

  392

  315

  61

  768

  1 Persons detained solely under powers contained in Schedule 2 or 3 to the Immigration Act 1971.

  2 These figures include people who have been in detention for less than one month. Because of the delay in recording receptions into, and releases from, detention and the large number of persons detained for a short period of time, the figures should be used with caution.

  3 Illegal entrants and persons subject to deportation action are as at 31 January, port cases are as at 3 February 1997.

  Sexual Orientation (Police Database)
  Mr. Michael Brown
  To ask the Secretary of State for the Home Department, pursuant to his answer of 3 March,Official Report, column 463, (1) if he will make it his policy to ensure that any references to individuals' sexuality are deleted from the police national computer; [19434]

  (2) on how many occasions an individual's sexual orientation has been recorded on the police national computer. [19433]

  Mr. Maclean
  There is no specific data field on the police national computer for recording sexual orientation. This might be inferred from the details of the convictions history and offending pattern. Information recorded on the PNC must be relevant to the purposes for which it is held in order to comply with the data protection principles of the Data Protection Act 1984. Data on sexual orientation would not be relevant for these purposes and would be removed if found to have been improperly recorded.

  Records are not kept of how many occasions an individual's sexual orientation may have been improperly recorded on the PNC.

  Prisoners (London)
  Mr. Cox
  To ask the Secretary of State for the Home Department how many prison inmates there were in each London prison on 1 March. [19492]

  Miss Widdecombe
  Responsibility for this matter has been delegated to the Director General of the Prison Service, who has been asked to arrange for a reply to be given.
  279
  Letter from A. J. Pearson to Mr. Tom Cox, dated 13 March 1997:
  The Home Secretary has asked me, in the absence of the Director General from the office, to reply to your recent Question asking how many prison inmates there were in each London prison on 1 March.
  Provisional figures are available for 28 February 1997 and these are detailed in the attached table.

  Population in London Prison Service establishments on 28 February 1997

  Prison Service establishment

  Population on 28 February 19971

  Belmarsh

  868

  Brixton

  617

  Downview

  289

  Feltham

  866

  Highdown

  689

  Holloway

  508

  Latchmere House

  174

  Pentonville

  908

  Wandsworth

  852

  Wormwood Scrubs

  1,213

  1 Provisional figures.

  Burglaries
  Mr. Callaghan
  To ask the Secretary of State for the Home Department what percentage of burglaries in each of the last five years was committed by people aged under 21 years. [19687]

  Mr. Maclean
  Information available is given in the table.

  Percentage of persons cautioned and convicted at all courts for burglary offences who were aged under 21 years, 1990 to 1995

  England and Wales

  1990

  1991

  1992

  1993

  1994

  1995

  Percentage

  64.8

  60.9

  58.9

  57.8

  58.4

  58.3

  Youth Crime
  Mr. George
  To ask the Secretary of State for the Home Department what has been the percentage change in the number of crimes committed by youths in the past 10 years. [19822]

  Mr. Maclean
  Information available is given in the table.

  Number and percentage change of known offenders (those cautioned or convicted at all courts) aged 10 to under 18 by type of offence, 1985 and 1995

  England and Wales

  Thousands

  Type of offence

  1985

  1995

  Percentage change

  Indictable

  213.3

  132.8

  -38

  Summary (excluding motoring)

  50.0

  46.2

  -9

  All offences (excluding summary motoring)

  256.2

  179.1

  -32

  Violent Crime
  Mr. Sheerman
  To ask the Secretary of State for the Home Department how many(a) sex offences, (b) homicides and (c) other violent crimes were recorded in West Yorkshire in each of the last 10 years; and what percentage of these led to successful prosecutions. [19690]
  280
  Mr. Maclean
  The requested information on recorded crime is given in the following table:

  Notifiable offences recorded by the police West Yorkshire police force area

  Year

  Sexual offences

  Homicide

  All violent crime1

  1985

  1,219

  26

  7,660

  1986

  1,247

  25

  8,062

  1987

  1,311

  31

  8,940

  1988

  1,275

  26

  10,047

  1989

  1,537

  33

  11,381

  1990

  1,584

  43

  12,109

  1991

  1,675

  34

  13,544

  1992

  1,361

  34

  13,727

  1993

  1,465

  27

  13,828

  1994

  1,504

  27

  13,886

  1995

  1,416

  43

  13,118

  1 Offence groups of violence against the person, sexual offences and robbery.

  The available court date relate to defendants convicted in the West Yorkshire police force area and are given in the following table. Information is given for the years 1985, 1990 and 1995 only. The provision of data for other years would involve disproportionate cost. It is not appropriate to express these figures as a percentage of recorded offences as they relate to offenders who may have been proceeded against for more than one offence.

  Number of defendants convicted at all courts for (a) sexual offences, (b) homicide and (c) violent crimes1 in the West Yorkshire Police Force Area 1985, 1990 and 1995

  West Yorkshire police force area

  Offence

  1985

  1990

  1995

  Sexual offences

  345

  328

  256

  Homicide

  21

  24

  18

  Violent crimes1

  2,861

  3,447

  2,751

  1 Includes the indictable offence groups of violence against the person, sexual offences and robbery and the summary offence of common assault.

  Mr. Sheerman
  To ask the Secretary of State for the Home Department how many(a) sex offences, (b) homicides and (c) violent crimes were recorded in each of the last 20 years; and what percentage of these led to successful prosecutions. [19691]

  Mr. Maclean
  The requested information on recorded crime is given in the following table:

  Notifiable offence recorded by the police

  England and Wales

  Year

  Sexual offences

  Homicide

  All violent crime1

  1975

  23,731

  515

  106,044

  1976

  22,203

  565

  111,562

  1977

  21,313

  482

  117,233

  1978

  22,367

  532

  122,590

  1979

  21,843

  629

  129,285

  1980

  21,107

  620

  133,359

  1981

  19,424

  559

  139,913

  1982

  19,729

  618

  151,261

  1983

  20,410

  550

  153,871

  1984

  20,222

  621

  159,299

  1985

  21,456

  616

  170,650

  1986

  22,684

  661

  178,203

  1987

  25,154

  688

  198,829

  1988

  26,529

  624

  216,214

  281

  Notifiable offence recorded by the police

  England and Wales

  Year

  Sexual offences

  Homicide

  All violent crime1

  1989

  29,733

  641

  239,858

  1990

  29,044

  669

  249,904

  1991

  29,423

  725

  265,085

  1992

  29,528

  687

  284,201

  1993

  31,284

  670

  294,231

  1994

  31,971

  726

  310,332

  1995

  30,274

  745

  310,936

  1 Offence groups of violence against the person, sexual offences and robbery.

  The available court data relate to defendants convicted in England and Wales and are given in the following table. Information is given for the years 1975, 1980, 1985, 1990 and 1995 only. The provision of data for other years would involve disproportionate cost. It is not appropriate to express these figures as a percentage of recorded offences as they relate to offenders who may have been proceeded against for more than one offence.

  Number of defendants convicted at all courts for (a) sexual offences, (b) homicide and (c) violent crimes1 1975, 1980, 1985, 1990 and 1995

  England and Wales

  Offence

  1975

  1980

  1985

  1990

  1995

  Sexual offences

  6,848

  8,042

  6,010

  6,605

  4,702

  Homicide

  377

  477

  441

  387

  455

  Violent crimes1

  48,660

  65,123

  58,564

  69,215

  57,484

  1 Includes the indictable offence groups of violence against the person, sexual offences and robbery and the summary offence of common assault.

  Closed Circuit Television
  Mr. Alan Williams
  To ask the Secretary of State for the Home Department if he will list the successful bids, in Wales, for CCTV funding; and how many bids were rejected and in which areas of Wales they were located. [20050]

  Mr. Maclean
  In the third round of the closed circuit television challenge competition—1997–98—the following bids from Wales were successful:

  Bid

  Amount awarded £

  Monmouth town centre

  112,500

  Prestatyn town centre

  85,500

  Wrexham town centre

  50,000

  There were 13 unsuccessful bids from the following areas:

  Abergele town centre.

  Ammanford pedestrian and commercial centre.

  Brecon, Newtown and Llandrindod Wells town centres.

  Princess of Wales Hospital, Bridgend.

  Lansbury Park, Caerphilly.

  Llanrumney, Cardiff.

  Ysgol John Bright, Llandudno.

  282

  Alway, Bettws, Llanmartin and Ringland shopping areas, Newport.

  Port Talbot town centre.

  Bishop Gore School and Singleton Park, Sketty, Swansea.

  De la Beche Street, Dynevor Place and the Kingsway, Swansea.

  Tenby town centre and harbour.

  Byte Street, Treherbert.

NATIONAL HERITAGE

  Sporting Ambassadors
  Lady Olga Maitland
  To ask the Secretary of State for National Heritage when she will announce the conclusions of the committee chaired by Sir Colin Cowdrey on sporting ambassadors. [20511]

  Mr. Sproat
  I will be announcing the committee's conclusions on the morning of 14 March and copies of the announcement will be placed in the Libraries of the House.

  Private Finance Initiative
  Mr. Milburn
  To ask the Secretary of State for National Heritage if she will provide a breakdown by project of PFI schemes for which her Department is responsible as identified in table 5.5 of the Red Book. [18930]

  Mr. Sproat
  [holding answer 6 March 1997]: The breakdown is in the following table. The figures in the table represented best estimates at the time the "Financial Statement and Budget Report 1997–98" was prepared. The figures in the FSBR are rounded to the nearest £10 million.

  PFI Capital expenditure

  PFl Capital expenditure

  1997–98

  1998–99

  1999–2000

  Total

  Signed contracts

  1.4

  1.4

  1.4

  4.2

  British Museum Object Store

  13.0

  11.0

  24.0

  British Museum Great Court

  1.0

  1.0

  Science Museum Wellcome Wing

  1.0

  1.0

  Tate Bankside Roof Observatory

  4.0

  4.0

  Tate Millbank Queen Alexander site

  15.0

  15.0

  Tate Millbank electric sub-station

  0.3

  0.3

  Natural History Museum combined heat and power

  1.0

  2.0

  3.0

  British Library bibliographic cataloguing

  >4.0

  4.0

  British Library Boston Spa building

  9.0

  4.0

  13.0

  British Library Colindale building

  10.0

  5.0

  15.0

  British Library catering and conference

  1.5

  1.5

  British Library digitisation

  35.0

  40.0

  75.0

  Sports Council IT

  2.0

  2.0

  English Heritage— Stonehenge English Heritage—GIS

  1.0

  1.0

  2.0

  Total

  38.9

  60.7

  65.4

  165

  283

TRADE AND INDUSTRY

  Industrial Tribunals
  Mr. Byers
  To ask the President of the Board of Trade how many law members of industrial tribunals were surveyed in the recent review of members' expenses and how many replied; what was the proportion of employee to employer members taking part; how many responses were received from each region; if he will place details of the survey in the Library; and what action he plans to take as a result of the survey. [20049]

  Mr. John M. Taylor
  Prior to the recent notification to lay members of industrial tribunals of changes to the arrangements for payment of their fees and expenses, an analysis of claims was undertaken. The analysis was based on a random sample of 400 claims made by members from across Great Britain. The sample did not separately identify claims made by employer and employee nominees. I will arrange for a summary of the results to be placed in the Library of the House.

  Small Firms Loans Guarantee Scheme
  Sir Michael Grylls
  To ask the President of the Board of Trade what plans he has to improve the Government publicity relating to the small firms loan guarantee scheme. [19758]

  Mr. Page
  There are no plans to change the way in which the scheme is publicised.

  Information on the scheme is widely available. Details appear in relevant DTI publications and there is a separate scheme booklet. This is widely distributed to lenders and business intermediaries throughout the United Kingdom and is freely available directly from the DTI. Currently, around 5,000 copies a month are requested.

  The main focus for promoting the scheme lies with lenders and intermediaries. The scheme is appropriate only when a lender considers the business proposal for a loan to be viable, and would be prepared to lend, but for the lack of collateral to use as security against a conventional loan or overdraft.

  Sir Michael Grylls
  To ask the President of the Board of Trade what plans he has to make the booklet relating to the small firms loans guarantee scheme more comprehensive. [19759]

  Mr. Page
  The booklet will be updated later this year to reflect recent changes.

  Roslin Institute
  Mr. Cash
  To ask the President of the Board of Trade if he will place in the Library copies of the agreements between the Roslin Institute and other bodies since the inception of the Roslin Institute. [18967]

  Mr. Ian Taylor
  The Roslin Institute enters into a very wide range of contracts and other agreements in the course of its business. All the contracts relating to commercial activities, including the exploitation of research, are classified as commercial in confidence.
  284

OVERSEAS DEVELOPMENT ADMINISTRATION

  Overseas Police Officers (Scholarships)
  Mr. Campbell-Savours
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the countries whose police officers received scholarship awards in Britain in 1991. [19916]

  Dr. Liam Fox
  In 1991, the FCO diplomatic wing and the ODA did not keep centrally a record of police officers who received scholarship awards. It would involve a disproportionate cost to collate this information now for all such projects.

  Namibia
  Mr. Campbell-Savours
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what date the human rights performance of Namibia was last graded for internal purposes by his Department. [19913]

  Dr. Liam Fox
  We have no formal grading system. But with Namibia, as with other countries, we take human rights performance into account when monitoring political developments.

  Sudan
  Mr. Corbyn
  Asked the Secretary of State for Foreign and Commonwealth Affairs if he will list the total bilateral aid contribution to multilateral aid programmes in the Sudan for each of the last five years. [19600]

  Dr. Liam Fox
  Since 1992, the UK has channelled £13.5 million of bilateral emergency assistance for Sudan through multilateral agencies. The breakdown of disbursements together with information on disbursements through international non-governmental organisations is as follows:

  Multilateral agencies

  NGOs

  Total

  1992

  1.6

  8.0

  9.6

  1993

  5.0

  6.3

  11.3

  1994

  3.9

  10.2

  14.1

  1995

  2.2

  5.0

  7.2

  1996

  0.8

  5.2

  6.0

  Total

  13.5

  34.7

  48.2

ENVIRONMENT

  Radioactive Waste (Vitrification)
  Mr. Meacher
  To ask the Secretary of State for the Environment what evaluation(a) his Department and (b) consultants to his Department have made of the assessment by the US Department of Energy's glass advisory panel of the safety of using vitrified glass to encapsulate high-activity radioactive waste; and if he will make a statement on the current operational status of vitrification plants for nuclear waste immobilisation in the United Kingdom. [19912]

  Mr. Gummer
  Neither my Department nor consultants used by my Department are aware of an assessment by the US Department of Energy's glass advisory panel of
  285
  the safety of using vitrified glass to encapsulate high-level radioactive waste. The status of vitrification plants are matters for the operators subject to meeting regulatory requirements. But I understand that the one vitrification plant in the UK is operated using two processing lines at the BNFL, Sellafield site in Cumbria. This plant was commissioned in February 1991 and has a consent to operate in full compliance with all UK regulations. BNFL is building a third operating line at Sellafield which is expected to be commissioned in the year 2000.

  Electricity Turbines (Fisheries)
  Sir Cranley Onslow
  To ask the Secretary of State for the Environment what steps he is taking to ensure that the installation of turbines by electricity generating companies does not cause damage to migratory fisheries on(a) the River Leven and (b) other rivers in England and Wales; and if he will make a statement. [19676]

  Mr. Robert B. Jones
  Section 14 of the Salmon and Freshwater Fisheries Act 1975—amended by schedule 15 the Environment Act 1995—requires the owner or occupier of any mill, defined as including any erection for the purpose of developing water power which diverts water from any watercourse frequented by salmon or migratory trout, to place and maintain, at his own cost, a screen to prevent access to the intake by those fish. Such a screen is required to be so located and constructed that, so far as reasonably practicable, those fish are not injured or damaged by it. This obligation applies only where the intake channel was constructed after 18 July 1923.

  There are two abstractions on the River Leven for hydro-power generation. Both intakes were constructed before 1923 and so are not covered by the screen obligation. Neither currently has screens in place, but the Environment Agency is well aware of the issue and is seeking agreement with the abstractor for the installation of suitable screens.

  Local Authority Delegations
  Mr. McNamara
  To ask the Secretary of State for the Environment if he will list those local authority delegations which met him or his Department's Ministers, and the hon. Member who accompanied each such delegation, and the subjects discussed between 1 November 1996 and 28 February 1997. [19717]

  Sir Paul Beresford
  A total of 79 authorities, as listed, sent delegations to Ministers in the Department of the Environment during the consultation period on the proposed local government finance settlement for England for 1997–98. The composition of each delegation was entirely a matter for individual local authorities, which were free to invite hon. Members to accompany them as they saw fit. A range of local government finance issues was discussed at each meeting.

  1. County Councils (21 meetings)

  Bedfordshire

  Derbyshire

  Devon

  Dorset

  Durham

  Gloucestershire

  Hampshire

  286

  Hereford and Worcester

  Kent

  Lancashire

  Lincolnshire

  Norfolk

  Northamptonshire

  Northumberland

  Nottinghamshire

  Oxfordshire

  Shropshire

  Somerset

  Staffordshire

  Suffolk

  Warwickshire.

  2 Shire Districts (26 meetings)

  Blaby (Leicestershire)

  Castle Point (Essex)

  Castle Morpeth (Northumberland)

  Copeland (Cumbria)

  Darlington (Durham)

  Derby (Derbyshire)

  East Hampshire

  Harlow (Essex)

  Hertsmere (Hertfordshire)

  Leicester (Leicestershire)

  Luton (Bedfordshire)

  Milton Keynes (Buckinghamshire)

  Northampton (Northamptonshire)

  Nottingham City (Nottinghamshire)

  Plymouth City (Devon)

  Poole (Dorset)

  Purbeck (Dorset)

  Rutland (Leicestershire)

  Salisbury (Wiltshire)

  Stoke on Trent (Staffordshire)

  Warrington (Cheshire)

  Waverley (Surrey)

  West Lindsey (Lincolnshire)

  West Somerset

  Woking (Surrey)

  York City (North Yorkshire).

  3. Metropolitan Districts (12 meetings)

  Barnsley (South Yorkshire)

  Bradford (West Yorkshire)

  Birmingham (West Midlands)

  Coventry (West Midlands)

  Doncaster (South Yorkshire)

  Manchester (Greater Manchester)

  Newcastle upon Tyne

  Rotherham (South Yorkshire)

  Sheffield (South Yorkshire)

  South Yorks districts

  Stockport (Greater Manchester)

  Wolverhampton (West Midlands).

  4. London Boroughs (10 meetings)

  Brent

  Greenwich

  287

  Hammersmith and Fulham

  Harrow

  Havering

  Hillingdon

  Kingston upon Thames

  Merton

  Redbridge

  Richmond upon Thames.

  5. Unitary Authorities (7 meetings)

  Bristol City

  Ex Cleveland Unitaries

  Isle of Wight

  Middlesbrough

  Redcar and Cleveland

  South Gloucester

  Stockton on Tees.

  6. Police Authorities (1 meeting)

  Greater Manchester.

  7. Fire Authorities (2 meetings)

  Humberside Fire

  Tyne and Wear FCDA.

  British Waterways
  Sir Anthony Durant
  To ask the Secretary of State for the Environment what part regeneration plays in British Waterways' management and operation of the canal network. [20606]

  Mr. Robert B. Jones
  Waterways provide an important catalyst for urban and rural regeneration. One of British Waterways' aims is to promote and accommodate conservation and regeneration. In doing so it works with a range of partners in the private, public and voluntary sectors.

  An excellent example of the role of canals in regeneration is the Birmingham waterfront where over £300 million of private sector finance has been attracted to developments alongside British Waterways' canals. Another success story is the joint investment of £7 million by British Waterways and Gloucester city council in Gloucester docks which has attracted over £30 million in private finance. The shift in the city's focus to the docks has seen the numbers employed rise from 100 to 2,000 and tourism visits rise from a few thousand to over 1 million. In Scotland the millennium link, aided by £32 million from the Millennium Commission, will create 4,200 permanent jobs and attract £400 million of private investment along the 70-mile waterway corridor.

  Blight
  Mr. Rowe
  To ask the Secretary of State for the Environment when he expects to publish the report of the interdepartmental working group on blight. [20607]

  Mr. Robert B. Jones
  The interdepartmental working group on blight was established to review the scope, cause and effects of blight arising during the various stages of major infrastructure projects and to consider whether any practical changes could be made to existing arrangements for property purchase and compensation. The group published a discussion paper last June and a progress report, which set out the various proposals that had been 288
  put to group, was published last November. Since then the group has been evaluating these ideas and assessing the costs and benefits of various options. That work has yet to be completed. I anticipate that the group will now complete its work in about the middle of this year.

  In addition to a consideration of possible changes to the purchase and compensation arrangements, the group is looking at steps that might be taken to reduce the blighting effects of projects by, for example, speeding up decision processes and reducing uncertainty. On 14 January I announced consultations on proposals to speed up both the development plans and planning appeals processes, all of which has the potential to reduce blight. However, the group has drawn attention to two ideas which might be pursued ahead of its final report. I therefore propose to begin consultation on ways of reducing the blighting effects of infrastructure projects which are shown on statutory development plans, but which have subsequently been abandoned, and on developing a code of good practice on the timely dissemination of information about projects by major infrastructure developers. My right hon. Friend the Secretary of State for Scotland is considering similar proposals.

  Listed Buildings (Green Belt)
  Sir Sydney Chapman
  To ask the Secretary of State for the Environment if he will make a statement on his policy in respect of the listed buildings in the green belt. [20608]

  Mr. Robert B. Jones
  National policy for green belts is set out in our planning policy guidance note 2 and for listed buildings in planning policy guidance note 15. PPG2 confirms the importance which the Government attach to green belts, and maintains the general presumption against "inappropriate" development within them—as detailed in PPG2. Very special circumstances are needed to outweigh this presumption. The Government also attach a high priority to protecting the historic environment and to ensuring that the special architectural or historic interest of listed buildings is fully recognised. PPG15 makes clear that, in general, the best way of ensuring the upkeep of historic buildings is to keep them in active use; and PPG2 advises that suitable reuse of a building is to be preferred to redevelopment where it is of architectural or historic interest.

  Where a change of use, extension or alteration to a listed building in the green belt would be essential for, or contribute significantly to, ensuring a viable future for the building or for maintaining it in good order, this could constitute or contribute to the "very special circumstances" which can justify inappropriate development in the green belt. Proposals would have to be of a high standard of design to complement or enhance their surroundings; and any proposals would need listed building consent as well as planning permission.

  Local Authority Services
  Mr. John Marshall
  To ask the Secretary of State for the Environment when he expects to publish the research on "CCT and Local Authority Blue-Collar Services" by Austin Mayhead and Co. [20672]
  289
  Sir Paul Beresford
  My Department will publish today research on "CCT and Local Authority Blue-Collar Services" by Austin Mayhead and Co. It followed up an earlier piece of research into blue-collar compulsory competitive tendering carried out by the institute of local government studies at the university of Birmingham.

  This research confirms the progress that has been made in achieving greater efficiency and value for money in the delivery of local authority services through fair competition between in-house teams and private contractors. Average annual savings from blue-collar CCT in the second round are running at 9 per cent. compared with 6.5 per cent. in the first round. Most authorities recognise that the quality of CCT services has improved since the first round. Three quarters said that CCT had resulted in clearer and more comprehensive service specifications and two thirds thought it had resulted in a closer reflection of consumer needs.

  Only a minority—11 per cent.—of authorities, however, are supportive of the compulsory element of the CCT regime and almost a third said they would not undertake competitive tendering of services should compulsion be removed.

  The report looks at the experiences of authorities during the second round of tendering for blue-collar services and analyses data on costs, number of bids, changes in specifications and other factual information about contracts.

  I will place in the Library today copies of the executive summary of a copy of the full report entitled "CCT and Local Authority Blue-Collar Services".

PRIME MINISTER

  Pay Review Bodies
  Mr. Bernard Jenkin
  To ask the Prime Minister what is the current membership of the public sector pay review bodies. [20512]

  The Prime Minister
  The current membership, with effect from 1 April 1997, is as listed:

  Senior salaries review body

  Sir Michael Perry CBE (Chairman)

  Sir Gordon Hourston

  Sir Anthony Wilson

  Sir Sydney Lipworth QC

  Mrs. Rosemary Day

  Ms Patricia Mann

  Mr. Mark Sheldon

  The Hon. Michael Beloff QC

  Professor Sandra Dawson

  Mr. David Clayman.

  Armed forces pay review body

  Sir Gordon Hourston (Chairman)

  Mr. Michael Bolton

  Mrs. Dorothy Venables

  Mr. John Cox OBE

  Mr. John Crosby

  Vice Admiral Sir Toby Frere KCB (from July 1997)

  Sir Gavin Laird CBE

  Mrs. Kay Coleman.

  290
  Review body on nursing staff, midwives, health visitors and professions allied to medicine

  Mr. Bryan Rigby (Chairman)

  Miss Anne Mackie OBE

  Professor Gillian Raab

  Ms Ruth Lea

  Mrs. Shelia Gleig

  Mrs. Anne Dean

  Mr. Lawrence Lyndon Haddon

  Mr. Keith Miles.

  Review body on doctors and dentists remuneration

  Mr. Brandon Gough (Chairman)

  Mrs. Carol Hui

  Dr. Elizabeth Nelson

  Mr. David Penton

  Mr. Michael Innes

  Mr. Christopher King CBE

  Mrs. Beryl Brewer

  Mr. Roderick Jackson.

  School teachers review body

  Mr. Tony Vineall

  Mrs. Brigita Amey

  Mr. Michael Harding

  Mrs. Julia Cuthbetson

  Miss Janet Langdon

  Mr. Peter Gelding

  Mr. Vincent Harris.

TRANSPORT

  Marine Oil Pollution (Contingency Plans)
  Mr. Gordon Prentice
  To ask the Secretary of State for Transport (1) what estimate he has made of the annual cost to local authorities of(a) drawing up and (b) maintaining their contingency plans for dealing with marine oil pollution; [19299]

  (2) what arrangements are in place to check the adequacy and resilience of local authority contingency plans for dealing with marine oil pollution. [19300]

  Mr. Bowis
  I have asked the chief executive of the Coastguard agency, Mr. Chris Harris, to write to the hon. Member.

  Letter from C. J. Harris to Mr. Gordon Prentice, dated 13 March 1997:
  The Secretary of State for Transport has asked me to reply to your recent Questions about the costs to local authorities of drawing up and maintaining their contingency plans for dealing with marine oil pollution and the adequacy and resilience of these plans.
  The forthcoming review of the National Contingency Plan will include an exercise to identify the costs to local authorities of preparing and maintaining contingency plans.
  The National Contingency Plan, maintained by the Agency's Marine Pollution Control Unit (MPCU) states that "each coastal local authority at district, island, county or regional level, should have a contingency plan so that an effective counter-pollution response may be effected speedily at any time." A copy of the August 1996 version is now in the House of Commons Library.
  Annex 11 of the National Contingency Plan contains a list of items which should be included in local authority plans. MPCU encourages local authorities to submit their plans for the Unit to

  291
  check that they are consistent with the National Plan. The Unit notifies them of any omissions and may make suggestions for amendments and improvements. MPCU also holds four one week residential training courses for local authority staff, covering all aspects of contingency planning. It encourages local authorities to exercise their plans and carry out training using equipment from MPCU's stockpiles. From time to time MPCU takes part in local authority exercises and incorporates local authorities into MPCU's exercises.

  M45 (Litter)
  Mr. Pawsey
  To ask the Secretary of State for Transport, pursuant to his answer of 5 March,Official Report, column 609, if he will instruct the Highways Agency to publish figures relating to the regularity of litter collection on the M45. [19562]

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

  Letter from Lawrie Haynes to Mr. James Pawsey, dated 13 March 1997:
  The Secretary of State for Transport has asked me to reply to your recent question about the regularity of litter collection on the M45.
  The funding available for motorway and trunk road routine maintenance this year has been extremely tight. In these circumstances we have taken the view that our prime concern must be to maintain the safety of the motorway and trunk road network. Consequently, those activities directly related to road safety have first call on our funds.
  This means that the normal programme of routine maintenance works carried out by our agent authorities, in accordance with our Code of Practice, has had to be curtailed. We have not been able to carry out activities beyond those necessary for achieving safety. Litter picking on the hard shoulder of the M45 is carried out every four weeks, and additionally if the need arises. Verge scavenging on the M45 has not been carried out since March 1996.

  M25 (Works)
  Mr. Mackinlay
  To ask the Secretary of State for Transport how the Highways Agency will identify those projects that will be delayed or deleted as a consequence of the additional expenditure it will have to meet consequent upon the relaying of the capping and asphalt surfacing replacement between junctions 6 and 8. [19572]

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

  Letter from Lawrie Haynes to Mr. Andrew Mackinlay, dated 13 March 1997:
  The Secretary of State for Transport has asked me to reply to your recent question asking which projects will be delayed or deleted as a consequence of the additional expenditure on relaying the capping layer and renewing the asphalt surfacing between junctions 6 and 8 on the M25.
  It will be some time yet before we know accurately what the additional costs will be. They will be the subject of negotiations with the contractor and not all of them will fall to the Agency.
  It is therefore not possible to give a precise answer to the question but whatever the cost, we must manage our programme within our budget. That said, there are no proposals for deleting schemes as a consequence. The most likely outcome is an adjustment to the timing on delivering projects as part of our normal management of projects to budget. But given that any additional costs are minor in relation to our overall budget, any delays will be small.

  Traffic Congestion
  Mr. Andrew Smith
  To ask the Secretary of State for Transport if he will list those stretches of road, including 292
  bridges, classified as orange and red for congestion in 1995 for each region which have residual life of (a) nought years and (b) nought to four years; and if he will specify the maintenance planned for those stretches of road. [20136]

  Mr. Watts
  The residual life of the road network is held on a database comprising some 20,000 discrete sections designed to permit efficient computer analysis. The sections of the network covering the congestion maps and the residual life bands specified in the question are likely to number some 2,000 reference sections which could be identified and interpreted to provide a meaningful answer only at disproportionate cost.

  The Highways Agency's plans for future maintenance of the trunk road network have not yet been finalised.

  Coastguard Service
  Ms Walley
  To ask the Secretary of State for Transport (1) he will assess the impact of safety of the reduction in sector posts by the Coastguard agency; and if he will make a statement; [19022]

  (2) what assessment he has made of the effects of the increasing role of volunteers in supporting the Coastguard agency. [19021]

  Mr. Bowis
  I have asked the chief executive of the Coastguard agency to write to the hon. Member.

  Letter from C. J. Harris to Ms Joan Walley, dated 13 March 1997:
  The Secretary of State for Transport has asked me to reply to your recent Questions about the reduction in sector posts and the role of volunteers in supporting the Coastguard Agency.
  The recent review of uniformed coastguard officers has introduced a new higher grade sector manager level with enhanced responsibilities, skills and abilities. This will enable the number of administrative sectors to be reduced from 90 to 64. These changes are administrative and will not affect HM Coastguard's coastal response nor increase reliance upon volunteers.
  Although volunteers play a vital part in the service we provide, the Agency is not increasing their role or number. In fact the opposite is true; nearly 200 Coastguard Watch Assistants have been recruited to replace the part-time auxiliary volunteers in operations rooms and in regional and district offices.

FOREIGN AND COMMONWEALTH AFFAIRS

  European Commission Committees
  Mr. Spearing
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library(a) the titles and short description of the functions of each regulatory, advisory or other committee of the Commission of the European Communities, (b) the names and details of each member and (c) their method of appointments and the designation of their responsible officers; and if they publish an annual report. [19435]

  Mr. David Davis
  A list of Commission committees is in section III of volume 4 of the 1997 draft general budget of the European Communities which is available in the Libraries of the House. The other details requested are not held centrally and could be collated only at disproportionate cost.
  293

  Intergovernmental Conference
  Mr. Charles Kennedy
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress with the European IGC. [18312]

  Mr. David Davis
  The intergovernmental conference is progressing well. All member states are working towards a conclusion to the intergovernmental conference at the Amsterdam European Council.

EDUCATION AND EMPLOYMENT

  Departmental Web Site
  Mr. Sheerman
  To ask the Secretary of State for Education and Employment when her Department established its Internet site; what representations she has received and what data she has collated on the use and utility of the site; and what steps she is taking to increase the amount of information available via the site. [19142]

  Mr. Robin Squire
  The Department's Internet site was established with the merger of the former Education and Employment Departments in the summer of 1995, both of which had their own sites for a short time prior to this.

  No significant representations have been received about the site, except for a few constructive comment received from users. Statistics show that the site is accessed, on average, 35,000 times a week.

  The Department's policy is to extend its site, wherever possible, to provide information about its policy areas.

  Customer Charters
  Mr. Donohoe
  To ask the Secretary of State for Education and Employment how much her Department and its executive agencies have spent drafting, publishing and circulating each of their customer charters and customer standard documents; and how many copies of each document have been issued. [19393]

  Mr. Robin Squire
  The Department and its executive agencies publish four charters and one customer standard document. The costs of publishing these documents and the number of copies issued are as follows:

  Publishing and circulating (£ millions)

  Number of copies issued (millions)

  The parent's charter

  3.073

  20

  The jobseeker's charter

  0.02

  0.055

  The higher education and further education charters

  0.77

  2.87 2.42

  The overseas labour service statement of service standard

  0.002

  0.02

  The involvement of civil servants in drafting and preparing text is part of their normal responsibilities and cannot be quantified separately.

  It would compromise the Department's confidential tendering procedures to disclose separately the payments made for the circulation of charters.
  294
  The figures shown cover the costs of publishing and circulating the latest version of the jobseeker's charter. The information on costs for previous versions could be provided only at disproportionate cost.

  The higher education and further education charters were produced jointly. It is not possible to disaggregate costs. Although the main publishing and circulation costs are shown, there is some additional on-going expenditure which is not possible to itemise separately.

  Nursery Vouchers (Wandsworth)
  Mr. Cox
  To ask the Secretary of State for Education and Employment how many nursery vouchers have been taken up in the London borough of Wandsworth. [19490]

  Mr. Robin Squire
  The following table shows the numbers of nursery education vouchers issued to parents and redeemed, in whole or in part, for each term during phase 1 of the voucher scheme in Wandsworth.

  Summer 1996

  Autumn 1996

  Spring 1997–to date

  Vouchers issued

  3,123

  3,147

  3,026

  Vouchers redeemed in whole or part

  2,798

  2,760

  2,437

  Deaf and Visually Impaired Children (Teachers)
  Mr. Matthew Taylor
  To ask the Secretary of State for Education and Employment (1) which teachers of deaf children are required to hold a qualification for teaching the deaf; [19895]

  (2) what specialist qualifications for teaching the deaf are required of a teacher of hearing-impaired children in a special unit where that child is registered in a mainstream class. [19897]

  Mrs. Gillan
  Teachers of classes of hearing impaired children, including teachers of children registered in a mainstream class but taught in a special unit, are required to gain a qualification recognised by the Secretary of State, within three years of appointment.

  Mr. Taylor
  To ask the Secretary of State for Education and Employment what estimate her Department has made of(a) the number of schools and (b) the number of special classes, in England and Wales, which require teachers with a qualification for teaching the deaf. [19896]

  Mrs. Gillan
  In January 1995 there were 28 maintained and 13 non-maintained special schools for children with hearing impairments—source: table 10 of "Statistical Bulletin", 9/96. The Department does not collect statistics on special classes for hearing impaired children. Teachers of such a class, whether in a special school or a mainstream school, must gain an approved qualification.

  Questions relating to schools in Wales are a matter for my right hon. Friend the Secretary of State for Wales.

  Mr. Taylor
  To ask the Secretary of State for Education and Employment if statements made for(a) deaf and (b) visually impaired children below statutory school age, require prior consultation with an appropriately qualified teacher under the Education Act 1981; and if she will make a statement. [19894]
  295
  Mrs. Gillan
  The Education (Special Educational Needs) Regulations 1994 require local education authorities making a statutory assessment of a child with hearing and/or visual impairment to seek advice from a teacher with a relevant qualification. The Government have no plans to change this requirement.

  Private Finance Initiative (Bolton)
  Mr. Thurnham
  To ask the Secretary of State for Education and Employment what decision has been reached concerning funding by the private finance initiative for the Caste Hill site in Bolton; and if she will make a statement. [19015]

  Mr. Robin Squire
  Bolton local education authority is assessing the feasibility of using the private finance initiative to take forward a project to build a replacement primary school and community facilities on the Castle Hill site. It is for the authority to decide whether the PFI offers the best value for money for the project.

  I am encouraged by the amount of interest that has been shown by local education authorities in the PFI to date. There are currently 15 pathfinder projects across the schools sector, including LEA, grant-maintained and voluntary-aided schools. There is a wide range of projects: examples include replacement secondary and primary schools and grouped projects for catering, information technology equipment and energy management facilities.

  Enborne Lodge School
  Mr. Rendel
  To ask the Secretary of State for Education and Employment, pursuant to her answers of 4 March 1997,Official Report, columns 557–58, if the proceeds of the sale of Enborne Lodge school will be divided according to the provisions in force at the time of the decision to sell or those in force at the time of the sale itself. [19952]

  Mrs. Gillan
  A final decision on the interpretation of legislation would be a matter for the courts. Subject to that, however, my right hon. Friend considers that the provisions which would apply would be those in force at the time of any sale. Proposals by the Association of London Government which would affect the arrangements for sharing the proceeds from disposal of certain former Inner London education authority property are at present under consideration.

  Teachers' Pay
  Mr. Peter Bottomley
  To ask the Secretary of State for Education and Employment what is the outcome of the consultation on her proposals to accept the School Teachers Review Body's recommendations for a 3.3 per cent. increase for teachers. [20614]

  Mrs. Gillian Shephard
  I am today confirming that I am accepting the School Teachers Review Body's recommendation to increase teachers' pay by 3.3 per cent. This award will be staged so that teachers will receive 2 per cent. on 1 April 1997 and the remainder on 1 December 1997. I will lay an order before Parliament which will give the values of the new spine points, scale and allowances with effect from 1 April 1997 and 1 December 1997.
  296
  I am writing to the teacher associations, the National Employers Organisation for School Teachers and the head teachers and chairmen of governors of all schools in England and Wales notifying them of my decision. Officials will be writing to other interested parties.

  I am announcing my confirmation of the pay award immediately because I want teachers to receive the first stage of their pay increase as soon as possible after 1 April 1997.

  I have received a number of representations about the level of the award and the staging of it and considered them carefully. The Government have decided to stage the pay awards for all the review body groups this year. Staging will make it possible to accommodate the costs within spending plans without prejudicing the planned level of service delivery. In addition, staging reflects the Government's view that settlements should be lower this year both generally throughout the public sector and specifically for the pay review body groups. I believe that phasing the increase will make it more manageable for local education authorities and schools.

  I have also decided to confirm my other proposals listed, which will come into force from 1 September 1997 by means of revisions to the "School Teachers' Pay and Conditions Document":

  (i) the STPCD should be amended to make it clear that sick leave should count as a period of service for the purpose of the award of experience points, but that the award of such points for absences from duty other than for holiday periods and maternity leave should be discretionary;

  (ii) within one month of the commencement of a period of absence of a head or a deputy the governing body should be required to consider whether payment of an acting allowance would be appropriate to an individual who is called upon to act as the head or deputy;

  (iii) the level of an acting allowance should ensure that the individual receives remuneration equivalent to an appropriate point on the pay spine for heads and deputies, not less than the minimum of the normal range for the school group but not necessarily the same as for a substantive postholder whose salary may reflect factors particular to the individual;

  (iv) individuals acting as heads or deputies and in receipt of an acting allowance should be regarded during that time as having the conditions of employment of the post for which they are temporarily being paid;

  (v) where teachers in charge of Pupil Referral Units (PRUs) are paid as heads they should be subject to the conditions of employment of heads; and

  (vi) where other centrally-based teachers are paid as heads or deputies their conditions of employment should be agreed on a separate contractual basis.

  I also confirm the following proposals which are not statutory recommendations because they will not in themselves require changes to be made to the STPCD 1996:

  (i) that appropriate guidance should be included in the NEE Circular on the application and management of the obligation of teachers to provide cover for absent colleagues, and the importance of effective management and monitoring of teacher absence;

  (ii) guidance should be provided in the DfEE's pay Circular which makes it clear that an acting allowance should be paid from, or backdated to, the time that the individual is called upon to perform functions that require the full authority of the post to be exercised, for example formulating aims and policies or appointing staff;

  297

  (iii) the Circular which accompanies the School Teachers' Pay and Conditions Document should include guidance based on the presumption that teachers in charge of PRUs should be paid as headteachers unless local circumstances make clear this is inappropriate, for example where the PRU is particularly small or part of an organisational structure which makes it different from other PRUs.

  Finally, on the STRB's recommendation that teacher governors should not be members of committees which determine the individual levels of pay of heads and deputies at their own school, I decided not to take a decision until after consultation. The arguments are balanced; I have now decided that the question will be considered further in the context of the review of the school government regulations. This will leave the matter as one for local discretion for the time being.

  Learning Credits
  Mr. Peter Bottomley
  To ask the Secretary of State for Education and Employment what plans she has for the implementation of learning credits; and if she will make a statement. [20615]

  Mr. Paice
  The White Paper "Learning to Compete", Cm 3486, published in December 1996 set out the Government's intention to introduce, progressively from September 1997, a new learning credits entitlement for all young people aged 14 to 21 to career planning and learning opportunities up to level 3. This will clarify and make more coherent young people's entitlement to post-16 learning and career planning, and increase still further their participation, motivation and attainment. Learning credits will be issued nationally from Easter 1998 to all 16-year-olds completing compulsory education.

  The consultation document "A Passport to Learning" published alongside the White Paper sought views on how learning credits should be implemented and their scope for further development.

  The Government's proposals have been warmly welcomed by respondents across the education and training worlds.

  The new learning credits entitlement includes:

  an improved entitlement to two weeks' work experience pre-16;

  enhanced careers education and guidance from 14;

  a new national record of achievement from 14;

  access by age 21 to learning opportunities leading, where appropriate, to level 3 qualifications; and

  continuing independent advice from the careers service post-16.

  The effective delivery of this entitlement will require the active partnership of careers services, training and enterprise councils, the Further Education Funding Council, local education authorities, schools, colleges and training providers.

  In taking forward learning credits through local partnerships, the Government believe that careers services should have the central role in delivering the learning credits entitlement. From September 1997 they will be responsible for a range of tasks including:

  issuing learning credits to those entering year 11;

  preparing young people in years 9 and 10, through group sessions, for learning credits;

  informing parents and schools about learning credits; and

  298

  providing extra help to those young people requiring further advice on how to use the learning credit.

  I am allocating £5.5 million to careers services for 1997–98 to enable them to fulfil these roles.

  The Government have decided that, initially, the learning credit will be in the form of a simple card which will be made available to all young people completing their compulsory education from Easter 1998. The experience of training and enterprise councils in delivering youth credits has shown that such cards can be a very effective mechanism for focusing young people on the range of options open to them.

  Learning credits will be made available to all young people. They will build on the best of youth credits arrangements. We intend to consider the potential for developing the card further to form the basis of systems for tracking more effectively how young people progress in post-16 learning. This should lead to improvements in planning, and contribute to evaluation of the effectiveness of learning provision and of the guidance process.

  The year 1997–98—the first year of learning credits—will be a transitional year. Careers education and guidance will be targeted, so that young people in their final year of compulsory education are advised how to use their credit effectively. In future years young people will receive this advice and guidance within a structured and coherent careers education, guidance and information package spanning years 10 and 11.

  Youth credits will be relevant to the transitional arrangements. Training and enterprise councils will be able, for 1997–98, either to adopt the national learning credits format from the outset or to continue with their current youth credit arrangements for the work-based route.

  More detailed guidance covering the implementation of learning credits will be made available to the key partners shortly.

  "A Passport to Learning" generated a great deal of interest in the potential for links to be developed between learning credits and the national record of achievement and lifetime learning. The Government will continue to reflect on these ideas.

WALES

  Local Government Finance
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement concerning the expected levels of council tax in 1997–98. [19213]

  Mr. Gwilym Jones
  Local authorities in Wales are required to notify my Department of the level of council tax set for 1997–98 by 17 March 1997. The available provisional information is given in the following table. I shall write to the hon. Member when final figures are available and place a copy of my letter in the Library of the House.

  Average band D Council taxes—1997–98

  Unitary authority

  Average band D payable1

  £

  Blaenau Gwent

  —

  Bridgend

  539

  Caerphilly

  —

  299

  Average band D Council taxes—1997–98

  Unitary authority

  Average band D payable1

  £

  Cardiff

  486

  Ceredigion

  562

  Conwy

  403

  Denbighshire

  —

  Flintshire

  511

  Gwynedd

  515

  Isle of Anglesey

  424

  Merthyr Tydfil

  569

  Monmouthshire

  403

  Neath Port Talbot

  619

  Newport

  413

  Pembrokeshire

  451

  Powys

  —

  Rhondda, Cynon, Taff

  —

  Swansea

  478

  Torfaen

  483

  The Vale of Glamorgan

  —

  Wrexham

  —

  1 After damping, including amounts for police, community councils, discretionary non-domestic rate relief.

  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on local authority capital expenditure plans for the year 1997–98. [19508]

  Mr. Gwilym Jones
  I refer the hon. Member to my right hon. Friend's statement on 12 December 1996 on public expenditure in Wales for 1997–98,Official Report, columns 405–19.

  Mr. Barry Jones
  To ask the Secretary of State for Wales when he proposes to increase the percentage of capital sales receipts available to local authorities; and if he will make a statement. [19503]

  Mr. Gwilym Jones
  The Government currently have no plans to increase the percentage of usable capital receipts from the sale of local authority assets. Authorities have to set aside a proportion of receipts from the sale of capital assets for debt redemption. If they were allowed to spend their set-aside resources, either other areas of spending would need to be reduced to ensure that debts were paid off or public spending as a whole would rise.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what representations he has received relating to changes to the formulae for the standard spending assessments; and if he will make a statement. [19505]

  Mr. Gwilym Jones
  The distribution formula for 1997–98 was ratified by the Welsh Consultative Council on Local Government Finance. A joint Welsh Office-Welsh Local Government Association review of the formula is under way for 1998–99. Recommendations for change will be considered by the consultative council in the autumn.

  Youth Unemployment
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on current levels of youth unemployment in(a) the previous county of Clwyd and (b) the county of Flintshire. [19512]

  Mr. Gwilym Jones
  In January 1997 there were 3,482 persons aged under 25 on the claimant unemployment count in the former county of Clwyd. The corresponding figure for Flintshire was 985.
  300

  NHS Trusts
  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 10 March,Official Report, column 38, to the hon. Member for Clwyd, North-West (Mr. Richards) on NHS trusts mergers, what estimate he has made of (a) the transitional costs of achieving the trust merger, (b) recurring administrative savings and (c) the time which it will take to reach the recurring administrative costs. [20084]

  Mr. Hague
  It is estimated by the trusts that the merger will result in recurring savings of up to £1 million starting in 1998–99. The level of transitional costs will depend upon the trust board's decisions on management arrangements in the new organisation.

  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 10 March,Official Report, column 38, to the hon. Member for Clwyd, North-West on NHS trust mergers, when he expects to appoint the (a) chairman and (b) board members of the newly merged trust. [20083]

  Mr. Hague
  Interim arrangements will be announced shortly which will enable the appointments to be made in line with the code of practice for public appointments issued by the Commissioner for Public Appointments.

  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 10 March,Official Report, column 38, to the hon. Member for Clwyd, North-West on NHS trust mergers, what estimate he has made of the job losses associated with the merger (a) before 1 April 1997 and (b) after 1 April 1997; and what estimate he has made of the winding-up costs in connection with the termination of services of board members. [20085]

  Mr. Hague
  There will be no job losses associated with the merger of the Pembrokeshire and Derwen NHS trusts before the new trust becomes operational on 1 April 1997. The detail of any job losses and costs incurred after that date will be a matter for the new trust board.

  Nursery Education (Conwy)
  Mr. Richards
  To ask the Secretary of State for Wales (1) how many children in Conwy he estimates will register for nursery education by the local education authority in the next 12 months; and if he will make a statement; [19957]

  (2) what estimates he has made of the value of nursery voucher redemption to Conwy county borough council; and if he will make a statement. [20041]

  Mr. Jonathan Evans
  Conwy county borough council has estimated that there will be 1,066 voucher-bearing children in their schools in the 1997 summer term. At this level, total annual voucher income for the authority would be £1,172,600.

  Mr. Richards
  To ask the Secretary of State for Wales (1) what justification Conwy county borough council has submitted to him in respect of increases in(a) centrally held school budgets and related services and (b) provision for the rationalisation of nursery education; [19958]

  (2) if he will make a statement on the costed items Conwy county borough council has included under the heading "Demography" in its education budget. [19959]
  301
  Mr. Evans
  Statements of the financial provision local authorities plan to make for schools they maintain have to be submitted before the start of the financial year. Information has not yet been received from Conwy county borough council.

  Community Hospitals
  Mr. Morgan
  To ask the Secretary of State for Wales what consultations he has had with the chairman of the Welsh Health Common Services Authority concerning the quality of project management of community hospitals by(a) Beard Dove and (b) Welsh Health Estates. [20082]

  Mr. Hague
  None. Welsh Health Estates does not act as project manager.

  Mr. Morgan
  To ask the Secretary of State for Wales what consultations he has had with the chairman of the Llandough NHS trust concerning the termination of the services of Beard Dove as the project management company for the Barry community hospital and its replacement by Welsh Health Estates. [20086]

  Mr. Hague
  None. This is a matter for the trust. However, Welsh Health Estates is not acting as project manager but is advising the trust.

  Suicides and Fatal Accidents
  Mr. Flynn
  To ask the Secretary of State for Wales how many and what percentage of the population in Wales have(a) committed suicide and (b) suffered a fatal accident in each of the last seven years; and if he will make a statement. [20036]

  Mr. Gwilym Jones
  The latest available, complete, annual figures from the Office for National Statistics for residents of Wales are shown in the following table:

  Suicides1

  Fatal accidents2

  Number

  Rate per 100,000

  Number

  Rate per 100,000

  1989

  264

  9.2

  719

  25.1

  1990

  303

  10.5

  711

  24.7

  1991

  337

  11.7

  717

  24.8

  1992

  335

  11.6

  698

  24.1

  1993

  297

  10.2

  673

  23.2

  1994

  331

  11.8

  690

  24.5

  1995

  317

  10.9

  708

  24.3

  1International Classification of Diseases: E950–E959, E980–E989 excluding E988.8.

  2 ICD E800–E929.

  Local Management of Schools (Conwy)
  Mr. Richards
  To ask the Secretary of State for Wales what changes Conwy county borough council has notified his Department it has made to its local management of schools scheme; and if he will make a statement. [20042]

  Mr. Jonathan Evans
  Conwy county borough council has not submitted any proposals for changes.

NORTHERN IRELAND

  Department of Agriculture (Personnel Documents)
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what inquiries he has conducted to 302
  establish who was responsible for passing restricted Department of Agriculture personnel documents to the Irish News; when the RUC was informed; what action can be taken against those held responsible; and to what extent such action takes account of the Northern Ireland civil service fair employment code. [18750]

  Sir Patrick Mayhew
  The permanent secretary of the NIO and the head of the Northern Ireland civil service has ordered an inquiry into the leakage to the media of documents and other information relating to the identity, records and deployment of civil servants in Northern Ireland. That inquiry will be headed by Mr. William Innes, a former senior Whitehall official with experience of government in Northern Ireland.

  If the inquiry indicates that a criminal offence may have been committed, the RUC will be informed.

  Only when the inquiry has been completed can a decision be taken on appropriate action. If that action involves a civil servant, it will comply with the civil service pay and conditions of service code.

  Sectarian Harassment
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland on what date a claim of sectarian harassment was lodged against the Department of Agriculture and one of the Minister's private office staff; on what date the claimant was transferred out of her private office; and if he will make a statement. [18751]

  Sir Patrick Mayhew
  The complainant raised orally allegations of sectarian harassment on 31 July 1995 and followed this up as requested in writing on 8 August 1995. A formal complaint of sectarian harassment was lodged with the Fair Employment Tribunal against the Department of Agriculture on 4 October 1995.

  The complainant was told of her transfer on 28 July 1995, informed orally about her new post on 7 August 1995 and took up her new post on 10 August 1995.

  Civil Service Graduates
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland if he will list for the most recent year for which figures are available(a) the percentage and number of school leavers who obtained a degree and (b) the percentage and number of posts requiring a degree filled in the Northern Ireland civil service clerical and administrative grades; and if he will ensure that the admission procedure does not discriminate against graduates. [18752]

  Sir John Wheeler
  It is estimated that 27 per cent. of school children in Northern Ireland—some 6,700—graduate by the age of 25.

  In the year 1996–97 a total of 735 clerical and administrative vacancies were filled in the non-industrial Northern Ireland civil service, of which 20, 2.7 per cent., required a degree as a condition of entry. The remaining 715 posts were standard clerical appointments where the nature of work to be performed does not require applicants to possess a graduate level qualification. Recruitment procedures to the NI civil service reflect the service's firm commitment to equality of opportunity in

  303
  employment; entry standards for particular posts are set in relation to the nature of the work to be performed and all applicants are considered strictly on the basis of merit.

  Northern Ireland Forum
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what plans he has to allow the Northern Ireland Forum to continue operating during any castle buildings talks adjournment. [18754]

  Sir Patrick Mayhew
  The Northern Ireland (Entry to Negotiations, etc) Act 1996 places me under a duty to make, subject to approval of a draft in each House, an order to withdraw from effect the provisions establishing the Forum if it appears to me that the negotiations have been concluded or suspended.

  On 10 March I announced that I had concluded that the talks were suspended, following the decision of the plenary session to adjourn until 3 June, and taking account of all the circumstances. In accordance with my statutory duty I therefore laid before Parliament the draft Northern Ireland (Entry to Negotiations, etc) Act 1996 (Cessation of Section 3) Order 1997.

  If the draft order is approved, the Forum will not be able to operate in any form. It will be possible for a new Secretary of State to bring before the next Parliament a further draft order reviving the Forum.

  Respite Care
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what plans he has to improve respite care facilities for special school students and their parents in the North Down and Ards area; and what factors underlay the closure of the South Eastern education and library board's summer schemes. [18755]

  Mr. Ancram
  There is no statutory requirement for education and library boards to provide summer schemes at special schools and my Department has no approval function to exercise. I understand that, in reaching its decision to discontinue the schemes, the board took into account concerns about the supervision and safety of pupils.

  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland when the respite care centre at Beechfield avenue, Conlig, Newtownards, will come into service; and if he will make statement. [18757]

  Mr. Moss
  A range of services for children with learning disability are currently provided by the centre. An afternoon club offering after school respite will restart shortly. Full use will be made of the facility as soon as an analysis of the findings of a detailed and comprehensive assessment of the needs of families with children with learning disability has been completed.

  Training Centres
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland if he will list the training centres indicating(a) their capacity and (b) the total number of trainees currently at each. [18759]
  304
  Mr. Ancram
  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 11 March 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 Agency's Training Centres.
  The Agency has 10 Training Centres in Northern Ireland. The following chart details the trainee capacity and the number of trainees currently at each Centre.

  Centre

  Physical capacity

  Current in-centre occupancy

  Ballymena

  330

  194

  Craigavon

  308

  129

  Dundonald

  408

  208

  Enniskillen

  204

  125

  Felden

  419

  152

  Lisburn

  216

  206

  Maydown

  208

  86

  Newry

  358

  155

  Omagh

  192

  122

  Springtown

  340

  122

  I hope you find this information useful.

  Acute Hospital Reorganisation Project
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland when he expects to announce his decisions on tranches 2 and 3 of the acute hospital reorganisation project; and if he will make a statement. [18760]

  Mr. Moss
  The position with regard to tranche 2 is that following receipt of the recommendations from the project steering group additional work had to be undertaken in relation to the recommendation on maternity services. This is now complete and I hope to make an announcement on all aspects of tranche 2 in the near future.

  Following consultations on tranche 3, the steering group put recommendations to me on 29 November 1996. I, in turn, consulted relevant bodies, inviting comments by mid-February. I will be considering these shortly and will announce my decisions soon afterwards.

  Clifton Special Care School
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland if he will make a statement about the summer schemes for mentally disabled children at Clifton special care school, Bangor; and what assessment he has made of the advantages of parents covering the cost of the schemes. [18756]

  Mr. Ancram
  There is no statutory requirement for education and library boards to provide summer schemes at special schools and my Department has no approval function to exercise. I understand that, in reaching its decision to discontinue the scheme at Clifton special school, the South Eastern education and library board took into account concerns about the safety and supervision of pupils. Any further proposals from parents should be put to the board for consideration.
  305

  Housing Executive Dwellings
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how many fires in Housing Executive properties in each of the last three years are estimated to have resulted from a failure to observe building regulations. [18970]

  Mr. Moss
  I am advised by the chief executive of the Northern Ireland Housing Executive that the answer is none.

  Noxious Smell (Newtownards)
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what investigations he has conducted into the source of the noxious smell detectable at Manse road, Manse park and Manse green, Newtownards; and what action the Water Service of the Department of Environment (Northern Ireland) proposes to take. [18758]

  Mr. Moss
  Responsibility for this matter has been delegated to the Water Service under its chief executive, Mr. H. R. F. Plester. I have asked him to arrange for a reply to be given.

  Letter from H. R. F. Plester to Mr. John D. Taylor, dated 10 March 1997:
  Mr. Moss has asked me to reply to your recent Parliamentary Question about the source of the noxious smell detectable at Manse Road, Manse Park and Manse Green, Newtownards, and what action the Water Service proposes to take.
  On 25 February 1997 Water Service officials and officers from the Environmental Health Department, Ards Borough Council, investigated a complaint about a smell at 7 & 12 Manse Green, Newtownards. This investigation established that the smell was not then emanating from the sewers or drainage culverts which serve the Manse Green area. Further checks by Water Service staff on 5 March 1997 revealed no evidence of any smell from the public sewers.

  Table 2: GP fundholders expenditure on the purchase of healthcare from non-HPSS providers

  Northern board area

  Southern board area

  Eastern board area

  Western board area

  Northern Ireland area

  £

  £

  £

  £

  £

  1995–96

  105,695

  13,740

  258,278

  65,231

  442,944

  This information was supplied by the individual Health and Personal Social Services Boards.

  Visual Handicap
  Mr. Thurnham
  To ask the Secretary of State for Northern Ireland how many people are registered(a) blind and (b) partially sighted. [19084]

  Mr. Moss
  Information is not collected centrally in the format requested. The numbers of blind and particularly sighted people in Northern Ireland who were in contact with health and social service providers during the year ended 31 March 1996 were 3,634 and 2,514 respectively.

  Organic Farming
  Mr. Flynn
  To ask the Secretary of State for Northern Ireland how many and what percentage of farms in Northern Ireland are currently classified as organic; and if he will make a statement. [19858]
  306
  The matter will continue to be investigated, as part of a process of elimination, by the Water Service in conjunction with the Ards Borough Council's Environmental Health Department. This liaison is on the basis that while Water Service considers its infrastructure is not the source of the smell problem this can best be proven definitively by further testing of the sewer system on the next occasion the problem is generally manifested in the area.

  Non-NHS Health Care Providers
  Mr. Chris Smith
  To ask the Secretary of State for Northern Ireland what was the total expenditure on the purchase of health care from non-NHS providers in 1995–96 by(a) health boards, (b) fundholding GPs and (c) NHS trusts in Northern Ireland. [18795]

  Mr. Moss
  The information requested is set out in the tables.

  Table 1 discloses expenditure by health and personal social services on the purchase of health care, personal social and related services from non-HPSS bodies and grants to voluntary organisations is also disclosed.

  This information has been extracted from the "Summary of Health and Personal Social Services and Special Agencies Accounts for 1995–96".

  Table 2 discloses expenditure by general practitioner fundholders on the purchase of health care and personal social services form non-HPSS providers.

  This information has been supplied by the individual health and personal social services boards.

  Table 1: Expenditure on non NHS providers in 1995–96

  Year

  HPSS Boards Other providers of health care and personal social services

  HSS trusts purchase of care from non-HPSS bodies and grants to voluntary organisations

  £

  £

  1995–96

  3,917,680

  64,382,000

  The information has been extracted from the Notes to the Accounts in the Summary of HPSS and Special Agencies Accounts for 1995–96

  Mr. Ancram
  [holding answer 11 March 1997]As at February 1997, there were 11 registered organic units in Northern Ireland. These constitute 0.04 per cent. of total active farms in Northern Ireland.

  Schools (North Down)
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland how many pupils there are at each primary and secondary school in North Down; and what is the permanent physical capacity of their buildings for enrolments, indicating any under-use or over-use. [19925]

  Mr. Ancram
  The information requested is set out in the table. The Department's calculation of a school's physical capacity is based solely on teaching spaces in both permanent and temporary accommodation. The
  307
  figures given are estimates of the capacity of the school's permanent accommodation for teaching purposes.

  School name

  Number of pupils at October 1996

  Capacity of permanent accommodation

  Primary schools

  Ballyholme Primary School

  Bangor

  721

  406

  Ballymagee Primary School

  Bangor

  283

  408

  Bangor Central Primary School

  Bangor

  455

  337

  Bloomfield Road Primary School

  Bangor

  350

  408

  Clandeboye Primary School

  Bangor

  504

  544

  Conlig Primary School

  Conlig

  59

  72

  Crawfordsburn Primary School

  Crawfordsburn

  134

  141

  Dundonald Primary School

  Dundonald

  587

  389

  Gilnahirk Primary School

  Belfast

  466

  358

  Glencraig Primary School

  Holywood

  197

  252

  Grange Park Primary School

  Bangor

  333

  203

  Groomsport Primary School

  Groomsport

  49

  145

  Holywood Primary School

  Holywood

  536

  348

  Kilcooley Primary School

  Bangor

  200

  567

  Kilmaine Primary School

  Bangor

  862

  494

  Rathmore Primary School

  Bangor

  511

  608

  Redburn Primary School

  Holywood

  178

  356

  St. Comgall's Primary School

  Bangor

  249

  233

  St. Malcachy's Primary School

  Bangor

  342

  437

  St. Patrick's Primary School

  Holywood

  224

  316

  Towerview Primary School

  Bangor

  361

  405

  Tullycarnett Primary School

  Knock

  299

  552

  Secondary and Grammar schools

  Bangor High School

  Bangor

  998

  681

  Bangor Grammar School

  Bangor

  920

  952

  Glenlola Collegiate

  Bangor

  1,014

  623

  Gransha Boys High School

  Bangor

  588

  764

  Holywood High School

  Holywood

  352

  415

  Our Lady and St. Patrick's College

  Knock

  1,233

  806

  St. Columbanus's High School

  Bangor

  458

  398

  Sullivan Upper School

  Holywood

  1,057

  1,044

  Secure Training Schools (Girls)
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what assessment he has made of the need for a secure training school for girls; what facilities are currently available for girls requiring escape-proof custody; and if he will make a statement about his capital expenditure priorities in relation to such offenders. [19926]

  Sir John Wheeler
  There are currently no girls under the age of 17 held at Maghaberry young offenders centre.308
  A review of training school accommodation, including secure accommodation for girls, is being undertaken in light of the proposal for a draft Criminal Justice (Children) (Northern Ireland) Order, which was issued for consultation in February this year.

  Driving-related Offences
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland how many custodial sentences were imposed in the last three years for a first offence on 17-years-olds convicted of driving-related offences not involving excess alcohol or car stealing; and if he will make a statement on the use of custodial sentences for those convicted of dangerous driving without fatal consequences. [19927]

  Sir John Wheeler
  The number of persons aged 17 years given custodial sentences for driving offences not involving excess alcohol or theft of a car, and the number of cases in which it was the first offence of any sort, for the years 1994 to 1996 were:

  Custodial sentences

  First offence

  1994

  37

  7

  1995

  19

  6

  1996

  16

  2

  Totals

  72

  15

  The use of custodial sentences for persons convicted of dangerous driving without fatal consequences is an issue for the courts to decide after consideration of all aspects of individual cases.

  Amnesty International
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what representations he has received from Amnesty International since 1 September 1994 in relation to the Northern Ireland troubles. [19928]

  Sir John Wheeler
  Amnesty International has written to my office on three occasions during the period. One letter was to inform the Government of a visit by Amnesty International to Northern Ireland to 13 to 18 October 1996, another enclosed the report entitled "UK Summary of Human Rights Concerns" and the third discussed the available information about Bloody Sunday.

  Sexual Offences (Protected Material) Bill
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland if he will make it his policy to seek to amend the Sexual Offences (Protected Material) Bill to extend its provisions to Northern Ireland from the time of its coming into force; and if he will make a statement on the merits of the Bill in relation to Northern Ireland. [19930]

  Sir John Wheeler
  The Bill has been drafted to meet the particular circumstances in England and Wales as identified by responses to the Home Office consultation document "Sentencing and Supervision of Sex Offenders" which was issued in June 1996. The Law Society in England and Wales has undertaken to amend its code of discipline so as to ensure that defence lawyers comply with the provisions in the Bill on supervised access.
  309
  The Home Office document was also circulated in Northern Ireland. On the particular issue of the misuse of victim's statements, the Northern Ireland responses did not produce any evidence of a major concern but did indicate a general consensus on the importance of developing solutions which reflected the needs of Northern Ireland.

  The Government believe that the matters addressed by the Bill do merit application in Northern Ireland and intends to bring forward legislation after appropriate consultation with interested parties.

  New Schools
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland for what reasons his power to specify a time before which proposals to open new schools could not be reconsidered was not invoked in the current year before resubmissions commenced. [19931]

  Mr. Ancram
  A power which enables the Department of Education to specify the form, content and timetable for statutory proposals for the establishment of new grant-maintained integrated schools, was included in the Education (Northern Ireland) Order 1996. In view of the existence of administrative guidance to the education and library boards and the Northern Ireland Council for Integrated Education about the timetable for the submission and publication of such proposals, it was not considered necessary to invoke this power immediately.

  However, in light of the recent submission of development proposals for the establishment of two new GMI schools, outside the recommended timetable, my Department has issued a direction on 6 March 1997 to all education and library boards under article 71 of the Education Reform (Northern Ireland) Order 1989 specifying the timetable to be applied to all future proposals.

  Year

  Suicides

  Fatal accidents

  Injuries undetermined whether accidentally or purposely inflicted

  Population

  Suicides as percentage of total population

  Fatal accidents as percentage total population

  Undetermined as percentage of total population

  1989

  116

  453

  18

  1,582,970

  0.007

  0.029

  0.001

  1990

  158

  460

  10

  1,589,353

  0.010

  0.029

  0.001

  1991

  129

  495

  19

  1,601,387

  0.008

  0.031

  0.001

  1992

  107

  377

  21

  1,618,406

  0.007

  0.023

  0.001

  1993

  129

  393

  22

  1,631,827

  0.008

  0.024

  0.001

  1994

  138

  433

  13

  1,641,711

  0.008

  0.026

  0.001

  1995

  122

  392

  24

  1,648,960

  0.007

  0.024

  0.001

SCOTLAND

  Extra-corporeal Membrane Oxygenation
  Mr. Etherington
  To ask the Secretary of State for Scotland if he will list those hospitals in Scotland which have facilities to provide extra-corporeal membrane oxygenation for children aged(a) up to six months and (b) six months and over; and how many paediatric intensive care beds there are in each of the units with extra-corporeal membrane oxygenation facilities. [19495]

  Lord James Douglas-Hamilton
  The Royal hospital for sick children in Glasgow has facilities to provide extra-corporeal membrane oxygenation—ECMO—for
  310

  Military Complaints Procedures
  Mr. Jacques Arnold
  To ask the Secretary of State for Northern Ireland when he intends to lay before Parliament the fourth annual report of the independent assessor of military complaints procedures in Northern Ireland. [20480]

  Sir Patrick Mayhew
  I have today arranged for the fourth annual report of the independent assessor of military complaints procedures in Northern Ireland to be laid before each House of Parliament. I note that the assessor has commented that the complaints procedures and their operation are being given proper attention by the Army and that he is not aware of any public misgivings in this area during 1996. The report provides welcome reassurance to the Government and to the public that the Army's complaints procedures withstand scrutiny. The number of formal non-criminal complaints registered in 1996 remains low despite the increase in Army patrolling made necessary as a result of the renewed terrorist campaign.

  Street Names
  Dr. Hendron
  To ask the Secretary of State for Northern Ireland under that legislative powers councils have the power to rename streets. [19953]

  Mr. Moss
  Article 11 of the local Government (Miscellaneous Provisions) (Northern Ireland) Order 1995 provides the authority for district councils to determine the name by which a street is to be known.

  Suicides and Fatal Accidents
  Mr. Flynn
  To ask the Secretary of State for Northern Ireland how many and what percentage of the population in Northern Ireland have(a) committed suicide and (b) suffered a fatal accident in each of the last seven years; and if he will make a statement. [20035]

  Sir John Wheeler
  The number of deaths registered as suicides and fatal accidents along with details of the percentage of the population in each of the last seven years are set out in the table.

  children aged up to six months and six months and over. The hospital has 121 paediatric intensive care beds and can provide ECMO treatment in both its paediatric intensive care and neo-natal surgical intensive care units.

  The Royal hospital for sick children in Edinburgh has ECMO facilities which are used only occasionally as support for other treatments.
  1At March 1996.

  Consultants
  Mr. Wallace
  To ask the Secretary of State for Scotland what is the total cost of consultants' reports commissioned by his Department since 1 April 1995; and
  311
  if he will summarise the identifiable savings achieved as a result of implementing the recommendations of reports. [19515]

  Lord James Douglas-Hamilton
  [holding answer 10 March 1997]The total cost of management consultancy work commissioned by the Scottish Office for the period 1 April 1995 to 31 March 1996 was £5,440,000. Information for the current financial year is not yet available.

  In 1995–96 some 150 consultancy contracts were led by the Scottish Office. Given the wide range of responsibilities and activities of the Scottish Office, the consultancy projects related to many different areas of business.

  The Scottish Office follows the guidance given in the August 1994 report of the Cabinet Office efficiency scrutiny on the use of external consultants. External consultants are engaged only when internal resources are not available, best procurement practices are followed to ensure that value for money is obtained, and all consultancy assignments are subjected to post-contract reviews. Not all consultancy projects lend themselves to analysis in terms of savings, but I am satisfied that the intelligent and selective use of consultants has consistently delivered worthwhile solutions and benefits for the Scottish Office in recent years.

  Dental Treatment (Complaints)
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will review the adequacy of provision for considering late complaints about dental treatment in cases where professional opinion verifies that the patient could not reasonably have been expected to realise there were grounds for complaint within the time limits set. [19047]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]No. On 1 April, after Mr. W. J. Duff had ceased to practice, a new system was introduced for the consideration of complaints against family health service practitioners, separately from discipline procedures. Normally complaints have to be made within six months of the event which is the subject of the complaint, or within six months of the patient becoming aware of the problem, provided that this is within 12 months of the event. There is, however, discretion to accept late complaints for investigation. Guidance issued to health boards makes it clear that this should be exercised with flexibility and sensitivity, and there is a procedure for decisions by complaints officers in health boards to be reviewed at the request of the complainer.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland for what reasons Moann Russell was awarded(a) the maximum amount for remedial treatment and (b) no compensation within the non-statutory complaints procedure in respect of NHS treatment. [19632]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: Mrs. Russell's complaint was made on 11 June 1994 and therefore fell to be dealt with under the National Health Service (Service Committees and Tribunal) (Scotland) Regulations in force at the time, as did the determination of any sum payable to her for remedial treatment.
  312
  The non-statutory complaints procedure came into force on 1 April 1996 for complaints made on or after that date.

  Mr. W. J. Duff
  Mrs. Fyfe
  To ask the Secretary of State for Scotland what were the dates on which patients raised complaints in each of the cases referred to Greater Glasgow health board by the Scottish dental practice division, in which the national health service tribunal found Mr. W. J. Duff had provided unnecessary treatment. [19048]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: These cases were referred to the tribunal following reports by regional dental officers; no complaints were made by the patients involved.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland what general conclusions were reached by regional dental officers from their inspections of Mr. W. J. Duff's patients on 25 August 1986 and subsequently. [19049]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: Regional dental officers undertake independent clinical examinations of individual dental patients and pass their findings of fact to the dental practice division of the Common Services Agency. Any adverse reports are then passed to the Scottish dental practice board which forwards a copy to the relevant health board. The health board then decides what further action to take. It is no part of the function of regional dental officers to draw general conclusions.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland how many patients of Mr. W. J. Duff have complained to date that they were not told in advance what treatment was to be carried out by him. [19051]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: One.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland (1) if he will request sight of the reports provided by the director of practitioner services to Greater Glasgow health board on the circumstances surrounding the case of Mr. W. J. Duff; [19052]

  (2) if he will publish the paper on Mr. W. J. Duff requested by Greater Glasgow health board at its meeting on 18 February; [19053]

  (3) if he will publish the report of the Director of Practitioner Services to Greater Glasgow health board on the circumstances surrounding the case of Mr. W. J. Duff. [19411]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: When the requested material has been prepared, it will be discussed by Greater Glasgow health board at a future meeting, during that part of its proceedings at which members of the public may be present. Once the paper or papers are in the public domain, I shall arrange for the hon. Member to receive a copy.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will ensure that money received from Mr. W. J. Duff by Greater Glasgow health board is applied directly for the benefit of his former patients. [19054]
  313
  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: Greater Glasgow health board has not as yet received any money from Mr. Duff. The sums due, or which may become due, from him fall into two categories. The first comprises sums for payment to former patients who are likely to incur additional expenditure in obtaining further treatment required as a result of Mr. Duff's failure to comply with his terms of service. The second comprises sums in the nature of fines for failure to comply with the terms of service. My right hon. Friend has no power to ensure that such sums are applied for the benefit of patients.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will make a financial contribution to the voluntary support group organised by former patients of Mr. W. J. Duff. [19133]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: No. Funding for NHS general dental services may be used only for the purposes set down in statute which do not include assistance to voluntary support groups.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland how many patients were registered with Mr. W. J. Duff in each year since he began practising; and what was the highest number of patients registered with any dentist in Scotland in each of these years. [19263]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: A new contract for the provision of NHS general dental services was introduced in October 1990, including, for the first time, the registration of patients under continuing care or capitation arrangements. The information requested is listed in the table for financial years 1991–92 to 1994–95:

  Number of patients registered under NHS continuing care and capitation arrangements with Mr. W. J. Duff and the highest number of patients registered with an NHS principal dentist in Scotland 1991–92 to 1994–95

  Dentist

  1991–92

  1992–93

  1993–94

  1994–95

  Mr. W. J. Duff 1

  847

  1,603

  1,930

  1,451

  Dentist with highest number of registrations2

  1,126

  2,338

  3,726

  5,788

  1 Mr. Duff ceased practising NHS general dental services in summer 1994.

  2 A dentist may hold more than one contract within a health board or within Scotland. A dentist may have more than one practice or may have patients registered with him/her who are treated by an assistant or vocational trainee.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland what factors led to the inspections of Mr. W. J. Duff's patients by regional dental officers on 25 August 1986. [19564]

  Lord James Douglas-Hamilton
  [holding answer 12 March 1997]: Each year, regional dental officers undertake clinical examinations on a small number of patients of every dentist in Scotland providing NHS general dental services. The patient sample is chosen at random.
  314

  Non-fossil Fuels
  Mr. Gallie
  To ask the Secretary of State for Scotland if he has made a decision on the second order under the Scottish renewables obligation; and if he will make a statement. [20609]

  Mr. Kynoch
  I have today laid before Parliament an order requiring the two public electricity suppliers—PESs—in Scotland to make arrangements to secure 112 MW of new renewable electricity generating capacity from a range of renewable sources. There has been a good response by bidders to tender invitation for SRO2, and average bid prices have been much lower this time round. This represents a considerable success for our policy of creating an initial market within each of the most promising technologies through strong price competition between projects. This has allowed me to set a larger order than originally envisaged when announcing SRO2 in November 1995.

  In order to meet their obligations arising from the order, I understand that Scottish Power and Scottish Hydro-Electric expect to sign contracts with 26 project developers. These are expected to be nine waste to energy projects making up 55 MW of capacity seven wind projects totalling 44 MW, nine hydro projects totalling 11 MW and one biomass project of 2 MW.

  We are aware of concerns about the possible effects on the environmental and landscape of the development of renewable energy projects and expect developers to give particular care and attention to these sensitive issues. Successful developers will need to obtain planning permission for their projects if they have not already done so; award of a contract as a result of the order does not confer any special advantage in the planning process and approval must be sought in the usual way. I know too that there are concerns about the need to strike the right balance between the visual impact of wind farms and the need to safeguard the scenic value of large parts of the Scottish countryside. For this reason, we have decided that wind projects, while being allocated substantial capacity within the order, should not form a disproportionately large part of it.

  As far as waste to energy projects are concerned, I was very pleased that the overall level of bid prices for this technology had fallen as much as it has done since SRO1. In view of the environmental benefits which such projects can deliver, I have decided to increase the size of the allocation for waste to energy projects beyond that originally envisaged, to cover landfill gas, tyre incinerations and municipal waste incineration projects.

  We are aware of concerns in some quarters about the potential impact of new hydro schemes on fisheries. I understand that at least one of the hydro projects likely to be awarded a contract as a result of the order will include the installation of a new fish pass to assist salmon to gain easier access to spawning grounds. I have asked my officials to liaise closely with the project developer on the fisheries aspects. All hydro projects do of course require consultation with the local district salmon fisheries board before being granted permission to proceed.

  On biomass, although the prices tendered for projects were comparatively high, we took account of the wider benefits to agriculture and the environment of such projects, and the need to enable the technology to

  315
  establish a foothold in Scotland. For this reason we decided to allocate a small part of the order to this technology.

  By making an order for a total of 112 MW, we are taking a considerable step towards meeting Scotland's share of the Government's overall aim of achieving 1,500 MW of new renewable generating capacity by the year 2000. I will make a further announcement in due course about the next steps that we propose to take under the SRO.

  I have made the order after considering the advice of the Director General of Electricity Supply and after consulting the two Scottish PESs.

  Galleries (Access)
  Mr. Stewart
  To ask the Secretary of State for Scotland if he will make a statement on improving access to the collections of the national galleries of Scotland. [20610]

  Mr. Michael Forsyth
  I am anxious that the people of Scotland should have the fullest possible opportunity to see and appreciate the country's heritage of art and design in appropriate surroundings. At present only one fifth of the Scottish paintings held by the national galleries of Scotland—NGS—are on permanent public view. It is right that action should to taken to improve the position.

  To this end I am inviting the NGS trustees to consider the establishment of a new national loans scheme whereby coherent groups of good quality works of art from the national galleries are made available for exhibition at suitable local museums and galleries and other appropriate locations throughout Scotland. This initiative would also encourage local museums and galleries to take advantage of the opportunities offered by the heritage lottery fund to upgrade their facilities to a standard appropriate to housing works of national importance.

  Deaths in Scotland, 1989–1995—suicides, accidents, etc.

  Suicide1

  Undetermined2

  Accidents3

  Number

  Rate

  Number

  Rate

  Number

  Rate

  1989

  527

  10.34

  191

  3.75

  1,829

  35.89

  1990

  535

  10.49

  214

  4.19

  1,784

  34.97

  1991

  525

  10.28

  181

  3.54

  1,734

  33.95

  1992

  569

  11.13

  224

  4.38

  1,580

  30.91

  1993

  615

  12.01

  297

  5.80

  1,469

  28.69

  1994

  624

  12.16

  210

  4.09

  1,413

  27.53

  1995

  623

  12.13

  213

  4.15

  1,439

  28.01

  1 World Health Organisation International Classification of Diseases, 9th Revision. (ICD9) codes E950–E959.

  2 ICD9 codes E98O–E989 (Injury undetermined whether accidentally or purposely inflicted).

  3 ICD9 codes E800–E929.

  Rates are per 100,000 population.

TREASURY

  School Finance
  Dame Angela Rumbold
  To ask the Chancellor of the Exchequer what estimate he has made of the effect on the public sector borrowing requirement of allowing schools to borrow money from the banks to pay for capital spending. [18535]
  316
  As a further step the board of trustees of the NGS has put to me revised outline proposals to establish a new national gallery of Scottish art and design in Glasgow. These proposals reflect the advice of the national heritage memorial fund that it could not support a project of the scale described in the NGS's original application for lottery funding towards the capital costs of acquiring and fitting out the former Post Office building in George square. The new proposals which take account of that advice are smaller in scale and more focused on the objective of making available to the public good-quality works of Scottish art which are not currently on permanent display.

  The trustees are aware that the capital costs of the revised project would need to be met from non-government sources and I would require half the running costs for at least the first four years to be met from private sources. The provision of the balance from public funds would be a matter for consideration in future public expenditure rounds. The project would also have to meet normal requirements of public sector investment appraisal.

  On the basis of these assurances about the funding of the capital and running costs of a Glasgow gallery, I am prepared for further detailed work to go ahead on this proposal, in parallel with the development of the new national loans scheme initiative, with the objective of maximising access to the national collections.

  Suicides and Fatal Accidents
  Mr. Flynn
  To ask the Secretary of State for Scotland how many and what percentage of the population in Scotland have(a) committed suicide and (b) suffered a fatal accident in each of the last seven years; and if he will make a statement. [20034]

  Lord James Douglas-Hamilton
  The information requested is given in the table:

  Mr. Waldegrave
  Voluntary-aided and grant-maintained school borrowing has no effect on the PSBR as both are classified to the private sector. Any borrowing that local authority schools undertake would count against the local authority control totals and would count in the PSBR.

  Economic and Monetary Union
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer what assessment he has made of the degree
  317
  of resistance to the proposed introduction of a single currency in each of the member states of the European Union. [18536]

  Mr. Kenneth Clarke
  That is a matter for each member state.

  Mr. David Shaw
  To ask the Chancellor of the Exchequer (1) what proposals have been assessed by (i) European institutions and (ii) member Governments for a common basis of calculating inflation in each EU member state; and what assessment he has made of the implications of such proposals for(a) United Kingdom Government expenditure and (b) United Kingdom pensioners' incomes; [17358]

  (2) what reports on the determination of price indices in each EU member state have been evaluated by which European institutions in connection with the management of the proposed single currency; and if he will publish those reports. [17357]

  Mr. Oppenheim
  Protocol 6 to the Maastricht treaty states that the criterion on price stability will be assessed using consumer price indices on a comparable basis. Eurostat has now developed a harmonised index of consumer prices—HICP—for member states, and the first full set of figures was published on 7 March.

  Eurostat commissioned a report on the similarities and differences between national consumer price indices. The report, published by Eurostat in 1989, covered the methodology used by each country and set out the need for harmonised indices.

  The proposed legislation for the HICPs, in the form of draft regulations, was first discussed at a working level by technical representatives from each member state's national statistical institute at meetings chaired by Eurostat. The European Monetary Institute and the Commission were also present at these discussions as non-voting members and their opinion was sought before any legislation was agreed. The legislation in its final form was voted on by the Statistical Programme Committee using standard EU voting procedures.

  The Government have an obligation to uprate pensions and benefits by the RPI.

  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer if it is his policy to be hostile to the principle of a single European currency; and if he will make a statement. [17500]

  Mr. Clarke
  The Government believe that it is in Britain's national interest to keep our options open, continue to negotiate and decide at the appropriate time whether or not it would be in Britain's interests to participate in a single currency.

  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what assessment he has made of the implications of the increase in the value of the dollar in the last year for the stability of the proposed single European currency. [18867]

  Mr. Clarke
  The increase in the value of the dollar in the last year reflected the judgment of the market of the value of that currency vis-a-vis other currencies; last year's increase has no implications in itself for the future stability of the proposed single European currency.
  318
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer what plans he has to update the convergence programme produced by the United Kingdom in April 1996. [20479]

  Mr. Clarke
  An updated convergence programme was submitted today to the European Commission. Copies of the convergence programme have been placed in the Libraries of both Houses.

  Consumer Spending
  Mr. Dykes
  To ask the Chancellor of the Exchequer if he will make a statement on recent trends in consumer spending. [18537]

  Mrs. Angela Knight
  Consumer spending is growing at a healthy rate on the back of levels of consumer confidence not seen for over eight years.

  Government Statistics
  Mr. Campbell-Savours
  To ask the Chancellor of the Exchequer what revisions he proposes of Government statistics as published in the Red Book. [18538]

  Mr. Jack
  A more detailed analysis of public expenditure will be published on 20 March in departmental reports and in the Treasury document "Public Expenditure Statistical Analyses". I expect the next Industry Act forecast to be published in the summer.

  Public Debt
  Mr. Waller
  To ask the Chancellor of the Exchequer if he will make a statement on his policy in respect of the United Kingdom's public debt. [18539]

  Mr. Waldegrave
  The Government's fiscal objective is to bring the public sector borrowing requirement back towards balance over the medium term, and in particular to ensure that when the economy is on trend the public sector borrows no more than is required to finance its net capital spending. The ratio of government debt to gross domestic product is projected to fall over the medium term as the PSBR comes down. The UK's debt burden is already among the very lowest in the European Union. It is also lower than in any year under the last Labour Government. If the UK had continued to borrow at the rate seen under the last Labour Government, the debt burden would be double what it is now.

  Income Tax
  Mr. Sumberg
  To ask the Chancellor of the Exchequer what representations he has received in respect of his policy on the rates of income tax. [18540]

  Mr. Garnier
  To ask the Chancellor of the Exchequer what representations he has received on his policy in respect of income tax. [18543]

  Mr. Jack
  I receive a steady flow of representations regarding all aspects of the tax system.

  Mr. Pawsey
  To ask the Chancellor of the Exchequer what is his policy on the basic rate of income tax. [18545]
  319
  Mr. Jack
  It is our policy to reduce the basic rate of income tax to 20 per cent. when it is economically prudent to do so. The last Budget took another major step towards this goal by reducing the basic rate to 24 per cent.—10 per cent. lower than it was in 1978–79.

  Mr. Riddick
  To ask the Chancellor of the Exchequer if he will list the changes in the standard rate of income tax since 1967. [18547]

  Mr. Jack
  This information is published in table 1.5 of the "Tax Benefit Reference Manual 1996–97", a copy of which is available in the Library.

  Productivity
  Mr. Sutcliffe
  To ask the Chancellor of the Exchequer what plans he has to increase productivity in the United Kingdom. [18541]

  Mrs. Angela Knight
  There has been a significant improvement in the UK's productivity performance over the last 15 years, compared both with other countries and with the UK's performance in the 1970s. The UK's productivity performance is benefiting from a more stable economic environment, with continued health growth and low inflation, and from the Government's supply side reforms which have contributed to increased labour market flexibility, strengthened competition and market forces, and improved industrial relations. The improvement should continue over the rest of the 1990s as the impact of supply side reform continues to be felt.

  Windfall Gains
  Mr. Clifton-Brown
  To ask the Chancellor of the Exchequer if he will make a statement on the economic impact of windfall gains arising from(a) the demutualising of building societies and (b) takeovers of life assurance companies. [18542]

  Mrs. Angela Knight
  Experience and recent surveys suggest that most of the payouts will be saved rather than spent. Therefore, I expect them to have a relatively small impact on consumers' expenditure this year.

  Mr. Dover
  To ask the Chancellor of the Exchequer what representations he has received on the legality of a windfall tax on privatised companies; and if he will make a statement. [19424]

  Mr. Jack
  No such representations have been received.

  Exchange Rates
  Sir David Knox
  To ask the Chancellor of the Exchequer how many representations he has received(a) for and (b) against fluctuating exchange rates during the past three months. [18544]

  Mrs. Angela Knight
  I have received many representations during the past three months both for and against the recent appreciation of sterling.

  Economic Growth
  Mr. John Marshall
  To ask the Chancellor of the Exchequer when he last met his EU counterparts to discuss economic growth. [18546]
  320
  Mrs. Angela Knight
  My right hon. and learned Friend last met his European Union counterparts at the Council of Economic and Finance Ministers on 17 February 1997, where among other issues they discussed the general economic situation in the European Union. My right hon. and learned Friend outlined the continuing success of the UK economy with five years of growth combined with low inflation and falling unemployment.

  Education and Unemployment Benefit Expenditure
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer what is the estimated outturn general government expenditure on(a) education and (b) unemployment benefits for 1995–96. [17438]

  Mrs. Angela Knight
  The estimated outturn for general government expenditure in 1995–96 on(a) education is £35.9 billion and (b) unemployment benefit is £1.1 billion.

  These are the most recently published figures for these parts of general government expenditure and have been taken from "Public Expenditure Statistical Analyses 1996–97", published in March 1996. Revised figures will be available in PESA 1997–98, which is due to be published shortly.

  European Community (Publicity)
  Mr. Redwood
  To ask the Chancellor of the Exchequer how much the EC spent on public relations and publicity in 1995–96. [18102]

  Mr. Oppenheim
  Payments from the European Community Budget in 1995 on information and communications amounted to 47,701,477 ecu or £35,373,7321. Figures on a UK financial year basis are not available.
  1 Converted at the rate £1 = 1.3485 ecu, the rate holding at 31 January 1997.

  Value Added Tax
  Mr. Salmond
  To ask the Chancellor of the Exchequer if he will provide a definition of the term "retail premises" as used in VAT legislation and the Finance Bill; and if he will make a statement. [18652]

  Mr. Oppenheim
  [holding answer 4 March 1997]The question concerns a proposed amendment to clause 37 of the Finance Bill which will not now be tabled. I refer the hon. Member instead to the amendment laid on 4 March, and to my press statement that day.

  Departmental Web Site
  Mr. Sheerman
  To ask the Chancellor of the Exchequer when his Department established its Internet site; what representations he has received and what data he has collated on the use and utility of the site; and what steps he is taking to increase the amount of information available via the site. [19143]

  Mrs. Angela Knight
  The Treasury established its Internet site on 14 November 1994, and was one of the first Government Departments to do so. The site offers a wide range of material which continues to grow. It includes Budget documentation, Treasury press releases, ministerial speeches and the minutes of the Chancellor's
  321
  monthly monetary meeting. Use of the site has climbed dramatically since its launch, with about 33,000 accesses in the 1994 Budget week, about 250,000 in the 1995 Budget week and about 400,000 in the 1996 Budget week. Accesses for a typical week currently run at about 15,000. The site was nominated by the public and chosen by a panel of industry experts as a finalist in the 1996 UK web awards—Yell—for best non-commercial site. We are committed to expanding and improving the site further.

  London Underground (Finance)
  Mr. Spearing
  To ask the Chancellor of the Exchequer, pursuant to his answer of 4 March,Official Report, column 552, concerning the scoring of future investment in London Underground Ltd. in respect of the obligations imposed by the treaty on European union, if he will set out the differences between the criteria determining whether public investment contributes to (a) the general government deficit and (b) the public sector borrowing requirement. [19204]

  Mr. Kenneth Clarke
  The capital expenditure of bodies in general government—central and local government—scores in the calculation of the general government financial deficit. The capital expenditure of public corporations does not affect the GGFD, as public corporations are not part of general government. However, if public corporations' capital expenditure is financed by general government capital grants or subsidies, this expenditure will score as general government expenditure and thus increase the GGFD. All borrowing by general government and public corporations scores in the PSBR.

  Long-term Care
  Mr. Bayley
  To ask the Chancellor of the Exchequer what advice has been given to his Department by the Government Actuary about(a) the likely uptake and (b) the cost to the Exchequer of introducing private partnership insurance for long-term care; and if he will place in the Library the figures and papers received from the Government Actuary. [19309]

  Mr. Waldegrave
  [holding answer 10 March 1997]I refer the hon. Member to the answer given by the Secretary of State for Health on 10 March 1997,Official Report, column 113. The Treasury received no figures or papers from the Government Actuary.

  Labour Statistics
  Ms Harman
  To ask the Chancellor of the Exchequer how many(a) men and (b) women aged (A) 50 to 54, (B) 55 to 59, (C) 60 to 64 and (D) 65 to 69 years were (i) in full-time work, (ii) in part-time work, (iii) unemployed, (iv) long-term sick and disabled and (v) retired in each of the last 10 years. [19244]

  Mrs. Angela Knight
  [holding answer 10 March 1997]The information requested falls within the responsibility of the chief executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.
  322
  Letter from Tim Holt to Ms Harriet Harman, dated 13 March 1997 The Chancellor of the Exchequer has asked me to reply as the Director of the Office for National Statistics to your recent question on how many men and women, by varying age groups, are in full-time work, part-time work, unemployed, long-term sick and disabled and retired in each of the last 10 years.
  This information is available from the Labour Force Survey database which can be accessed by the House of Commons Library.

  Mr. Milburn
  To ask the Chancellor of the Exchequer how many(a) men, (b) women and (c) men and women are employed in (i) Great Britain, (ii) each standard region of England, (iii) Wales (iv) Scotland for each major group of the standard occupational classification. [19585]

  Mrs. Knight
  [holding answer 10 March 1997]The information requested falls within the responsibility of the chief executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.

  Letter from Tim Holt to Mr. Alan Milburn, dated 13 March 1997:
  The Chancellor of the Exchequer has asked me to reply as the Director of the Office for National Statistics to your recent question on the number of men and women in employment broken down by region and occupation in Great Britain.
  The information is available from the Labour Force Survey database and can be accessed by the House of Commons Library.

  Private Health Insurance
  Mr. Timms
  To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for York (Mr. Bayley) of 21 October 1994,Official Report, columns 373–74, on the cost and take-up of private health insurance. [19485]

  Mr. Jack
  [holding answer 10 March 1997]The information is given in the table.

  Tax relief on private medical insurance contracts for individuals aged 60 or over

  Year

  Approximate number of contracts

  Approximate number of individuals covered

  Cost of tax relief (£ million)

  1990–91

  350,000

  500,000

  40

  1991–92

  350,000

  500,000

  60

  1992–93

  350,000

  500,000

  70

  1993–94

  375,000

  550,000

  80

  1994–95

  375,000

  550,000

  95

  1995–96

  400,000

  600,000

  100

  1996–971

  400,000

  600,000

  110

  1 Provisional.

  Advance Corporation Tax
  Mr. Trotter
  To ask the Chancellor of the Exchequer how much additional tax would be raised if pension funds were not able to recover advance corporation tax. [19843]

  Mr. Jack
  Pension funds are unable to recover ACT. However, if they were not entitled to receive payments of tax credits on dividend payments there would be an Exchequer gain, before allowing for any behavioural effects, of nearly £4 billion.
  323

  Methicillin-resistant Staphylococcus Aureus
  Mr. Mackinlay
  To ask the Chancellor of the Exchequer if doctors completing death certificates are required to include in the certificate the fact that the deceased was a victim of MRSA, when this contributed to the cause of death. [19854]

  Mrs. Angela Knight
  [holding answer 11 March 1997]The information requested falls within the responsibility of the chief executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.

  Letter from Tim Holt to Mr. Andrew Mackinlay, dated 13 March 1997:
  The Chancellor of the Exchequer has asked me to reply to your recent question asking if doctors completing death certificates are required to include in the certificate the fact that the deceased was a victim of MRSA, when this contributed to the cause of death.

  Section 22 of the Births and Deaths Registration Act 1953 places duties on medical practitioners as follows:
  "in the case of the death of any person who has been attended during his last illness by a registered medical practitioner, that practitioner shall sign a certificate in the prescribed form stating to the best of his knowledge and belief the cause of death and shall forthwith deliver that certificate to the registrar."

  This requirement is included in the Instructions to certifiers, which are at the front of every book of medical certificates of cause of death (MCCD). The instructions further ask the certifier to give the sequence of conditions or events which led directly to the death in part I of the certificate, and to list any other conditions which contributed to the death, in part II. Beyond this, it is up to the judgement of the attending physician to decide what should be included. No particular disease or event is specifically named as being required to be included on the death certificate, although there are instructions about which causes and circumstances of death require referral to the coroner. Death certification is covered in undergraduate and postgraduate training for doctors. The Office for National Statistics (ONS) has recently produced a video (Death Counts) and documentation to help in this training.

  If the certificate is completed correctly, the condition of the last used line of part I is the underlying cause of death, i.e. that condition or event which initiated the train of events leading directly to death. The underlying cause of death is selected and coded according to the rules of the Ninth Revision of the International Classification of Diseases (ICD-9), and this is the condition used in routine tabulations and statistics. When the ONS is asked for information on deaths owing to a particular condition, the answer is normally based on the underlying cause, because this is the cause most useful for public health and preventative purposes.

  Since 1933, all the conditions mentioned on the approximately 580,000 deaths per year registered in England and Wales have been coded and stored in the mortality databases of ONS, where this additional information can be used for special analyses. Deaths due to methicillin resistant staphylococcus aureus (MRSA) infection are coded to a variety of ICD-9 codes for staph. aureus infection, depending on the body site affected. There is no specific code to denote methicillin resistance of the infecting organism, so this can only be identified by searching the text from the certificate.

  Century Date Change (Computers)
  Mr. Dalyell
  To ask the Chancellor of the Exchequer what research he has(a) commissioned and (b) evaluated on the impact of the century date change on his Department's information technology systems. [18698]
  324
  Mrs. Angela Knight
  The Treasury has work in progress to identify and test its computer systems to ensure that they will operate correctly at the turn of the century. It has not proved necessary to commission any additional external research.

  Gross Domestic Product
  Mr. Tim Smith
  To ask the Chancellor of the Exchequer what proportion of gross domestic product(a) was in 1978–79 and (b) he estimates will be in 1997–98 accounted for by income tax. [19891]

  Mr. Jack
  The ratio of income tax receipts to GDP was 11 per cent. in 1978–79. The Budget forecast of the corresponding ratio in 1997–98 is 9 per cent. Over this period, the basic rate of income tax will have fallen from 33 per cent. to 23 per cent.—the lowest headline rate for nearly 60 years.

  Investment
  Ms Quin
  To ask the Chancellor of the Exchequer what new measures he is proposing to promote investment levels in the economy. [18523]

  Mrs. Angela Knight
  Creating a stable economic environment with steady growth, low inflation, and low taxation is overwhelmingly the best way to encourage businesses to expand and invest with confidence.

  Privatisation
  Sir Wyn Roberts
  To ask the Chancellor of the Exchequer if he will make a statement on the privatisation programme. [18528]

  Mr. Jack
  The UK privatisation programme has been a great success. We will continue to look for opportunities to return businesses to the private sector and to promote UK privatisation expertise internationally.

SOCIAL SECURITY

  Incapacity Benefit
  Mr. Pike
  To ask the Secretary of State for Social Security what are the latest figures for the number of applications for invalidity benefit which have(a) been initially refused, (b) gone to appeal and (c) been granted at appeal; and if he will make a statement. [17812]

  Mr. Burt
  The information is in the table:

  Number of incapacity benefit recipients disallowed benefit

  Number of appeals by incapacity benefit recipients received by Independent Tribunal Service

  Number of appeals by incapacity benefit recipients cleared at hearing

  Number of decisions in favour of appellant

  April 1995 to January 1997

  185,400

  102,600

  43,400

  19,700

  Notes:

  1. Incapacity benefit replaced sickness benefit and invalidity benefit from April 1995.
  325
  2. Currently around 55 per cent. of incapacity benefit recipients who are disallowed benefit appeal. The benefit is restored in approximately 45 per cent. of cases heard by appeal tribunals.

  3. The proportion of successful appeals against refusal of incapacity benefit is lower than the previous appeal success rate under invalidity benefit and similar to the success rate of appeals throughout the social security appeal system.

  4. Includes appeals against disallowance of incapacity benefit.

  5. Figures are rounded to the nearest 100, provisional and are subject to revision.

  Sources:

  Benefits Agency and Independent Tribunal Service.

  Mr. Alan Howarth
  To ask the Secretary of State for Social Security how many people are currently claiming(a) incapacity benefit and (b) severe disablement allowance; and how many of these have an increase in benefit in respect of an adult dependant. [18977]

  Mr. Burt
  The information is in the table.

  Recipients at 31 August 1996

  Recipients of an adult dependency increase at 31 August 1996

  Incapacity benefit

  1,780,000

  332,000

  Severe disablement allowance

  355,000

  4,000

  1. Figures are rounded to the nearest thousand.

  2. Figures are taken from a 5 per cent, sample of the computer system and exclude a small number of cases not held on the system.

  Mr. Corbyn
  To ask the Secretary of State for Social Security what is the average length of time the Benefits Agency currently takes to assess an application for incapacity benefit; and what benefit an applicant is entitled to while awaiting the outcome. [19634]

  Mr. Burt
  The administration of social security benefits is a matter for Peter Mathison, the chief executive of the Benefits Agency. He will write to the hon. Member.

  Letter from Peter Mathison to Mr. Jeremy Corbyn, dated 12 March 1997]:
  The Secretary of State has asked me to reply to your recent Parliamentary Question asking what is the average length of time the Benefits Agency (BA) currently takes to assess an application for Incapacity Benefit (IB), and whilst an applicant is awaiting the outcome, what benefit he is entitled to.
  The Secretary of State has set the BA the following targets for clearing new claims to IB:—

  65% to be cleared within 10 days

  85% to be cleared within 30 days

  The actual performance year to date, from 1 April 1996 to 31 January 1997, is:-

  79.3% of new claims to IB are cleared within 10 days

  95.7% of new claims to IB are cleared within 30 days

  The BA administers more than 20 benefits, all of which can be claimed at any time. Award of benefit is dependent on satisfaction of the conditions of entitlement for the particular benefit at the time of the claim. Without specific details of a persons circumstances it is not possible to determine entitlement to individual benefits.

  I hope you find this reply helpful.

  Child Care Disregard
  Mr. Alan Howarth
  To ask the Secretary of State for Social Security how many people receiving non-means-tested benefits have offset part-time earnings 326
  against a child care disregard since November 1996; and what is his estimate of (a) the numbers gaining and (b) the annual cost. [18946]

  Mr. Burt
  There is insufficient information on which to base an estimate.

  Invalid Care Allowance
  Mr. Alan Howarth
  To ask the Secretary of State for Social Security (1) what is his estimate of(a) the numbers gaining from and (b) the cost of extending invalid care allowance for (i) four weeks, (ii) eight weeks and (iii) 13 weeks after the cared-for person has died; [18948]

  (2) what is his estimate of (a) the numbers who would benefit from and (b) the cost of extending invalid care allowance for (i) four weeks, (ii) eight weeks and (iii) 13 weeks after the cared-for person has entered permanent residential care. [18981]

  Mr. Burt
  The information is in the table:

  Extending invalid care allowance after death of disabled person

  4 weeks

  8 weeks

  13 weeks

  Estimated costs

  £3 million

  £5 million

  £10 million

  Estimated gainers

  30,000

  30,000

  30,000

  Notes:

  1. Invalid care allowance may be payable for up to four weeks after a disabled person has entered residential care.

  2. The costs and numbers of gainers from extending invalid care allowance for a period thereafter are estimated to be negligible.

  3. Costs are net of impact on income related benefits in payment but assumes no change in the income-related benefit rule whereby carer premium can continue for a further eight weeks after invalid care allowance ceases.

  4. Estimates of gainers are rounded to the nearest thousand, of costs of the nearest £1 million.

  Source:

  Invalid Care Allowance Unit records.

  Mr. Howarth
  To ask the Secretary of State for Social Security how many people receiving invalid care allowance have offset part-time earnings against care costs since November 1996; and what is his estimate of(a) the numbers gaining and (b) the annual cost. [18947]

  Mr. Burt
  There is insufficient information on which to base an estimate.

  Jobseeker's Allowance
  Mr. Alan Howarth
  To ask the Secretary of State for Social Security (1) how many claimants of each of the(a) contributory and (b) income-related jobseeker's allowance are currently (i) single people without children, (ii) couples without children and (iii) couples with children; and what is the average duration of benefit in each case; [18975]

  (2) how many people are currently in receipt of (a) jobseeker's allowance and (b) income support. [18976]

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

  Information on jobseeker's allowance is yet not available. Provisional summary findings from the November 1996 "Quarterly Statistical Enquiry" will be

  327
  published on 20 March and more detailed analyses will be published in the summer. The findings will be placed in the Library.

  Income support claimants—May 1996

  Thousands

  Number of claimants

  Unemployed cases

  1,495

  Other cases

  4,054

  All cases

  5,549

  Notes:

  1. Provisional jobseeker's allowance findings will include estimates of claimants by type of allowance in payment, age. sex and duration of current claim. The detailed analyses will include information on partners and dependants.

  2. Numbers are rounded to the nearest thousand.

  3. Sample size 5 per cent.

  Source:

  Income Support Statistics Quarterly Enquiry May 1996.

  Disability Living Allowance
  Mr. Alan Howarth
  To ask the Secretary of State for Social Security what is his estimate of the numbers of people who receive disability living allowance who also have earnings from employment. [18983]

  Mr. Andrew Mitchell
  The estimated number of people receiving disability living allowance who also have earnings from employment is around 80,000, and for those in self-employment around 5,000.

  Industrial Injuries Disablement Benefit
  Mr. Alan Howarth
  To ask the Secretary of State for Social Security what advice he has received from the Industrial Injuries Advisory Council on his proposal to abolish good causes backdating of industrial injuries disablement benefit. [18979]

  Mr. Roger Evans
  A copy of the letter sent by the Industrial Injuries Advisory Council to the Social Security Advisory Committee concerning the backdating proposals has been placed in the Library. We intend to publish our response to the Social Security Advisory Committee's report on the proposals shortly.

  Parent Plus Scheme
  Mr. Sheerman
  To ask the Secretary of State for Social Security (1) what fee will be paid to private sector contractors for placing lone parents in work under the parent plus scheme; [19059]

  (2) what restrictions will apply to the type of work in which lone parents will be placed by private contractors before receiving their fee under the parent plus scheme; [19106]

  (3) what fee private sector contractors will be paid for placing lone mothers in part-time work under the parent plus scheme; [19060]

  (4) what period of time a lone parent will have to remain in work before a fee is paid to the contractor for placing them in work under the parent plus scheme. [19061]

  Mr. Andrew Mitchell
  The contracting process is still underway. Details of contracts will not be finally agreed until this process is completed. It is expected that contracts will be awarded at the end of March.
  328

  Information Technology Services Agency
  Mr. Leigh
  To ask the Secretary of State for Social Security when he will publish the revised framework document for the Information Technology Services Agency. [20612]

  Mr. Heald
  I have today arranged for the revised framework document for the Information Technology Services Agency to be placed in the Library. This document covers the period from January 1997 to December 1999.

  Benefits Backdating
  Mr. Leigh
  To ask the Secretary of State for Social Security what plans he has to align the rules on the backdating of benefits as provided for by the Social Security (Claims and Payments) Regulations 1987, and to clarify the responsibilities of claimants in providing evidence to support their claims. [20613]

  Mr. Roger Evans
  I will tomorrow lay before Parliament the Social Security (Miscellaneous Amendments) (No. 2) Regulations 1997. The regulations will align, as far as possible, the rules on the backdating of benefit and will clarify claimants' responsibilities by requiring them to provide basic information to support their claim.

  The new rules on backdating will introduce two simple rules for most benefits, allowing up to three months' backdating of late claims, and up to one month's backdating of reviews following a change in a claimant's circumstances. The new rules will apply to most benefits from 7 April 1997, but will not apply to retirement pension until 4 August 1997. Aligning the backdating rules will reduce the complexity of the social security scheme and so increase administrative efficiency. Subject to changes in how promptly people claim or ask for reviews, we estimate that the new rules will affect around 450,000 claimants and that net benefit savings of £119 million in 1997–98, £126 million in 1998–99 and £130 million in 1999–2000 will arise. There will be an initial administrative cost of £1.8 million in 1997–98, £1.1 million in 1998–99 and £0.4 million in 1999–2000 in introducing the changes.

  The regulations will also require claims to income support and jobseeker's allowance from 6 October 1997 to be made on a properly completed claim form, with supporting documents as required on the form. The date of claim for benefit will be the date the claimant first contacts the Benefits Agency or the Employment Service, as appropriate, for the purpose of claiming, provided a properly completed claim is received within one month of that first date, or at or before an interview where this is required for jobseeker's allowance.

  We have consulted the Social Security Advisory Committee on these proposals and copies of the statement together with its report will be placed in the Library.

  State Pensions
  Ms Harman
  To ask the Secretary of State for Social Security what proportion of average earnings he estimates £175 constitutes at present; and what the figure will be in 2040, using the Government Actuary's assumptions about earning growth, in current prices. [19648]
  329
  Mr. Heald
  The figure of £175 a week represents 50 per cent. of average earnings for April 1996 and is projected to represent 26 per cent. of average earnings in 2040, assuming 1.5 per cent. real earnings growth up to that year.

  Ms Harman
  To ask the Secretary of State for Social Security if people currently under 20 years old will have their basic state pension paid out of the national insurance fund when they retire under his basic pension plan. [19626]

  Mr. Heald
  Whether anyone currently under 20 will be outside the new scheme will depend on the precise age limit for joining the scheme, to be determined nearer the time.

  Ms Harman
  To ask the Secretary of State for Social Security if he will list in relation to paragraph 36 of the technical document on Her Majesty's Government's basic pension plus proposal, the gross cost of revenue forgone for every 10 years from 2000 to 2090. [19627]

  Mr. Heald
  The gross costs of new rebates under basic pension plus will rise on average by £330 million in each year following implementation, reaching some £15 billion a year by 2040 or later. Reversal of timing of tax reliefs for the generation covered by basic state pension plus will more than halve the impact on public finances. Thereafter, there would be a rapid decline in public expenditure on pensions as they are met from investments funded by rebates.

DEFENCE

  Armed Services (Deaths)
  Mr. Flynn
  To ask the Secretary of State for Defence, pursuant to his answer of 4 March,Official Report,

  The number of armed forces personnel who died within the first six months of joining, from 1 January 1990 to 3 March 1997 (based on information reported to DASA as at 3 March 1997)

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  1997 to 3 March 1997

  Total

  Tri-service

  Active service

  1

  0

  0

  0

  0

  0

  0

  0

  1

  Assault

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Coroner verdicts of suicide

  2

  0

  0

  0

  0

  0

  0

  0

  2

  Other self inflicted1

  0

  0

  0

  0

  0

  1

  0

  0

  1

  Accidents

  3

  4

  4

  2

  1

  2

  4

  0

  20

  Natural causes

  1

  3

  3

  0

  0

  2

  1

  0

  10

  Details of causes not yet available

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Total

  7

  7

  7

  2

  1

  5

  5

  0

  34

  Navy

  Active service

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Assault

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Coroner verdicts of suicide

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Other self inflicted1

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Accidents

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Natural causes

  0

  3

  0

  0

  0

  0

  1

  0

  4

  Details of causes not yet available

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Total

  0

  3

  0

  0

  0

  0

  1

  0

  4

  Army2

  Active service

  1

  0

  0

  0

  0

  0

  0

  0

  1

  Assault

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Coroner verdicts of suicide

  1

  0

  0

  0

  0

  0

  0

  0

  1

  Other self inflicted1

  0

  0

  0

  0

  0

  1

  0

  0

  1

  Accidents

  2

  4

  4

  2

  1

  2

  4

  0

  19

  Natural causes

  0

  0

  2

  0

  0

  2

  0

  0

  4

  Details of causes not yet available

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Total

  4

  4

  6

  2

  1

  5

  4

  0

  26

  330
  columns 591–92, (1) if he will estimate how many members of each armed service have (a) been killed in accidents and (b) committed suicide during training periods in each of the last seven years; [19614]

  (2) if he will estimate how many members of each armed service have (a) been killed on active service, (b) been killed in accidents, (c) committed suicide and (d) died of natural causes within the first six months of joining, in each of the last seven years. [19613]

  Mr. Soames
  This is a matter for the chief executive of the Defence Analytical Services Agency. I have asked the chief executive to write to the hon. Member.

  Letter from Paul Altobell to Mr. Paul Flynn, dated 13 March 1997:
  I am replying to your two questions to the Secretary of State for Defence about the numbers of personnel in the Services who have (i) been killed in accidents during training periods, or committed suicide during training periods and (ii) died within the first six months of joining, since 1990. As Chief Executive of Defence Analytical Services Agency this matter falls within my area of responsibility.
  The information you request is detailed in the attached tables. In the first, I have shown those who died while on training, defined as basic training, assault course/parachute jumps and similar training, and exercises. In the second I have listed those who died within their first six months of joining, classified according to our standard classification system. Figures in both tables are for the same period, 1 January 1990 to 3 March 1997, as was covered in my letter to you of 3 March 1997.
  I am afraid our database does not contain the numbers of suicides which occurred during training. These could only be collected at disproportionate cost. As you are aware the overall numbers of suicides were contained in the table sent with my letter of 3 March 1997.
  331

  The number of armed forces personnel who died within the first six months of joining, from 1 January 1990 to 3 March 1997 (based on information reported to DASA as at 3 March 1997)

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  1997 to 3 March 1997

  Total

  RAF

  Active service

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Assault

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Coroner verdicts of suicide

  1

  0

  0

  0

  0

  0

  0

  0

  1

  Other self inflicted1

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Accidents

  1

  0

  0

  0

  0

  0

  0

  0

  1

  Natural causes

  1

  0

  1

  0

  0

  0

  0

  0

  2

  Details of causes not yet available

  0

  0

  0

  0

  0

  0

  0

  0

  0

  Total

  3

  0

  1

  0

  0

  0

  0

  0

  4

  1This covers cases with open or misadventure coroner verdicts and those yet to be confirmed.

  2Includes Gurkhas.

  Armed forces personnel killed in accidents while on training1(from 1 January 1990 to 3 March 1997) (based on information reported to DASA as at 3 March 1997)

  Navy

  Army2

  RAF

  Total

  1990

  0

  5

  2

  7

  1991

  1

  8

  0

  9

  1992

  0

  9

  0

  9

  1993

  6

  2

  0

  8

  1994

  0

  7

  0

  7

  1995

  1

  3

  0

  4

  1996

  0

  1

  0

  1

  1997 to 3 March 1997

  0

  0

  0

  0

  Total

  8

  35

  2

  45

  1Training defined using the NATO STANAG for classification of disease, injuries and causes of death as basic training, assault courses/parachute jumps etc, and exercises.

  2Includes Gurkhas.

  Customer Charters
  Mr. Donohoe
  To ask the Secretary of State for Defence how much his Department and its executive agencies have spent drafting, publishing and circulating each of their customer charters and customer standard documents; and how many copies of each document have been issued. [19389]

  Mr. Arbuthnot
  My Department keeps no central record of this information. Where such documents are published by agencies, this is a matter for the chief executives and I have asked them to write to the hon. Member.

  Letter from J. C. R. Hunt to Mr. Brian Donohoe, dated 13 March 1997:
  I am replying to your Question to the Secretary of State for Defence about customer charters and Customer Standard documents and the cost and number of each document issued as this matter falls within my area of responsibility as Chief Executive of the Metrological Office.
  In the current financial year we will spend some £200 on printing our own Charter Standard for the Public, which is the only one of our publications falling within the ambit of your question. About 3,500 copies will have been distributed in various ways.
  The administrative/drafting costs of updating our Charter cannot be identified in isolation but are unlikely to exceed £1,000.
  I hope this information answers your question.
  332
  Letter from M. A. Rowe to Mr. Brian Donohoe, dated 13 March 1997
  I am replying to your Question to the Secretary of State for Defence regarding production of a customer charter. This matter falls within my area of responsibility as Chief Executive of the Pay and Personnel Agency (PPA).
  The PPA customer charter has not yet been printed, but our predecessor organisation—the Pay Services Directorate of the Defence Accounts Agency—issued 20,000 copies of its charter at an overall cost of £5,143. We estimate the equivalent cost of the PPA customer charter will be £3,500. It will be issued to every member of the MOD paid by the PPA—some 120,000 staff—but it will be a simpler version of its predecessor, hence the lower costs.

  RAF Establishments (Yorkshire and Humberside)
  Mr. Bayley
  To ask the Secretary of State for Defence if he will list the Royal Air Force(a) bases and (b) other establishments in Yorkshire and Humberside in April 1992 indicating for each the number of (i) service and (ii) civilian personnel employed (1) at that date and (2) currently; and if he will list the date of closure of each of these establishments which closed after April 1992. [18266]

  Mr. Soames
  The information requested is not held centrally and, as a result, some of the statistics in the following table provided are incomplete or not available for the dates requested.

  July 1992

  January 1997

  Location

  RAF

  Civilians1

  RAF

  Civilians1

  RAF bases

  Catterick2

  720

  1,281

  4

  995

  Church Fenton

  0

  19

  6

  2

  Cowden

  312

  16

  6

  7

  Dishforth

  0

  38

  1

  32

  Finningley4

  n/a

  166

  6

  13

  Fylingdales

  87

  83

  73

  82

  Leeming

  1,888

  184

  1,284

  258

  Linton on Ouse

  n/a

  152

  475

  209

  Staxton Wold

  255

  48

  116

  58

  Topcliffe

  0

  40

  0

  29

  Other establishments

  Bradford CIO5

  3

  0

  0

  0

  Grimsby CIO5

  3

  0

  0

  0

  MOD Harrogate6

  n/a

  1,345

  0

  0

  Huddersfield CIO5

  3

  0

  0

  0

  Hull CIO

  5

  0

  3

  0

  Leeds CIO

  8

  1

  7

  2

  Sheffield CIO

  6

  1

  7

  2

  York CIO5

  3

  0

  0

  0

  1Excludes contractors personnel.

  333
  2Catterick passed to Army control on 30 June 1994.

  3Figure as at May 1993.

  4RAF Finningley closed on 1 April 1996, although a small staff is retained to manage disposal of the site.

  5As a result of the defence costs study into service recruiting, the careers information office structure has been rationalised and the RAF CIOs in Bradford, Grimsby, Huddersfield and York were closed on 1 December 1995, 3 March 1995, 31 March 1995 and 8 May 1996 respectively.

  6The MOD site at Harrogate was closed on 1 April 1996 following rationalisation of the RAF support management task at HQ logistics command.

  Training Teams (Namibia)
  Mr. Campbell-Savours
  To ask the Secretary of State for Defence what was the cost to public funds of providing the military training team to Namibia in 1991. [19684]

  Mr. Soames
  Details of the military assistance provided to individual countries, including the amount spent, is confidential between Governments under exemption 1 in the code of practice on access to Government information. However, as announced in the answer given by my hon. Friend the Member for Boothferry (Mr. Davies) to the hon. Member for Cynon Valley (Mrs. Clwyd) on 28 January 1997,Official Report, columns 140–41, we are now reviewing this practice against the background of the Government's commitment to openness. The House will be informed of the results of the review in due course.

  Employment Statistics
  Mr. Callaghan
  To ask the Secretary of State for Defence what proportion of those employed by his Department in the last five years were(a) men and (b) women. [19658]

  Mr. Soames
  This is a matter for the chief executive of the Defence Analytical Services Agency. I have asked the chief executive to write to the hon. Member.

  Letter from Paul Altobell to Mr. Jim Callaghan, dated 13 March 1997 I am replying to your question to the Secretary of State for Defence regarding the proportion of males and females employed by his Department in the last five years, as this falls within my area of responsibility as Chief Executive of Defence Analytical Services Agency.
  The figures are as follows:

  Percentage of personnel employed by MOD by gender at 1 April

  1992

  1993

  1994

  1995

  1996

  Civilian personnel

  Males

  69.9

  69.7

  69.6

  69.8

  69.4

  Females

  30.1

  30.3

  30.4

  30.2

  30.6

  Service personnel

  Males

  93.3

  93.1

  93.0

  92.9

  92.9

  Females

  6.7

  6.9

  7.0

  7.1

  7.1

  All personnel

  Males

  85.7

  85.5

  85.3

  85.1

  85.1

  Females

  14.3

  14.5

  14.7

  14.9

  14.9

  All figures include full time and part time personnel. Figures for 1992 and 1993 include GCHQ personnel.

  I hope you find this information helpful.
  334

  Ministry of Defence Police
  Mrs. Dunwoody
  To ask the Secretary of State for Defence what factors underlie the decision not to include a question relating to morale in the staff care survey carried out by the chief constable of the Ministry of Defence Police; [19725]

  (2) what plans he has to carry out studies into morale within the Ministry of Defence Police. [19726]

  Mr. Soames
  This is a matter for the chief constable/chief executive of the Ministry of Defence Police agency. I have asked the chief constable/chief executive to write to the hon. Member.

  Letter from Michael Smallwood to Mrs. Gwyneth Dunwoody, dated 13 March 1997 I am replying to your Questions to the Secretary of State for Defence about morale in the Ministry of Defence Police, on behalf of the Chief Constable/Chief Executive of the Ministry of Defence Police Agency, as this falls into his area of responsibility. The Chief Constable/Chief Executive is away from the office at present.
  Although the Ministry of Defence Police Staff Care Survey 1997 does not specifically use the term morale, the responses to the Job Satisfaction questions (Section I) will provide an indication of morale in the Force. I attach a copy of the survey questionnaire for your information, from which you will see that management and staff representatives worked closely together to formulate the questionnaire. The Chief Constable/Chief Executive has no immediate plans to carry out specific studies into morale in the Ministry of Defence Police.
  In addition, two recent surveys of customer and public satisfaction have recorded satisfaction ratings of 86% and 91% respectively. These ratings are not considered indicative of low morale.
  A copy of the Ministry of Defence Police Staff Care Survey 1997 is being placed in the Library of the House.

  Military Survey Defence Agency
  Mr. Keen
  To ask the Secretary of State for Defence what are the estimated savings to public funds accruing from the Military Survey Defence Agency element of the defence intelligence staff "Competing for Quality" proposal for information systems—information technology and open source information services; and what impact these measures will have on the efficiency
  of the Military Survey Defence Agency. [19366]

  Mr. Soames
  This is a matter for the chief executive of the Military Survey Defence Agency. I have asked the chief executive to write to the hon. Member.

  Letter from Philip Wildman to Mr. Alan Keen, dated 13 March 1997 I am replying to your Question to the Secretary of State for Defence about the Military Survey Defence Agency element of the Defence Intelligence Staff (DIS) Competing For Quality (CFQ) proposal for IS/IT and Open Source Information (OSINF) services, as this matter falls within my area of responsibility as Chief Executive.
  During last year the DIS conducted a CFQ Feasibility Study with involvement from the business areas affected by the CFQ initiative to examine the extent to which IS/IT, OSINF services together with Media Services and Printing could be exposed to competition with the private sector. It concluded that MOD should seek to test through competition whether improved Value For Money (VFM) can be obtained by contractorising a defined package of these services. The Feasibility Study recommendations have been accepted by Ministers and the project is to be taken forward, and will be subject to the normal consultation process. The invitation to companies to provide proposals is scheduled to be issued by mid summer. Consequently at this stage, it would be premature to assess the level of savings and

  335
  efficiencies that may result. However, if a competitive procurement cannot show better Value For Money (VFM), then the DIS and Military Survey will not proceed with the initiative.

  Beef
  Mr. Richards
  To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Plymouth, Devonport (Mr. Jamieson) of 20 February 1997, Official Report, column 718, if the armed forces are supplied with German beef; and if he will make a statement. [20040]

  Mr. Arbuthnot
  This is a matter for the chief executive of the Naval Bases and Supply Agency. I have asked the chief executive to write to the hon. Member.

  Letter from John Trewby to Mr. Rod Richards, dated 13 March 1997 I am replying to your Question to the Secretary of State for Defence about the supply of German beef to the Armed Forces as this matter falls within my area of responsibility as Chief Executive of the Naval Bases and Supply Agency.
  NAAFI are currently contracted to supply food for the Armed Forces. They have advised that the only area where German beef has been supplied is to our Forces in Germany, and that the products and quantities involved are small. Most beef products, including those supplied for our Forces in Germany, are sourced from South America on value for money grounds. Due to the ban on British beef exports a small number of low offtake beef products, which otherwise might have been sourced in the UK have been obtained from continental European sources, mainly Holland but with a small proportion from Germany.

  Military Museums
  Mr. Key
  To ask the Secretary of State for Defence when the Minister of State for the Armed Forces expects to reply to the letter dated 20 January from the hon. Member for Salisbury on the subject of military museums. [19063]

  Mr. Soames
  The Under-Secretary of State for Defence, my noble Friend the Earl Howe, wrote to the hon. Member on Tuesday 11 March 1997.

  Military Provost Guard Service
  Mrs. Dunwoody
  To ask the Secretary of State for Defence which organisation will undertake the training of the Military Provost Guard Service with respect to civilian powers of arrest; how such training will be funded; and what estimate he has made of the cost of the training. [19727]

  Mr. Soames
  The Royal Military Police training school, part of the adjutant general's corps training group, provides instruction to Military Provost Guard Service soldiers on a citizen's powers of arrest as part of the MPGS training course. The training is funded from the adjutant general's budget. The cost of training MPGS soldiers on a citizen's powers of arrest is estimated at some £1,000 for the pilot scheme.

  Mrs. Dunwoody
  To ask the Secretary of State for Defence how many of the applications described as firm applications for military local service engagement(a) did not specify a preference for service in their local area and (b) specified a preference for a move from Northern Ireland to the United Kingdom mainland. [19729]
  336
  Mr. Soames
  Thirty-seven applications have indicated "any site" as a preference, and 38 indicated a willingness to move to a site that was not nearest to their application address to obtain a vacancy. There have been no military provost guard service recruits from Northern Ireland.

  Mrs. Dunwoody
  To ask the Secretary of State for Defence what was the average cost to his Department of travel-to-work expenses incurred by a military local service engagement guard living(a) 21 miles and (b) 10 miles form his or her duty station in the last year for which figures are available. [19724]

  Mr. Soames
  As the Military Provost Guard Service will not form until April 1997, no historical figures are available.

  Equipment Exhibition
  Mr. Flynn
  To ask the Secretary of State for Defence where the Royal Navy and British Army equipment exhibition will be held, including any off-site events; and on which days it will be open to(a) overseas customers, (b) the press and (c) the public. [19531]

  Mr. Arbuthnot
  [holding answer 12 March 1997]: The 1997 Royal Navy and British Army equipment exhibition will beheld at Farnborough on 1 to 5 September and at Portsmouth naval base on 2 to 4 September. The exhibition will be open to overseas visitors every day. A press day is planned for 31 August. The exhibition is not open to the public.

  Mr. Flynn
  To ask the Secretary of State for Defence what is the estimated cost to public funds of the Royal Navy and British Army equipment exhibition. [19532]

  Mr. Arbuthnot
  [holding answer 12 March 1997]: The aim is that there should be no cost to public funds.

  Mr. Flynn
  To ask the Secretary of State for Defence how many visitors are expected at the Royal Navy and British Army equipment exhibition; and from which countries buyers will be invited. [19533]

  Mr. Arbuthnot
  [holding answer 12 March 1997]: An estimated 30,000 people will visit the exhibition. Invitations are issued to representatives from countries with an interest in the legitimate purchase of defence equipment.

  Mr. Flynn
  To ask the Secretary of State for Defence who will be opening the Royal Navy and British Army equipment exhibition. [19534]

  Mr. Arbuthnot
  [holding answer 12 March 1997]: It has not yet been decided who will open the exhibition.

  Mr. Flynn
  To ask the Secretary of State for Defence which non-United Kingdom companies will be exhibiting at the Royal Navy and British Army equipment exhibition. [19535]

  Mr. Arbuthnot
  [holding answer 12 March 1997]: All exhibiting companies must be United Kingdom registered.

  Royal Yacht
  Mr. Tony Banks
  To ask the Secretary of State for Defence (1) what is the estimated cost of replacing the
  337
  gold leaf on the royal yacht Britannia damaged in the recent accident; and if it will be replaced before the yacht's arrival in Hong Kong; [20079]

  (2) what is the total estimated cost of the damage to the royal yacht Britannia as a result of the accident at Karachi; and who will pay for the repair work. [20078]

  Mr. Soames
  On 28 February, while in the Gulf, en route from Doha to Karachi, HMY Britannia was involved in a minor collision with RFA Bayleaf while replenishing at sea. The repair costs for Britannia, which will be met from defence votes, are not yet known, but all necessary repairs, including any to her gold leaf, will be completed before she arrives in Hong Kong.

  Horizon Cruiser
  Mr. George
  To ask the Secretary of State for Defence if he will make a statement on the future of the Horizon anti-air warfare cruiser. [20133]

  Mr. Arbuthnot
  The United Kingdom remains committed to the collaborative common new generation frigate programme, comprising Project Horizon and the principal anti-air missile system, PAAMS.

  Mr. George
  To ask the Secretary of State for Defence what consultation the chief of defence procurement has had with this French and Italian counterparts on the future of Horizon. [20134]

  Mr. Arbuthnot
  The chief of defence procurement consults regularly with his French and Italian counterparts on the common new generation frigate programme.

  School Cadet Forces
  Ms Armstrong
  To ask the Secretary of State for Defence if schools which establish a cadet force within the terms of the Government's recent proposals to expand cadet forces will also be eligible to seek funding from his Department for(a) armouries and (b) firing ranges on school sites. [20030]

  Mr. Soames
  No undertaking has been made to expand the cadet forces, and media reports of a possible expansion have been overblown. However, we are currently looking into the scope for expanding the cadet forces, so that more young people can enjoy the benefits of membership. A study will be made of the opportunities, limitations and costs, including those of any new armouries and firing ranges which might be required, within any possible future expansion.

  Ms Armstrong
  To ask the Secretary of State for Defence what is the estimated cost to public funds of providing(a) armouries and (b) firing ranges in all state secondary schools eligible to establish cadet forces. [20029]

  Mr. Soames
  Any secondary school may request the formation of a cadet unit within its premises, and may subsequently ask for the installation of an armoury or firing range. Should the cadet authorities agree, and the resources allow, these facilities can be provided. The costs would vary from site to site, but as an example, the estimated cost of providing a firing range and armoury at Longhill school, Brighton is £95,000.
  338

  Defence Evaluation and Research Agency
  Mr. Nicholls
  To ask the Secretary of State for Defence when he expects to announce the completion of the sale of the DERA support services division. [20654]

  Mr. Arbuthnot
  Contracts between the Defence Evaluation and Research Agency, acting on behalf of the Secretary of State for Defence, and the venture capitalist Cinven for the sale of DERA's support services division have been exchanged. Completion will take place by mid-April, subject to the conclusion of mutually satisfactory arrangements for a pension scheme for the new company.

HEALTH

  NHS Administration Costs
  Mr. Chris Smith
  To ask the Secretary of State for Health what was the administrative cost of the NHS as a percentage of its total budget for each year since 1989. [13647]

  Mr. Horam
  I refer the hon. Member to the replies I gave the hon. Member for Peckham (Ms Harman) on 30 November 1995,Official Report, column 862, and the hon. Member for Bradford, South (Mr. Sutcliffe) on 3 December 1996, Official Report, column 635.

  Changes over the years in the roles and responsibilities of family practitioner committees, family health services authorities, district health authorities, and regional health authorities, and the transfer of functions to NHS trusts, mean that the figures are not directly comparable. These figures also include expenditure on medical negligence, capital charges, grants to voluntary bodies and some health care services—for example, health promotion.

  Mr. Simon Hughes
  To ask the Secretary of State for Health if he will list the amount spent on administration in each NHS(a) health authority and (b) trust. [19431]

  Mr. Horam
  The latest available health authority headquarters administration figures, relating to 1995–96, are already in the Library. However, changes over the years in the roles and responsibilities of family practitioner committees, family health services authorities, district health authorities, and regional health authorities, and the transfer of functions to NHS trusts, mean that the health authority headquarters administration figures are not directly comparable over time. These figures also include expenditure on medical negligence, capital charges, grants to voluntary bodies and some health care services—for example, health promotion.

  For information on health authority costs and trust management costs, I refer the hon. Member to the booklet "Health Authority Costs and Management Costs in NHS Trusts" which is published today.

  Mr. Hughes
  To ask the Secretary of State for Health how much is spent on management and administration per annum at present in each health authority in England. [20119]

  Mr. Horam
  For information on health authority costs and trust management costs, I refer the hon. Member to the booklet "Health Authority Costs and Management Costs in NHS Trusts" which is published today.
  339
  The latest available health authority headquarters administration figures, relating to 1995–96, are already in the Library. However, changes over the years in the roles and responsibilities of family practitioner committees, family health services authorities, district health authorities, and regional health authorities, and the transfer of functions to NHS trusts, means that the figures are not directly comparable. These figures also include expenditure on medical negligence, capital charges, grants to voluntary bodies and some health care services—for example, health promotion).

  Mr. Ainger
  To ask the Secretary of State for Health what were the administrative costs of each health authority in England in each of the last five years. [17465]

  Mr. Horam
  [holding answer 24 February 1997]: I refer the hon. Member to the replies I gave the hon. Member for Darlington (Mr. Milburn) on 22 May 1996, Official Report, columns 215–16, and the reply I gave the late hon. Member for Don Valley (Mr. Redmond) on 30 October 1996, Official Report, column 134.

  Changes over the years in the roles and responsibilities of family practitioner committees, family health services authorities, district health authorities, and regional health authorities, and the transfer of functions to NHS trusts, mean that the figures are not directly comparable. These figures also include expenditure on medical negligence, capital charges, grants to voluntary bodies and some health care services—for example, health promotion).

  Greater London Health Budget
  Mr. Cox
  To ask the Secretary of State for Health what proportion of the national health service budget for Greater London was spent on administration during 1996; and if he will make a statement. [17965]

  Mr. Horam
  The information requested is not available.

  Meals on Wheels
  Mr. Simon Hughes
  To ask the Secretary of State for Health if he will list the amount charged by each county council for the provision of meals on wheels. [18706]

  Mr. Burns
  Information on the charges typically made to individual users of services by local authority social services departments is not held centrally. However, aggregate figures by client group of gross and net expenditure and fees and charges relating to meals on wheels for each local authority social services department in England in 1994–95, the latest year for which this information is available, may be found on Internet—http://www.open.gov.uk/doh/publi c/pss—stat. htm— which can be accessed in the Library.

  NHS Pension Scheme (GP Staff)
  Mr. Chris Smith
  To ask the Secretary of State for Health if the assumption underlying his estimate of £5million for the first-year costs of allowing GPs' practice staff to join the NHS pension scheme was that any practice staff who wished to could join or only those nominated by their GP employer; and what is the difference in cost between estimates based on these two assumptions. [18796]
  340
  Mr. Malone
  Assumptions underlying the £5 million costs were based on the results of the staff interest survey. The results reflected the level of interest among staff who were employed by general practitioner practices which expressed an interest in participating.

  Adoption
  Mr. Simon Hughes
  To ask the Secretary of State for Health if he will list for each English local authority the amount currently charged for inter-county adoption home studies. [18783]

  Mr. Burns
  These figures are not held centrally.

  Dentists
  Mr. Gordon Prentice
  To ask the Secretary of State for Health what discussions he has had with the British Dental Association concerning fast-track procedures for striking off dentists who may pose a threat to the public. [19295]

  Mr. Malone
  In December 1995 we consulted the British Dental Association about powers for the national health service tribunal to suspend dentists from providing general dental services. We amended the National Health Service (General Dental Services) Regulations to reflect these changes which came into force on 21 December 1995.

  GP Patient Lists
  Mr. Simon Hughes
  To ask the Secretary of State for Health on how many occasions in each of the last five years the Medical Practices Committee has decided to disperse the patient list of a vacant general practitioner post following a recommendation by a health authority that the post be advertised. [19430]

  Mr. Malone
  We understand from the Medical Practices Committee that there was one occasion in the past five years when the committee dispersed a patient list following a recommendation from a health authority to advertise.

  Customer Charters
  Mr. Donohoe
  To ask the Secretary of State for Health how much his Department and its executive agencies have spent drafting, publishing and circulating each of their customer charters and customer standard documents; and how many copies of each document have been issued. [19384]

  Mr. Horam
  The following table shows the information requested:

  Item

  Cost of drafting publishing and circulating £

  Number of copies distributed

  The patients charter

  6,622,610

  26,880,000

  The patients charter maternity services

  191,799

  1,350,000

  The patients charter blood donors

  144,144

  28,250

  The patients charter services for children and young people

  359,927

  354,000

  341

  Item

  Cost of drafting publishing and circulating £

  Number of copies distributed

  The patients charter mental health services

  88,225

  65,300

  A framework for local community care charters in England

  76,765

  100,000

  The MDA code of practice on enforcement

  6,553

  4,150

  MCA working with business

  6,536

  5,500

  NHSPA commitment to service: Members charter

  2,000

  14,200

  Private Finance Initiative
  Mr. Simon Hughes
  To ask the Secretary of State for Health what estimate he has made of the number of PFI contracts which have been signed by 30 March(a) 1997 and (b) 1998. [19415]

  Mr. Horam
  Information on estimated future dates of contract signature is held centrally only for major private finance initiative schemes, generally with a capital value of over £10 million, which have at least reached preferred bidder stage. Of these schemes, it is estimated that three will have signed commercial contracts by 30 March 1997 and that a further 20 will have signed commercial contracts by 30 March 1998. Commercial contracts for 47 PFI schemes, of £1 million or above, have already been signed.

  Residential Care (Assets)
  Mr. Simon Hughes
  To ask the Secretary of State for Health (1) what estimate he has made of the total value in real terms of assets sold by old people to pay for residential care in each of the last five years; and what in each case was the percentage change from the previous year; [19370]

  (2) how many people, having sold their assets to pay for residential care, exhausted their funds in the last year for which figures are available; and how many such people remained in the same residential home; [19372]

  (3) how many people sold their homes to pay for residential care in 1995–96; and what estimate he has made of the number who will have done so in 1996–97. [19371]

  Mr. Burns
  The information requested is not held centrally.

  NHS Numbers
  Mr. Barron
  To ask the Secretary of State for Health if he will list for the most recent dates for which figures are available(a) the number of duplicate NHS numbers issued since the project to issue computerised numbers began and (b) the cost to the NHS to date of correcting this problem. [19546]

  Mr. Horam
  Between 4 December 1995, when the new national health service number was introduced, and 5 March 1997, the latest date for which figures are available, approximately 6,750 new NHS numbers had been re-issued by registrars of births and deaths at a subsequent birth registration. This is less than 1 per cent.342
  of all birth registrations. Whenever an NHS number is erroneously re-issued, at least two registrations are affected. Occasionally, NHS numbers have been re-issued more than once, thereby affecting three or more registrations.

  If an NHS number is re-issued at a birth registration this is detected by the NHS central register and all affected babies are issued with a unique replacement number. The cost to the NHS of correcting non-unique NHS numbers in patient registers is neglible. The cost of amending the software used by registrars of births and deaths to issue NHS numbers is being met by the Office for National Statistics.

  Hospital Buildings
  Mr. Simon Hughes
  To ask the Secretary of State for Health how many square feet of former hospital buildings remain(a) empty, (b) derelict and (c) unsold. [19417]

  Mr. Horam
  The information requested is not available centrally.

  Health Information Helpline
  Mrs. Anne Campbell
  To ask the Secretary of State for Health what was the number of telephone calls from(a) the public and (b) Cambridge constituents to the health information helpline in the last 12 months for which figures are available; and what were the numbers of each category of inquiry. [19618]

  Mr. Horam
  The number of calls received by the national health information service between January 1996 and December 1996, inclusive, was 573,295. The number of calls at constituency level and categories of calls are not collected centrally.

  Psychiatric Beds
  Mr. Simon Hughes
  To ask the Secretary of State for Health how many psychiatric beds have closed in each yea since 1980. [19373]

  Mr. Burns
  The information requested is not held centrally in the form requested.

  General Managers
  Mr. Simon Hughes
  To ask the Secretary of State for Health what was the total remuneration of each NHS district health authority's general manager in each of the last three years. [19429]

  Mr. Malone
  I refer the hon. Member to the reply I gave the late hon. Member for Don Valley (Mr. Redmond) on 16 February 1995,Official Report, column 808, and the hon. Member for Peckham (Ms Harman) on 26 February 1996, Official Report, column 354. Information concerning 1995–96 is shown in the table. The figures need to be treated with caution. The payments listed represent remuneration in respect of the total gross salary, bonus payments, monetary value of benefits in kind, taxable expenses allowances and compensation payments in relation to offices described rather than an individual. Thus, payments listed for a particular district health authority could refer to more than one individual.
  343

  Chief executives' remuneration by district health authority

  £000

  1995–96

  Northumberland HA

  75

  Sunderland Health Commission

  56

  North Durham HA

  79

  South Durham HA

  79

  Tees HA

  81

  South of Tyne Health Commission

  79

  North Cumbria HA

  53

  Newcastle and North Tyneside HA

  86

  East Riding HA

  84

  United Health—Grimsby and Scunthorpe HA

  75

  North Yorkshire HA

  85

  Bradford HA

  49

  West Yorkshire HA

  87

  Leeds Healthcare

  87

  Wakefield HA

  76

  North Derbyshire DHA

  80

  Southern Derbyshire Health

  80

  Leicestershire HA

  87

  Nottingham HA

  46

  Barnsley DHA

  74

  Doncaster DHA

  81

  Rotherham HA

  71

  Sheffield Health

  79

  North Nottinghamshire DHA

  75

  Lincolnshire HA

  81

  Cambridge DHA

  37

  North West Anglia Health Commission

  85

  Huntingdon DHA

  17

  Suffolk DHA

  86

  East Norfolk District Health Commission

  74

  Bedfordshire Health

  80

  North West Hertfordshire DHA

  20

  South West Hertfordshire DHA

  20

  Barnet HA

  81

  Hillingdon Health Agency

  70

  East and North Hertfordshire DHA

  41

  Brent and Harrow HA

  79

  Ealing, Hammersmith and Hounslow HA

  97

  Kensington, Chelsea and Westminster DHA

  75

  North Essex HA

  87

  South Essex DHA

  65

  Barking and Havering HA

  42

  Redbridge and Waltham Forest DHA

  17

  East London and The City HA

  85

  New River DHA

  79

  Camden and Islington HA

  93

  Bromley DHA

  84

  East Sussex HA

  437

  East Kent HA

  75

  West Kent DHA

  88

  Bexley and Greenwich Health

  91

  Lambeth, Southwark and Lewisham Health Commission

  94

  Croydon Health Commissioning Agency

  91

  Merton Sutton and Wandsworth DHA

  83

  Kingston and Richmond HA

  80

  West Surrey Health Commission

  83

  Eastern Surrey Health Commission

  150

  West Sussex HA

  87

  Dorset Health Commission

  99

  Portsmouth and South East Hampshire Health Commission

  78

  Southampton and South West Hampshire Health Commission

  89

  North and Mid Hampshire HA

  73

  Health Commission for Wiltshire and Bath

  68

  Isle of Wight Health Commission

  66

  Berkshire Health Commission

  47

  Buckinghamshire DHA

  74

  Northamptonshire DHA

  40

  Oxfordshire DHA

  41

  Bristol and District DHA

  80

  Cornwall and Isles of Scilly DHA

  80

  North and East Devon HA

  71

  South and West Devon HA

  94

  Gloucestershire DHA

  43

  Somerset HA

  74

  Herefordshire HA

  138

  Worcester and District DHA

  492

  344

  Chief executives' remuneration by district health authority

  £000

  Shropshire HA

  83

  North Staffordshire HA

  84

  Coventry HA

  76

  Dudley HA

  36

  Sandwell HA

  70

  Solihull Health

  37

  Walsall HA

  60

  Wolverhampton HA

  55

  South Birmingham HA

  48

  North Worcestershire HA

  309

  South Staffordshire HA

  89

  Warwickshire HA

  35

  North Birmingham HA

  53

  North Cheshire HA

  82

  South Cheshire HA

  71

  Liverpool HA

  84

  St. Helens and Knowsley HA

  36

  Sefton HA

  37

  Wirral HA

  75

  Stockport Health Commission

  36

  North West Lancashire HA

  79

  East Lancashire HA

  84

  South Lancashire HA

  71

  Wigan and Bolton HA

  80

  Bury and Rochdale DHA

  73

  West Pennine HA

  83

  Manchester Health Commission

  105

  Salford and Trafford HA

  74

  Morecambe Bay HA

  32

  Source:

  Annual accounts of district health authorities.

  Notes:

  1. Figures are provisional.

  2. East Sussex DHA—amount includes £351,000 of pension contributions.

  3. Bexley and Greenwich—amount recorded in FHSA accounts.

  4. Eastern Surrey DHA—amount includes £72,000 of compensation for loss of office to former East Surrey DHA chief executive.

  5. Herefordshire DHA—amount includes £81,000 of compensation for loss of office.

  6. Worcester and District DHA—amount includes £107,000 of compensation for loss of office and £310,000 of pension contributions.

  7. Walsall DHA—amount recorded in FHSA accounts.

  8. North Worcestershire DHA—amount includes £99,000 of compensation for loss of office and £143,000 of pension contributions.

  9. Wirral DHA—amount recorded in FHSA accounts.

  10. Manchester DHA—amount shown is a shared cost between the DHA and the FHSA. The cost of the DHA is 75 per cent. of the figure shown.

  Liver Disease
  Mr. Simon Hughes
  To ask the Secretary of State for Health how many diagnoses of chronic liver disease there have been in each of the last five years. [19418]

  Mr. Horam
  The information requested is not held centrally.

  Lariam
  Ms Corston
  To ask the Secretary of State for Health, pursuant to his answer of 25 February,Official Report, column 180, what factors led to deferring until 1995 the inclusion in his Department's publication "Health Information for Overseas Travel" of information about side effects of dizziness, disturbed sense of balance or a neuropsychiatric disorder included in changes made to the product information for Lariam in October 1991. [19682]
  345
  Mr. Malone
  The 1995 edition of "Health Information for Overseas Travel" was the first edition of that book.

  Power Lines (Cancer)
  Ms Walley
  To ask the Secretary of State for Health what data he collates in respect of the number of cases of cancer sufferers resident in homes adjacent to high current configuration power lines; and if he will make a statement. [19828]

  Mr. Horam
  The information requested is not collected centrally. However, several epidemiological studies are currently under way to investigate childhood cancer in relation to various possible causes including electromagnetic fields. The largest study of this type in this country is the United Kingdom childhood cancer study which is funded in part by the Department of Health, with technical support provided by the National Radiological Protection Board. The Department is also funding two pilot studies, one of adults and one of children, looking at cancer incidence near power lines.

  Children's Homes
  Mr. MacShane
  To ask the Secretary of State for Health what proposals he has for the administration of children's homes currently run by local authorities to be offered out for tender to the private sector. [19732]

  Mr. Burns
  None. It is for local authorities to make such arrangements as they consider appropriate to ensure that homes are available for the care and accommodation of children looked after by them—whether by their own provision or that of the independent sector.

  Nurses, Midwives and Health Visitors Act 1979
  Mr. Hendry
  To ask the Secretary of State for Health what plans he has to review the Nurses, Midwives and Health Visitors Act 1979. [20616]

  Mr. Dorrell
  It is Government policy to regularly review non-departmental public bodies. The national boards for nursing, midwifery and health visiting in the four countries of the United Kingdom fall into this category. The United Kingdom Central Council for Nursing, Midwifery and Health Visiting does not. However, there is a clear relationship between the statutory bodies. The Government therefore, as a first stage, intend to commission an independent and fundamental review of the current operations of the five statutory bodies created by the Nurses, Midwives and Health Visitors Act 1979. This will be a comprehensive study of all aspects of their work, including those issues around determining fitness to practise which go to the heart of the council's role in protecting the public. I shall, in particular, want it to consider the need for new powers to impose life bans on people convicted of the most serious offences. We shall then bring forward for consultation specific proposals for change in the light of the outcome of that review.

  Non-ionising Radiation
  Ms Walley
  To ask the Secretary of State for Health (1) what guidelines he has issued in respect of limiting levels of exposure to non-ionising radiation; and if he will make a statement; [19836]
  346
  (2) what representations he has received from the National Radiological Protection Board in the last five years on the standards of protection for exposure to non-ionising radiation; and if he will make a statement. [19837]

  Mr. Horam
  The National Radiological Protection Board provides advice to Government on the risks to human health from both ionising and non-ionising radiation. Non-ionising radiation includes low and high-frequency electromagnetic fields as well as solar and artificial ultraviolet radiation.

  In 1993 the NRPB issued guidelines on limiting exposure to electromagnetic fields and radiation—"Restrictions on Human Exposure to Static and Time Varying Electromagnetic Fields and Radiation" (documents of NRPB, Vol. 4, No. 5). The guidelines are based solely on preventing the well-established biological effects of heating and shock from acute exposure to electromagnetic fields and radiation.

  Initiatives to reduce excessive exposure to ultraviolet radiation have been under way since "The Health of the Nation" White Paper in 1992. These include the Health Education Authority's "Sun Know How" campaign, a report by the NRPB's advisory group on non-ionising radiation covering health effects from ultraviolet radiation (documents of NRPB, Vol. 6, No. 2), distribution of NRPB's "Board Statement on Effects of Ultraviolet Radiation on Human Health" to all general practitioners, public health physicians and occupational health physicians, and the development of an Internet web site. Copies of the documents are in the Library.

  Electromagnetic Fields
  Ms Walley
  To ask the Secretary of State for Health (1) what assessment he has made of the risk of cancer from(a) domestic exposure to electromagnetic fields,(b) parental exposure to electromagnetic fields and (c) employment in occupations with high exposure to electromagnetic fields; and if he will make a statement; [19839]

  (2) what assessment he has made of the risk to human health associated with exposure to electromagnetic fields; and if he will make a statement. [19835]

  Mr. Horam
  The Department obtains advice on the health implications of exposure to electromagnetic fields from the National Radiological Protection Board and other sources, including its own funded research. The NRPB's advisory group on non-ionising radiation conducted an extensive review of the subject in 1992—"Electromagnetic Fields and the Risk of Cancer" (document series, Vol. 3, No. 1)—and concluded that there was no firm evidence of a carcinogenic hazard from exposure of paternal gonads, the foetus, children or adults to the extremely low-frequency fields that might be associated with residence near major sources of electricity supply, the use of electrical appliances or work in the electrical, electronic and telecommunication industries. The independence expert Committee on Medical Aspects of Radiation in the Environment has endorsed the advisory group's report. A supplementary report was published in 1994 by the NRPB—"Electromagnetic Fields and the risk of Cancer" (document series, Vol. 5, No. 2)—to take into account the results of further experimental
  347
  and epidemiological studies from Scandinavia, France and Canada. Copies of the advisory group's reports are available in the Library.

  Several epidemiological studies are currently under way to investigate childhood cancer in relation to various possible causes, including electromagnetic fields. The largest study of that type in this country is the United Kingdom childhood cancer study, which is funded in part by the Department, with technical support provided by the NRPB. The Department is also funding two pilot studies, one of adults and one of children, looking at cancer incidence near power lines.

  Methicillin-resistant Staphylococcus Aureus
  Mr. Brian David Jenkins
  To ask the Secretary of State for Health what action his Department is taking to prevent the spread of MRSA within hospitals and the community. [19723]

  Completed schemes

  Project/scheme

  Completed date

  Cost £

  Updated cost £

  Amersham—dermatology unit

  21 January 1994

  2,581,694

  3,195,841

  Amersham operating theatres

  24 June 1983

  1,333,653

  1,873,782

  Amersham phase 1

  22 July 1991

  6,193,487

  7,312,478

  Buckingham—phase 1

  16 February 1990

  1,263,502

  1,577,974

  Milton Keynes DGH—end unit

  24 September 1992

  1,202,638

  1,431,955

  Milton Keynes DGH—M1 unit

  24 November 1988

  2,495,264

  3,187,133

  Milton Keynes DGH—OPD

  13 November 1989

  3,578,463

  4,278,928

  Milton Keynes DGH—phase 1

  12 September 1983

  15,638,544

  19,974,686

  Milton Keynes DGH—phase 2

  21 August 1991

  17,810,043

  21,296,264

  St. John's EMI

  11 March 1991

  1,816,779

  1,843,014

  Stoke Mandeville—maternity

  5 May 1991

  6,030,648

  6,117,733

  Stoke Mandeville—OPD/hospice

  18 July 1989

  1,598,049

  1,952,399

  Stoke Mandeville—pathology

  5 May 1989

  1,545,574

  1,930,250

  Stoke Mandeville—X-ray

  10 July 1987

  1,287,006

  1,689,947

  Stoke Mandeville—enabling works

  30 July 1996

  1,185,964

  1,306,886

  Tindal M1 development

  7 May 1991

  3,831,237

  3,472,831

  Tweed Drive—nursing home

  17 November 1989

  1,224,958

  1,212,018

  Wycombe pathology

  5 July 1985

  1,314,300

  1,801,553

  Wycombe—X-ray extensions and alterations

  16 September 1994

  2,074,436

  2,545,487

  Milton Keynes—secure unit phase 2

  14 February 1995

  1,918,847

  2,228,083

  Aylesbury manor house rehabilitation unit

  30 June 1995

  1,520,819

  1,689,131

  Totals

  77,445,905

  91,918,373

  Abbreviations:

  DGH = District General Hospital.

  EMI = Elderly Mentally Infirm.

  OPD = Out-Patients Department.

  MI = Mental Illness.

  Planned schemes

  Project/scheme

  Forecast completion date

  Estimated cost (£)

  Stoke Mandeville Hospital redevelopment

  Negotiating with potential PFI partners

  20,000,000

  Aylesbury Vale mental health intensive care unit

  Summer 1998

  1,800,000

  Amersham and High Wycombe redevelopment (South Buckinghamshire)

  Start on site date dependent on the outcome of refinancing discussions

  38,000,000

  348
  Mr. Horam
  The Department is currently working with professional groups on the revision of clinical guidelines on methicillin-resistant staphylococcus aureus issued to the national health service in September 1994. We have also commissioned the Royal College of Nursing to produce an education video and teaching pack on MRSA. In May 1996 the Department issued a leaflet on MRSA to health authorities, social services departments and nursing and residential homes.

  Copies of the guidelines issued in 1994 and the leaflet on MRSA are available in the Library.

  Hospital Building Schemes (Buckinghamshire)
  Mr. Lidington
  To ask the Secretary of State for Health if he will update the list of hospital building schemes in Buckinghamshire given in his answer of 3 July 1996,Official Report, columns 443–44; and if he will make a statement. [19841]

  Mr. Horam
  The information requested is shown in the tables:

  Fluoridation
  Mr. Chris Smith
  To ask the Secretary of State for Health if he will list the references of the scientific work published since 1990 upon which the Government's advisers base their recommendations to fluoridate. [20073]

  Mr. Malone
  I refer the hon. Member to the reply I gave the hon. Member for Sunderland, North (Mr. Etherington) on 28 January,Official Report, column 163.
  349

  Ophthalmology Sessions
  Mr. Simon Hughes
  To ask the Secretary of State for Health how many consultant ophthalmology sessions are available on average each week at present; and how many were available each week on average in each of the past five years. [20118]

  Mr. Malone
  The information requested is not available centrally.

  NHS Policy Board
  Mr. Bayley
  To ask the Secretary of State for Health (1) what was on the agenda for the NHS policy board meeting on 12 March; [19134]

  (2) pursuant to his answer of 22 January, Official Report, column 668, if he will place in the Library the 1996–97 quarter 3 (a) income and expenditure returns and (b) year-end turnover and outturn forecasts for (i) health authorities and (ii) NHS trusts, together with the further papers on the quarter 3 returns to be considered by the NHS policy board on 12 March. [19276]

  Mr. Malone
  The NHS policy board meeting scheduled for 12 March 1997 did not take place. The 1996–97 quarter 3 forecasts for health authorities and NHS trusts will be placed in the Library shortly.

  Information submitted to the NHS policy board provided for internal management discussion and advice, which includes its agenda, is exempt from publication under part 2 of the "Open Government Code of Practice."

  Factor 8
  Mr. Alfred Morris
  To ask the Secretary of State for Health if he will make it his policy to fund provision for recombinant factor 8 on an equivalent basis to that provided in Scotland; and if he will make a statement. [20043]

  Mr. Horam
  The Department does not allocate money to support specific treatments for particular patient groups. National health service funds are allocated to purchasers of health care who are best placed to decide what services, including treatments, they wish to purchase to meet local needs.

  Depression (Prescribed Drugs)
  Mr. Flynn
  To ask the Secretary of State for Health what changes have taken place in each of the past five years in the number of drugs prescribed for treating depression. [20031]

  Mr. Malone
  The number of licensed preparations used in the treatment of depression are shown in the table:

  Number of licensed preparations used in the treatment of depression, 1991 to 1995

  England

  Year

  Number of licensed preparations

  1991

  144

  1992

  143

  1993

  147

  350

  Number of licensed preparations used in the treatment of depression, 1991 to 1995

  England

  Year

  Number of licensed preparations

  1994

  153

  1995

  155

  1. Antidepressants are those preparations in the British National Formulary [issue 28, September 1994] therapeutic section 4.3—antidepressant drugs.

  2. These preparations are the main category of preparations used in the treatment of depression, but not solely used for it. Doctors may also prescribe other preparations.

  Mr. Flynn
  To ask the Secretary of State for Health what assessment he has made of the financial and other support that is provided to groups pressing for an increase in drug use for depression from(a) patients, (b) doctors, (c) drug companies and (d) doctors employed by drug companies. [20032]

  Mr. Burns
  The Department has not undertaken such an assessment.

  Health Service Financial Performance
  Mr. Bayley
  To ask the Secretary of State for Health which(a) health authorities and (b) NHS trusts are currently in the NHS executive's (i) red and (ii) amber zone for financial performance; and what are the criteria for inclusion in each zone. [20044]

  Mr. Horam
  Monitoring financial information for trusts and health authorities is already placed in the Library following analysis and review by the national health service executive. The red or amber status of trusts and health authorities is internal management information.

  Health Service Senior Managers (Pay)
  Mr. Bayley
  To ask the Secretary of State for Health for what reasons(a) health authorities are and (b) NHS trusts are not required to pay their senior managers on NHS Whitley rates. [20046]

  Mr. Malone
  The pay of general and senior managers on national terms and conditions is not negotiated in Whitley councils but is determined centrally by my right hon. Friend the Secretary of State. Health authorities have to pay national rates. The National Health Service and Community Care Act 1990 gave trusts the freedom to set their own terms and conditions of service and has enabled the pay of senior executives to be determined locally where local needs and market factors can properly be taken into account in order to deliver improved patient care.

AGRICULTURE, FISHERIES AND FOOD

  Farm Woodlands
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food when he expects his Department to publish the booklet "Farm Woodlands: An Introductory Guide"; and what plans he has to publicise the farm woodland premium scheme in advance of the booklet becoming available. [19578]
  351
  Mr. Boswell
  Full details of the revised farm woodland premium scheme will be contained in the new "FWPS Rules and Procedures" booklet. Both this and the new application forms are currently being printed and are expected to be available before the beginning of April when the new scheme is due to commence.

  Advice of a more general nature will be contained in "Farm Woodlands: An Introductory Guide". Work is currently in progress on this. Interested organisations will be consulted shortly on the draft and it is expected that the booklet will be published in the autumn of this year. In the meantime, the existing "Farm Woodlands: A Practical Guide", which the new booklet will replace, is being reprinted.

  Publicity for the scheme will be concentrated over the spring and summer, with various promotional activities, including targeting local farming events and the agricultural shows, undertaken by ADAS and the Scottish Agricultural College advisory service. We also intend to

  Adult herd size

  1988

  1989

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  1–9

  21

  81

  166

  303

  553

  826

  976

  1,074

  1,126

  10–19

  23

  90

  213

  401

  691

  1,039

  1,248

  1,382

  1,441

  20–29

  35

  141

  337

  589

  1,045

  1,512

  1,783

  1,922

  1,995

  30–39

  56

  221

  507

  913

  1,539

  2,106

  2,427

  2,561

  2,638

  40–49

  90

  325

  727

  1,216

  1,959

  2,630

  2,924

  3,057

  3,116

  50–59

  107

  386

  760

  1,225

  1,850

  2,398

  2,701

  2,825

  2,884

  60–69

  107

  384

  762

  1,255

  1,876

  2,393

  2,625

  2,709

  2,780

  70–79

  117

  358

  728

  1,151

  1,688

  2,119

  2,347

  2,422

  2,447

  80–89

  122

  363

  696

  1,109

  1,582

  1,938

  2,114

  2,176

  2,207

  90–99

  97

  347

  663

  1,025

  1,380

  1,685

  1,797

  1,831

  1,857

  100–149

  456

  1,463

  2,571

  3,683

  4,870

  5,753

  6,138

  6,243

  6,307

  150–199

  192

  601

  1,066

  1,454

  1,823

  2,080

  2,189

  2,237

  2,260

  200–249

  91

  253

  412

  545

  671

  772

  823

  838

  845

  250+

  58

  147

  249

  319

  400

  498

  535

  545

  550

  Unknown

  22

  45

  95

  251

  554

  899

  1,097

  1,225

  1,388

  Total

  1,594

  5,205

  9,952

  15,439

  22,481

  28,648

  31,724

  33,047

  33,841

  It is not possible, without disproportionate cost, to provide the total number of herds for each category of herd size.

  Mrs. Helen Jackson
  To ask the Minister of Agriculture, Fisheries and Food when he will make a statement to the House regarding the disposal to landfill of BSE-related cattle carcases and other remains. [20080]

  Mrs. Browning
  I refer the hon. Member to the reply given to the hon. Member for Edinburgh, East (Dr. Strang) on 11 March 1997,Official Report, columns 54–5.

  Green Vegetables
  Mr. Martyn Jones
  To ask the Minister of Agriculture, Fisheries and Food what has been the percentage change in the consumption of fresh green vegetables from 1980 to 1995. [19294]

  Mr. Boswell
  Household consumption of fresh green vegetables fell by 36 per cent. between 1980 and 1995. However, this has been offset by a 5 per cent. increase in the household consumption of other fresh vegetables, excluding potatoes, and a 23 per cent. increase in processed vegetables (table 5.1, page 70 of the National Food Survey, 1995 ISBN 0–11–243014–7 refers).
  352
  place an advertisement in the farming press in the next few weeks and individual letters will be sent to existing participants outlining the changes to the scheme. The Forestry Commission also intends to run local seminars about the scheme.

  Bovine Spongiform Encephalopathy
  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food how many herds had had a BSE case by the end of each year from 1988 to 1996, broken down to show herds with head sizes of(a) less than 10, (b) 10 to 19, (c) 20 to 29, (d) 30 to 39, (e) 40 to 49, (f) 50 to 59, (g) 60 to 69, (h) 70 to 79, (i) 80 to 89, (j) 90 to 99, (k) 100 to 149, (l) 150 to 199, (m) 200 to 249 and (n) 250 and above, cattle; and if he will indicate the total number of herds for each category. [18207]

  Mrs. Browning
  [holding answer 10 March 1997]: The following table shows the cumulative number of adult herds with confirmed cases of BSE by herd size at the end of each year—1988 to 1996:

  Meat Inspectors
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food how many authorised meat inspectors were in post on(a) 1 January 1996 and (b) the latest date for which figures are available. [19549]

  Mrs. Browning
  [holding answer 10 March 1997]: At 1 January 1996, the Meat Hygiene Service employed a total of 972 meat hygiene inspectors.

  The Meat Hygiene Service currently employs a total of 1,160 meat hygiene inspectors.

  Customer Charters
  Mr. Donohoe
  To ask the Minister of Agriculture, Fisheries and Food how much his Department and its executive agencies have spent drafting, publishing and circulating each of their customer charters and customer standard documents; and how many copies of each document have been issued. [19380]

  Mr. Boswell
  I will write to the hon. Member with the information requested.
  353

  MV Caroline
  Mr. Tony Banks
  To ask the Minister of Agriculture, Fisheries and Food what veterinary inspection will be made of animals due to be exported from Dover on the MV Caroline on or about 7 March; and if he will make a statement. [19543]

  Mrs. Browning
  The pre-export inspection of animals consists of a visual appraisal and, if deemed appropriate, a physical examination. The purpose of the inspection is to ensure that the animals intended for export comply with Community health requirements, show no signs of infectious or contagious disease and are fit to travel to their intended destination.

  Mr. Banks
  To ask the Minister of Agriculture, Fisheries and Food if the veterinary officers from his Department have investigated the condition of animals transported on the MV Caroline. [19544]

  Mrs. Browning
  When animals have been transported from Britain in this ship the operator has received advice about the on-board facilities for animals. Loading of animals into the ship is also supervised, and veterinary and technical experts from this Department have accompanied some voyages.

  Farm Animals (Breeding)
  Miss Hoey
  To ask the Minister of Agriculture, Fisheries and Food what further action he plans to take following the report of the committee considering the ethical implications of emerging techniques in the breeding of farm animals. [19905]

  Mrs. Browning
  I refer the hon. Member to the reply given to the hon. Member for Doncaster, North (Mr. Hughes) on 3 February 1997,Official Report, column 513–14.

  In addition, following discussions with the Royal College of Veterinary Surgeons, a working party has been set up to look into the role of non-veterinarians in relation to the artificial insemination of cattle and horses. The results of this exercise may affect the way the recommendations of the Banner committee are taken forward in relation to AI. Further action will therefore be considered once the results of the working party are known.

  Food and Agricultural Science Establishments
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food how many purpose-built laboratories in Government-funded food and agricultural science establishments are mothballed; and if he will list each establishment with such a laboratory. [19921]

  Mr. Douglas Hogg
  No laboratories owned by the Ministry have been mothballed. However, some have been closed permanently as a result of reorganisation and restructuring or following the completion of new or modernised facilities. I have no information about laboratories not owned by the Ministry.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what proportion of laboratory capacity in Government-funded food and agricultural 354
  science establishments built in (a) 1980 to 1985 (b) 1985 to 1990, (c) 1990 to 1995 and (d) 1995 to date, has been mothballed. [19922]

  Mr. Hogg
  No laboratories owned by the Ministry have been mothballed. I have no information about laboratories not owned by the Ministry.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food if he will list the Government-funded food and agricultural science sites vacated since 1980, indicating(a) those in which the Biotechnology and Biological Sciences Research Council, other research councils and agencies, service or central laboratories retain the freehold or lease, (b) the estimated commercial sales value of each facility and (c) the length of time each has been vacant. [19923]

  Mr. Hogg
  Since 1980, the Ministry has vacated, either wholly or in part, the laboratories as listed. Prior to 1990, surplus accommodation was surrendered to the Property Services Agency for reuse by other Government Departments or disposal. I have no information about the way in which such properties may have been reused or disposed of or about their commercial values. The Ministry has not disposed of any laboratories since 1990 although some are due to be sold for redevelopment in the near future.

  It would be inappropriate to release estimated values for properties which have yet to be sold as this might affect adversely the amounts that buyers would be prepared to pay for them. I have no information about vacant laboratories owned freehold or leasehold by other Government Departments or by other organisations.

  Laboratories vacated by the Ministry of Agriculture since 1980

  Laboratory

  Date vacated

  ADAS Laboratories at Shardlow Hall, Derbyshire

  1986

  ADAS Laboratories at Olantigh Road, Wye, Nr Ashford, Kent

  1986

  ADAS Laboratories at Coley Park, Reading

  1995

  ADAS Laboratories at Starcross Nr Exeter, Devon

  1995

  ADAS Laboratories at Brooklands Avenue, Cambridge

  1995

  ADAS Laboratories at Lawnswood, Leeds

  1995

  ADAS Laboratories at Trawsgoed, Nr Aberystwyth

  1995

  Food Science Laboratories at Romeny Street, London SW1

  1990

  Food Science Laboratories at Haldean House, Norwich

  1990

  Torry Research Station, Aberdeen

  1996

  The Central Science Laboratory, Tolworth, Surrey

  1992

  The Central Science Laboratory, Harpenden, Herts

  1996

  The Central Science Laboratory, London Road, Slough

  1996

  The Central Science Laboratory, Luddington, Warwickshire

  1996

  The Veterinary Investigation Centre, Gabalfa, Cardiff

  1986

  The Veterinary Investigation Centre, Chester

  1986

  The Veterinary Investigation Centre, Elmbridge Court, Gloucester

  1986

  The Veterinary Investigation Centre, Gladstone Road, Northampton

  1986

  The Veterinary Investigation Centre, Coley Park, Reading

  1994

  The Veterinary Investigation Centre, Lawnswood, Leeds

  1990

  The Veterinary Investigation Centre,

  355

  Laboratories vacated by the Ministry of Agriculture since 1980

  Laboratory

  Date vacated

  Riseholme, Lincoln

  1996

  The Veterinary Investigation Centre, Madingley Road, Cambridge

  1993

  The Veterinary Investigation Centre, Weybridge, Surrey

  1980

  The Veterinary Investigation Centre, Jupiter Road, Norwich

  1993

  The Veterinary Investigation Centre, Wye Nr Ashford, Kent

  1992

  The Veterinary Investigation Centre, Whittington Road, Worcester

  1993

  The Veterinary Investigation Centre, Bangor, North Wales

  1991

  Horticultural Laboratories at Worthing Road, Littlehampton

  1995

  Surrendered to the Ministry by Horticulture Research International.

  Since 1980, a number of new laboratories have been built and others have been either rebuilt or substantially refurbished. These are listed.

  New laboratories

  Date built

  The Central Science Laboratory, Sand Hutton York

  1996

  The Food Science Laboratory, Colney Lane, Norwich

  1990

  The Veterinary Investigation Centre, Bury St. Edmunds

  1993

  The Veterinary Investigation Centre, Luddington, Warwickshire

  1993

  Rebuilt/refurbished laboratories

  Date rebuilt/ refurbished

  The Veterinary Investigation Centre, Starcross, Devon

  1993

  ADAS Laboratory, Wergs Road, Wolverhampton

  1992

  The Veterinary Investigation Centre, West House, Thirsk

  1996

  The Veterinary Investigation Centre, Calthwaite, Penrith

  1996

  The Veterinary Investigation Centre, Sutton Bonnington

  1990

  The Veterinary Investigation Centre, Itchen Abbas, Winchester

  1994

  The Veterinary Investigation Centre, Barton Hall, Preston

  1985

  Meat Hygiene Service
  Mr. Martyn Jones
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on each case in which an official of the Meat Hygiene Service was dismissed for failing to enforce full compliance with specified bovine material controls in slaughterhouses. [20268]

  Mrs. Browning
  It is the Government's policy, explained more fully in their response to the Second Report from the Public Service Committee, Session 1995–96, that the results of internal civil service disciplinary investigations into the conduct of individuals should not be disclosed publicly.
  356
  Mr. Tipping
  To ask the Minister of Agriculture, Fisheries and Food if he will place a copy of the national review of standards and practices within the fresh meat industry, prepared by the Meat Hygiene Service hygiene advice teams and referred to in the last annual report of the MHS in the Library. [19733]

  Mrs. Browning
  [holding answer 11 March 1997]: A copy of the report was placed in the Library of the House on 6 March 1997.

  Mr. Tipping
  To ask the Minister of Agriculture, Fisheries and Food how many meat hygiene inspectors work in Nottinghamshire; and where they are located. [19706]

  Mrs. Browning
  [holding answer 11 March 1997]: On a full-time equivalent basis, the Meat Hygiene Service—which is responsible for these matters—currently employs 13 full-time meat hygiene inspectors at three licensed fresh meat premises in Nottinghamshire.

  The Meat Hygiene Service also employs additional casual meat hygiene inspectors at these plants where necessary for holiday and sickness cover.

  Food Hygiene
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what action he has taken to implement the recommendations of the hygiene advisory team report by William Swann relating to national policy in respect of the contamination of animals presented for slaughter. [19663]

  Mrs. Browning
  [holding answer 11 March 1997]: I refer the hon. Member to the statement made by my right hon. Friend the Minister of Agriculture, Fisheries and Food on 6 March 1997, Official Report, columns 1023–35.

  Quarantine
  Mr. Tim Smith
  To ask the Minister of Agriculture, Fisheries and Food for what reasons quarantine kennels are omitted from the licensing and inspection regime under the Boarded Animal Establishment Act 1963. [19892]

  Mrs. Browning
  Provision is made for the licensing and inspection of quarantine premises under the Rabies (Importation of Dogs, Cats and Other Mammals) Order 1974, as amended.

  Ewes (Export for Religious Slaughter)
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to restrict the export of ewes for outdoor religious slaughter in France. [19908]

  Mrs. Browning
  [holding answer 12 March 1997]: The Department's powers to regulate sheep exports are exercisable only in relation to the legal provisions concerned with the welfare of animals during transport. We shall apply the relevant rules thoroughly in the usual way. Enforcement of the rules concerned with welfare at slaughter in France is a matter for the French authorities.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Sheffield.): The LORD CHANCELLOR on the Woolsack.

Tributes to the Late Earl of Listowel
The Lord Privy Seal (Viscount Cranborne): My Lords, as Leader of your Lordships' House, it is one of my sadder duties, although perhaps a privileged one, to lead tributes in your Lordships' House. Today I rise to pay tribute to the late Lord Listowel, who sadly died yesterday afternoon.
Lord Listowel—or Billy as he was affectionately known to his many friends in your Lordships' House—had recently joined the distinguished band of your Lordships active into their nineties. He succeeded his father as long ago as 1931, and took his seat in the following year. This made him the longest serving active Member of our House. He thus had the distinction of having been a Member of your Lordships' House for 65 years. I suggest, if I may, that few can equal his record of service to this House. I should also record that he had the distinction of being the longest serving member of the Privy Council, having been appointed to that body in 1946.
Lord Listowel had an unusual career. Having gained experience in local government both before and after the Second World War, he served in Sir Winston Churchill's Government from 1944 to 1945 as Parliamentary Under-Secretary of State for India and Deputy Leader of your Lordships' House. He then served as Postmaster General; as Secretary of State for India and for Burma; as Minister of State for the Colonies; and as a Parliamentary Secretary in the Ministry of Agriculture. He was also Governor-General of Ghana from 1957 to 1960. As your Lordships will know, Ghana was the first African nation to achieve independence from the United Kingdom. As Governor-General, Lord Listowel saw that fledgling nation through its first heady days of independence. I venture to suggest to your Lordships that there can be few Members even of this august House who can record such a varied and distinguished record as a Minister and servant of the Crown.
Lord Listowel also had a remarkable career in the House. As your Lordships will remember, he was Chairman of Committees from 1965 to 1976. At the start of his term of office, he oversaw a major reorganisation of the administration of this House. For the first time the Administration Committee operated as an executive body; and for the first time an executive rather than merely an honorary Black Rod was appointed. This period also saw valuable additions to your Lordships' facilities. The Dining Room was extended, and infill building work took place in State Officers' Court providing a considerable amount of new accommodation.
420
As Chairman of Committees, Lord Listowel spent many hours on unopposed Bill committees following the passing of the Local Government Act in 1972. The Act established a framework for a new local government structure, but individual authorities needed to apply to Parliament for their own Private Bills. Consideration of these Bills by the Chairman of Committees ensured the effective scrutiny of this highly complex legislation. Lord Listowel also sat for many years as a Deputy Speaker of your Lordships' House. Indeed, his friendly face was a familiar sight on the Woolsack right up until 17th July last year. Those of your Lordships who were in the House in the early 1970s will remember that he worked particularly long hours during that time when the House sat far later far more often than has perhaps recently been the case. The Chairman of Committees tells me that after Lord Listowel's last sitting on the Woolsack he wrote to say what a joy it had been to sit and feel wanted at his age. He remained on the panel of Deputy Speakers right up until the day of his death.
As a man, Lord Listowel, I think it is fair to say, was held in as high a regard as any Member of your Lordships' House. He was always kind and gentle and an unfailing friend to all of your Lordships no matter where they sat in this House. I can say without fear of contradiction that he will be sorely missed. I am sure that your Lordships would wish to join me in giving our condolences to Lady Listowel and her family and to pay tribute to a much loved figure in your Lordships' House.
Lord Richard: My Lords, I am delighted to follow the noble Viscount the Leader of the House in paying tribute to my noble friend Lord Listowel. It is a somewhat sobering reflection to realise that he was a Member of this House longer than I have been on this planet. It is always sobering when that happens. I remember appearing in a case not too long ago when I discovered that another barrister on the case had been called to the Bar five years before I was born. I suppose one has to get used to longevity in this House, but it is a somewhat sad event when one has to do what we are trying to do this afternoon.
Lord Listowel was a well known, prominent and much respected Member of your Lordships' House. As the noble Viscount the Leader of the House has said, his political career was long, distinguished and varied. It was based firmly upon his commitment to the Labour Party and the principles—as he perceived them—on which that party was based. It is said that he went up to Balliol but his father removed him after he had been there a year because he had shown dangerous Left-wing tendencies and had started to make radical speeches in the union. Having been removed from Oxford, he was then sent to Cambridge. I am told that Cambridge proved no less subversive than Oxford had been. His political career followed from that.
I think it is right to say that apart from the noble and learned Lord, Lord Hailsham, Lord Listowel was the last survivor of the coalition government. Indeed he was Labour Chief Whip in the House of Lords from 1940 to 1944. In 1944 he became Deputy Leader of the House. I think that the grandfather of the Lord Privy Seal was at that time the Leader of the House. With the change

421
of government in 1945, he moved into ministerial office. I suppose that he will be remembered most for his contribution to colonial and Commonwealth affairs.
The noble Viscount the Leader of the House referred to Lord Listowel's time as Secretary of State for India. He played a crucial role in the run-up to the independence of that country. Later he became Governor-General of Ghana, where he struck up, it seems, a remarkably warm relationship with President Nkrumah. I do not think that was a relationship that followed necessarily from all President Nkrumah's relationships with British politicians, governors-general or Ministers; but with regard to Lord Listowel, deep respect and affection were felt on both sides.
The noble Viscount referred to Lord Listowel's time as Chairman of Committees. He was, I think, the first Labour Chairman of Committees in your Lordships' House. He served his time there with distinction. He sat regularly on the Woolsack until last summer. I have one personal memory of Lord Listowel which I treasure. The first election I ever fought was in 1959 in South Kensington. That is not a part of the country noted for its Socialist affiliations. It was very difficult to get anyone to come down to make a major speech on behalf of the cause, in so far as one did make major speeches in South Kensington. Lord Listowel was approached. He accepted. I well remember a packed meeting in Kensington Town Hall where Lord Listowel, with perhaps uncharacteristic robustness, took on the record of the then Conservative Government. Lest it be thought that it had a great effect upon the result, I can say only that with his efforts and mine I saved my deposit by 40 votes.
Lord Listowel was, as the Lord Privy Seal has said, a man of extraordinary politeness, kindness, patience and natural courtesy. He will be greatly missed by the House as a whole. He was a distinguished and assiduous servant of the House. Those of us on these Benches would wish to remember him as a good and loyal colleague who served his party and his country well. On behalf of my noble friends, may I join with the Lord Privy Seal in expressing our deepest sympathy to Lady Listowel and her family.
Lord Jenkins of Hillhead: My Lords, Lord Listowel was, until almost last week when I think I remember last seeing him, living history, expressed with a quiet dignity and a modest sense of service which had infused his whole long life. He was a Peer, as we have been told, for nearly 66 years; a junior Minister in Churchill's Grand Coalition; Deputy Leader of your Lordships' House over half a century ago; a Secretary of State under Attlee, who later, when he had discharged his task of getting rid of the charge for which that department of state was created, was content to become a Parliamentary Under-Secretary at the Ministry of Agriculture and Fisheries. That shows a true sense of humble duty, although he later reblossomed as a successful governor-general and as Chairman of Committees here for 11 years. It was a great record of un-self-seeking service. He will be much missed in this House and I join with my noble friends in expressing sympathy to his widow.
Baroness Hylton-Foster: My Lords, I was not a Member of this House when the very distinguished Lord Listowel was Leader of the House. With all the Cross-Benchers, I should like to join in the tributes which have already been paid by so many of those who knew him many years ago and latterly.
As Convener of the Cross-Bench Peers, I was in the fortunate position of getting to know him better when he was Chairman of Committees, and also, for some time, as has been said today, Deputy Speaker. We on these Benches always admired his impartiality. He was always tremendously patient. He showed courtesy and many kindnesses, about which no one really knew anything. He was more popular because he was modest, and he was loved as a result on all sides of the House. We on the Cross-Benches admired him. I believe, as the noble Viscount the Lord Privy Seal said, that it was 17th July last year that he sat last on the Woolsack. On these Benches we shall always remember him with affection and great respect.
The Lord Bishop of Sheffield: My Lords, from the Bench of Bishops I wish to add a word of gratitude and respect to Lord Listowel. We valued a colleague who, as long ago as 1931, had written a book on the values of life. He was a philosopher who was both wise and good—in the true sense of the words, a philosopher prince. He will be missed, and we are grateful for all he gave to the country and to this House in all those years.
Lord Donaldson of Kingsbridge: My Lords, as I knew Billy Listowel before most people in this House were born, I wish to record one of what his father regarded as his dangerous and disagreeable Left-wing tendencies. He formed a group of people, of which I am ashamed to say I was not one, to try to live on the dole, and they did for about five years.

UNHCR: Funding
3.17 p.m.
Lord Rea Lord Rea asked Her Majesty's Government:
What recent discussions they have had with the United Nations High Commission for Refugees concerning the adequacy of the funds available to it.
Lord Chesham: My Lords, we stay closely in touch with the office of the United Nations High Commission for Refugees and my noble friend Lady Chalker announced a further contribution of £5 million on 11th March.
Lord Rea: My Lords, I thank the noble Lord for that Answer. Are the funds available to UNHCR keeping pace with the number of refugees, especially of course those in the developing world? Is he aware that after a few years there is often a larger number of refugees to be returned than the number of those originally displaced owing to their high fertility rate, which is consequent upon the vulnerability of women in refugee

423
situations and the lack of reproductive health services? Is the UNHCR addressing that problem adequately either itself or through other agencies or NGOs?
Lord Chesham: My Lords, we do not believe that the UNHCR is badly funded. In 1996 it came close to reaching its target for general programmes. It raised more than its target for nine out of its 15 major special programmes. We can only agree about the increasing number of displaced persons. Projects related to the protection and health of women refugees are now part of many UNHCR programmes. Typical projects relate to family planning and income generation. The UNHCR has guidelines on the protection of women refugees which it applies wherever it is active. Gender issues form a significant part of staff training.
Lord Renton: My Lords, could it be pointed out in discussions with the United Nations High Commissioner for Refugees that the United Kingdom has received more than its fair share of the many refugees in this world and has contributed financially as well as any other country?
Lord Chesham: My Lords, my noble friend makes a very good point. I do not necessarily think that it is important for us to raise the matter. I believe that around the world what we do is generally appreciated.
Lord Avebury: My Lords, I appreciate the additional contribution announced by the Minister towards the UNHCR's programme. But does the noble Lord believe that it is satisfactory, and does the UNHCR see it as satisfactory, that money has to be raised specially to meet emergencies as they arise? Is it not dangerous for the commission to have to rely on the generosity of donor nations at a time when refugee problems such as that in eastern Zaire are getting worse? Does the Minister also agree that we need to put the UNHCR's funding on a sound basis before it extends its role too far into dealing with the internally displaced, which is a huge extra burden on the resources available?
Lord Chesham: My Lords, part of the budget of the UNHCR comes from the UN budget; that is on a regular basis. However, we are never certain what catastrophes will occur and where. It is essential that, rather than saying, "Here is x amount, and that's it", everyone should always be prepared, if a particular problem arises, to be in a position to help.
Lord Hylton: My Lords, will the Minister tell the House whether the budget of the UNHCR contains any provision for preventive diplomacy aimed at stopping, in particular, the outbreak of internal conflicts and the vast displacements of population that they cause?
Lord Chesham: My Lords, I am not sure that that comes within the role of the UNHCR. I do not believe that it is part of its brief.
Lord Judd: My Lords, we all appreciate the additional support for the UNHCR. In the still deeply
424
disturbing crisis of the Great Lakes region of Africa, how successful has it been in locating and reaching all the refugees? Have the Government seen the reports of large numbers of children having died or being at risk in eastern Zaire and of young Rwandan men being among refugees who, having been taken, have not been seen again and are presumed killed? Does the UNHCR really have the resources and backing to deal with all this? Can safe corridors—for example, back to Rwanda—be established? Wherever the UNHCR operates, can we ensure that it has adequate resources for its mandate for the protection of refugees, not least against enforced repatriation?
Lord Chesham: My Lords, that question covers quite a large area. I shall try to answer as best I can. In relation to the point about children and young boys missing, we have not received any firm evidence of these sorts of atrocities. However, we treat all such allegations very seriously. We are urging the UNHCR to investigate crimes. We have not seen any reliable reports on the abduction of boys.
So far as children generally are concerned, this month we provided a further £250,000 in support of the Save the Children Fund tracing and family reunification project within Rwanda. That is in addition to an earlier £250,000 for its emergency programme in eastern Zaire. We support those activities as we can.
As to the refugee situation more generally in eastern Zaire, there is a problem regarding the difference between the army and the rebels. We are urging all regional leaders with influence on Kabila to press him to agree to an immediate cease-fire so that corridors can be set up. At present we are not in a position to demand anything very much. We do not have an international armed force in the area. If we had such a force there, we should have to consider such proposals very seriously. We very much regret that the Zairian Government recently expelled 40 international relief workers, including several from the UNHCR. We are protesting as much as we can on that issue.
Lord Rea: My Lords, may I ask the Minister a specific question of which I gave him notice? I refer to the Atrush refugee camp in northern Iraq for Kurdish refugees from Turkey. The UNHCR ostensibly closed the camp earlier this year but apparently the refugees have refused to go home. As the Minister may be aware, I intended to go on a human rights visit to the camp. However, we have been unable to get transit permission. Does the Minister have any news about the well-being of this large group of 15,000 to 20,000 people, largely consisting of women and children?
Lord Chesham: My Lords, our latest information is that refugees are now leaving Atrush. Some have chosen to return to Turkey; several thousand have stayed in northern Iraq. The UNHCR and the World Food Programme continue to provide assistance as necessary. However, the UNHCR does not have access to the camp at Atrush and has no estimate of the number of refugees remaining there.

Water Fluoridation
3.26 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal asked Her Majesty's Government:
Which organisations and authorities have been consulted on proposed guidance regarding the Water Fluoridation Act 1985, now contained in the Water Industry Act 1991.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, comments on the draft guidance for health authorities on water fluoridation were invited from the former regional health authorities, the Water Services Association, the Water Companies Association and other government departments.
Baroness Fisher of Rednal: My Lords, I thank the noble Baroness for that reply. On 20th January she said that guidelines would be available in the spring. I do not suggest a date when spring starts and finishes. However, I hope that she will be able to highlight in the guidelines the deplorable state of affairs between the water authorities and the side concerned with public health. The two are constantly in conflict. That was not the intention of the Water Fluoridation Act when it was put on the statute book. Can the Minister give the House any assurance that that conflict will cease following the publication of the new guidelines?
Baroness Cumberlege: My Lords, that would be our intention. The water authorities want further clarification on one or two matters of detail. We will try to achieve that.
Baroness Hayman: My Lords, we now understand from Mr. Malone that the advice that the Department of Health is issuing is to health authorities rather than to the water companies. Is that not the wrong target? What action will the Government take to ensure that water companies, following proper consultation by health authorities and a request for fluoridation, act within the intentions of the 1985 Act?
Baroness Cumberlege: My Lords, it is a matter for the water companies to decide whether or not they wish to fluoridate the water. The guidance will be useful to water companies as well as to health authorities.

Pilgrim Trust
3.28 p.m.
Lord Cocks of Hartcliffe Lord Cocks of Hartcliffe asked Her Majesty's Government:
Whether they will ask the Charity Commission to investigate whether the grant by the Pilgrim Trust towards the funding of the Constitution Unit is compatible with the trust's status as a registered charity.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, if any noble Lord ever has evidence of impropriety by any charity and passes it on to me, in turn I will pass it on to the Charity Commission.
Lord Cocks of Hartcliffe: My Lords, I thank the Minister for that reply. It is my understanding that the Pilgrim Trust has given the money to the Constitution Unit, which is not a charity, for general purposes. Does the Minister agree that this is a matter to which the attention of the Charity Commissioners should be drawn?
Lord Inglewood: My Lords, the noble Lord, Lord Cocks, having raised the matter on the Floor of the House, I will pass on his comments to the Charity Commission.
Lord Jenkins of Hillhead: My Lords, I should declare an interest, although it will become obvious, having had the pleasure of being a trustee of the Pilgrim Trust for some 21 years. Successive chairmen have been: to begin with Lord Harlech, the father of the present noble Lord, Lord Harlech; Lord Richardson of Duntisbourne, a former Governor of the Bank of England; Sir Harry Fisher, an ex-High Court judge; now it is Mrs. Mary Moore. My fellow trustees of the Pilgrim Trust are now the Lord Chief Justice of England and a variety of other distinguished people including, from the noble Lord's own party, Sir Claus Moser.
The noble and learned Lord, the Lord Chief Justice, was present at the launching of the Constitution Unit study, as was the present Secretary of the Cabinet, Sir Robin Butler. The previous Secretary of the Cabinet, the noble Lord, Lord Armstrong of Ilminster, is also a trustee of the Pilgrim Trust. The idea or the implication of the noble Lord's Question that the Pilgrim Trust and the Constitution Unit are politically motivated bodies is an example of the extraordinarily malign fantasies which occasionally seize the mind of the noble Lord, Lord Cocks.
Lord Inglewood: My Lords, standing at the Dispatch Box it is not for me to answer the questions that have been posed. It is a matter for the Charity Commissioner.
Lord Cocks of Hartcliffe: My Lords, I am sure that the Charity Commission will give due weight to the remarks of the noble Lord, Lord Jenkins, since he recently led a major debate on transparency in political funding. Will the Minister give a sense of urgency to the Charity Commission? I have already waited nine months for the results of its investigation into the Scarman Trust, which was formerly the Charter 88 Education Trust.
Lord Inglewood: My Lords, in the case of the Scarman Trust, formerly the Charter 88 Trust, I gather that the inquiry had to look at a number of complex issues. The inquiry is soon to be finalised. I understand that emerging findings are that the trust will be required to clarify and, where necessary, review and revise its relationship with other organisations. I am sure that the

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Charity Commissioner will take forward his inquiries as speedily as possible, consistent with carrying out a thorough and proper inquiry.

Fur Imports: EU Regulation
3.32 p.m.
Baroness Castle of Blackburn Baroness Castle of Blackburn asked Her Majesty's Government:
What steps they are taking in the Council of Ministers to ensure that Regulation 3254/91 banning the import into the European Union of furs from animals caught in the leghold trap is implemented without any further delay.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, the Government have strongly supported the regulations which were adopted by the Council of Ministers in November 1991. The European Commission is negotiating with the main fur-producing countries an agreement by which the principles of the regulations can be implemented. The Council of Ministers has requested the Commission to introduce an import ban if no satisfactory agreement can be reached.
Baroness Castle of Blackburn: Yes, but is it not a fact that it is five years since the regulation was passed? It is over a year since an agreed date for its implementation was fixed as January 1996. There is no end date for the negotiations yet agreed so that the implementation can begin. Is not the villain of the piece the Commissioner for trade? I am sorry to say he is a British Commissioner in the European Community who is holding up the obvious desire of the Environment Council, the responsible body, on which I am glad to say our British Minister has played a distinguished and firm role, by all sorts of procrastination and dragging of feet?
Does the Minister agree that the fur trade in this country and throughout Europe has become uppish again as a result of that dilatoriness? So today we see restored on the backs of beautiful women from Madonna to the models on the catwalk the furs which may have come from animals caught in that barbaric and cruel trap. Does the Minister therefore agree with me that we should encourage British women to refuse to wear fur, saying that it is not a badge of fashion but a badge of shame?
Earl Ferrers: My Lords, I admire the noble Baroness, Lady Castle, enormously and always have done. I long to agree with her. I always have done. But, unfortunately I have never been able to. I am afraid I do not agree with her today at all. She says that there is no end date to the negotiations. She is perfectly right. There are no end dates to negotiations; you have to find a solution to them. She blames the Commissioner for Trade but she is, if I may say so, quite wrong. She says that there has been procrastination and, if I may say so, she is quite wrong. In 1991 the environment Ministers agreed to ban the import of furs. What we are trying to do now is to agree how that
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should be done with those countries—in particular Russia, Canada and America—where there are problems. It is better to have an agreement. If we do not get an agreement, there is the problem of contravention of World Trade Organisation agreements and a trade war. That is what we are trying to avoid.
Lord Pearson of Rannoch: My Lords, does my noble friend agree that it is often impossible to know the genuine provenance and destination of many goods circulating in Europe, given the fraudulent nature of the single market? In this case, can my noble friend tell the House how the regulation proposes to tell the difference between the skin of an animal that has been caught in a leghold trap and the skin of an animal that met with a less painful end?
Earl Ferrers: My Lords, that is one of the factors in the negotiations.
Baroness Nicol: My Lords, will the Minister accept that when I started in politics quite a long time ago, I was known as "the poor man's Barbara Castle"? I now realise what a compliment that was. Given that this country banned the traps as long ago as 1954, is it not a great shame that we now have to reproach a British Commissioner with apparently delaying the implementation of the new agreement? I wish to add my compliments to the present Secretary of State for the Environment who has worked hard to get the agreement adopted. I think we should give him credit for that. However, perhaps some reproach should be given to the British Commissioner for not implementing the agreement.
Earl Ferrers: My Lords, the compliment paid to the noble Baroness was a good one and she need feel no shame about it. It is a great glory. Having said that, I believe that she also is wrong. We must get away from the business of trying to reproach the Commissioner. What happened was that the environment Ministers agreed that there should be a prohibition. What was not agreed was how the ban should be implemented. It is in order to try to negotiate how to implement the ban and the factors involved that the discussions are continuing. My right honourable friend the Secretary of State wants an unconditional ban on steel-jawed leghold traps and action to phase out padded leghold and aquatic traps. If an agreement cannot be arrived at, then the instructions are that the proposal should be implemented. But there are dangers with it. It is better to get an agreement than to have a trade war.
Lord Carter: My Lords, is the Minister aware that the proposal being considered for approval by the International Organisation for Standardisation, which has a role, would allow traps that take up to three minutes to kill the animal? That would allow significant injuries such as the amputation of digits, bone fractures and tissue lacerations. The proposal would allow a trap-to-death time of at least three minutes and probably much longer. Do the Government agree with the Labour Party that such

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traps are completely unacceptable and, with us, will they oppose any attempt to allow them as a way of getting round the proposed ban on the import of furs?
Earl Ferrers: My Lords, my right honourable friend the Secretary of State went to the Council of Ministers with a steel-jawed leghold trap and a pencil. He put the pencil in the leghold trap in front of his colleagues on the Council of Ministers and the pencil was stripped in two. That shook his colleagues. It is for that reason that my right honourable friend is doing all he can to get the leghold traps banned. But you have to get the agreement of your ministerial colleagues and then try to get agreement with the countries who use them not to import into Europe furs procured by such methods. It is better to try to get an agreement with them rather than to have the possibility of a trade war.
Baroness Castle of Blackburn: Is the Minister aware that he is no better than the Commissioner for Trade, Sir Leon Brittan? The Commissioner stated that there can never be any international agreement to curb an iniquitous practice because it would interfere with the GATT agreement. Does the Minister know that Article 20 of the GATT agreement allows exceptions to be made when necessary to protect public morals or the life or health of humans, plants and animals? This is a clear case coming under Article 20, as argued very effectively in the Environment Council by, I am glad to say, a British environment Minister. So why do the Government not have the courage to tell the British Commissioner for trade that he is defying both the will of the Council of Environment Ministers which is the responsible body and which has unanimously rejected these spuriously humane methods of trapping and also the will of Parliament? Are we in this House saying that the Commissioner can defy all the democratic controls in Europe?
Earl Ferrers: My Lords, the noble Baroness sometimes becomes very irate and sometimes she is quite rude to people. I think she meant to be rude to me this afternoon. In fact she has paid me the greatest of compliments. She says that I am no worse than the Commissioner. My goodness me, I regard that, rather like the noble Baroness behind her, as a great compliment.
I must try to get over to the noble Baroness a point that she seems to be finding very difficult to accept for some reason. The fact is that it is not the fault of the Commissioner for Trade. From a sedentary position, the noble Baroness says yes, it is. I can assure her, no, it is not. The fact is that the Commissioner for Trade is doing his best to reach an agreement, which is much better than having all-out conflict.
Baroness Park of Monmouth: My Lords, I hate to take the personalities out of this discussion. However, will my noble friend the Minister confirm that the problem has arisen because Directorate-General XI on the environment totally failed to consult and work with Directorate-General I on GATT. The whole issue stems from relative incompetence, I am sorry to say, in
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manoeuvring and managing this business in the Commission. It is not a personal matter; it is a matter of bad organisation.
Earl Ferrers: My Lords, I am not sure whether or not that is supposed to be a compliment. I shall take it whichever way I can. The fact is that the regulations were agreed to be implemented, but there was no decision on how the ban should be carried out. That is the problem that is being overcome. No matter whose fault it is, the main principle is to try to get in place as soon as possible the ban which the noble Baroness wants to have in place.
Baroness Castle of Blackburn: Has the Minister been to Strasbourg in the past few days, as I have, and talked to the Commissioner for Trade, Sir Leon Brittan? Has he heard him admit that he is the prime mover in trying to thwart the will of Parliament and of the Council and to push through the spurious agreement on humane methods of trapping, which merely consist of putting a bit of plastic round the jaw but still holding the animal in pain and panic?
Earl Ferrers: My Lords, I have not had the privilege of going to Europe as the noble Baroness has. I have been detained in your Lordships' House because her party is being so difficult over some of the business we have to transact. Unlike the noble Baroness, Ministers are not allowed the privilege of escaping. I am surprised that her Chief Whip allowed her to escape whereas mine does not allow me to do so. Nor did I have the privilege of being a fly on the wall and hearing the noble Baroness's conversation with Sir Leon. Although I have the greatest admiration for her integrity, I think that I would like to hear Sir Leon's version of the conversation as well as hers before I come to a conclusion.

Social Security Administration (Fraud) Bill
3.45 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Mackay of Ardbrecknish.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Earl Russell Earl Russell moved Amendment No. 44A:
Before Clause 4, insert the following new clause—
AUTOMATED DATA PROCESSING
(" . After section 187 of the Social Security Administration Act 1992 insert—
"Automated data processing.
187A. No decision concerning or relating to a person's entitlement to any benefit, or to the payment of that benefit, shall be validly made if it is based solely on the automated processing of data.".").
The noble Earl said: Having enjoyed the preceding exchanges, I shall begin in the same spirit by relating an incident. One very hot summer day in 1981 there was the kind of thunderstorm which only the east coast of the United States knows. The United States social security main computer was struck by lightning and lost its memory. That was discovered only when an old lady in San Francisco went to claim her pension and was given a monthly pension cheque for the sum of 5 million dollars. The old lady took it hack. That is an entirely commendable spirit of honour but one cannot count on it happening universally.
We all know that computers are capable of error. We have probably all experienced errors made by computers. Bank computers are capable of paying amounts to the wrong person. I have had a good deal of experience of that and have endeavoured to react in the spirit of the old lady in San Francisco. We heard recently in the debate on party funding and related matters a good many stories about fundraising letters which computers had sent out to the wrong people. So I do not feel that we need have any argument about whether or not computers are capable of error. They are.
It is also extremely difficult to correct an error made by a computer. Somebody has to talk to the computer and the computer does not always listen. Computer generated letters, repeating errors, are sent out and are received over and over again. I shall not regale the House with experiences involving other American banks. The Minister knows my views about the computers in American banks. But that underlines why it has been decided in European Union Directive 95/46, Article 15, that decisions should not be based solely on automated data processing. It is a very good protection for the principle of civil liberties.
Moreover, it is a directive which will need to be in force in English and Scottish law not later than April 1998. If it is not done now, which is a convenient moment to do it, it will necessarily take up the legislative time of a future government. To attempt to clutter up the legislative programme of a future government is a form of scorched earth policy in which I hope this Government will not indulge, especially since it is still possible that it just might be them.
I believe that it would be highly convenient as well as just and practical to put that principle into our law now. If we do not do it now, we shall have to do it very soon. It is a strong case and I do not see a case to be made against it. I beg to move.
The Earl of Balfour: Before my noble friend the Minister replies, I wonder whether I could ask him to take up with the social security offices throughout the country, and the Customs too for that matter, the need to ensure that at least somebody is trained to be able to delete a mistake in the computer and put it right. I am sure I cannot be the only one who has found that a number has been misplaced or a wrong postcode has been put on letters, and no matter what I do or what letters I send, they still come back wrong.
I understand that it is a matter of training and people need to be specifically taught to go through a special procedure—I do not know what procedure—whereby
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you can correct or delete something in a computer's memory and put it right. If I may respectfully say so, in a number of government departments the people with that ability seem to be extremely rare.
Lord Mackay of Ardbrecknish: Perhaps I may respond to my noble friend. It is not so much ability; it is authorisation. One has to ensure that the person who corrects or alters something in a data bank or database is authorised to do so, so that unauthorised persons cannot make changes which are not corrections but which are actually adding wrong data to the computer. It is more a matter of the people who are authorised to do it doing it than it is people trained to do it. The authorised people are well trained to do it.
The question of mistakes is one of the important aspects of the first part of the Bill. Data matching will in any case throw up mistakes of a postcode nature. It will then be up to people who have been employed to do this to decide what is, for example, the right postcode and then to make the alteration. They have to be authorised, otherwise one could have people making unauthorised entries which might be wrong or fraudulent entries. That is one of the things we have to guard against.
The amendment largely retraces some of the ground we covered on Tuesday. I shall therefore be fairly brief. I hope the noble Earl does not mind. I can easily refer him to quite a few column inches of Hansard for Tuesday on this point. The amendment is prompted by Article 15.(1) of the European Union second directive on data protection which is concerned with automated decisions. It is not clear that the article covers decisions about benefit entitlement. With the amendment, the noble Earl is seeking to insert into our domestic law a provision which would specifically prohibit benefit decisions being taken solely by the automatic processing of data.
I have already covered our plans for the use of the powers within the Bill but perhaps I may again offer the noble Earl the reassurance I offered earlier in the Committee stage about the code of practice and also in response to Amendment No. 20 in the name of the noble Lord, Lord Carter. The discovery of an inconsistency during a data matching exercise will not lead immediately or automatically to a stop on the payment of benefit. I can put it no plainer than that. I thought I had put it plainly on Tuesday.
Where an inconsistency is discovered which might indicate that an existing benefit award is incorrect, the normal procedure will be for the case to be referred to the benefit office responsible for further investigation. In the vast majority of cases where the rate of benefit is involved, the claimant will be asked to explain the inconsistency before any action is taken. That may be impractical where, for instance, the data suggest that the claimant has moved abroad or in cases where the whole identity is entirely fictitious. If the claimant fails to respond to a letter to his last known address within a reasonable time, powers exist within regulations made under Section 5 of the Social Security Administration Act to suspend the payment of benefit. I do not suppose anyone would argue against of those situations.

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Adjudication officers then make decisions about an individual's entitlement to benefit by applying the law to the facts of each case. Local authorities do the same in relation to housing benefit and council tax benefit. If and when a decision is made by an adjudication officer or a local authority, that individual will be informed of that decision in writing and notified at the same time of his review and appeal rights.
Article 15 and the noble Earl's amendment relate to decisions based solely on the automated processing of data. I have explained that data matching does not involve taking decisions. All it does is identify inconsistencies which may then be subject to further human investigation. As I have said before, we believe that prior to October 1998, when we shall have to implement the directive into domestic law, the Government will have to bring forward the necessary legislation encompassing the whole field of data protection and data use and not just specifically this small corner relating to the Benefits Agency.
Although I hear what the noble Earl says about trying to prevent a future government having to take up the time of both Houses in order to bring forward legislation, I have to say to him that they will have to bring forward legislation. That is the proper place to do it and not in a Bill concerned solely with social security. I hope I have this time managed to explain to the noble Earl how the data matching and any errors thrown up by the data matching will be treated, and I trust I have assured him that there will be no automatic stopping of benefit.
Earl Russell: Before I consider what to do with the amendment, I wonder whether the Minister can tell me why he is not convinced that Article 15 of Directive 95/46 does not apply to social security matters. I was very surprised to hear him say that.
Lord Mackay of Ardbrecknish: I do not know what more I can say. We do not think it necessarily does, but we do not think the problem arises for the reasons I have explained. Equally, as I have explained, we shall have to address all these matters as they affect the whole field of data protection when we come to enact in our domestic law the necessary legislation in order to allow us to fulfil by October 1998 the terms of the directive. I really cannot be plainer than that.
Earl Russell: If the answer comes to the Minister and comes into his mind, I shall be happy to give way to him at any time when he is willing to ask me to do so. I cannot see any reason why he should have that opinion. He says that he does so for the reasons he gave me. That is a little like the letter I quoted last Thursday about the Jobseekers Act, "We have not granted you jobseeker's allowance for the reasons explained in a previous letter", which had not arrived. The point is of some importance, so if any light could be shed on it I would be happy to give way.
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On authorisation, the Minister makes a good and valid point, and I accept it. But in doing that he inadvertently strengthened the case for the amendment. It is right that access to the computer should be restricted to those who have authority and the proper status, but that means that it takes longer to put errors right since the number of those people is limited. That means that the need for restriction on decisions made on potentially erroneous data is rather bigger than it was before.
The Minister says that data matching does not involve decisions. In a very narrow and technical sense, that is true. Yet it is equally true that data matching is presumed to be the cause of decisions. Otherwise there would be no point in all the effort put into the Bill. The risk of erroneous decisions remains. I believe the Minister is receiving some light on this matter. I shall be interested to hear what it is.
Lord Mackay of Ardbrecknish: I thought I had shed more than enough light on this point on Tuesday when I made it clear what the position would be and I explained what data matching was. I said in my original remarks not so much that it did not apply but that it was doubtful whether Article 15 concerns the evaluation of certain personal aspects relating to a person such as his performance. I am afraid that I am now having some trouble with the writing on the notes.
I come back to my main point. This is a much wider matter than simply data matching in the Department of Social Security. We shall have to address the issue in the next Session of Parliament in order to put into domestic legislation before October 1998 the terms of the directive. It seems to me that that is the sensible way to proceed. I do not believe that it is sensible to do a little bit on social security especially when I hear the noble Earl suggesting that even if a doubt is thrown up by data matching somehow or other the adjudication officer will not be able to change a benefit decision because the doubt has been put into his mind by an automatic process. That is trying to say, "Let us not have the modern world or any computers." One of the things they do very quickly and cleverly is throw up information on which one can act in every field of life. I do not quite understand that particular part of the noble Earl's argument.
Article 15 says,
"Member states shall grant the right to every person not to be subject to a decision which produces a legal effect concerning him or which significantly affects him, and which is based solely on automated processes of data intended to evaluate certain personal aspects relating to him such as his performance at work, credit worthiness, reliability and conduct".
That is based solely on automated processing of data. I believe I explained that the way we envisage this working it will not be based solely on the automated data process. It may be based on the automated data process, but it will then have to be taken on board by the people working in the Benefits Agency and, at the end of the day, by the adjudication officer if it comes to a decision on benefit. I believe that I am just repeating what I said on Tuesday. I cannot be any clearer than that.
4 p.m.
Earl Russell: If I understood the Minister correctly, he has just granted the whole substance of this amendment. He said that no decision would be based solely on automated data matching: in other words, it would he checked first before any action was taken. If the Minister said that, I thank him warmly. He has granted me what I was asking and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Unauthorised disclosure by officials]:
Lord Carter Lord Carter moved Amendment No. 45:
Page 10, line 25, at end insert—
("() At the end of section 123 of that Act insert—
"(11) For the purposes of this section, a "disclosure without lawful authority" includes the circumstances where information is disclosed to a person who is employed in social security administration or adjudication, but where that information is subsequently used by that person for an unauthorised or an unlawful purpose.".").
The noble Lord said: This amendment deals with a very important point which has been drawn to our attention. We are advised that there could be a major flaw in the Bill. It will be interesting to hear the Minister's view. The amendment brings in a new subsection to Section 123 of the Social Security Administration Act 1992. The words of the amendment are:
"For the purposes of this section, a 'disclosure without lawful authority' includes the circumstances where information is disclosed to a person who is employed in social security administration or adjudication, but where that information is subsequently used by that person for an unauthorised or an unlawful purpose".
The implication is that although the disclosure is proper, the use is not.
The purpose of the amendment is to assess whether there is adequate protection from the unauthorised use of personal data by an official who is authorised to use it. The point was raised at Committee stage in another place.
The problem seems to be that the Data Protection Registrar is of the view that there is a loophole in the law but the Government are not of that opinion. They cannot both be right. It is important that the divergence of opinion is resolved. The Government are proposing wider access to sensitive personal data and we are opposed to that. They must be sure of the position should an official abuse that ability to access personal data. The impact of the amendment is to widen the offences in Section 123, which are currently linked to disclosure. The amendment also removes the uncertainty which may surround Section 1 of the Computer Misuse Act 1990.
For example, under the Bill there is increased potential for an estranged partner to pry into the affairs of another, a scenario which can apply to an official who uses access to DSS and tax records in order to locate his former partner or wife who perhaps he has intimidated or beaten up. He might use his access to pry into the financial circumstances of his ex-wife's new lover. In such cases there is no disclosure to a third party. Legitimate access is given to information which results in it being used for another, but improper, purpose. The offences in Section
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123 might not apply because they relate to disclosure of personal information to a third party. That is the basis of the advice we have been given.
The absence of disclosure of information is the key issue in these examples. An official who is authorised to have access to such information may not disclose it but could use it for his own purposes. That is why the amendment deals with circumstances in which the information accessed by an official is used for an unauthorised purpose. Thus it tracks the unauthorised use of the information for the purpose of locating an ex-partner or studying the financial affairs of an ex-partner's new partner.
The amendment sends a clear signal that unauthorised access to, and use of, information as well as disclosure, can lead to prosecution. We are advised to ask the Minister what the impact is of the case of R. v. Brown which reached the House of Lords. The prosecution was overturned on appeal because it was deemed that a police officer had accessed the police national computer to obtain personal information and had used that data.
The Minister may cite the Computer Misuse Act 1990 as a way of getting round the examples I have given. However, I refer him to page 85 of the annual report of the registrar which states,
"It is not clear whether access is 'unauthorised' for the purposes of the Computer Misuse Act where the employee has authority to access data for limited purposes and in fact accesses them for other purposes".
The Data Protection Registrar is saying that the 1990 Act may be insufficient to deal with disclosure. There is the possibility of disciplinary action against an official who accesses information for improper or personal purposes, but we understand that there is no opportunity to take legal action against such an official by prosecution in the courts. If information is used for offensive purposes action should be merited.
Therefore, we are trying to help the Minister by tightening up the provisions on disclosure, and that is why there is access and usage. The Audit Commission's report of March 1995 found that instances of computer hacking in Whitehall had increased by 140 per cent. in 1994. The report went on to say that the majority of the 655 reported incidents involved staff exceeding their authority by using their passwords to try to obtain information on members of the public to disclose to outsiders.
I am not sure whether the Minister is aware of the correspondence between my honourable friend Mr. Harry Cohen, the Minister and the Date Protection Registrar. My honourable friend wrote to Mr. Oliver Heald, the Parliamentary Under-Secretary, on 16th January 1997, on a point raised in Committee.
"I return to a point I raised with you. It relates to offences under the Computer Misuse Act 1990 and the circumstances under which an employee who is authorised to access a computer exceeds his or her level of authorisation. The point I was raising was that the Date Protection Registrar has made a statement in her twelfth annual report which expresses some doubt on the circumstances. You on the other hand are convinced that the 1990 Act is certain. My understanding (from hearsay sources I should add) is that there [have] been cases where the Crown Prosecution Service has failed in the prosecution of these offences, where a case has come to trial before a judge".
Mr. Cohen asked to be reassured that the registrar was mistaken in her concerns. He wrote,
"As you can imagine, if there is any doubt, I would like to see the law amended and the Fraud Bill offers a suitable opportunity in this regard".
A copy of that letter was sent to the Data Protection Registrar. There is an interesting little sidewind on this. Mr. Cohen wrote on 16th January 1997. In all the discussion we have had about information in documentation and computers being wrong, the reply of the Data Protection Registrar was dated 27th January 1996. The typist in the office of the registrar obviously had not realised that the new year had started and put the wrong date on the letter. The interesting point is what would have happened if that letter was filed through the word processor under its date. It would have disappeared into the computer works in the previous year.
In her reply the registrar thanks Mr. Cohen for the copy of the letter and says,
"One of the cases to which you refer is R. v. Victoria Parker (now Bignell) heard before Southwark Crown Court. This has increased my concern that there is a gap in the protection provided by the Data Protection Act 1984 and the Computer Misuse Act 1990. I understand from the CPS that they intend to appeal the point to the Divisional Court".
As I say, that was on 27th January, and I am not sure whether the appeal has yet been heard. She copied her reply to Mr. Heald.
The Minister will agree that this is an extremely important point and that real concern has been expressed by the registrar that the Act could be flawed. This amendment provides the Minister with an opportunity to say who is right and who is wrong. I beg to move.
Earl Russell: Some years ago my wife was visiting the local women's refuge, as she did from time to time, when a call came in from the local police station to one of the women in the refuge. The call was from a policewoman, wishing to check whether the woman in question was actually in the refuge. She was. That sounds a perfectly reputable call, but if you work in a women's refuge you are trained to be extremely wary of disclosure, so somebody asked the woman if she knew anything about the person who was calling her and discovered that the policewoman who was calling happened to be the best friend of the woman's ex-husband from whom she had fled to the refuge. Disclosure to a policewoman is not necessarily unauthorised disclosure; for a policewoman to possess information is not necessarily unauthorised possession of information, but to disclose it to the violent ex-partner is unlawful disclosure.
The whole point of the amendment is that it does not deal with disclosure only; it deals with use. A person may be perfectly authorised to be in possession of information, but not to use it for a particular purpose. After all, every public servant is not only a public servant; he or she is also a person with all the normal human weaknesses, sins, failings and liability to temptation. That point used to be expressed under the doctrine of what lawyers used to call "the king's two
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bodies"—there is the king's public body, which one might describe as the Crown, and the king's personal body, which is the one that gets the toothache. That is perhaps most clearly expressed in the recent case of President Carter's signature. When he was running for office, Mr. Carter was absolutely horrified to discover that not all letters from the President were signed by the President, so he gave an election pledge that he would personally sign all letters from the President. After he had been elected, his staff slowly and painfully succeeded in explaining to him that that task would take him exactly 24 hours a day. In the end, President Carter was persuaded to understand the doctrine of "the king's two bodies". I hope that persuading the Minister to understand it will not be quite so laborious, but the Minister is extremely quick so I do not think that it will be.
The point is to create an offence of unlawful use because without it, there is no protection. The Minister may invoke the Data Protection Act, but the Data Protection Registrar has stated:
"it is not clear whether access is 'unauthorised' for the purposes of the Computer Misuse Act where the employee has authority to access data for limited purposes and in fact accesses them for other purposes".
That is exactly our case. The Data Protection Registrar is not clear that the law is sufficient, and if she is not clear, others might not be clear either.
The Minister in another place gave a whole series of reassurances against disclosure. He gave the assurance that if a battered wife is concerned that a member of staff might let her husband know where she lives, the record could be deemed to be sensitive. The Minister repeated that assurance the other day. That was very welcome, but it does not cover this case because this case is not about disclosing information to the husband; it is about what happens where the authority concerned might actually be the husband. That cannot be covered by any reassurance about disclosure. We need a separate reassurance about use.
In the case of R v. Brown, which reached the House of Lords, whether such use of the police national computer was an offence appeared doubtful and, in effect, the prosecution failed. That indicates a real gap in the law. If the Minister would like to be generous just once on this Bill, this would be a suitable place. It would protect many innocent people and, as far as I can see, it would cost the Government nothing.
4.15 p.m.
Lord Mackay of Ardbrecknish: I hope that I can be generous at least in the assurances that I may be able to give both the noble Lord, Lord Carter, and the noble Earl. A fair number of points arose in the speeches that we have just heard and I shall try to deal with them all although I believe that the noble Earl realises that I answered one of his points the other day on the question of the battered wife. A battered wife could

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indicate that there was a problem, in which case her file would be subject to access only by highly authorised persons. That would give her protection.
Earl Russell: I did thank the Minister warmly for that assurance, but what I have said today is that that is not the same case as that which we seek to cover in this amendment, so that assurance, however welcome, is not to our present purpose.
Lord Mackay of Ardbrecknish: I thought that I should reiterate it. I must have misunderstood the noble Earl's point because I thought that he was raising the question again and I wanted to be sure that the point that I made two days ago was clear.
Section 123 of the Social Security Administration Act makes it an offence for employees of, and contractors to, the Department of Social Security and certain other government departments to disclose personal social security information unlawfully. Clause 4 of this Bill extends that offence to employees of local authorities, and to any contractors or their employees exercising housing benefit or council tax benefit functions. Unauthorised disclosure is an offence which attracts a penalty on conviction on indictment of imprisonment for a maximum term of two years, or a fine, or both.
The department considers unauthorised disclosure of information from departmental records or other information obtained by staff in the course of their official duties to be serious misconduct, and incidents are met with a range of penalties including dismissal. Where work is performed by contractors, strict conditions of confidentiality are included in the relevant contracts; moreover, our contractors, whose business often depends on the confidential processing of personal information for many other clients as well as ourselves, take confidentiality as seriously as we do and their employees are subject to similarly stringent disciplinary procedures.
Local authorities have their own disciplinary procedures, and of course their staff are subject to a general duty of confidentiality. Once this Bill has received Royal Assent, the department will issue a circular to draw local authorities' attention to the new offence.
The amendment seeks to make it an offence to pass on information to a person employed in social security administration or adjudication if that person subsequently uses the information unlawfully or without authority. That seems a little harsh. Indeed, having listened to the noble Lord, Lord Carter, I suspect that that is not what he meant although it is what the amendment would achieve. The amendment would make the supplier his brother's keeper by placing him under a responsibility for the receiver's behaviour. The receiver may, of course, be committing an offence himself under Section 123 of the Social Security Administration Act, for which he could be fined, imprisoned or both; and the offence would occur with retrospective effect. At the time the information was supplied the receiver would have done nothing with it, but the supplier could, by the mere act of supplying
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information in a way which was lawful at the time he did it, become guilty of an offence by the receiver's actions at some undefined point in the future.
As drafted the amendment would make officials of the department responsible for any later lapses in security by local authorities and their contractors, or others to whom they have passed information including the department's own contractors. The effect could be that no information would be passed between for fear of later culpability. Nor is it clear where the chain of culpability would stop: if the end receiver used the information unlawfully or without authorisation, then the supplier would have committed an offence, but what about the person who supplied him? Is he guilty too?
I believe that the noble Lord's amendment is intended to extend the offence to a person who uses information in an unauthorised way without disclosing it to another person. Such a case might hypothetically be one where an official accessed the records of an ex-partner in order to find out his or her whereabouts and then harassed that person. That was the example used. Officials do not have unrestricted access to information held in the department's systems. It is made very clear to them that they may only access information relevant to the work allocated to them, and access to any other information for which prior authority is not given by a senior officer is therefore unauthorised. This guards against staff entering a database and browsing through it, whether or not they then use the information themselves unlawfully or disclose it to another person. In such cases, whether or not the offence in Section 123 of the Social Security Administration Act, which I described earlier, applies, there are other safeguards elsewhere in legislation to ensure that information obtained in the course of an individual's job is not used unlawfully. Browsing is an offence under Section 1 of the Computer Misuse Act 1990, which creates the offence of accessing information without authorisation. A person is guilty of an offence if the access he intends to secure is unauthorised and he knows at the time he accesses the computer that that is the case. Successful prosecutions have been brought for unauthorised access to computers under this offence.
Section 122C(4) gives the Secretary of State power to impose conditions on the use of information supplied by the department to local authorities. We intend to exercise this power to impose requirements which are aimed at ensuring the security of data supplied. However, responsibility for preventing unauthorised access inevitably must remain with each local authority itself.
The noble Lord referred to R. v. Brown which, as I understand it, related to browsing. Browsing is, I suppose, rather like surfing the Internet. Browsing is the viewing of data without using it, disclosing it or even mentioning it to anyone else. In this particular case, on 9th February 1996 the court held that the employee could not be prosecuted under the Data Protection Act for simply browsing computerised personal data without using or disclosing it. I understand that the Home Office has considered the matter very carefully following the Brown decision but, in the light

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of the facts of that case, has concluded that it is not necessary to take any immediate action to make any amendment to the Data Protection Act.
In Brown it was also held that the term "use" in the Data Protection Act, while not wide enough to cover the situation where someone merely called up and viewed computerised personal data, should nevertheless be given its natural meaning. The effect of this is to confirm that if that data is subsequently used for any unauthorised purpose that action is caught by the existing legislation. Brown also confirmed that while unauthorised access was not an offence under the Data Protection Act, the Data Protection Registrar can still take action against the data holder for a breach of the data protection principles. In addition, the Computer Misuse Act continues to be effective against employees or contractors who access computer systems beyond the extent of their authorisation, and the Department of Social Security has brought successful prosecutions on this basis. Moreover, in the case of personal data relating to social security, the offence under Section 123 of the Act would also be relevant. As I believe I suggested earlier, it could easily lead not just to prosecution but to disciplinary action: either downgrading of the person involved or dismissal from the service of the department.
A number of other issues have arisen. The noble Lord, Lord Carter, asked me who was right: the Data Protection Registrar or the Secretary of State.
Lord Carter: Make my day—say that you are wrong!
Lord Mackay of Ardbrecknish: I will not say that at all. What I will say is that it is ultimately for the courts to decide how the law is to be interpreted. It is not for me to decide who is right and who is wrong in this matter. However, if there are difficulties in this area it is for the Home Office to address the point. I underline that my department has relied successfully on the Computer Misuse Act 1990 when dealing with situations of this kind. There have been three successful prosecutions of the department's staff under that Act.
To demonstrate that the department takes this matter very seriously, in 1995/96 it dismissed eight members of staff and 12 others had penalties imposed, including fines, downgrading and written warnings on account of unauthorised access to departmental systems. In addition, two members of staff were dismissed and three others had penalties imposed for the unauthorised disclosure of information. I hope that both the noble Lord and the noble Earl can be assured that we take these matters very seriously indeed. Staff within the department do not have unrestricted access to the information held in its systems. It is made very clear to them that they may only access information that is relevant to the work that is allocated to them. Access to any other information for which prior authority is not given by a senior officer is therefore unauthorised. All staff receive an on-screen warning that accessing departmental data without authority is an offence; in other words, when they enter the system to do whatever they need to do legitimately they receive a warning. We
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provide a wide range of guidance to staff. Indeed, the issue of hacking has recently been drawn to the attention of all staff in a security campaign run by the department.
We take these matters very seriously. If one looks at the three levels of the problem—access, use and disclosure—it is clear that, as to access, the Computer Misuse Act 1990 can be and has been used. We also have the internal disciplinary system within the department. As to the question of use, the Data Protection Act can be applied. We also have the disciplinary procedures within the department. As far as concerns disclosure, use can be made of the Social Security Administration Act and the Data Protection Act. We believe that we have sufficient safeguards.
I said earlier that I believed the amendment of the noble Lord, Lord Carter, did not do exactly what he intended. But I hope that I have dealt with what he is after, explained that we take these matters very seriously and the different levels of protection in our internal disciplinary systems. Further, we have been and are able to use the three Acts that I have mentioned to deal with those who infringe both those enactments and the principles and guidance given to staff in the context of what the department fully accepts is the need to handle other people's data with care.
Baroness Hollis of Heigham: The Minister has been very helpful and clear in dealing with the procedures in place within the DSS, partly because it is a very large organisation with very clear lines of responsibility and detailed forms of management, on the assumption that the work is done in-house. But the problem is perhaps less likely to occur within the department than within local authorities. In local authorities it is not a question of browsing or unauthorised or illegitimate access. One may be dealing with a small local authority that has only a few officers who are handling this material. They will have a right of full legitimate access to that information. For example, the individuals may be housing officers checking against income support records. They realise for the first time that the person on income support is having some top-slicing—it is an issue to which the noble Earl will refer on a later amendment—which suggests arrears of debt and so on, which are unknown to the local authority officers. That is information, legitimately obtained, which he might go on to use illegitimately.
Can the Minister assure us over and above the general reference to local authority good management guidelines, and so on, that that offence would be caught within the Bill at present? Surely we need an amendment such as that moved by my noble friend, or a revised version, to pick up that point. We are not talking about browsing or unauthorised access but legitimate authorised access which gives rise to unauthorised use. In the situation I have described, can the Minister assure us that we do not need this additional protection?
4.30 p.m.
Lord Monkswell: I have followed the debate with interest and it appears that the Minister has given assurances about unauthorised access and unauthorised disclosure. I think that there is probably enough

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protection in terms of the use of information for an unlawful purpose. If it were unlawful, those issues would be caught by some other statute.
However, the concern relates to the unauthorised use of information obtained on an authorised basis. The noble Lord, Lord Russell, mentioned the individual who may have authorised access to the whereabouts of a spouse whom he has mistreated in the past. Perhaps I may suggest another example. A senior official within the housing benefits service runs in his private capacity establishments which have as tenants predominantly people who are in receipt of housing benefit. The information that he would legitimately obtain as a senior housing benefit officer from the computer system would be useful to him in running establishments with predominantly housing benefit tenants. I hope that that officer would not be authorised to use that information that he has legitimately obtained as a senior housing benefit officer in his private capacity. From what the Minister said, there is nothing that renders that use unlawful. That is the crux of this issue.
I accept the intention as described by the noble Lord, Lord Carter. The wording of the amendment may not be quite right. I am not sure that the Minister addressed the kernel of the problem which we addressed with the amendment.
Earl Russell: I think that the Minister tried hard to be helpful. When he said we take these matters seriously, he clearly meant what he said. What I am not quite so certain about is whether the matters that he takes seriously are these matters. The Minister referred to the matter resting on three legs: disclosure; access; and use. He is right. But all the reassurance that he gave related to disclosure and access. Clearly the department is aware of those two risks and is doing everything it can to meet them. But we are dealing with disclosure to a person who is actually authorised to have the information, and access by a person who is allowed to have it.
Let me take some cases which have arisen. They concern the police. In my opinion, the Conservative Party has suffered severely and unjustly from a number of cases where some of its Members in another place have been stopped by the police, questioned but not charged, and the information has found its way on to the front page of the Sun. In those cases, police officers were clearly authorised to have access to the information, but they were not authorised to use it, possibly for their own purposes, and possibly even for their own profit. The noble Baroness reminds me that that may constitute disclosure. But if the policeman writes the piece himself—and I would not be surprised if that has been known—that is not covered; and the provisions do not cover the case where the person uses the information purely for his own personal benefit.
Let us suppose that the information is market sensitive, and the individual acts upon it. He may make a considerable sum of money out of it. In my opinion that is an unauthorised use. I cannot help remembering the words once used in this Chamber by the right
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reverend Prelate the Bishop of Guildford: it is not that we cannot get them to meet our concern; it is that we cannot get them to see that this is our concern.
Lord Mackay of Ardbrecknish: If the noble Earl checks in Hansard, he will see that I ended my summary by talking about access, use and disclosure. I discussed in each case the Act which could be used in a breach. I instanced the fact that the Data Protection Act could be used in the case of unlawful use. I added that the Department of Social Security would take disciplinary steps against the individual. That leads me back one step to the point raised by the noble Lord, Lord Monkswell. The unauthorised use of information obtained lawfully is unauthorised and therefore it is in breach of the Computer Misuse Act. That is the point I make about use; it is a breach of the Computer Misuse Act.
As regards the noble Lord's example, it would be doubtful whether a local authority would give a person such as he instanced the right to access the kind of information we are discussing. However, let us leave that to one side. Even if it did, and the individual had authorisation for access, if he used that information in an unauthorised way, he would be in breach of the Data Protection Act and I suspect that he would not long have his job with the local authority.
The noble Baroness asked me a question about local authorities and, quite rightly, said that some local authorities are quite small and will not have big data bases. That will not allow them to escape from the legislation contained in the Computer Misuse Act or the Data Protection Act. They will clearly be caught by that Act regardless of the size of the data base. The Bill before us provides that information can he supplied only by the Department of Social Security to local authorities, and by one local authority to another, to tackle benefit fraud and for specified benefit administration purposes.
Authorities will be responsible for ensuring that their staff comply with the new law, and with the requirements of the Data Protection Act, and in addition to internal authority controls, authorities' external auditors may become aware of and comment upon any unauthorised use of personal data.
Baroness Hollis of Heigham: Perhaps the Minister will forgive my intervening. It may give time for him to be given the information if he does not have it to hand.
In a small local authority with few officers, a local authority officer has legitimate use of the full file but he proceeds to make use of the information in some private capacity. Can the Minister read out, or tell us, the words of the Data Protection Act which catch the offence of unauthorised use of authorised material?
Lord Mackay of Ardbrecknish: I do not have the Data Protection Act to hand, but I have made it clear that it covers the unauthorised use of information to which the person had authorised access. As I mentioned earlier, we have successfully prosecuted department staff under the Computer Misuse Act.

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I was about to give the noble Baroness the reassurance that Clause 4 makes an offence the unlawful disclosure of personal data by local authority staff, auditors, and local government ombudsmen. Therefore, it makes an offence the unlawful disclosure of personal data by those people, including local authority staff mentioned by the noble Baroness.
To sum up, we believe that in addition to the tight internal controls we have, and what I believe will be the responsible way local authorities will deal with the three issues of access, use and disclosure—we shall be sending out a circular once the Bill receives Royal Assent drawing attention to the new offence in Clause 4—the legislation is in place which will allow the authorities to prosecute anyone who breaches the terms of the Act; that is, through unauthorised access, unauthorised use or unauthorised disclosure. In addition, we will certainly take disciplinary steps against such a person.
Lord Carter: I am sure that the Committee is extremely grateful to the Minister. Perhaps while I ask the Minister a question, advice will reach him on the Data Protection Act. We can see only the provisions which deal with disclosure. We can see nothing which deals with use. Perhaps advice about that will be forthcoming and we can be directed to the relevant part of the Data Protection Act.
If the amendment is incorrectly drafted it can be redrafted, or the Minister can bring back his own amendment if he is prepared to take the point. I am still not convinced, not about authorised access as part of a person's work—that is the proper access of information—but about the unauthorised use of such information. The Minister has not dealt with the concerns of the registrar, which I read to him. Perhaps I may again quote from her letter. It refers not to R. v Brown but to R. v. Victoria Parker, now Bignell. It was heard before Southwark Crown Court. In January, the registrar stated:
"This has increased my concern that there is a gap in the protection provided by the Data Protection Act 1984 and the Computer Misuse Act 1990".
Obviously, the CPS takes the matter seriously enough to appeal the point to the Divisional Court in order to have the law clarified.
The Minister must deal with the issue. It is the job of the Data Protection Registrar to consider such issues. She has expressed real concern that there is a gap in protection and the amendment is intended to deal with that. However, the Minister appears to be saying that the department is entirely happy that there is no such gap. The Minister must say in terms on what grounds the registrar's argument is misconceived.
Perhaps I may give an example. It is not wholly appropriate, but it shows what can happen. I am not sure whether the Committee is aware that banks have what are called "related" or "connected" accounts. At a particular bank in the area where I live, I am involved with a number of accounts both personal and business. I introduced a co-director to that bank. When I ask the bank for a printout
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of the balances on the various accounts I invariably receive one which has his name and his balance in the middle. That is not unauthorised use because the employee of the bank is completely authorised to search the records for that information. I do not know whether he or she is authorised to pass that on to me, but, as the Minister says, he or she cannot be responsible for my behaviour. I might go back to my company and say to the director, "Look, you are heavily overdrawn and I wish that you would do something about that".
I was surprised when I was handed such information, but it is standard procedure in this bank that all accounts which it calls "connected" or "related" are printed out together. Those balances are elicited every day so that the manager can look at them. That is an example of authorised use. I am not sure about disclosure and certainly not the use I might make of the information.
I hope that the Minister has taken on board the point that we are not talking about browsing. We are talking about someone who is authorised as part of his duty to obtain information about taxation, housing benefit, or whatever, who realises that it applies to someone he knows—it could be a former partner, for instance—and who then proceeds to use it.
Is the Minister really happy that that is the case? I know that he has said he is. I do not want to press the amendment to a Division but it relates to an important point. I wish to give the Minister an opportunity to discuss it following this stage of the Bill or to write to me. I hope that if he says he will write he will not merely repeat the argument because I am still not convinced. I do not believe that he has answered the concerns of the registrar.
4.45 p.m.
Lord Mackay of Ardbrecknish: During our little discussion about right or wrong, I indicated that it is ultimately for the courts to decide how the law is interpreted in this dispute, if I may put it as strongly as that, between the Data Protection Registrar and the Secretary of State. We have relied on the Computer Misuse Act quite successfully. As regards the Data Protection Act, perhaps I may refer to Section 5(1) and (2), which creates the duty, and to subsection (3), which clearly applies the duties to the employee. It states:
"A servant or agent of a person to whom subsection (2) above applies shall, as respects personal data held by that person, be subject to the same restrictions on the use, disclosure or transfer of the data as those to which that person is subject under paragraphs (b), (d) and (e)".
The offence is created in subsection (5), which states:
"Any person who contravenes subsection (1) above or knowingly or recklessly contravenes any of the other provisions of this section shall be guilty of an offence.".
We in the department, and that includes the people who run and work the system, are satisfied about the matter. It may be additionally helpful to explain that the report of the Data Protection Registrar on Brown states that your Lordships' House in its judicial capacity,
"also showed concern that the term 'use' should he given its ordinary meaning and not interpreted in a way which would narrow the scope of the Act and make it difficult to fulfil the intention of Parliament. It was for this reason they rejected the argument put forward by Counsel.".

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The noble and learned Lord, Lord Goff, in the judgment said:
"It seems to me that the above reading of the statute (the judgement) accords not only with the natural and ordinary meaning of the word 'use' in its statutory context, but also with the statutory purpose of protecting personal data from improper use.".
In the same vein, the noble and learned Lord, Lord Hoffmann, rejected the argument that the term "data" covers only data held in the memory of the machine with the words:
"It would he strange if the Act was concerned only with what happened unseen in the computer and not with what happened when the information became accessible to the human user. This is not making the tail wag the dog; it is all tail and no dog.".
I realise that these are complex issues and I understand the seriousness of them. However, I hope that the reassurances I have given will at least help the noble Lord to check when he has an opportunity following today's Committee stage. If he has any further reservations, I should certainly be happy to try to resolve them either at a meeting or in writing.
Lord Carter: Just so that we are clear, the Minister was correct to refer to the case of Regina v. Brown which reached the House of Lords. As I said before, in that case the prosecution was overturned on appeal because it was deemed that a police officer who had accessed the Police National Computer to obtain personal information did not use the data. However, I would ask the Minister to comment on the other case that I mentioned. The Minister referred to that specifically. I do not have the details of that case but I presume that the context was different. This is the one about which the Data Protection Registrar said:
"This has increased my concern that there is a gap in the protection provided by the Data Protection Act 1984 and the Computer Misuse Act 1990".
The Minister does not seem to have been briefed on that case. It may be better to return to this matter when the Minister has had the briefing. We may need to have a meeting or return to this matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 46 not moved.]
Clause 4 agreed to.
Clause 5 [Overseeing of administration by Secretary of State]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 47:
Page 10, line 30, at end insert ("with relevant experience").
The noble Baroness said: This is a very important amendment. Its intention is to ensure that anyone appointed to report on the administration of housing and council tax benefits has relevant experience in the administration of those benefits.
It is a probing amendment but I hope that it will provide an opportunity to debate the issue of the importance of relevant experience for members of the fraud inspectorate. I am informed that local authority fraud investigators have had difficulties in the past
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because DSS officials with no specific experience of housing and council tax administration have sometimes sought to impose inappropriate policies on them.
I am told that the best example of that is the failure by DSS officials to recognise the importance of organised landlord fraud because they do not have to deal with landlords as their experience is confined to DSS benefits. Any person appointed to examine the administration of housing and council tax benefit must have a background in the administration of those benefits to ensure that their advice is based on a realistic understanding of the issues and the practical difficulties involved.
I gather that this amendment, or something similar to it, was debated in Committee in another place. At that time the reaction of the Minister was that people with local authority experience would be recruited. But I am told that the local government associations and the Association of Metropolitan Authorities still remain of the view that members of the fraud inspectorate should have experience in the administration of the benefits which they are investigating—that is, housing and council tax benefit. They believe that that requirement should be written onto the face of the Bill.
I emphasise, as we have repeatedly done on this side of the Committee, that everything possible must be done to minimise fraud but the benefit system is intended to provide a safety net for the poor, the disadvantaged and the vulnerable. Therefore, it is very important that we achieve the right balance; and, in particular, it is important that we have in place a system, and people experienced in the administration of the system, to detect and deal with possible landlord fraud. One of the problems which I face in looking at this legislation, while I oppose fraud from wherever it comes and whoever is responsible for it, is that we may well identify people who have inadvertently become involved in what could look like fraud but people who have a much greater stake in organised fraud are able to get away with it much more easily. That is much more likely to be the case unless the people involved with the administration and the inspectorate have experience of the housing benefit and council tax system to which this amendment relates.
I hope that since the matter was debated in the other place, the Government have had an opportunity to reconsider what was suggested in the other place because this seems to me to be a useful amendment. If accepted, it will send out the right signals that we want people who are experienced in these particular benefits. I beg to move.
Lord Mackay of Ardbrecknish: I do not think that there should be any doubt about the Government's commitment in the fight against fraud. I am sure that Members of the Committee noticed that my right honourable friend Peter Lilley, yesterday morning, held a press conference and unveiled a poster on the occasion of the milestone being passed in the various area benefit spotlights of more than £100 million of benefit money being saved by those area spotlights.

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Our commitment is there to be seen. Nobody should doubt that we shall be appointing people who possess relevant experience and qualifications in order to carry out the inspections of local authority benefit administration and anti-fraud performance because we wish to enhance that anti-fraud performance. It would not be in the Secretary of State's interest to do otherwise. I echo the reassurances given by my honourable friend Mr. Alistair Burt in another place.
It is intended that the persons authorised under this clause will be the staff of the new Benefit Fraud Inspectorate. The head of that inspectorate is currently in the process of recruiting staff, and advertisements for two of the senior management posts have appeared already in the national press. In addition, those posts have been advertised both in local government publications and throughout the Civil Service. The intention is to attract public and private sector staff but particularly to target audiences who are likely to have the most appropriate skills and experience for those vital roles.
We can all agree—and I am sure that we do—that the recruitment of high calibre staff is an integral part of ensuring that the inspectorate is effective. That the head of the inspectorate is seeking to recruit such staff is demonstrated clearly in the essential skills and qualities set out in the advertisement. Perhaps it may be useful if I outline briefly the skills and experience considered essential for the inspectorate's staff team. Of course, one person will not necessarily have all the skills but the team collectively will have them all. They are: a knowledge of financial systems; a knowledge of local government administration; a knowledge of the benefits payment system; a knowledge of benefit fraud investigation; a knowledge of audit and management systems; and a knowledge of information technology. That is what we shall be looking for in the staff appointed to the inspectorate.
Therefore, I do not believe that it is necessary to place a statutory obligation on the Secretary of State to ensure that staff recruited to the inspectorate have the appropriate skills and experience. The noble Baroness referred in particular to landlord fraud. We accept that there is landlord fraud as well as all the other kinds of fraud. That will be part and parcel of the skill and experience which we shall be looking for, perhaps under the heading of "benefit fraud investigation". But it is also related to the system of payment of benefit because one way in which the fraud takes place is by the misuse or abuse of the benefits payment system by which we pay out housing benefit.
I hope that I have reassured the noble Baroness, Lady Turner of Camden, that her amendment is unnecessary. I ask her to withdraw the amendment with my assurance in relation to the skills which we believe will have to be present in the whole team when we have completed the appointments.
Lord Monkswell: It strikes me that in the list of qualifying experience to be part of the team, the Minister has not mentioned one area of experience and
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expertise—that is, experience of being a residential landlord. I should have thought that that would bring an expertise to the team in terms of what might be described as poacher turned gamekeeper. That might be quite useful to the team in carrying out its functions in relation to rooting out landlord fraud.
5 p.m.
Lord Mackay of Ardbrechnish: If I had suggested that we recruit a landlord to this, Members of the Committee opposite would have thought that I was being less than serious about the pursuit of landlord fraud.
Baroness Turner of Camden: I thank the Minister for his explanation. Certainly, he has given extensive assurances as to the kind of experience people would be expected to have before they could even be considered for this kind of post. It is very reassuring.
I still fail to see why there is any objection to including this in the Bill and in primary legislation because, if we did so include it, it would send out a very clear signal that we were going to insist upon people having a standard of skill in particular areas of operation that are regarded as important within the context of the Bill. However, I do not intend to press the amendment today. I shall look carefully tomorrow in Hansard at what the Minister has said, but he has given quite extensive assurances and we are very grateful for them.
Baroness Hollis of Heigham: Before my noble friend sits down, I wonder if she is aware that such phrases would actually be extremely valuable. Recently I was shown a report by one of the newly appointed school inspectors under the Government's initiative containing 13 mistakes of spelling, syntax, grammar and comprehension which the head of the English department had corrected before sending it back. This was a school inspector of standard English. I saw the report myself—the comments and corrections. They were entirely correct and valid. It suggests that sometimes people are being appointed by the Government who do not appear to possess the most obvious qualifications required for the exercise of their duties. I wonder if my noble friend agrees.
Baroness Turner of Camden: I wonder whether the Minister would like to respond to that. We are in Committee.
Lord Mackay of Ardbrecknish: We have strayed considerably from the initial point, and I know nothing of the case in point. It sometimes seems that in relation to appointments to this House there does not appear to be the relevant experience in being able to understand my arguments, but perhaps that is a biased position. It would be unusual if the Secretary of State appointed people who did not have some relevant experience for the job they were doing. He would be exposing himself to a fair amount of ridicule and he would be exposing his policy to the risk of failure.
Lord Monkswell: Surely, the Government can accept that this Government have rather a reputation in that

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regard. I seem to remember an advertisement in the national press for someone to run British Rail which said that no previous experience in running a railway was required.
Baroness Hollis of Heigham: Or was desirable.
Baroness Turner of Camden: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter Lord Carter moved Amendment No. 48:
Page 10, line 31, leave out from ("administration") to ("their") in line 33 and insert ("of social security benefits and, in particular,").
The noble Lord said: In moving Amendment No. 48 I shall also speak to Amendments Nos. 50 and 60. Amendment No. 48 is intended to ensure that the fraud inspectorate will be able to cover all social security benefits administration. The amendment would allow the formation of an independent fraud inspectorate with a remit to investigate efficiency in the administration of all benefits, not just housing benefit and council tax benefit, but DSS-administered benefits too. There appears to be no justification for confining the power to appoint persons to report on administration to those benefits administered by local authorities only. The implication seems to be that local authorities need to be coerced into fighting fraud but that the record of the DSS, the Benefits Agency and other government departments is above reproach. I apologise to the Minister; this briefing is rather pointed.
In fact, central government's record is far from perfect. For example, the Commons Social Security Select Committee severely criticised the lack of control exercised over the national insurance number system as a major contributor to benefit fraud. Local authorities also have practical experience of cases where they detect housing benefit fraud and the recipient is also implicated in fraudulently obtaining DSS benefits. However, in some cases, when they inform the DSS, the department has been extremely slow to act on the information and stop the fraudulent claim. Perhaps the officers concerned did not have the relevant experience.
Amendment No. 50 requires the fraud inspectorate to publish an annual report. What the report is intended to contain appears in the amendment. The fraud inspectorate would be required to publish reports on at least an annual basis. They would have to contain details of the costs of the inspectorate, of the individual studies carried out, of reports produced, of recommendations made and of the action taken in response to those recommendations. In particular, the amendment would give the inspectorate powers to make general recommendations, including recommendations to the Secretary of State, about how benefits administration could be improved.
As drafted, the Bill requires the fraud inspectorate to report to the Secretary of State on individual local authorities, but there is no requirement for a more general report on its work or for more general recommendations on the administration of benefits. The amendment would give the fraud inspectorate the
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opportunity to give details of its work and to make recommendations on best practice which might be of value to all agencies administering benefits. Crucially, it would also give the inspectorate the opportunity to make recommendations about central government's benefits policy if changes were required to improve efficiency and prevent fraud.
On a number of Bills relating to social security and indeed other fields, such as health and agriculture, over the years, I have proposed amendments asking for reports either on a regular or an annual basis. We always receive the same answer. It would be interesting this time if the Minister were to be able to give some new arguments when he rejects the amendment, if he does reject it.
Amendment No. 60 is to give the Audit Commission powers to conduct studies into the administration of all social security benefits. The amendment would ensure that the powers being given to the Audit Commission to conduct studies cover all social security benefits, not just council tax and housing benefit. It does not seem unreasonable that there should be some independent scrutiny of the DSS administration of the benefits for which it is responsible. We are not entirely clear whether it should be the Audit Commission or the National Audit Office. It will be interesting to hear the Minister's response. The argument is about independent scrutiny. That is the important point.
The amendment also provides an opportunity to ask the Minister to explain why the powers contained in Clause 6 are necessary. What does this clause add to the Audit Commission's existing powers to conduct studies into local government economy, efficiency and effectiveness? Why are specific new powers to look at council tax benefit and housing benefit deemed to be necessary? I beg to move.
Lord Monkswell: I support my noble friend on this amendment. A phrase we hear quite regularly is that one is trying to achieve level playing fields. That is something very pertinent to our culture. Generally speaking, we believe in fairness: it is something very deep in the British psyche.
The amendment tries to ensure that in terms of social security administration and the prevention of fraud we are looking towards a level playing field. We do not want a situation where central government can use, as a stick to beat local government, certain facts and figures. There has been continual criticism of the high levels of voids—unlet domestic property—in council housing stock. However, when one looks at the figures and the information one finds the level of voids in central government housing stock to be far higher than that in the local authority stock.
We should recognise that there will be differences and variations. We should be prepared to learn from the good examples of administration of social security matters under local authority control. That experience, one hopes, can be fed back not only to other local authorities but also to the national scene. The

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amendment of my noble friend not only accords with the British psyche; it will provide long-term benefits for public administration at national and local level.
Lord Mackay of Ardbrecknish: I think I have explained to the noble Lord, Lord Monkswell, that the concept of a level playing field is entirely theoretical. If level playing fields existed, teams would not have to change ends at half time.
Baroness Hollis of Heigham: Has the noble Lord not heard of the sun?
Lord Mackay of Ardbrecknish: I am not entirely sure what the sun has to do with it unless it is the newspaper. As the sun seldom shines—
Baroness Hollis of Heigham: The Minister will surely accept that tennis courts are level but nonetheless people change ends because otherwise one player is playing into the sun?
Lord Mackay of Ardbrecknish: I think that illustrates my point that there is no such thing as a level playing field because players have to change ends. I am not entirely sure why I am being pulled up on my reprimand about the level playing field concept. Everything I say appears to be controversial today.
This group of amendments seeks to broaden the scope of matters which the Benefit Fraud Inspectorate and the Audit Commission would consider, in carrying out their functions under the provisions of this Bill, and to place a requirement upon the inspectorate to report on work undertaken and its effectiveness.
Amendment No. 48 would give the Secretary of State power to authorise persons to consider and report to him on the prevention and detection of fraud in all social security benefits. While I understand the intention behind the amendment, it is absolutely unnecessary because the Secretary of State does not require any additional powers to authorise investigations of social security benefits in general. He already has these powers. Indeed, we have fraud teams that work inside the Benefits Agency. The administration of housing benefit and council tax benefits raises different issues because local authorities are independent of the Secretary of State and have individual approaches to carrying out their obligations to administer benefits. That is why we need the new powers in this clause. That said, generally it will not be sensible to examine the administration of housing benefit in isolation and the inspector's remit will therefore include the interconnection between local authorities and the Benefits Agency. Where any such considerations identify a problem or a solution that has implications throughout the system the Committee may be assured that the appropriate action will be taken.
Amendment No. 60 is similar to the amendment we are discussing in that it would allow the Secretary of State to request the Audit Commission to undertake studies into the administration of all social security benefits, not just housing benefit and council tax benefit.
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This amendment is both inappropriate in principle and unnecessary in practice as it would give the Audit Commission a role in examining the administration of centrally administered benefits which fall outside its remit. The broader constitutional position is that the Comptroller and Auditor General, together with his staff in the National Audit Office, is responsible for external audit in central government. The Audit Commission and its cousin or brother, the Accounts Commission for Scotland, are responsible for external audit in local government and individual health bodies. Amendment No. 60 would cut across these long-established principles.
As I have already explained, the Secretary of State does not require any new powers to authorise investigations of the administration of social security benefits in general. He is able to invite external auditors to examine any part of departmental benefit procedure under current provisions.
Amendment No. 50 would place a statutory duty on persons authorised to carry out inspections under Clause 5 to prepare reports at least once a year on the inspections carried out, the costs involved, the recommendations made and the steps taken in response to those recommendations. The Benefit Fraud Inspectorate will form part of the department and will be accountable to the Secretary of State. It will be a separate unit operating independently from the agencies within the department which have responsibility for administering benefits.
The head of the inspectorate will produce annual accountability reports for the Secretary of State explaining the work the inspectorate has carried out and the running costs, staffing and resources involved. Reports will also contain information of a more technical nature commenting on overall achievements and on points of general interest arising from that year's inspection programme. We do not, however, consider that it would be appropriate for the inspectorate's annual accountability report to contain all the detailed recommendations which have been made in each of the individual inspection reports compiled during the year. There are two main reasons for this. First, the reports are relevant to the individual authority at the time of the inspection. Secondly, authorities will be under no statutory obligation to adopt the detailed recommendations contained in inspection reports.
While it is intended that the head of the Benefit Fraud Inspectorate will make annual reports to the Secretary of State and that generally these will be published, it would be inappropriate for those reports to cover all the subjects suggested in the amendment. It is also worth noting—although I do not think this was the intention—that it appears that the reporting requirement would fall on each individual who was authorised to report. That would be impractical and unwieldy. However, I know that was not the intention of the amendment. I hope that with those explanations of how we believe the system will work and of the quite different role of the Audit Commission and of the National Audit Office, the noble Lord, Lord Carter, will see that the provisions and the powers that the Secretary of State requires are already to hand.
5.15 p.m.
Lord Carter: I am extremely grateful to the Minister for that reply. I think I said that we were not quite sure whether it was a case of the Audit Commission or the National Audit Office. Is it correct that the appropriate parts of the annual accountability report will be published and will be in the public domain but it will be the responsibility of the Secretary of State to decide what is or is not published? That is how I expected the position to be. I shall read with care what the Minister has said but I think he has satisfied our concerns. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 49:
Page 10, line 34, at end insert (", and with compliance with the data protection principles (as set out Schedule I to the Data Protection Act 1984).").
The noble Baroness said: The Secretary of State will authorise people to report to him on local authorities' administration of housing benefit and council tax benefit and their performance in detecting fraud. This amendment would ensure that at the same time they would also report not just on their performance in detecting fraud but also on their observance of the principles of data protection as laid down in the 1984 Act. I am sure the Committee is acquainted with those principles but I shall summarise them briefly.
The principles are as follows. Data will be obtained and processed fairly and lawfully. Data may be held only for lawful purposes which are described in the register entry. Data should be used or disclosed only for those or compatible purposes. Data must be adequate, relevant and not excessive in relation to the purpose for which they are held. Data should be accurate and, where necessary, kept up to date. Data should be held no longer than is necessary for the purpose. Individuals should be allowed to access information held about them and, where appropriate, correct or erase it. Data must be surrounded by proper security.
Asking local authorities, in their report to the Secretary of State on their performance in eradicating fraud, also to report on their observance of the above eight principles is an essential safeguard to ensure that not just the end—eradicating fraud—but also the means—the observance of proper procedures in so doing—is respected. I should like to see local authorities being required to name a specified local authority officer, for example the city solicitor or the electoral registration officer, who has designated responsibility. His or her job would be made more straightforward if he or she not only conformed to those principles but also was guided by what we hope will be in the code of practice. It is essential that a proper balance is maintained between being tough on fraud and respecting the rights of the individual to privacy and confidential handling of sensitive material, for example on issues such as immigration status, cohabitation, financial and health status.
I have no doubt that most local authorities will observe these principles but there is the possibility of abuse, perhaps where an authority is facing a subsidy penalty for not uncovering sufficient fraud and seeks to cut corners. There is also the possibility of abuse where some of this work has been contracted out to private companies which would like to exploit some of the information for commercial gain, perhaps to promote medical insurance or to inform clients of people's credit ratings. We hope that that will not happen but this amendment would construct a local authority mindset that it must observe the ethic of data protection while being vigorous in attacking fraud. The Minister's proposed code of practice, which he conceded in Tuesday's discussions, may cover these points. We should like confirmation from the Minister that that will indeed be the case. If not, we shall obviously want to press him further. I beg to move.
Earl Russell: Ministers do not run well in blinkers. For that reason, I am happy to support the amendment. The Minister may recall—I shall not rehearse it in detail—that I said on Second Reading that getting the Bill right was going to be a matter of observing balance. Whenever one sets an administration to pursue a single objective in isolation, that sense of balance goes. One gets a single-minded blinkered concentration upon a single subject. That way injustice happens. There is nothing new about it. It has always been true.
The Minister knows—or at least he has good cause to know—that the need to report on something tends to concentrate one's mind heavily on that one thing. Whoever is carrying out functions under the Bill will have to report on fraud. As the Bill stands, it risks focusing their minds in a single-minded, obsessive way on fraud. Making them think that what results in the apparent—I stress the word "apparent"—detection of fraud is always good, and that that is the only criterion of good. That way injustices are likely to happen and probably will happen. But if the amendment is accepted, then in the course of reporting upon something else as well, having another priority they wish to satisfy, another thing that is marked as good, they will, as the noble Baroness persuasively put it, have something which influences their mindset in a much more constructive direction. That is a good thing indeed. Good is not a single thing, and the better we appreciate that, the better we shall do it.
Lord Mackay of Ardbrecknish: The amendment seeks to place a statutory requirement upon the Benefit Fraud Inspectorate to monitor local compliance with the Data Protection Act 1984. It merely adds the words of the amendment to the first subsection of Section 139A, which states:
"The Secretary of State may authorise persons to consider and report to him on the administration by authorities of housing benefit and council tax benefit and, in particular, their performance in the prevention and detection of fraud relating to those benefits".
That is why it is called the Benefit Fraud Inspectorate. The amendment would add to its role the duty to look for compliance with the data protection principles as set out in Schedule 1 of the Data Protection Act.

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The protection of individual privacy is an important responsibility of those in charge of local authorities. Quite rightly, each local authority holding relevant personal data is under an obligation to comply with the Data Protection Act. It is the proper role of the Data Protection Registrar to enforce that legislation. It would not be appropriate to usurp the registrar's position by giving a completely unrelated organisation a partial responsibility for policing data protection. To do so could only cause confusion.
The amendment would considerably alter the role of the inspectorate. We envisage the inspectorate as a dedicated unit set up specifically to examine, and report on, the administration of social security benefits. Its staff will be experts on social security matters. To give them other responsibilities, unrelated to the social security system, will inevitably dissipate the impact of the inspectorate and its effectiveness.
Baroness Hollis of Heigham: I am grateful to the Minister for giving way. He said that the inspectorate is being asked to pursue functions unrelated—"unrelated" is the word that he used—to the purposes of whatever system. The point about this is that how that fraud is pursued—that is the data protection issue—is integral to the purposes for which the Bill is being addressed. The Minister has tried to make a separation between means and ends, which we are trying to keep firmly integrated.
Lord Mackay of Ardbrecknish: I do not think it is integration, I think that it is addition. When it is looking at how the local authority may be running its system, the inspectorate may well have to look into the computer systems; but it will be doing so specifically on the basis of checking on how it is running its anti-fraud systems. Priority must be given to reducing the £1 billion of housing benefit fraud. I am sure that that is agreed between us.
If we were to place this additional burden on the inspectorate, then clearly it would have another function placed upon it, and that would add to the cost of running it. This extension of the inspectorate's role would lead to an increase in its running costs. It is hard to justify an additional role and additional expenditure to duplicate functions which are already, under other Acts, the proper responsibility of others.
I do not believe that it would be appropriate to extend the Benefit Fraud Inspectorate's remit in the way suggested. Neither do I believe that such a change would achieve any additional protection of the individual's right to privacy. Indeed, there is a risk that by confusing the responsibilities for those important issues, the amendment will achieve an effect quite the opposite of that intended.
I should point out that under Section 5 of the Local Government and Housing Act 1989 every authority is required to appoint a monitoring officer specifically to deal with contravention of any rule of law, or statutory code of practice, by that authority's members, officers, or employees. The monitoring
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officer has, in turn, duties to report to the members of the authority who are themselves accountable to their electorate.
If any information comes to light during an inspection which casts doubt upon the legality of an authority's data protection procedures, then that will be reported to the monitoring officer concerned in that specific local authority.
I hope that with that explanation of why I do not believe that that additional burden should be placed on the fraud inspectorate and the explanation of what the fraud inspectorate will do if it comes across an abuse of the Data Protection Act or misuse under the Act, the noble Baroness can withdraw the amendment.
Earl Russell: When the Minister talked about a dedicated unit and about the first priority, he entirely illustrated the ground of my misgivings. There is not a moment's dispute between us that the elimination or substantial reduction of the cost of fraud must be a high priority, but we are always going around in debate—I am sure that I am as guilty as anyone else—saying that this must be the first priority, this is the highest priority, this is the top priority. Priorities, like boxers, cannot all be the greatest. Priorities have to jostle with one another. Among priorities, just as much as in the market, there is a great deal of health in competition. The Minister is proposing here to set up a priority which is immune to competition. That is indeed dedication. It is the voice of the heresy hunter; it frightens me.
Baroness Hollis of Heigham: I wonder whether the Minister can help me with a question. When moving the amendment, I asked whether such matters will be covered by the code of practice which was granted, so to speak, by the Minister in reply to amendments we moved at the beginning of Tuesday's debate. Will the inspectors of the fraud squad, so to speak, monitor the compliance of local authorities with that code of practice, and will that code of practice embody the concerns that I have raised?
Lord Mackay of Ardbrecknish: We are a little confused about the role of inspectors and the code of practice which we discussed at the beginning of Tuesday, which was put in as part of the data protection measures, and is designed to ensure that the people who are doing the data matching and running the systems, comply with the provisions of Acts such as the Data Protection Act. That is what that code of practice is about.
If the inspectorate sees something that infringes the Act or indeed the code it will report that to the monitoring officer of the local authority, whose responsibility and duty it is to deal with these issues. That will be the clear line of reporting of any matter that the fraud inspectorate comes across. To add to its role and make it police the Data Protection Act as well is simply not sensible. The policeman for the Data Protection Act, and indeed other statutes, is the monitoring officer employed by the authority.
5.30 p.m.
Baroness Hollis of Heigham: I am rather disappointed by that reply. After all, the code of practice is the DSS code of practice, not that of the registrar. It is not unreasonable therefore that when government fraud inspectors investigate the performance of the local authority, they should also assess and review that same local authority's observance of the code.
The Minister persists in thinking that data protection on the one hand and pursuance of fraud on the other are two parallel responsibilities which do not meet, and to layer the one on to the other is to produce an additional role, responsibility and expense. That is profoundly to misunderstand the issue. Data protection is about how it is done. Dealing with fraud is what is being attempted.
The amendment tries to ensure that in the process of pursuing fraud—a matter on which we are entirely at one—nobody cuts corners by failing to comply with the principles of data protection. Therefore an inspectorate that is concerned, which is pressing and possibly harassing and hounding a local authority to meet its fraud targets, should at the same time be required to hold in consideration that in so doing the local authority must conform to the principles which I hope will be laid down in the code of practice and are certainly laid down in the Data Protection Act 1984. If not, there is a danger that corners will be cut and that, in the pursuit of fraud, with the inspectorate at their back, the local authorities will not comply as they should because there will not be an equivalent weight of consideration.
I am very disappointed by the Minister's reply. I wish to test the opinion of the Committee.
5.32 p.m.
On Question, Whether the said amendment (No. 49) shall be agreed to?
Their Lordships divided: Contents, 54; Not-Contents, 138.

Division No. 1

CONTENTS

Addington, L.

Graham of Edmonton, L.

Alderdice, L.

Grey, E.

Beaumont of Whitley, L.

Harris of Greenwich, L. [Teller.]

Borrie, L.

Haskel, L.

Broadbridge, L.

Hollis of Heigham, B.

Bruce of Donington, L.

Hughes, L.

Carlisle, E.

Jeger, B.

Carter, L.

Judd, L.

Clancarty, E.

Kilbracken, L.

Cocks of Hartcliffe, L.

Lester of Herne Hill, L.

Currie of Marylebone, L.

Longford, E.

David, B.

Lovell-Davis, L.

Dormand of Easington, L.

McIntosh of Haringey, L.

Dubs, L.

McNair, L.

Eatwell, L.

McNally, L.

Falkland, V.

Mar and Kellie, E.

Fisher of Rednal, B.

Monkswell, L.

Geraint, L.

Morris of Castle Morris, L.

Gould of Potternewton, B.

Ponsonby of Shulbrede, L.

[Teller]

Prys-Davies, L.

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Redesdale, L.

Thurso, V.

Rodgers of Quarry Bank, L.

Tordoff, L.

Russell E

Turner of Camden, B.

Serota, B.

Wallace of Coslany, L.

Whitty, L.

Shepherd, L.

Williams of Crosby, B.

Stoddart of Swindon, L.

Williams of Elvel, L.

Thomson of Monifieth, L.

Winston, L.

NOT-CONTENTS

Acton, L.

Holderness, L.

Ailsa, M.

HolmPatrick, L.

Aldington, L.

Hooper, B.

Alexander of Tunis, E.

Howe, E.

Allenby of Megiddo, V.

Howe of Aberavon, L.

Ampthill, L.

Hylton-Foster, B.

Anelay of St. Johns, B.

Inglewood, L.

Annaly, L.

Kenilworth, L.

Ashbourne, L.

Kingsland, L.

Astor of Hever, L.

Kinnoull, E.

Balfour, E

Kintore, E.

Barber of Tewkesbury, L.

Lauderdale, E.

Belhaven and Stenton, L.

Lindsay, E.

Berners, B.

Liverpool, E.

Biddulph, L.

Long, V.

Blaker, L.

Lucas, L.

Blatch, B.

Lucas of Chilworth, L.

Boardman, L.

Luke, L.

Boyd-Carpenter, L.

Lyell, L.

Brabazon of Tara, L.

McColl of Dulwich, L.

Brentford, V.

Mackay of Ardbrecknish, L.

Bridgeman, V.

Mackay of Clashfem, L.

Brigstocke, B.

[Lord Chancellor.]

Brookes, L.

Mackay of Drumadoon, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Butterworth, L.

Marlesford, L.

Cadman, L.

Massereene and Ferrard, V.

Campbell of Alloway, L.

Merrivale, L.

Campbell of Croy, L.

Mersey, V.

Carnock, L.

Miller of Hendon, B.

Chelmsford, V.

Milverton, L.

Chesham, L. [Teller.]

Monckton of Brenchley, V.

Clanwilliam, E.

Monk Bretton, L.

Clark of Kempston, L.

Mottistone, L.

Coleridge, L.

Mountevans, L.

Courtown, E.

Mowbray and Stouiton, L.

Craigavon, V.

Munster, E.

Cranborne, V. [Lord Privy Seal.]

Murton of Lindisfarne, L.

Crathome, L.

Nelson, E.

Crickhowell, L.

O'Cathain, B.

Cross, V.

Oppenheim-Barnes, B.

Cumberlege, B.

Orr-Ewing, L.

Davidson, V.

Oxfuird, V.

Denbigh, E.

Park of Monmouth, B.

Denton of Wakefield, B.

Pike, B.

Dixon-Smith, L.

Pilkington of Oxenford, L.

Downshire, M.

Platt of Writtle, B.

Dundee, E.

Quinton, L.

Eden of Winton, L.

Rankeillour, L.

Elibank, L.

Rees, L.

Ellenborough, L.

Rennell, L.

Elliott of Morpeth, L.

Renton, L.

Elton, L.

Renwick, L.

Feldman, L.

Saint Albans, D.

Flather, B.

St. John of Fawsley, L.

Forbes, L.

Saltoun of Abernethy, Ly.

Gibson-Watt, L.

Shaw of Northstead, L.

Gisborough, L.

Skelmersdale, L.

Goschen, V.

Soulsby of Swaffham Prior, L.

Gray, L.

Stewartby, L.

Harding of Petherton, L.

Stodart of Leaston, L.

Harris of Peckham, L.

Strange, B.

Harrowby, E.

Strathclyde, L. [Teller.]

Hayhoe, L.

Swinfen, L.

Henley, L.

Taylor of Warwick, L.

461

Teynham, L.

Vivian, L.

Thomas of Gwydir, L.

Willoughby de Broke, L.

Wise, L.

Trumpington, B.

Wynford, L.

Ullswater, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.41 p.m.
[Amendment No. 50 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 51:
Page 11, line 40, at end insert—
("(3) Any report which relates to an obligation to satisfy the requirements of any of the data protection principles (as set out in Schedule 1 to the Data Protection Act 1984) shall be sent to the Data Protection Registrar within three months of its delivery to the Secretary of State.—).
The noble Baroness said: Amendment No. 51 proposes that the report to the Secretary of State should, within three months, also be sent to the Data Protection Registrar as she is the custodian of civil liberties in respect of privacy, appointed by Parliament to undertake that function on our behalf. Her work will be greatly extended as a result of the Bill, monitoring a much more extensive and complicated set of information transactions between the DSS and the Inland Revenue, between Customs and Excise and the Inland Revenue via the DSS to local authorities.
We are obviously pleased that the registrar will be expecting data matching bodies to conform to the DSS code of practice. Could we ask the Minister what additional staff the Data Protection Registrar will have in the light of the additional responsibilities placed on her under the Bill? Am I right in thinking that the Home Office has cut the grant in aid to her office? Can we hope that the Minister will support what is, after all, a modest amendment but will lock the Data Protection Registrar into the system? As the Minister said on the previous amendment, she is the protector of these concerns. I beg to move.
Lord Mackay of Ardbrecknish: This amendment is similar to the last one, but in this case it places a statutory requirement upon the Benefit Fraud Inspectorate to send to the Data Protection Registrar reports on the local authorities' compliance with the Data Protection Act 1984.
For the reasons I outlined a short time ago, we do not believe that the Benefit Fraud Inspectorate ought to be asked to monitor compliance with the Data Protection Act. The proper place for that role is with the Data Protection Registrar. This amendment would considerably alter the role of the inspectorate, as would the previous one, and I believe that widening its scope would reduce concentration on its main task, which is housing benefit and council tax benefit fraud. It would also increase the running costs.
There is little difference between this amendment and the last one relating to the fraud inspectorate. Any authorised persons conducting an inspection on
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behalf of the Secretary of State will, of course, need to be aware of the legal context within which local authorities work. That will include the legislation relating to data protection. It will also include responsibilities relating to the employment of the health and safety laws. The noble Baroness is not yet asking that the fraud inspectorate monitor these Acts as well, but the inspectorate would have to be aware of the Acts, particularly the Data Protection Act. The inspectorate will not be able to ask local authorities to ride roughshod over the Data Protection Act, as the noble Baroness seems to think, in order to meet some fraud objectives.
Any concerns about possible breaches of data protection legislation encountered by the inspectorate will, as I have already explained, be reported to the chief officers within the local authority. It is the clear legal responsibility of those officers to comply with the Act. They are accountable for procedures in the local authority and it would be wrong to dilute that by placing a statutory responsibility on the inspectorate. The Data Protection Registrar gives advice to local authorities on issues concerning data protection.
To reiterate, it would not be appropriate to extend the Benefit Fraud Inspectorate's remit in the way suggested by the amendment. Nor do we believe that the amendment would offer any additional safeguard to an individual's personal privacy.
I hope that the noble Baroness will withdraw her amendment, but if she wishes to go to a vote, I am sure that my noble friends will support me in the Lobby.
Baroness Hollis of Heigham: I do not know why the Minister should be so certain, perhaps he should ask his noble friends. Is that not the appropriate etiquette on these occasions? I am baffled by part of what the Minister said—no doubt it is my fault. He said that the inspectorate was not responsible for ensuring health and safety either. That was the job of the Health and Safety Executive. Can the Minister explain to me what on earth that analogy has to do with the matters under discussion?
The point about this amendment as well as the previous one is that data protection principles ensure the propriety of the path trodden to get to the point of eradicating fraud. We are talking about data matching. That is how, to some degree, the fraud will be determined and made transparent and therefore pursued. Will the Minister tell us where he gets the analogy of the Health and Safety Executive? I do not understand it.
Lord Mackay of Ardbrecknish: I was pointing out that there are other pieces of legislation which control matters within local government. We would not expect the fraud inspectorate to be on the lookout for those, any more than we would expect those responsible for that legislation to monitor the Data Protection Act. If the noble Baroness does not like the example, then I withdraw it. But my argument stands in relation to the Data Protection Act.
I am clear as to what the fraud inspectorate's task is. If the noble Baroness wishes to dilute it, that is her concern. I do not. I believe that the proper procedures

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are in place with regard to the Data Protection Act. I do not think that it is necessary to add data protection duties to the activities of the fraud inspectorate.
Baroness Hollis of Heigham: It is clear that the Minister accepts the ineptitude of the analogy. The fraud inspectors will no more look into health and safety than they will look into equal opportunities, responsibilities on race relations, environmental assessments or anything else. The point about data protection is that in the pursuit of fraud one will handle sensitive material and, therefore, it should be handled in ways that conform to principles of data protection. It is about how you get there. That is why it is integral and the Minister knows that the cross-reference to health and safety was absurd.
Lord Mackay of Ardbrecknish: I did not wish to go back to the analogy, I was trying not to waste the Committee's time by continuing it. Of course, health and safety are concerned with the way the staff work. The point is that when it comes to the employment of fraud staff, health and safety issues are relevant when they relate to what people do and how they carry out their work.
If one were making the kind of argument put forward by the noble Baroness, one would say: "While they are at it, they had better check that what the staff are doing in their fraud work is consistent with health and safety issues". I said and remain of the opinion that there are proper bodies to do that, just as there are proper bodies to look after data.
Baroness Hollis of Heigham: That is an absurd analogy but we could argue about it afterwards. I do not understand where the Minister is coming from on this. He refuses to accept that we are talking about the methodology, how one gets from point A to point B so that the means do not subvert the end or the end does not subvert the means. I am very dissatisfied with the Minister's response and would like to seek the opinion of the Committee.
5.49 p.m.
On Question, Whether the said amendment (No. 51) shall be agreed to?
Their Lordships divided: Contents, 48; Not-Contents, 127.

Division No. 2

CONTENTS

Addington, L.

Eatwell, L.

Alderdice, L.

Elis-Thomas, L.

Beaumont of Whitley, L.

Fisher of Rednal, B.

Borrie, L.

Gould of Potternewton, B.

Broadbridge, L.

[Teller.]

Carlisle, E.

Graham of Edmonton, L. [Teller.]

Carter, L.

Grey, E.

Clancarty, E.

Harris of Greenwich, L.

Cocks of Hartclilfe, L.

Haskel, L.

David, B.

Hollis of Heigham, B.

Dormand of Easington, L.

Hughes, L.

Dubs, L.

Jay of Paddington, B.

464

Kilbracken, L.

Rodgers of Quarry Bank, L.

Lester of Herne Hill, L.

Russell, E.

McIntosh of Haringey, L.

Serota, B.

McNair, L

Stoddart of Swindon, L.

McNally L

Thomson of Monifieth, L.

Mar and Kellie, E.

Thurso, V.

Meston, L.

Tordoff, L.

Monkswell, L.

Turner of Camden, B.

Wallace of Coslany, L.

Morris of Castle Morris, L.

Whitty, L

Ponsonby of Shulbrede, L.

Williams of Crosby, B.

Prys-Davies, L.

Williams of Elvel, L.

Redesdale, L.

Winston, L.

NOT-CONTENTS

Acton, L.

Holderness, L.

Ailsa, M.

HolmPatrick, L.

Alexander of Tunis, E.

Howe, E.

Ampthill, L.

Howe of Aberavon, L.

Anelay of St. Johns, B.

Hylton-Foster, B.

Annaly, L.

Inglewood, L.

Ashbourne, L.

Jeffreys, L.

Astor of Hever, L.

Kenilworth, L.

Attlee, E.

Kingsland, L.

Balfour, E.

Kinnoull, E.

Belhaven and Stenton, L.

Kintore, E.

Belstead, L.

Lauderdale, E.

Berners, B.

Lindsay, E.

Bethell, L.

Liverpool, E.

Biddulph, L.

Long, V.

Blaker, L.

Lucas, L.

Blatch, B.

Lucas of Chilworth, L.

Boardman, L.

Luke, L.

Boyd-Carpenter, L.

Lyell, L.

Brabazon of Tara, L.

McColl of Dulwich, L.

Bridgeman, V.

Mackay of Ardbrecknish, L.

Brigstocke, B.

Mackay of Clashfern, L.

Brookes, L.

[Lord Chancellor.]

Brougham and Vaux, L.

Mackay of Drumadoon, L.

Cadman, L.

Macleod of Borve, B.

Campbell of Alloway, L.

Marlesford, L.

Campbell of Croy, L.

Massereene and Ferrard, V.

Carnock, L.

Merrivale, L.

Chelmsford, V.

Mersey, V.

Chesham, L. [Teller.]

Miller of Hendon, B.

Clanwilliam, E.

Milverton, L.

Clark of Kempston, L.

Monckton of Brenchley, V.

Coleridge, L.

Mottistone, L.

Courtown, E.

Mountevans, L.

Craigavon, V.

Mowbray and Stourton, L.

Cranborne, V. [Lord Privy Seal.]

Munster, E.

Crickhowell, L.

Murton of Lindisfarne, L.

Cross, V.

Nelson, E.

Cumberlege, B.

O'Cathain, B.

Davidson, V.

Oppenheim-Barnes, B.

Denbigh, E.

Oxfuird, V.

Denton of Wakefield, B.

Park of Monmouth, B.

Dixon-Smith, L.

Pilkington of Oxenford, L.

Downshire, M.

Platt of Writtle, B.

Eden of Winton, L.

Quinton, L.

Elibank, L.

Rankeillour, L.

Elliott of Morpeth, L.

Rees, L.

Elton, L.

Rennell, L.

Feldman, L.

Renton, L.

Flather, B.

Renwick, L.

Forbes, L.

Saint Albans, D.

Gisborough, L.

SL John of Fawsley, L.

Goschen, V.

Shaw of Northstead, L.

Gray, L.

Skelmersdale, L.

Haddington, E.

Stewartby, L.

Harding of Petherton, L.

Stodart of Leaston, L.

Harris of Peckham, L.

Strange, B.

Harrowby, E.

Strathclyde, L. [Teller.]

Hayhoe, L.

Taylor of Warwick, L.

Henley, L.

Thomas of Gwydir, L.

465

Trumpington, B.

Wharton, B.

Ullswater, V.

Willoughby de Broke, L.

Vinson, L.

Wise, L.

Vivian, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.57 p.m.
Lord Carter Lord Carter moved Amendment No. 52:
Page 11, line 40, at end insert—
("(3) Any authority sent a report by the Secretary of State under subsection (2) above may, within 28 days of receiving the report, make such representations to the Secretary of State about the content of the report as it considers appropriate.
(4) In considering any further action as a result of a report made under this section the Secretary of State shall have regard to any representations made by an authority under subsection (3) above.").
The noble Lord said: This amendment is designed to allow local authorities to respond to reports on social security administration. We are advised on this matter by the Association of District Councils, the Association of London Government and the Association of Metropolitan Authorities who believe that there is a serious point here and that the Bill requires amendment.
The amendment would give a right of reply to an authority which has had a report made against it under Clause 5. The intention is to give an authority in that case an opportunity to make comments about such issues as the accuracy of the statements in the report and the methodology used. It would also—which is extremely important—give the authority the opportunity to explain the reasons for any failings identified in the context of its own financial position, the level of subsidy received from the Government and the overall impact of the Government's benefits policy.
As drafted the Bill establishes a system which allows an adverse report to be made against an authority under Clause 5 which could then be used as the basis of a direction from the Secretary of State under Clause 8, the compulsory contracting out of benefits administration under Clause 9, and the deduction of subsidy under Clause 10. Although an authority will have an opportunity to submit proposals for improving its performance and remedying any failings identified in the report and prior to receiving a direction under Clause 8 there will be no statutory right of reply for the authority before that stage. That means that there is no requirement on the Secretary of State to consider an authority's representations before moving on to the next stage of making a direction or deducting a subsidy.
The amendment was moved in Committee in another place where the Minister argued that it was unnecessary because it would largely pre-empt the provisions already made in Clause 8. But the purpose of the amendment is precisely intended to pre-empt the provisions in Clause 8 because that is the clause which deals with directions by the Secretary of State. We feel that local authorities should have an opportunity to make comments on adverse reports against them and that the Secretary of State should be required to consider those representations before moving on to consider taking action against a local authority. In some cases, criticisms
466
of poor performance may not be well founded or the poor performance may be caused by insufficient government subsidy for administration costs or by inappropriate policies which are pursued by the DSS. We know that central government subsidy now covers only two-thirds of actual benefit administration costs and in individual authorities the proportion will be much lower. In this context lack of central government support to a particular authority may be the principal reason for its failure to perform adequately. The authority should have the opportunity to make such points and the Secretary of State should be under an obligation to take them into account before considering the making of directions under Clause 8.
We think there is an injustice here. We do not think the local authorities will have the chance to respond before the Secretary of State makes directions under Clause 8. It would considerably add to the justice of the Bill if the Minister were minded to accept the amendment. I beg to move.
6 p.m.
Earl Russell: I am very happy to support the amendment. When one thinks of amendments in one's own mind one tends to use a shorthand. One identifies them by a single word with which one associates them. I am sure the noble Lord, Lord Carter, will understand why I have identified this as the Calderdale amendment. We have here another case of a report on which the local authority wishes to make comments. It is in the Government's interest to allow these comments before any action is taken and to institutionalise the procedure for them.
We have here a procedure which may end up in a deduction of subsidy or in another penalty. We have in effect an exercise of administrative power. All such excises of power, by a provision which is many centuries old in English law, are liable to review by the judges in court. The noble Lord, Lord Lucas, who, I am happy to see, is now in his place, will, I am sure, recall a very interesting discussion we had to which I referred the other day about the extent to which the drafting of legislation may tend to increase the number of judicial reviews. If there is no restriction on the powers of authority in the wording of the legislation, then, literally as a kind of court of last resort, the powers of judicial review come into operation. If this amendment is not accepted, the powers of judicial review will be the first port of call for controlling the Secretary of State's exercise of power. If it is accepted, then there will be what I am sure the Government will find more satisfactory—a statutory check on the exercise of power. Power can be checked according to the expressed will of Parliament. There are advantages in that if Parliament will express the requisite will. But it can only do so, so far as I can see, by accepting the amendment.
One of the ways in which the local authority might well wish to express the view that it had been unfairly dealt with is by making reference to its financial position. Local authorities very frequently believe, and very frequently correctly believe, that poor performance is the result of inadequate financial support. There is a certain amount of support from central government but

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central government subsidies now cover only two-thirds of actual benefit administration. Because of the very complex way the formula for local authority support works, in individual authorities it may be very much lower. In those cases in particular, they may have a very strong case indeed for wanting to make representations. Those are two strong points in favour of the amendment. I am happy to support it.
Lord Mackay of Ardbrecknish: The amendment would require the Secretary of State to allow local authorities a certain period in which to make representations to him on the content of inspection reports. The amendment largely pre-empts the provisions already made in Clause 8 of the Bill. I do not believe that it is necessary to pre-empt the provisions of Clause 8.
The proposed procedure of inspection, reports and directions was designed to be fair to local authorities. It may be helpful if I outline them briefly. Following receipt of an inspection report, the Secretary of State will first ensure that the report is copied to the local authority concerned. This will happen in all cases, even where the performance of the authority is exemplary. It is unnecessary in such cases to make provision for the authority to respond to the report as this amendment does. Indeed, to do so would create an unnecessary layer of bureaucracy.
In a case where the Secretary of State believes that action may prove necessary, he will be required, before taking any action, to invite the local authority to consider the report and to submit its proposals to improve performance and remedy any failings identified. The Secretary of State must then consider any response, along with the report, before making any directions to the local authority.
So the provisions in Clause 8 already ensure that the authority concerned will have the opportunity to consider and respond to the report before directions are issued. Clearly, where an authority disagrees with the accuracy of the report or wishes to challenge the findings, it will be free to comment accordingly. Where the authority considers that any recommendations are inappropriate it will be able to state the reasons why.
The Secretary of State's power to issue a direction is permissive precisely to allow for circumstances where it would not be appropriate to make or even consider making a direction. Where the authority has raised compelling arguments against doing so, the Secretary of State must take these into account. It may not be the intention, but the amendment as drafted appears to introduce an additional stage in the process. To require an additional period of 28 days for comment prior to inviting the authority's proposals would only prolong the process and make it unduly bureaucratic.
The amount of time allowed for an authority to respond to a report must be flexible. Given the wide differences in local authority performance and the variations in caseloads between different authorities, it would not be appropriate to lay down a mandatory response time. It is precisely in order to maintain fairness that we need to be able to adjust to the particular
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circumstances of each individual authority when setting deadlines for action. In general we do not anticipate that an authority would be expected to respond in less than 28 days. There may, however, be occasions when swift action is necessary, while in other cases longer periods would be justified.
Clause 8 already makes adequate provision for a local authority to respond. With that explanation of how we believe the procedure of inspection, report and direction will work, I hope the noble Lord will feel able to withdraw the amendment.
Lord Carter: That was a very helpful response but perhaps I may put a point to the Minister. He said that the amendment would require the local authority to respond even when there was no reason to criticise its performance. I suppose that it could always write back to say, "Thank you". The intention of the amendment is to give an authority the opportunity to make comments about such issues as the accuracy of the statement in the report and the methodology used. If we go along with the Minister's argument and say that this is not required, will the local authority be allowed to make such comments when it submits its proposals in response to the report? When it submits its proposals for putting right whatever may be wrong, will it be allowed to say, "Yes, we understand what we have to do but we would like to point out that the reason for the problem is the inefficiency of the department"?
Lord Mackay of Ardbrecknish: Yes. I think I indicated that where the authority disagrees with the accuracy of the report or wishes to challenge the findings it will be free to comment accordingly. It can make some of those comments before it even comes back to the things it might do if it wishes to challenge points of fact, if I may call them that, or the accuracy of the report. It can do that. That is why I think a little flexibility is required.
Lord Carter: I was referring not just to accuracy. I was also thinking of more subjective opinions where the authority might feel that the problem had arisen because of wrong action on the part of the DSS. I do not wish to press the amendment to a Division. I shall read with care what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 53:
After Clause 5, insert the following new clause—
CHANGE OF CIRCUMSTANCES: REVIEW OF AWARD
(" . In section 5(1) of the Social Security Administration Act 1992 (regulations about claims for and payment of benefit) at end of paragraph (j) insert" and for requiring a review of the award and an award to be made within fourteen days of receipt of notice of any change of circumstances;".").
The noble Baroness said: The purpose of this amendment is to ensure that changes of circumstances are processed within 14 days of the notification of that change. As we know, people have a duty to inform the

469
authorities of a change of circumstances, but, unlike the initial claim in housing benefit cases, there is no timescale within which the local council should process that change. As a result, when a claim is eventually processed, recipients may find themselves faced with considerable under or overpayment and local authorities will then have to seek to put the matter right.
We have to remind ourselves when dealing with the benefit system that we are dealing with people who are by definition very poor and often disadvantaged and who live, as it were, very close to the edge. That means that any underpayment may be a matter of grave penury. Alternatively, if through no fault of their own, having made the notification of change of circumstances, nothing happens and suddenly they are asked to make up the underpayment, that may be a considerable embarrassment and the person concerned may not have the money available.
I do not think that it is too much to expect that a change of circumstances should be processed within 14 days. If we do not have that kind of timescale laid down in legislation, we may very well find that people are subjected to disadvantage which should not be there at all. I beg to move.
Earl Russell: This is rather an important amendment. The Minister and the noble Lord, Lord Lucas, may remember a number of exchanges that we had on the housing Bill where we were in danger for a while of passing like ships in the night. The noble Baroness, Lady Hollis, and I and many others, were asserting that many people were made to wait for many months before getting housing benefit. The Minister gave a whole series of statistics showing that very few people had to wait beyond a fortnight. It was only after very lengthy debate that it emerged that we were measuring two different things. Those of us speaking on this side of the House were measuring the length of time from when people put in the initial application for housing benefit or notifying the change of circumstances from which a claim arose. Ministers were measuring the time of a fortnight, on which there is a statutory check, from when the local authority got all the information on board. The clock does not start ticking for a local authority until all the information has been gathered in.
There have been local authorities—I think of the London boroughs of Lambeth and Brent in the bad old days before reforms began—which used to leave things for many months before they even began to ask for the information needed. In fact, I believe that the London Borough of Lambeth—I would not swear to the recollection now—once discovered a number of sacks containing applications for housing benefit, which had been left lying in a corner of an office for as long as six months.
The point that the noble Baroness, Lady Turner of Camden, made about people living near to the edge is very applicable indeed in that situation. If people have received overpayment through no fault of their own and they are then asked to repay an enormous sum all at once, even if the money is legally due, repaying it may be very difficult indeed.
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Some of us may have received bills from the Inland Revenue for several thousand pounds at a time for back tax which the Revenue has suddenly discovered is due, although in possession of all the information. That sort of thing can cause us, in much more comfortable circumstances, a considerable amount of dismay. If it can cause that to us, then how much more it must cause dismay to people who are really right on the edge and who may be refused the chance to cash a cheque because of an overdraft of £5?
At that sort of level, delay is very serious. So we need some recognition of the fact that the local authority clock ought to start ticking a bit faster. It is like not starting the stopwatch for the Olympic mile—or the 1500 metres, I should say, these days—until the runners are past the first 800 metres. That does not give a very accurate reading. This may not be exactly the right thing to do about it, but something must be done about the problem. People are suffering quite badly because nothing has been done yet.
6.15 p.m.
Lord Mackay of Ardbrecknish: The effect of this amendment would be to provide a power to make regulations to guarantee that notifications of changes of circumstances relating to the majority of benefits administered by my department and local authorities would automatically trigger a review which would have to be dealt with and a decision made within 14 days.
If regulations such as the amendment suggested were made, they could not provide for any exception to the 14-day time period. The amendment is needlessly restrictive. For practical reasons there is a need for exceptions to a 14-day general rule.
Decisions on benefit entitlement by adjudicating authorities are made on the information available to them and deciding the facts on the balance of probabilities. If the officer does not have sufficient information in order to make an accurate determination, he must properly seek more information, otherwise the claimant may be underpaid or overpaid. Proper determinations may not be possible within 14 days if further information has to be obtained either from the claimant or a third party.
For example, the claimant may notify that he has started part-time self employment but say that the business is not yet making any money. The adjudicating authority must arrange further inquiries on the nature of the business and estimated income and expenses before being able to decide whether benefit should be adjusted. A 14-day rule would place a requirement on the claimant to provide information to a very tight, if not impossible, deadline. Failure to provide the information may result in a decision which is to his disadvantage. Under present arrangements, the claimant is allowed up to a month to provide the information and that period runs from the date he was asked to supply it. The month may be extended for good reasons.
For most benefits, legislation has, since 1948, provided for decisions on claims and reviews to be made wherever practicable within 14 days. Different provisions exist for housing benefit and council tax

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benefit, but local authorities are nevertheless expected to deal with all determinations promptly. Failure to do so in overpayment cases may result in an authority losing central government subsidy.
It is, of course, a matter of public policy that the service given is prompt. Public services must now publish charters or service statements and report on performance and costs against those service standards. The Benefits Agency has targets for dealing with changes and the vast majority of cases are dealt with within 14 days. So, for the Benefits Agency, the increased costs would therefore be for very little gain.
While one always has to be a little cautious when looking at these measurements, because there may be a difference between the time of first notification and the time the clock starts ticking because the information was totally inadequate, the fact is that, for all changes—not just changes of circumstances—for income support, 95 per cent. of the cases are cleared within six days; for retirement pensions, 86 per cent. are cleared within five days and for child benefit changes, 92 per cent. are cleared within 13 days. Therefore, the Committee can see that we attempt to meet very exact targets because we are aware of the need to make speedy decisions in these cases.
As I have said, to make a 14-day rule would put the department and the various agencies into a straitjacket unnecessarily, which would not always work to the benefit of the claimant. Therefore, it is inappropriate to set on the face of legislation an absolute time limit which would apply in all circumstances regardless of the practical difficulties. I believe that the existing arrangements are satisfactory and that they do, in the great majority of cases, although perhaps not exactly, meet the purpose behind this amendment, as explained by the noble Baroness, Lady Turner of Camden. With that explanation, I hope that she can withdraw her amendment.
Baroness Turner of Camden: I thank the Minister for that response, but I am not entirely convinced that it is not a good idea to have such provisions stated on the face of the Bill. I know from my own experience that one can notify the Benefits Agency of a change of circumstance but that it may be some time before one is informed by the agency that that notification has gone through. I remember notifying the agency of the death of my husband. Some time went by and eventually I received a letter stating, "We are very sorry that your husband has died, but by the way you owe us £200 because there has been an overpayment". That is not a very good way of dealing with overpayments. That is an example from my own experience, but we must remember that those who receive council tax benefit or housing benefit are already living close to the edge, as the noble Earl said, and they really need some time limit to be put on the period within which the authorities should deal with a change of notification.
I shall read in Hansard what the Minister has said to see whether it might be a good idea to come back on Report with a slightly reworded amendment to deal with the exceptional circumstance. However, I believe that we must spell out somewhere in primary legislation the
472
fact that 14 days is the period which would normally be expected to apply. In the circumstances, however, I beg leave—
Lord Mackay of Ardbrecknish: I simply want to suggest that the noble Baroness might like to look at Section 21 of the Social Security Administration Act 1992, which provides that:
"An adjudication officer to whom a claim or question is submitted under section 20 … shall take it into consideration and, so far as practicable, dispose of it, in accordance with this section, and with the procedure regulations under section 59 below, within 14 days of its submission to him".
Perhaps the noble Baroness would care to consider that when she is reviewing what I have said.
Baroness Turner of Camden: In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden moved Baroness Turner of Camden moved Amendment No. 54:
After Clause 5, insert the following new clause—
OVERPAYMENTS: RECOVERY OF PAYMENTS FOLLOWING CHANGE INCIRCUMSTANCES
(". In section 71 of the Social Security Administration Act 1992 (overpayment) at end of subsection (1) insert "and hut for any payments and sums which have arisen as a result of a failure to make an award within fourteen days following notification of a change of circumstances.".").
The noble Baroness said: This amendment seeks to deal with the situation when an overpayment has resulted from an error or from failure to process the claim. It proposes that changes in circumstances should be processed within 14 days. We are attempting to ensure that the recovery of overpayments following a change of circumstances should not be due to be repaid when that overpayment has arisen because there has been poor administration.
I am indebted to NACAB for some information about what happens in certain cases. It has told me that, with regard to attendance allowance, 26 per cent. of all decisions taken by adjudication officers were incorrect—that is, more than one in four—compared with 15 per cent. in 1994–95 and that 18 per cent. included either an incorrect payment or a case where the accuracy of the payment was in doubt. It has evidence relating to the disability working allowance also, showing that 40 per cent.—two in five—of all decisions taken were incorrect, compared with 31 per cent. in 1994–95. On family credit, NACAB states that 26 per cent. of decisions were incorrect, of which 14 per cent. included incorrect payments or cases where the accuracy of the payment was in doubt. On income support, 41 per cent. of decisions were incorrect, compared with 38 per cent. in 1994–95. Indeed, nine out of 10 decisions were wrong concerning overpayments, 46 per cent. of which included incorrect payments or cases where the accuracy of the payment was in doubt. On the Social Fund, NACAB stated that 74 per cent. of decisions were incorrect.
Coming from an organisation with a lot of experience of advising claimants, that is a record which shows that many decisions are incorrect. If people are

473
disadvantaged because of those incorrect decisions, it seems wrong that they should be expected to meet the costs of those wrong decisions—yet that is what it amounts to. I repeat what I said in relation to the previous amendment: in dealing with people on benefit, we are dealing with people who live on tight budgets. Therefore, if mistakes are made by the authorities responsible for the administration of benefit, it seems to me that the claimants should not have to bear the weight of those wrong decisions. I beg to move.
Earl Russell: I shall not make a speech; I say only that the noble Baroness has made out a very strong case and I hope that it is taken seriously.
Lord Mackay of Ardbrecknish: As we heard from the noble Baroness, Lady Turner of Camden, the purpose of this amendment is to restrict the end date for the calculation of recoverable overpayments to 14 days following the date on which a claimant reports a change of circumstances. This does not fit well with the subject matter of Section 71(1) which concerns recovery of overpayments where a person has misrepresented or failed to disclose a material fact.
In any event, I can see no reason why the period of recoverable overpayments should be restricted in this way. As I explained on the previous amendment, every effort is made to action new information within 14 days. However, this is not always possible—particularly in complex cases or where the adjudication officer feels that additional information is required before the rate of benefit in payment can be reviewed. The practice of recovering the full overpayment was included in the 1948 National Assistance Act and has been reconfirmed by successive governments, both Labour and Conservative, in subsequent Acts—none of which restricts the period of the recoverable overpayment.
When people claim benefits they receive public money which Parliament has determined should be made available to those in genuine need. There is an obligation on those claiming benefit to ensure that they have reported everything that they should regarding their claim to benefit at the outset. Even where we are dealing with innocent misrepresentation where the claimant knew the facts but failed to report them, being unaware of the need to do so—and these cases are rare—the claimant has benefited from public money to which he or she was not entitled. In these circumstances it would be a dereliction of our duty if we did not seek to recover the overpayment in full.
Even when an adjudication officer decides that an overpayment is recoverable there is a right of appeal against the decision, and the Secretary of State can, and does, exercise his discretion where serious hardship would be caused to waive in whole or in part the recovery of the overpayment. In addition, where income support or jobseeker's allowance is in payment, the weekly rate at which the overpayment can be recovered is limited by regulations.
As far as improvements in the accuracy of payments of income support are concerned, the chief executive of the Benefits Agency has given assurances to the Public
474
Accounts Committee of his commitment to accuracy improvement. He has set in motion both short-term measures—for example, to increase the accountability of managers and to improve the training given to staff—and longer-term measures to improve the processes and systems for awarding and paying benefit. That is one of the motivations behind the Change Programme. We want to see whether we can improve the system and one of our objectives is to improve the accuracy figures. I fully accept that that is important.
The calculation of overpayment is a complex area. The chief adjudication officer and the Benefits Agency are currently working together to improve standards by means of new information technology support, a programme of seminars, the production of new guidance and desk aids, and changes in class monitoring in order to increase the profile of adjudication within districts. I hope that all those factors will help to reduce the number of cases of inaccuracy and therefore the number of cases in which overpayment comes into play.
I am sure that the noble Baroness knows how we exercise our powers with relation to overpayment—and how we exercise discretion with regard to certain categories of people and the recovery of overpayment—and I hope that she will feel able to withdraw her amendment.
6.30 p.m.
Earl Russell: The Minister disappoints me. He deals with a case that has not been made. He answers a case against the recovery of overpayment. No one has made any such case. The case is simply that a degree of mercy be shown to people who have received a considerable amount of overpayment through no fault of their own. It is the recovery of those sums at speed, all in one go or over a very short period, which causes hardship. I can only hope that the Minister's tax inspector does not share his principles.
The Minister was also perhaps a little unwise to mention the Change Programme. I understand the case made by the Benefits Agency about the rate of error. I have always been inclined to the merciful approach because I know that to err is human and that the pressure to which it is subject is very severe. But I am surprised to hear the Change Programme invoked as a reason for the likely decline in the rate of error. One understands that wagers are not made in the Chamber. Were we to be outside the Chamber I might well have offered the Minister the wager that after three years of the Change Programme the rate of error would not be less than it is today. I would be rather surprised if the Minister took such a wager.
Lord Mackay of Ardbrecknish: I am not sure whether we can take wagers in the Chamber. The noble Earl says that we cannot. Given his long knowledge of these procedural matters, indeed we cannot. I say to the noble Earl that we would be extremely disappointed if we did not find ways to improve the accuracy of the information. One of the matters that we have discovered in looking at the process is that the point at which the raw information is checked is way down the system. Very often that is one of the factors that leads to

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inaccuracy. We hope that if checking takes place much closer to the beginning of the process not only will it speed up the process but it will also lead to greater accuracy. I do not want to go too far into the detail of the Change Programme. However, I would be deeply disappointed if the noble Earl's pessimism turned out to be justified.
As to hardship, the recovery of overpayment by the deduction of benefit is, we believe, the most cost effective way of recouping the loss. To ensure that no claimant suffers hardship, recovery from weekly amounts of benefit is subject to limits set out in the legislation. Where a claimant puts forward a good reason for a lower rate of recovery or argues that recovery should not take place, that case is looked at sympathetically. I hope that out in the field we look at individual cases of hardship sympathetically and at slower ways to recover overpayment or, in some cases, waive it.
Earl Russell: Whatever we can do about wagers, I am certain that in this Chamber I cannot tell the story of the Glasgow physiology student. Perhaps I can look forward to telling the Minister that story outside the Chamber.
Baroness Turner of Camden: I thank the Minister for his explanation. I remind him that we are referring here to the recovery of overpayments which are not the fault of the recipient but which arise because of incompetence or oversight on the part of the Benefits Agency or the authority responsible for making the payment. It must come as bit of a shock to many people suddenly to find that they are asked to make good an overpayment when they themselves have not been responsible for providing inaccurate information and the overpayment has arisen because someone else made a mistake in the system.
Although I do not intend to divide the Committee on the amendment, I feel strongly about it. I should like to think about what the Minister said. I am grateful to him for his comments about training. Obviously, it is important that staff should be properly trained and that performance monitoring should take place. I am also glad to learn that the head of the Benefits Agency intends to ensure that proper monitoring is carried out. However, that still does not tackle the situation I seek to deal with by way of the amendment; that is to say, to ensure that people are not suddenly faced, through no fault of their own, with a demand for repayment. I beg leave to withdraw the amendment on the basis that I am likely to come back with a rather similar amendment at Report Stage.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 55:
After Clause 5, insert the following new clause—
INFORMATION RELATING TO DETERMINATION OF CLAIM: TIME LIMITS
(" . In section 5(l) of the Social Security Administration Act 1992 (regulations about claims for and payment of benefit) at end of paragraph (h) insert "and for requiring a request for information or evidence by the determining authority to be made in such a
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manner and within such a period as may be prescribed, not being more than seven days from the date on which the new claim is received at the appropriate DSS office or the designated office, whichever is the earlier, and where it appears to the determining authority that further information or evidence is required for requiring that request to be not more than ten days from the date on which the claim is received;".").
The noble Baroness said: The purpose of the amendment is to provide for regulations which will ensure that when applications are made for housing benefit, requests for information and evidence are made within seven days of the receipt of the claim. Delays in the determination of claims for housing benefit are a significant factor in causing arrears of rent, even homelessness, despite regulations which require local authorities to make payments within 14 days of receiving full information on the claim. One cause of delay is the current lack of any time limit on the period for requesting additional information. The amendment seeks to tackle that by introducing time limits for requests for additional information and evidence by the determining authority.
DSS proposals to pay housing benefit in arrears make it even more essential that the benefit is paid speedily. During the Housing Bill there was an argument for changing benefit regulations to ensure that local authorities made requests for information or evidence within specified periods in order to prevent delays but without much success. At that stage the Minister said:
"I am not complacent. I recognise the strength of feeling behind this amendment. I propose to monitor the position".
I am advised by NACAB, to whom I am indebted for briefing, that the problem persists. I beg to move.
Lord Mackay of Ardbrecknish: Having listened to the noble Baroness, I now appreciate that her amendment is directed at the Secretary of State who may be being dilatory in some cases in collecting the necessary evidence. Perhaps I may explain how the claim process works at present and why I do not believe the amendment would help either the organisation or the claimant. The onus for making the claim for benefit lies with the individual who wishes to claim. That claim is submitted to the Secretary of State whose task it is to check whether it contains sufficient information to enable the adjudication officer to make a determination. If it does he submits it straightaway to the adjudication officer under Section 20 of the Administration Act. Section 21 requires the adjudication officer, so far as practicable, to dispose of the claim within 14 days. However, it may be that before he can dispose of it the adjudication officer requires the Secretary of State to request further evidence. In such cases the 14 days may well be impracticable. If the Secretary of State requires more information before submitting it to the adjudication officer, Regulation 7(1) of the claims and payments regulations allows the claimant one month to produce the required information or such longer period as the Secretary of State may consider reasonable.
The amendment would introduce into this procedure deadlines for the request of information. The Secretary of State would have seven days to request information following the receipt of a claim and a further three days would be allowed where further information was

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requested. I can understand the desire to ensure efficient administration, but I believe that such an amendment would be counter-productive and would not achieve what the noble Baroness desires. I suspect that it would not be beneficial to the claimant. If the request for information was not made within the prescribed seven or 10-day period the Secretary of State would pass the claim as it stood to the adjudication officer. The adjudication officer would then be obliged to decide the claim on the evidence before him. The onus is on the claimant to show that he is entitled to benefit and most requests for further information are made because it appears that the evidence the claimant has provided is not sufficient to do this. So the almost inevitable result is that the claimant, under the noble Baroness's suggested rule, would be disallowed benefit.
I know that that is not what the noble Baroness has in mind when she proposes the amendment, but I believe that that would be its effect. In my view claimants are well served by the current provisions, which provide the flexibility needed to ensure that we can ask questions to make sure that the adjudication officer has all the evidence before he makes the decision. If he is forced to make that evidence on inadequate information because of time limits, the chances are that the information will be inadequate in such a way that the claimant will not receive the benefit, or perhaps as much benefit, as he is entitled to receive. I know that that is in no way the noble Baroness's intention.
With that explanation of how the system works at present—I am sure the noble Baroness knows it—and as regards the problem that will arise from her amendment, I hope that she will feel able to withdraw it.
Baroness Turner of Camden: I thank the Minister for that response. He is quite right. It is not the intention in moving the amendment to make it more difficult for the claimant to have benefit; quite the contrary. The intention is to ensure that the claim is processed as quickly as possible and that the claimant is not subject to unnecessary delays in seeking his benefit.
As I said in regard to the previous amendment, I shall read in Hansard what the Minister said to see whether it might be a good idea to come back with a different form of wording designed to achieve the objective of the amendment. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Gould of Potternewton Baroness Gould of Potternewton moved Amendment No. 56:
After Clause 5, insert the following new clause—
REPORT ON BENEFIT FRAUD BY ONE PERSON CLAIMING ON BEHALF OF ANOTHER
(". The Secretary of State shall report to Parliament on the administration of social security in relation to the payment of benefit to another person on behalf of a person entitled to such benefit with particular reference to safeguarding such a person from fraud.").
The noble Baroness said: In moving the new clause, my intention is to highlight a crucial but so far ignored element in relation to fraud: the appointment of
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appointees and agents. I am somewhat surprised that a Bill which deals with fraud makes no reference to reviewing the system of appointeeships or agencies. There has been considerable evidence to suggest that such fraud as takes place is sufficient to warrant the Government conducting a substantial review of the system, in particular in respect of appointeeships.
The current arrangements which allow for a person to appoint someone else to manage his benefit entitlement on his behalf if he is mentally incapacitated, or to collect his benefit if he is unable to do so himself, can lead to considerable potential for undetected fraud and abuse. This possibility is exacerbated in a number of ways: by there being little statutory backing for the system for appointing appointees or agents; by there being no formal mechanism once an appointee is appointed; and because the Benefits Agency provides only limited public information on the system and conducts limited monitoring of appointees or agents.
At this stage I should declare an interest as I act as an agent. I have to say that I was disturbed at the time of my becoming an agent that no check was made as to my credentials. I have, however, an agency card stating that I am authorised to collect money on behalf of the named person. The Minister may tell us that there has to be a witness to such an appointment; and that is right. But there is no stipulation as to who that person should be. It does not have to be an accredited person such as a doctor or social worker. It can be someone closely connected to the person who is to act as agent. That is because officially the nomination of an agent is an informal arrangement between claimant and agent. It is assumed that the claimant is in a position to make judgments about who should act on his behalf. One consequence is that there is no monitoring of these arrangements, but it is all too easy for vulnerable people to be misled.
Another concern is that people acting as agents are under no obligation to inform the Benefits Agency when or if the claimant is no longer capable of giving the agent the authority to draw benefit. The agent could continue to collect benefits for someone when an appointee might be more appropriate. This opens the agent to the temptation to retain access to funds without there being the proper authority to do so. Relying on the integrity of agents, no matter how many are acting properly, is obviously a weakness in the system.
As it currently operates, the appointeeship system is even more open to abuse. Although this arrangement is intended for people who are unable to act for themselves, there is no requirement for medical confirmation that an appointee is required. Currently Benefits Agency staff without any special training or experience can make that decision alone. Similarly, there is a lack of public information about how the system operates and, as internal Benefits Agency staff guidance is inadequate, many procedures are not followed. For example, against current guidance some appointees have been appointed without a face-to-face interview to determine their suitability.
Once appointed, again there is no adequate monitoring. Staff guidance only suggests spasmodic case checks on appointees when a person is in

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residential care. Cases have arisen where the appointee has left his job at the home and consequently an unauthorised person has been collecting benefit entitlement, sometimes for years. Despite the Law Commission in 1993 concluding that appointeeships should be reviewed every six or 12 months, no action has been taken by the Government.
Another example is the number of care home owners who are often acting as appointees despite the fact that the Benefits Agency guidance states that they should be used only as a last resort. In order to protect the claimant, the very least that should happen is that the home concerned should be required to submit an annual account of the benefit claimed and how it has been spent. That would ensure that the benefit entitlement collected is spent on the person for whom the appointee acts.
It is difficult to estimate how widespread is fraud and abuse in this area of benefit payments. That is mainly because of the lack of information, lack of monitoring and the laxity of the current rules which provide adequate scope for fraud and abuse to occur.
In reply to a Question in another place, the Minister indicated that the department keeps these matters under ongoing review, and that in particular current arrangements for appointees and agents in the context of transition to payment by benefit cards is being examined. But that is not sufficient. There needs to be a tightening up of the whole process. The Secretary of State having to report to Parliament would highlight the shortcomings in the current system and would, one hopes, result in encouraging the DSS to consult on bringing forward adequate regulations. I beg to move.
Earl Russell: Agency is something which always needs supervision. Some of us have come across a fairly similar problem of agency in the administration of proxy votes. I do not make any party point. All parties have been accused of abusing the system. All parties need monitoring. Original sin does not have any party. But that is beside the present point. I hope that it may be discussed between our party headquarters.
We are dealing with a group of people who are often unable to look after themselves. For example, if someone suffers from Alzheimer's, he is not in a particularly good state to check whether the agent is exercising his power properly. There is some need for external supervision. What form that external supervision should take is a very much more difficult problem. One thinks perhaps of the powers of public trustees because the person concerned is in effect exercising a trusteeship and perhaps that is the appropriate form of supervision.
The Answer to a Written Question to which the noble Baroness, Lady Gould, referred was in answer to my honourable friend Miss Lynne in another place. I accept that the department keeps everything under review, but perhaps the Minister can tell us what kind of review is being conducted. What methodology is being used? What, if any, preliminary impressions has it gained?
Lord Mackay of Ardbrecknish: I have some sympathy with the concerns expressed by the noble
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Baroness, Lady Gould. It is recognised that the number of people who are incapable of managing their own affairs, and who are therefore in need of an appointee, is increasing. Regrettably, there have been cases where those who have been appointed to so act have misappropriated the money. In the past, some problems have been identified in relation to residential care and nursing homes, which are where those in need of appointeeship are commonly cared for.
However, I am not persuaded that the natural concerns that we all have are addressed by the proposed amendment. First, the vast majority of appointees are family or friends acting in a caring role and performing a valuable, but often unnoticed, task. I believe that it would be highly intrusive and provocative to conduct a survey which had a remit of checking that the appointee was not defrauding the person being cared for. I fear that a large number of existing appointees might respond to such a survey by requesting that the department appoint somebody else. The reality is that in many cases there would be no one else to be the appointee. That rather basic fact takes the edge off the point of conducting a survey.
I appreciate that in the past there have been problems in connection with some proprietors of residential homes. I can tell the noble Baroness that existing guidance to staff in Benefits Agency offices is that they should consider appointing a proprietor of a residential home to act for the claimant only where no other suitable person can be found. The reason for that guidance is not necessarily that proprietors are viewed by the department as potential fraudsters; it is simply that the task of being an appointee goes wider than just cashing the claimant's benefit, taking out the fees to the home and giving the claimant the remainder. There is an onus to report changes in circumstances which may affect entitlement to benefit, and proprietors of homes may not be in a position to fulfil such a role.
The noble Baroness outlined the procedure which currently exists before an appointee arrangement is approved. Perhaps I may go over that, too. The claimant is visited to ascertain whether he is capable of managing his affairs. The prospective appointee is also visited, either with the claimant or separately, to ensure that he understands and is prepared to take on the role of appointee. In addition the Secretary of State has discretion to terminate an existing appointment. He would certainly do that without delay if there were, for instance, any suggestion of the claimant being defrauded.
I can also tell the noble Baroness that the Benefits Agency looked at the whole area of appointee arrangements last year. It found that the procedures were basically sound, although some concerns were raised that procedures had not been properly followed. The noble Baroness suggested that, too. The conclusion of the agency was not so much that the procedures needed changing, but that it was necessary to emphasise the fact that the procedures should be followed.
I am grateful to the noble Baroness for raising these issues. I shall certainly discuss with my officials her point that procedures were not being properly followed.

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There is little doubt that they ought to be properly followed. I shall certainly take steps to ensure that the Benefits Agency is aware of the fact that the noble Baroness suggests that that may not be the case. As I said, after our investigation concerns were expressed that in some cases the procedures were not being followed. I hope that the emphasis we placed on following the proper procedures has, so to speak, got through to the staff on the ground.
The broader point raised by the noble Earl and alluded to by the noble Baroness related to keeping the matter under review. We are at a particular transition period in the way in which we pay benefits. The whole area of agent collection is being considered as part of the studies we need to undertake leading up to the benefit payment card. Research has shown us that we need to continue with an agent system for the collection of benefits because, as we all agree, there are customers who cannot collect themselves and who need appointees or agents. As my honourable friend said in another place, we are making the system more secure within the changes associated with the card. We must address methods of verification of the agent which are different from the current methods because benefit books are quite different from the systems which will be used for benefit payment cards. That is one of the problems we are having to investigate in addressing the introduction of benefit payment cards.
I hope that those words help to reassure the noble Baroness that we are looking at these matters with regard to the transition from the current system to the benefit payment card system. I should be interested to hear of any particular case she has in mind where the procedures fail to be carried out. Even if the appointee was the right and proper person to be appointed, the procedures ought still to have been carried out in order to ascertain that that was the case. We are all agreed that vulnerable claimants must be protected. I spend some time trying to tease out issues relating to the introduction of benefit payments cards. However, I believe that the amendment would take us too far down a different road and would not help to achieve our goal. I am pleased to have had the opportunity to discuss the matter and to hear the points put to me by the noble Baroness.
Lord Carter: Before my noble friend decides what to do with the amendment, perhaps I may make a suggestion. The Minister mentioned a review of the appointment of appointees and referred to the problems which arise when no one is available. We have an Official Solicitor and an Official Trustee. Will the Government consider an Official Appointee? Obviously, that would be a right and proper person and such an office would help to solve some of the problems described by the Minister.
Lord Mackay of Ardbrecknish: I have a suspicion that that would be a very bureaucratic system to devise as regards the bulk of the cases where the appointee is likely to be a close relative or friend of the person concerned. In the circumstances, it would be wrong to
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create a system similar to that of official solicitors and official trustees, but perhaps I have misunderstood the noble Lord's suggestion.
Lord Carter: I make the suggestion only in respect of those cases where there is a problem in finding someone to undertake the task. I believe that the Official Trustee delegates the task to a retired person. A retired insurance broker can act as an official trustee in certain cases. One could have a register of such people to be drawn upon when there was a problem finding the right person.
Lord Mackay of Ardbrecknish: When there is a real problem in finding an appointee the situation is different from that we have been discussing. It is not a matter of an appointee being available, but of an appointee being a right and proper person.
I shall look at that small point—small in number—and I shall try to ensure that after the Committee stage the Benefits Agency is aware of the concerns that procedures are not being properly followed.
Earl Russell: I am grateful to the Minister who has tried very hard to be constructive. Of course it is possible that this is not the best answer, but perhaps we ought to think about what is. When the Minister talked about the benefit payment card he was getting warmer. We must make some distinctions. It is not enough to control the choice of appointee. No one is immune to temptation, even close relatives. One need only think, "Oh, my prophetic soul, my uncle." One cannot deal with the problem simply by controlling the choice of the appointee; one must have some monitoring of the conduct of the appointee in office.
Here one needs to make another distinction between people who are unable to collect their benefit because of physical incapacity and people who are unable to do so because of mental incapacity. If you are unable to collect your benefit because of mental incapacity, you simply cannot monitor the person who is collecting it for you. That is what made me wonder about automatic credit transfer: I have heard the Minister sing its praises on other occasions.
Where there is a clear mental incapacity, if benefit were paid by automatic credit transfer it could be tapped only by somebody who had authorised access to the claimant's bank account, and access to bank accounts and use of them is carefully monitored independently. Is that a road which we might possibly go down?
Lord Mackay of Ardbrecknish: When we were having our discussions in relation to the benefit payment card, I discussed that point. The problem is that not everybody has a bank account. We may then start to go down the road of forcing somebody to have a bank account.
The noble Earl is quite right that the problem is greatly helped if the payment is carried out by ACT. But equally the money has to be collected from the bank. I am pleased to hear that the noble Earl thinks that the banks have sound systems in place—apart from

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American ones. My personal experience does not lead me to quite the same confident position which the noble Earl has adopted. But he has a point about the advantages of ACT with regard to someone who cannot get to the post office to collect his benefit either through the existing system or a future system. The problem is that individual circumstances are so varied it is difficult to make hard and fast rules.
Baroness Gould of Potternewton: I thank the Minister for his sympathetic reply and the comments he made. I believe that all parties agree with the noble Earl as regards the point he raised about proxy votes and use of them. I did not think that we should achieve such agreement on the rest of the amendment. I am pleased that we have gone so far in the meeting of minds.
I should be pleased to hear the results of the Minister's discussions with his officials so that we can reassure those many organisations which work in this field that action is being taken. That would be extremely helpful. I shall make sure that the Minister receives information about particular cases so that he will be able to refer those to his officials.
I was pleased to hear the Minister say that he will consider the point raised by my noble friend Lord Carter. In the light of the progress made on the amendment, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Lucas: I beg to move that the House be now resumed. In moving that Motion, I suggest that the Committee stage begin again not before five minutes past eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Finance Bill
Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a money Bill, read a first time, and to be printed.
Consolidated Fund (No. 2) Bill
Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a money Bill, and read a first time.

Education (No. 2) (Northern Ireland) Order 1996
7.4 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield)The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield) rose to move, That the draft order laid before the House on 3rd December be approved.
The noble Baroness said: The order will provide for the introduction in Northern Ireland of a grant scheme for pre-school education; clarify the open enrolment
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provisions of the Education Reform (N.I.) Order 1989; make provision to allow changes to be made to the existing arrangements for home to school transport covered by the Education and Libraries (N.I.) Order 1986; and introduce some technical amendments to educational legislation to remove impediments to one type of contract which may be appropriate under the private finance initiative. It also makes a number of minor miscellaneous amendments to existing legislation.
The order was considered by a wide range of educational interests in Northern Ireland. All of their comments were carefully considered and as a result, a number of minor changes have been made to the draft order. I am grateful for the interest shown by those who took the trouble to respond.
I believe that it would be helpful to the House if I say a few words about the main provisions of the order. The draft order contains enabling powers for the introduction in Northern Ireland of a grant scheme for pre-school education. This scheme has already been the subject of corresponding legislation in respect of England, Wales and Scotland. While plans to introduce the scheme in Northern Ireland in September 1997 have had to be postponed for the moment, the Government remain committed to the introduction of the scheme as soon 0as the necessary resources can be made available. While this is a national scheme, it is intended that the detail of its operation in Northern Ireland will reflect local circumstances there.
The existing provisions relating to the admission of children to grant-aided schools in Northern Ireland are revised by this order, although there is no underlying change in open enrolment policy. The general principle remains that the intention of the legislation is to enable parents as far as possible to realise their preferences in terms of the schools they would like their children to attend.
Specifically, the new provisions will clarify that parental preference is constrained by the physical capacity of schools; that schools, other than in specified circumstances, should admit pupils up to the limit of their enrolment number; and that schools admissions criteria can be applied only where a school is oversubscribed with applications.
The main new change is the proposal to prohibit schools from using the order of parental preferences as part of their admissions criteria.
Amendments to the transport arrangements proposed under this order will enable the Department of Education to take the lead in determining the transport arrangements which are considered necessary for facilitating the attendance of pupils at grant-aided schools and relevant students at institutions of further education. Such transport would continue to be provided free of charge for those pupils and students eligible for transport assistance.
The amendment also enables boards to provide transport assistance for those pupils at grant-aided schools and relevant students attending institutions of further education, for whom transport is not considered necessary. Provision is made for boards to make charges for any transport provided and for charges to he remitted

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in certain circumstances. This provision is an enabling one and the department and education and library boards are currently investigating alternative ways in which savings might be achieved. The new power is, however, necessary should further savings in transport costs be judged necessary to protect classroom expenditure.
I should stress, however, that the Government consider that free transport will always be necessary for pupils of compulsory school age who are unable to gain a place in a suitable school within statutory walking distance of their home and there is no question of such pupils having to pay for transport.
The order also introduces some technical amendments to education legislation to remove some impediments to one type of contract which may be appropriate under the private finance initiative. Previous powers were drafted at a time when such contracts were not envisaged and some adjustments are necessary.
The PFI may apply in a wide variety of ways in the education sector but one particular possibility which is being explored is the provision of school accommodation under a contract whereby the private sector would design, build, finance, operate and maintain the school premises and provide a variety of associated services. In theory this could include all aspects excluding teaching.
The existing powers in respect of voluntary maintained schools need to be adjusted because they prescribe that the education and library boards must provide some of these services for these schools. Also they prescribe separate funding mechanisms for recurrent and capital grant for voluntary maintained and voluntary grammar schools which would be difficult to apply in respect of a PFI contract. No changes are needed to existing powers to facilitate PFI contracts in respect of controlled schools or further education colleges.
I must stress that these powers will only come into operation if and when a contract is agreed between the relevant contracting authority and the individual school and is approved by the department. This will only arise if a contract is affordable and represents good value for money, also if it incorporates the important principles of risk transfer which are central to the PFI.
These are the main provisions of the order, which I believe will help improve the education system in Northern Ireland. I beg to move.
Moved, That the draft order laid before the House on 3rd December be approved.—(Baroness Denton of Wakefield.)
Lord Morris of Castle Morris: My Lords, the House will be grateful to the noble Baroness, the Minister, for introducing this order with her characteristic clarity and care. She will not expect us on these Benches to welcome with any enthusiasm whatever a document which extends to Northern Ireland the drab and dreary prospect of nursery vouchers—heretofore graciously innocent of them—the main burden of this order.
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Those of us concerned with the progress of the Nursery Vouchers and Grant Maintained Schools Bill in your Lordships' House day after day and night after night last year take no delight in contemplating the advent of those dismal dockets in the Emerald Isle. Nevertheless, the extension of the scheme has been formally proposed and we must live with it as best we can for what we can only hope will be the briefest of all possible periods. It is the policy of my party to honour such vouchers as are issued, but to issue none of them ourselves if and when we become the Government.
I have read this order carefully and I have also read, with profit, the debate upon it by the Seventh Standing Committee on Delegated Legislation in another place. That debate raised many questions which were not answered, and I should be grateful if the Minister could elucidate at least some of them.
First, her honourable friend was asked about uniform holiday arrangements and the savings in transport costs which they might make. He replied that he was waiting for the boards to tell him the exact savings that could be made through the co-ordination of holidays. Can the noble Baroness tell the House what he has managed to discover?
Commenting on the private finance initiative provisions in the order, her honourable friend said:
"It is early days for the PFI".
That drew the response from a Member of the Committee that it has been government policy now for five years, yet comparatively little has happened in Northern Ireland. Can the Minister tell us what has actually been achieved by the PFI in Northern Ireland?
Turning to the vexatious vouchers themselves, her honourable friend the Minister of State told the Committee that plans to introduce the voucher scheme in Northern Ireland in September 1996 had to be postponed to maintain and protect mainstream school and other education priorities. That phraseology is intriguing. What priorities were so urgent that the implementation of nursery vouchers had to be delayed for them, and when will the first nursery voucher now be issued?
Her honourable friend was later asked whether the voucher scheme would have the same value, regardless of whether there are qualified staff and regardless of whether the standards of accommodation were those required to meet educational criteria or those for child care. His reply was opaque, and I should be grateful if the noble Baroness could introduce an appropriate transparency.
He was also asked if he had signed a contract with a company called Capita to administer the scheme, worth £300,000 over a three-year period. He did not say yes; he did not say no. He did not say anything. Can the noble Baroness assist us with the relevant information and tell us whether any money has yet been spent on that contract or any similar one, which an incoming Government might have to cancel?
Lord Alderdice: My Lords, the noble Baroness has already been justly appreciated for her presentation of this order. However, I have to say that I too have a

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number of considerable problems about it. The matter of nursery vouchers has already been referred to, and we all understand that in another place there are increasing indications of concern about them.
In Northern Ireland we rejoice in the fact that, while the community charge, for example, was tried out as a pilot scheme for the rest of the United Kingdom, we were relieved of that particular problem. We had rather hoped that the same might be the case in respect of nursery vouchers. No more of that; it has already been mentioned.
I turn to a number of other issues. I see in them an extraordinary paradox in the way that the Government have approached matters. For example, take the matter of the PFI. I cannot for the life of me see why a developer should want to take on simply the provision of buildings. If they should take on not only the provision of buildings, but, as the noble Baroness has indicated, possibly almost all of the other services except for teaching, what precisely will the argument be to ensure that teaching should never come under that particular requirement?
Is one not simply moving in the direction of indicating that we should be talking about private schools? If the building, the maintenance, the management, the domestic services, the meals, security and all these other matters are to be dealt with in this way, including, presumably, secretarial staff, a librarian and an assistant in the classroom, how long will it be before in fact we are actually talking about a fully private school?
Of course, if one does not do that, then why on earth should private developers get involved? It has already been asked how far the PFI has gone in Northern Ireland. To my knowledge, in health, for example, where the issue has been available, there has not been very much progress, other than a car park provided at the Royal Victoria Hospital and one or two other bits and pieces. That is because, as private companies have looked at it, they have said that unless they are providing the whole package and the whole service, there is not a great deal in it for them. There has not been much progress in PFI in Northern Ireland in health, and I doubt very much if there will be very much progress in education either, unless one moves down the whole road.
If that is the current Government's intention, would it not be better to indicate that is the case? When people enter into programmes without knowing the whole story, they sometimes become very disenchanted with it. This is the case in the whole question of the local management of schools, for example. We find many people coming on to the boards of governors of schools—I see this at home in Belfast—with the intention of supporting teachers, not sacking them; with the intention of building and developing schools and services, not presiding over their deterioration and demise. Now in Northern Ireland they find themselves with recent cuts in education, with the calculation that perhaps 500 teaching jobs are at risk, with 15,000 children having to be moved into other classes to cope with the problem. These people, who came forward
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from the community to say, "Let us involve ourselves", are now saying, "We did not come in to preside over this". They have had their fingers burnt. In those and in other circumstances people who were tempted into a particular area are finding that they may not want to stick with it.
In the case of choice, of open enrolment, which is another matter dealt with in this order, we find that parents are encouraged to look around to find the best school for their children. But then of course if that means travelling a distance, the Government says: "We have to introduce a charge for the transport". What does that mean? What it means is that only those who can afford to pay for their children's transport can pay for the opportunity of choice that has been introduced by the Government.
That is not in any way to say that good things are not happening. I know from representations in regard to Grosvenor Grammar School, Belmont Primary School and St. Bernard's Primary School in my own area that capital developments have taken place there. I am not one who is not prepared to give credit where it is due. There have been very good developments.
However, I fear there are serious problems in all of the areas referred to in this order, whether it is PFI, nursery vouchers, or open enrolment and the transport charges that come in its wake and make the choice that is proclaimed available only to those who can afford to pay for it. I have the deepest of reservations not about some of the hopes and desires for choice and greater benefit and the introduction of more moneys into the system but for the outcome of this order.
Lord Harris of Greenwich: I wish to say a few words about nursery vouchers. I realise that the question I am going to put is really a question for the accounting officer at the Northern Ireland Office. We are on the eve of a general election, as we all know. The noble Lord, Lord Morris of Castle Morris, has made the position of a potential successor government clear; namely, that they would not pursue this scheme. The question arises, therefore, as to whether, once the Prime Minister announces the dissolution of Parliament, any steps will be taken to enter into new contracts in this area. If a successor government were to be elected and were to find that their predecessors had, notwithstanding the clear expression of their view, continued cheerfully to sign a contract when a large number of people in this country believe there is likely to be a change of government, that in my view would be a wholly improper way to spend public money.
What I am asking the noble Baroness to tell us is the following. What is likely to be the decision of her department in relation to the signing of any new contracts before the last date of this Parliament; namely, the 21st or 22nd May? Will she confirm that no new contracts would be signed in this area which would take effect after that date? Otherwise, in my view, the expenditure which would then arise would be an entirely improper way of committing public money. Perhaps she will confirm that that would be the position.
Baroness Denton of Wakefield: My Lords, I thank noble Lords for their input into this debate. I also thank

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the noble Lord, Lord Moms of Castle Morris, for the courtesy of informing me of the matters he wished to raise. I shall try to deal with all the points that have been mentioned.
As regards savings resulting from the harmonisation of holidays, I regret I can bring no further detailed news. The boards are presently examining the scope for making savings and are discussing the practicalities of that with schools. It is not possible to say what savings will result until those discussions are complete, but it is hoped that the boards will have completed their discussions within the next few weeks and that such savings as may arise will be identified.
Noble Lords discussed the private finance initiative in education. In common with developments in education in Great Britain, no PFI contract has as yet been put in place. However, there are whole new areas of activity in education comprising projects of a smaller size which lead us to believe that progress can be made in that area. The Department for Education in Northern Ireland has established six pathfinder PFI projects, two in further education colleges and four in secondary schools. One of the FE projects—the North West Institute of Further and Higher Education—has reached the stage where three private sector consortia have lodged their bids for this £7 million capital project and a preferred bidder is scheduled to be selected by June 1997. The other FE project—the Belfast Institute for Further and Higher Education—which is valued at £10 million has just formally been launched. The four schools projects are expected to be formally initiated following several months of detailed planning and preparation under EC procurement regulations. These will be launched in a few weeks' time.
The noble Lord, Lord Alderdice, asked about opportunities for the private sector. We believe that buildings which are utilised for only part of the year offer opportunities for use outside school hours in this respect. I certainly have faith in the value of education in Northern Ireland. If there were an outcry that such measures would cover teaching, no one would wish to take that on.
As regards PFI, what has not been achieved has not been for want of trying. Much will happen in the next few months. Noble Lords asked what priorities rank above nursery vouchers. I got the feeling that they might have welcomed the postponement which we are proposing but they were not so gracious as to make that statement. The reason for the postponement is that it is important to ensure that we have the resources to meet the commitments to which we are already committed. That was the reason for the decision to postpone the measure; namely, to ensure that resources are available in the classroom. We had not envisaged that our decision would give the Opposition Benches such pleasure as we reached that decision reluctantly. I reassure the noble Lord, Lord Harris of Greenwich, that the contract has been arranged with Capita that Northern Ireland negotiates an opt in clause to the national contract when required and not before. Therefore nothing will be spent until such point as the vouchers are introduced. In the view of the noble Lord, Lord Morris, Capita will not receive income in the future from that project but we hope that will not be the case.
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The value of the planned vouchers remains the same regardless of the setting—whether nursery schools or playgroups—in which they are used. Children will qualify for vouchers for one, two or three terms depending on the date on which they reach their fourth birthday. As noble Lords would expect, providers in all settings must meet the requirements in respect of staff qualifications and accommodation set out under the scheme before they can become registered voucher redeeming institutions.
The noble Lord, Lord Alderdice, mentioned the disappointment of people who had joined governing bodies in order to participate in them. I regard this matter from a slightly different point of view. Due to the current pressure on law and order budgets in Northern Ireland it is not possible to bring more resources to this matter. We have discussed resources with the boards and the governing bodies and the people who are involved at the sharp end in making the relevant decisions. We are grateful to people who give up so much of their time to become involved in education.
The noble Lord was concerned that transport costs would limit parents' choice as regards the schools their children could attend. I do not feel as nervous about this matter as he does as there is an enormous number of good schools available in Northern Ireland. However, we have to be practical. We could allocate far more resources to education if we were not faced with bills for rebuilding schools that have been burnt down in periods of violence. Ministers take no pleasure in being subjected to pressures in allocating resources. The best way to ensure that more resources are available for education is a resumption of the cease-fire and an end to violence in Northern Ireland. This debate concerns an enabling measure in the education sector. I believe it will bring benefit to education in the Province of which we are all so proud.
On Question, Motion agreed to.

British Gas plc (Rateable Values) Amendment) Order 1997 British Gas plc (Rateable Values) (Scotland) Amendment Order 1997

  Non-Domestic Rating (Chargeable Amounts for Small Hereditaments) Amendment Regulations 1997
  7.30 p.m.
  The Minister of State, Department for the Environment (Earl Ferrers)The Minister of State, Department for the Environment (Earl Ferrers): rose to move, That the draft orders and regulations laid before the House on 11th and 12th February he approved [12th Report from the Joint Committee].
  The noble Earl said: My Lords, all three of the instruments, are about non-domestic rates. I should like first to explain the effect of the two British Gas orders.

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  British Gas is one of a small group of industries whose rateable values are not assessed by the valuation officer, but instead are prescribed by the Secretary of State.
  One of the drawbacks of prescribing rateable values is that they cannot be easily amended if the amount of property, which is occupied or owned by the ratepayer, changes. In the case of British Gas, the property has changed—and changed significantly.
  Since 1995, British Gas has substantially reduced its property holdings by demolishing or disposing of a lot of its surplus premises. For example, many of the large gaswork sites, which have historically been included in the prescribed rateable value—such as, for example, the Greenwich Millennium site—have been cleared of all buildings or have been sold outright.
  We estimate that the value of property such as this is almost £95 million in England and Wales and £6 million in Scotland. If British Gas were assessed in the normal way by valuation officers, these property changes would automatically have been reflected in their rateable value. Because, though, their value is prescribed by the Secretary of State, we need to bring forward these orders to achieve the same results.
  The third set of regulations are required to correct an oversight in regulations which I brought to the House before Christmas. I apologise to the House for that.
  These regulations concern England and Wales only. When we debated the original Non-Domestic Rating (Chargeable Amounts for Small Hereditament) Regulations in December, I explained that they were introduced in order to give effect to the Chancellor's Budget announcement that the rates bills of small properties should be frozen in 1997/98 at their 1996/97 levels.
  As the regulations stand at present, though, small empty property will not benefit from the Chancellor's generosity—their bills will rise in line with inflation by about 2 per cent. That is not what the Chancellor intended nor is it, in fact, what we had intended when we made the regulations before Christmas. The regulations before us today will therefore extend the protection to all empty property, as from 1st April this year. I beg to move.
  Moved, That the draft orders and regulations laid before the House on 11th and 12th February be approved [12th Report from the Joint Committee].—[Earl Ferrers.]
  On Question, Motion agreed to.

  Deregulation (Provision of School Action Plans) Order 1997
  7.33 p.m.
  The Minister of State, Department for Education and Employment (Lord Henley)The Minister of State, Department for Education and Employment (Lord Henley) rose to move, That the draft order laid before the House on 17th February be approved [17th Report from the Deregulation Committee].
  The noble Lord said: My Lords, this draft order is a response to representations from some schools that there is at present an unreasonable burden on them following their statutory inspection. The School Inspections Act 1996 requires maintained schools in England and Wales, following their inspection, to prepare an action plan and distribute copies to the parents of all pupils at the school.
  Action plans have often turned out in practice to be longer and more detailed than was originally envisaged. They may focus on the detailed internal management of the school. As a result, they are often not easily intelligible to parents. We agree that distribution of the full text is often an unnecessary burden on schools and that parents would be better served by a short summary informing them how the school proposes to address points made in the inspection report. This would replicate what already happens with inspection reports, where only a summary is sent automatically to parents.
  The draft order therefore allows schools the option—I stress it must be an option—of distributing instead to each parent a summary of their action plan. Parents would still have the right to ask for a copy and schools would be obliged to inform parents of that right.
  The proposed order would be made under the Deregulation and Contracting Out Act 1994. The procedures laid down in that Act ensure that there is full public consultation on any proposal before it is brought forward as a draft order, and detailed scrutiny by Committees in both Houses thereafter. The House of Lords Delegated Powers Scrunity Committee and its counterpart in another place are satisfied that the proposal for the draft order meets the requirements of the 1994 Act and is appropriate to he made without amendment.
  I commend this order to the House, so that it may be signed by my right honourable friends the Secretaries of State for Education and Employment and for Wales as soon as possible. It will come into effect 14 days thereafter. I beg to move.
  Moved, That the draft order laid before the House on 17th February be approved [17th Report from the Deregulation Committee].—(Lord Henley.)
  Lord Morris of Castle Morris: My Lords, the House will be grateful to the Minister for explaining this order, which proposes a change that no one would describe as of an earth-shaking significance or magnitude. I would rate it as approximately .005 on the education Richter scale of importance.
  Lord Byron, in his epic poem Don Juan, describes his contemporary, Samuel Taylor Coleridge:
  "explaining metaphysics to the nation, I wish he would explain his explanation".
  If I may, I would presume to suggest to the Minister that his explanatory note to this simple order attracts the same request from me. Paragraph 2 of the explanatory note opens with the following sentence, which takes up 10 lines:
  "By virtue of section 17(1) of the 1996 Act the governing bodies of county, voluntary and maintained special schools which have delegated budgets and the governing bodies of grant-maintained and

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  grant-maintained special schools are required to prepare a statement of action which they propose to take in the light of either any report of an inspection of the school by a registered inspector under section 10 of that Act or a report of an inspection of the school by OFSTED (or in Wales, Her Majesty's Chief Inspector) which states that special measures are required in relation to the school".
  It is not only unmemorable, it is ambiguous because of its lack of punctuation. It can mean two quite separate things. The order, by comparison, is a model of perspicuity.
  However, all is not lost. We may also enjoy a second paper entitled "Explanatory Document", as distinct from "Explanatory Note", which is five and a half times as long as the order itself, and is supported by two annexes. The first of those lists the consultees, which at a conservative estimate total well over 200 persons and bodies; and the second divides them up into those who agree with the proposals, those who agree but propose amendments, and those who do not agree. That third group is made up of two members: the local education authorities in Lincolnshire and Pembrokeshire.
  Paragraph 4 of the explanatory document indicates clearly the level of importance of what is proposed. Its title is "Expected costs savings", and it says:
  "Schools which distribute a summary instead of the full action plan will have lower reprographic and stationery costs. Any postage costs they incur may also be reduced. Stationery and reprographic costs quoted by respondents mostly vary between 2p - 5p per sheet. Buckinghamshire LEA note that for an average secondary school with a distribution of 800 a two-page summary in place of a typical ten page action plan would save the printing of some 6,400 A4 sheets. Schools with a number of significant key issues to address have longer action plans and therefore larger potential savings".
  What that means is that the local LEA secondary school in Buckinghamshire, and presumably elsewhere, will be able, once every four or five years, to save approximately £224, which is the cost of 6,400 A.4 sheets being reprographically reproduced—every four years, £224!
  I have three questions to ask. First, Setting aside all questions of the percentage of officials' time, heat, light, premises cost and so on, how much, what order of magnitude, did it cost to produce this tiny order and to run a massive consultation on it? Secondly, why was that obvious omission not seen and obviated in the preparation of the School Inspection Act 1996? Failure to foresee the implications of paragraph 57 of that Act has resulted in this wasteful expenditure.
  Thirdly, why was the error not corrected simply by amending Schedule 8 to the Education Bill currently before this House? It could have been done for nothing. The School Inspection Act is already varied several times in that schedule. I assure the House that, if a suitable amendment had been proposed on school action plans, we on these Benches would not have prepared a midnight ambush against it. I should be grateful for the Minister's answers to those three questions.
  Lord Henley: My Lords, I appreciate that, as the noble Lord said, the provision is not exactly earth-shaking. He described it as being .005 on the Richter scale of education Acts. He then moved on to the regulation itself. He quoted from the first sentence of paragraph 2. It is a first sentence of which Henry
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  James himself would have been proud. The noble Lord, probably a great reader of Henry James, would be able to understand it perfectly well and, even given the lack of punctuation that he addresses, it is one that makes clear and sense.
  The noble Lord then moved on to the explanatory document, and complained to some extent that the document is too long. I believe the explanatory document is the very model of what explanatory documents ought to be. I believe that it received some praise in Committee in another place in relation to how it is set out, what we had done, and how and whom we had consulted. I take great pride in the fact that we list at enormous length those whom we did have to consult. Because I do not have to emulate my noble and learned friend the Lord Advocate in his activities of a night or two ago, I shall not take the trouble to read out the whole list of consultees in Annex 1. It stretches from page 7 to halfway down page 9. The noble Lord, Lord Harris of Greenwich, might like me to do so on some other occasion; should he wish it I will send him a copy.
  The noble Lord, Lord Morris, asked a number of questions relating to the cost, all of which can be addressed in a similar way. He asked first what was the cost of the order. I do not know; however, it was right that we should have proceeded on that basis. There was a burden on schools. Having done that, it was also quite right that we should have consulted. Having consulted, it was quite right that we should then have taken the opportunity to reduce the costs and burdens on schools, which is exactly what we are doing.
  Quoting from paragraph 4 of the explanatory document, the noble Lord says that the savings will be minuscule. But he talked only about savings in the cost of reproducing paper. The noble Lord should also remember that there are enormous savings in staff time. The noble Lord knows how long it takes to photocopy a large number of documents. That staff time could probably be used in other ways.
  Also, the noble Lord, as someone who is as "green" as myself, will also recognise that we should encourage schools to do their bit to reduce the number of forests that we have to chop down purely to produce these documents when they are not always so necessary.
  The noble Lord then went on to ask why this provision was not included in the 1996 Act. The 1996 Act was a consolidation measure relating back to the 1993 and 1994 Acts. As Members of this House, the noble Lord and his noble friend Lady Farrington also had a duty at that time to remind us that this might impose an unfair burden on this House in that it is a revising Chamber. I am sure they would have "done their bit" if this proposal had been suggested at the time.
  The noble Lord then went on to say that we could have saved an awful lot more money had we used Schedule 8 rather than this measure. I take the noble Lord's point. I do not know whether that is the case or not; but we have still to get that Act on to the statute book. I understand that the noble Lord and I will discuss that matter further on Monday. Nevertheless, the opportunity was available to us.

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  Even had we decided to follow the Schedule 8 route as the noble Lord suggested, I believe he would also agree with me, as I believe would the noble Baroness, Lady Farrington of Ribbleton, that it would have been right to consult on this matter. So we should not have saved the costs of the consultation even had we pursued the Schedule 8 route rather than the deregulation Act route. For that reason, and having answered all three of his points, I hope that the noble Lord will accept that this order, though not a major one, is a worthy one and that he will he prepared to support it. I commend it to the House.
  On Question, Motion agreed to.

  British Nationality (Hong Kong) Bill [H.L.]
  7.45 p.m.
  Lord Willoughby de Broke: My Lords, I beg to move that the Commons amendments be now considered.
  Moved, That the Commons amendments be now considered.—(Lord Willoughby de Broke.)
  On Question, Motion agreed to.
  COMMONS AMENDMENTS
  [The page and line refer to Bill (90) as first printed by the Commons.]
  COMMONS AMENDMENT
  Leave out Clause 1.
  Lord Willoughby de Broke: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In doing so, I shall also speak to Amendments Nos. 2 to 18.
  One of the favourite expressions of the late Deng Xiaoping was,
  "It matters not what colour your cat is as long as it catches mice".
  So although the amendments before your Lordships will substantially alter the original Bill, I am satisfied that even though the cat—is a different sort of cat—a blow-dried, shampooed-and-set cat—it will still do its job and catch mice.
  I was touched when I read the proceedings of the Committee stage in another place. Several Members of the Committee were kind enough to express concern in case I should be in some way hurt or disappointed that my Bill should be so severely altered. I assure the Members of that Committee that I am not at all disappointed. I am only delighted that it is going ahead as planned. It is important that the Bill be enacted as soon as possible. Pride simply does not enter into it on this occasion. I thank the Members of that Committee for the time that they gave to reviewing the Bill, and particularly my honourable friend the Member for Staffordshire South who so skilfully piloted it through its various stages in another place.
  I also take this opportunity to thank my right honourable friend the Home Secretary for not being afraid to change his mind and for accepting the strong
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  case that was made to him by everyone who supported the Bill. My thanks go, too, to the Home Office officials who have worked hard to produce an effective and acceptable Bill in a very short space of time.
  Turning to the amendments, Amendments Nos. 1, 2 and 3 omit Clauses 1, 2 and 3 in order to pave the way for new Clause 1 and make some consequential rearrangements.
  The replacement clause in Amendment No. 4 provides for eligible people to have an entitlement to registration as British citizens on application, instead of an automatic claim to British citizenship. It also defines the requirements which applicants will need to satisfy in order to establish an entitlement, such as ordinary residence in Hong Kong at the time of application and immediately before 4th February 1997, the date on which the Home Secretary announced his intention to legislate. It excludes people who renounced or otherwise took active steps to give up another citizenship on or after 4th February 1997.
  The clause makes provision for the inclusion of children born as British nationals on or after that date and of those whose applications for naturalisation or registration as Hong Kong British Dependent Territories citizens or other British nationals are only granted on or after 4th February. It also makes provision for registration to take place only from 1st July 1997 to ensure that all potential beneficiaries qualify for right of abode in Hong Kong automatically on that date.
  Amendment No. 5 first removes subsection (1) of Clause 4 which provides for people becoming British citizens under the Act to lose British Dependent Territories citizenship (BDTC) and also British National (Overseas) BN(O) status if they have that status.
  As far as the loss of BDTC status is concerned, British citizenship under the Act will only be granted from 1st July; by then the status of Hong Kong BDTC will have ceased to exist; therefore that element of subsection (1) is unnecessary.
  As far as the loss of BN(O) status is concerned, depriving successful applicants of that status could mean that their children and grandchildren would not be able to benefit from Article 6 of the Hong Kong (British Nationality) Order 1986 and become British Overseas citizens (BOCs) if they would otherwise be stateless. Article 6 requires the person who would be stateless to be descended from a BN(O) or a BOC.
  Secondly, this amendment removes subsection (2) of Clause 4, which provides for the anti-statelessness provisions in Article 6 of the 1986 order to cease to have effect. As I have just explained, while these provisions will not be needed for the beneficiaries of the Act, they might still be needed for some potentially stateless children and grandchildren. They therefore need to be left extant.
  Thirdly, the amendment inserts the provisions contained in Clause 2 of the original Bill on the acquisition of British citizenship "by descent" and "otherwise than by descent". It adds provisions for British nationals other than BDTCs to acquire British citizenship by descent in all cases. Their present status is equivalent to a "by descent" status.

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  Amendment No. 6 reinstates the power, given under Section 41(2) of the British Nationality Act 1981, to make regulations for the taking of fees. It will be necessary to charge applicants a fee in the normal way to meet the costs of providing them with citizenship.
  Amendment No. 7 removes the reference to Section 44(1) of the British Nationality Act 1981. Section 44(1) says that any discretion shall be exercised without regard to the race, colour or religion of any person who may be affected by its exercise. This Bill has no discretionary provisions—registration will be an entitlement for those who meet the requirements. The reference to Section 44(1) is therefore unnecessary.
  Amendment No. 8 ensures that where, in legislation pre-dating the British Nationality Act 1981 which introduced British citizenship, there are references to,
  "[citizens] of the United Kingdom and Colonies",
  and their entitlement to do certain things or be eligible for certain things those references will automatically apply to people acquiring British citizenship under this legislation.
  Amendment No. 9 deletes subsection (3) of Clause 5 which is a House of Lords privilege amendment. A money resolution has already been passed making subsection (3) redundant.
  Amendments Nos. 10 to 17 are drafting changes which clarify Schedule 1 without affecting the substance. Amendment No. 18 deletes Schedule 2 which is not needed because the insertion of the reference to Section 41 of the British Nationality Act 1981 by Amendment No. 6—previously described—means that the British Nationality (General) Regulations 1982 would automatically prescribe how and to whom applications for registration should be made.
  I am delighted that the Government have accepted the Bill and I congratulate them on doing so. I know that those affected by it are immensely relieved.
  I end by thanking most sincerely all noble Lords from all sides of the House who have supported not only this Bill but the intention behind previous attempts to enact it. I think particularly of Lord Bonham-Carter. I know that he would be very pleased to see the Bill enacted, I only wish he were here with us. I am grateful to my noble friend on the Front Bench for her courtesy throughout all stages of the Bill. I warmly welcome her at last onto the side of the angels. I beg to move.
  Moved, That the House do agree with the Commons in their Amendment No. 1—(Lord Willoughby de Broke.)
  7.55 p.m.
  Lord Thomson of Monifieth: My Lords, the noble Lord, Lord Willoughby de Broke, is unduly modest in what he said in introducing the amendments. He has every reason to be proud at having finally been able to steer the Bill to a successful conclusion. When we last discussed it on Third Reading on 29th January, I made a final plea to the noble Baroness that it was not yet too late. That was in a mood of some pessimism and I was quite astonished, a few days later, to read the
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  announcement that the Government had decided to accept the Bill. We ought all to greet that change of mind very graciously.
  I am bound to say to the noble Lord, Lord Willoughby, that although I am not a great expert on procedure in your Lordships' House, I suspect that he is making a little piece of parliamentary history. It is not usual for this House to accept Commons amendments that virtually abolish the original Bill and rewrite it almost totally and then to say what a splendid thing the Government in the other place are doing in making the proposals.
  "Joy shall be in heaven over one sinner that repenteth, more than over ninety and nine just persons".
  There have been many just persons in all parts of both Houses and outside. They include distinguished former governors of Hong Kong and the present Governor of Hong Kong, I think one can now safely say. He felt that it was a point of honour for this country in dealing with the important minority of people in Hong Kong who have been loyal to this country and served it well. I notice from the proceedings in another place that the Minister there told us that there are probably 8,000 such people—a larger figure than some of us have used.
  Therefore, the Government have agreed to do something important. I was touched by what the noble Lord, Lord Willoughby de Broke, said about my former colleague, Lord Bonham-Carter, who was one of the pioneers in raising the cause. I join with the noble Lord, Lord Willoughby de Broke, and, no doubt, the noble Lord, Lord Dubs, in welcoming the change of mind on the part of the Government.
  7.56 p.m.
  Lord Dubs: My Lords, I very much agree with what the noble Lord, Lord Thomson, said. Perhaps I may on my own part congratulate the noble Lord, Lord Willoughby de Broke, on his single-minded dedication to getting the Bill through, the enormous amount of work he put into it and the able way in which he got us where we are. I am delighted that the Government have seen fit to change their mind. I was tempted to say that I always welcome the sinner who repents, but I do not regard the Minister as a sinner in that respect. I think that she had to do the bidding and was made to act as though she was a sinner, but I do not believe that she ever was. I do not expect her to comment on that but she was in a difficult position when the whole House was critical of the arguments that she put forward.
  It is good that we are now all agreed and I am delighted that the Government have seen fit to change their mind. I know that a lot of work went on behind the scenes to achieve that end and I congratulate the noble Lord, Lord Willoughby de Broke, and his friends who went to much trouble to see that the case for the Bill was well put and listened to by the Government. The result is that we now have agreement on what is before us.
  When I was in the other place, I had the privilege of serving on the Standing Committee dealing with the British Nationality Bill which became the 1981 Act. We spent much time considering the position of Hong Kong

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  and all felt uneasy as to whether we had got it right. The passage of time has suggested that we did not get it right. Further changes had to be made of which this is an important one.
  I do not wish to go through the details, the noble Lord, Lord Willoughby, has explained to the House what the new Commons amendments mean. I wish to make a comment about two of the changes. I think it is right that people should register to become British citizens rather than that there should be an automatic process. I believe that British citizenship is an enormous privilege, by whatever means one acquires it. It is right that for those who are not British citizens the process of becoming such should be an explicit and deliberate act rather than something that happens to them inadvertently so that they do not even know that they have got it. To that extent, the change is very much for the better and improves the principle underlying the Bill. I appreciate that many of the changes are technical and 1 do not wish to dwell on them.
  I wish to ask the Minister one question. In the new arrangements under the Bill, the critical date is 4th February 1997. I understand that with the exception of children born after that date, that is the cut off date and anyone who gave up any other citizenship before 4th February would be entitled to become British citizens on that date, assuming that they qualify by reason of the provisions in the new Bill.
  In the original version of the Bill, the cut off date was 21st November. I wondered what the reasons were for that change. I understood that the date of 21st November was chosen so that people would not have had any basis for renouncing their citizenship, whatever it was, in order to benefit. It gave a fairly long period so that the position would be clear. I wondered what the reason was for making the change. I do not dispute that there may be merit in it.
  Beyond that, I repeat the welcome to the new Bill. I am delighted that we have got there and done it before the election so that it is on the statute book and the people of Hong Kong will know that we have done our duty by a small minority of people there who deserve well of us and who will receive justice as a result of the measure.
  8 p.m.
  Baroness Blatch: My Lords, I am grateful to my noble friend Lord Willoughby de Broke for accepting the savaging—it is the only way I can put it—of his original Bill. But as my noble friend said, the purpose of the Bill remains firmly intact and at the end of the day that is what matters.
  When the Bill was last considered, I indicated that the Government remained opposed to new legislation to give British citizenship to the solely British ethnic minorities in Hong Kong. The House will now be fully aware that we have decided to withdraw our opposition. We have done so because, in the light of the views expressed in both Houses and by the Governor and others in Hong Kong, it has become clear that, however forcefully we emphasised the immigration guarantees which the ethnic minorities have been given, and
  500
  however much we underlined the fact that they would not become stateless, we had ultimately not succeeded in assuaging the concern that the ethnic minorities felt about their position in Hong Kong after the change in sovereignty. It is plain that nothing short of British citizenship will put their minds at rest.
  The Government are therefore now content to support my noble friend's Bill. As my noble friend said, the Bill as it has returned from another place is a rather different animal from the one which was before the House last year. However, it is different only in detail, not in its objectives. The amendments are all designed to ensure that the Bill properly meets its objectives. As amended, the Bill will ensure that, subject to certain safeguards to prevent abuse, all solely British nationals of whatever type in Hong Kong will be entitled to be registered as British citizens. It will also cover all those in the non-Chinese ethnic minority communities in Hong Kong who would have benefited from the immigration guarantee.
  My noble friend has unreservedly welcomed the amendments before us this evening and I also commend them to the House. I hope now that we can see early enactment of this measure and the speedy establishment of the machinery for dealing with the applications in Hong Kong.
  As regards the 4th February date mentioned by the noble Lord, Lord Dubs, the Bill, like the Government's earlier assurances, is aimed at the ethnic minorities living in Hong Kong when the Home Secretary made his announcement. It would be wrong for the Bill to apply also to people resident elsewhere who moved voluntarily to Hong Kong following the announcement by the Home Secretary. The cut-off date was pushed back, as it was thought only fair not to—I must pause there.
  Lord Dubs: My Lords, perhaps the Minister will give way. I welcome what she has said so far by way of explanation and look forward to hearing the rest of it when the Minister is ready to give it to us.
  Baroness Blatch: It was fair not to penalise those who renounced their citizenship before the Home Secretary made his announcement. I think I got it right in my own first answer. I should have left it at that while I was winning.
  I join my noble friend in thanking my right honourable friend the Secretary of State who did listen to the arguments; Members of another place who worked very hard and fast in bringing the Bill before us at this time; and the officials in the Home Office who, I know, have been helpful to my noble friend in talking him through the amendments to make sure that nothing in the intentions of my noble friend were compromised in any way.
  I think all of us will want to join my noble friend and other noble Lords who referred to the late Lord Bonham-Carter. What Lord Bonham-Carter started has been finished tonight, due in large measure, I believe, to the arguments he put in this House which were taken up by my noble friend Lord Willoughby de Broke. I am

  501
  not sure what protocol says about what I am about to say. But I should like not simply to put that on record but to write to Lady Bonham-Carter with the acknowledgment of this House that the efforts made by Lord Bonham-Carter in this respect have been both recognised and honoured in the passage of this Bill.
  Let me conclude by offering my congratulations to my noble friend on his success with the Bill. I know that it will give him and all those who supported him great satisfaction to see it enacted and this long-running and difficult issue brought to a happy conclusion.
  Lord Dubs: My Lords, before the Minister sits down, let me add a word in relation to the late Lord Bonham-Carter. I knew him very well as a friend in all kinds of political activities outside the House, although he was in a different party. I very much respected the stand that he took on this matter. I was not a Member of the House at the time. What the Minister said is a very noble gesture with which I should like to associate myself fully.
  Lord Thomson of Monifieth: My Lords, before the noble Lord sits down, I should like to express my appreciation and say to the noble Baroness that what she has just said is generous beyond the call of duty. I am sure that it will be very deeply appreciated by Lady Bonham-Carter.
  Lord Willoughby de Broke: My Lords, I commend Commons Amendment No. 1 to the House.
  On Question, Motion agreed to.
  COMMONS AMENDMENTS

  2 Leave out Clause 2.

  3 Leave out Clause 3.

  4 Before Clause 4, insert the following new clause

  ACQUISITION OF BRITISH CITIZENSHIP
  '.—(1) Subject to the provisions of this section, the Secretary of State shall, on an application made for the purpose, register as a British citizen any person who—

  (a) is ordinarily resident in Hong Kong at the time of the application; and

  (b) satisfies the requirements of subsection (2) or (3) below.

  (2) The requirements of this subsection are that, immediately before 4th February 1997 ("the relevant date"), the person—

  (a) was ordinarily resident in Hong Kong;

  (b) was a British Dependent Territories citizen by virtue only of his having a connection with Hong Kong (within the meaning given by the Schedule to this Act); and

  (c) would have been a stateless person if he had not been such a citizen, or such a citizen and a British National (Overseas).

  (3) The requirements of this subsection are that, immediately before the relevant date, the person—

  (a) was ordinarily resident in Hong Kong;

  (b) was a British Overseas citizen, a British subject or a British protected person; and

  502

  (c) would have been a stateless person if he had not been such a citizen, subject or person.

  (4) Subsections (2) and (3) above shall each have effect, in relation to a person who is or was born at any time on or after the relevant date, as if the reference to immediately before that date were a reference to that time.
  (5) Paragraphs (b) and (c) of each of those subsections shall have effect, in relation to a person who, at any time on or after the relevant date, becomes or became—

  (a) in the case of subsection (2) above, a British Dependent Territories citizen; or

  (b) in the case of subsection (3) above, a British Overseas citizen, a British subject or a British protected person,

  as if the reference to immediately before that date were a reference to that time.
  (6) A person shall not be registered under subsection (1) above if, on or after the relevant date, he renounces or renounced, or otherwise gives or gave up of his own volition, the status of a national or citizen of a country or territory outside the United Kingdom.
  (7) A person shall not be registered under subsection (1) above before 1st July 1997.
  (8) In this section expressions which are also used in the British Nationality Act 1981 ("the principal Act") have the same meanings as in that Act.'.
  5 Clause 4, page 2, line 1, leave out subsections (1) and (2) and insert—
  '(1) A person who is registered as a British citizen under subsection (1) of section (Acquisition of British citizenship) above, and satisfies the requirements of subsection (2) of that section, shall be treated for the purposes of the principal Act as—

  (a) a British citizen by descent; or

  (b) a British citizen otherwise than by descent,

  according as, immediately before becoming a British citizen, he was for the purposes of that Act a British Dependent Territories citizen by descent or a British Dependent Territories citizen otherwise than by descent.
  (2) A person who is registered as a British citizen under subsection (1) of section (Acquisition of British citizenship) above, and satisfies the requirements of subsection (3) of that section, shall be treated for the purposes of the principal Act as a British citizen by descent.'.
  6 Clause 4, page 2, line 11, leave out 'other than subsection (2)'.
  7 Clause 4, page 2, leave out lines 13 and 14.
  8 Clause 4, page 2, line 19, at end insert—
  'section 51(3) (meaning of "citizen of the United Kingdom and Colonies" in other Acts and instruments).'.
  9 Clause 5, page 2, line 24, leave out subsection (3).
  10 Schedule 1, page 3, line 5, leave out from 'person' to 'below' in line 8 and insert 'shall be taken to have a connection with Hong Kong for the purposes of section (Acquisition of British citizenship)(2) of this Act if—
  (a) subject to paragraph 2'.
  11 Schedule 1, page 3, line 15, after 'mother' insert '("the registered person")'.
  12 Schedule 1, page 3, line 20, leave out 'person registered' and insert 'registered person'.
  13 Schedule 1, page 3, line 25, leave out from 'would' to end of line 26 and insert ', but for his death or renunciation of citizenship, be such a citizen by virtue of his having such a connection'.
  14 Schedule 1, page 3, line 28, leave out 'citizenship has been renounced and subsequently resumed,' and insert 'the registered person had previously renounced citizenship of

  503
  the United Kingdom and Colonies, or British Dependent Territories citizenship,'.
  15 Schedule 1, page 3, line 36, leave out 'have been so but for his death' and insert ', but for his death or renunciation of citizenship, he such a citizen by virtue of his having such a connection'.
  16 Schedule 1, page 3, line 42, leave out '(3)' and insert '2.'.
  17 Schedule 1, page 3, line 43, leave out 'under' and insert 'as specified in'.
  18 Leave out Schedule 2.
  Lord Willoughby de Broke: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 to 18 en bloc, to which I spoke on Commons Amendment No. 1.
  Moved, That the House do agree with the Commons in their Amendments Nos. 2 to 18.—(Lord Willoughby de Broke.)
  On Question, Motion agreed to.

  Social Security Administration (Fraud) Bill
  8.6 p.m.
  House again in Committee.
  [Amendment No. 57 not moved.]
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 58:
  After Clause 5, insert the following new clause—
  REPORT TO PARLIAMENT: SUPPLY OF INFORMATION AND IDENTIFICATION OF ENTITLEMENT
  (". The Secretary of State shall, within two years of the commencement of this Act, lay before each House of Parliament a report on such progress as has been made on the efficiency of administration in maximising entitlement to benefit, to include—

  (a) an assessment from each local authority as to the progress made by that authority in identifying and maximising entitlement to benefit in that authority area;

  (b) the extent to which information held by any authority under the provisions of this Act has been used by the authority and the Secretary of State to identify those persons who are entitled to receive benefit for the purposes of determining that entitlement; and

  (c) the extent to which information supplied to one authority for the purposes of ascertaining benefit entitlement has been used as verification for another benefit claim.").

  The noble Baroness said: We return to the subject of benefit entitlement. It is an extremely important issue and only one amendment so far has addressed it. On that amendment, Amendment No. 6, with which Amendment No. 57 was grouped, we argued that in the four main income related benefits—family credit, income support, housing benefit and council tax benefit—perhaps £2 billion to £3 billion worth of benefit went unclaimed. In other words, probably as much benefit was underpaid in the DSS's budget as was lost because it was overpaid due to fraud, a pattern broadly confirmed by research abroad.
  It is worth emphasising that over 30 per cent. of those eligible for the in-work benefit of family credit fail to claim it; that probably 30 per cent. of pensioners eligible
  504
  for council tax benefit fail to claim it, a figure rising perhaps to 45 per cent. among pensioners who are owner-occupiers; and that 40 per cent. of pensioners entitled to income support fail to claim it. Those are very large figures indeed. I accept that there is always a loss of potential claimants whenever there is reliance on a means-tested benefit, unlike a universal benefit. But the failure especially of the elderly—and significantly, they are the under-claiming group in almost every income related benefit—to claim what is rightfully theirs is far too high.
  It is often said that people fail to claim because the sums are too small. But, as we argued last Tuesday, the sums can be very large indeed. A pensioner who fails to claim income support and council tax benefit is probably losing a £20 addition to a pension of £61 a week. Again, it is sometimes said that people fail to claim because their circumstances change very rapidly. Again, that is simply not true for pensioners whose income varies very little over the rest of their non-working lives.
  It is sometimes said by the Government—it was repeated by the Minister last Tuesday night—that it is a matter of personal choice. I fail to see how, realistically, it can be a matter of personal choice to live on £61 a week rather than £81 a week and have to stay in bed because you cannot afford to run the heating in the living room. We all have enough confidence in the Minister's decency to know that he does not want pensioners living below the poverty line because they fail to claim the benefits to which they are entitled. The question is how we encourage them to take up those benefits.
  One thing we have found, and it is clear from the Government's own report Income Related Benefits: Estimates of Take Up, is that of all the income related benefits, housing benefit has the highest take-up, even by pensioners. More than 90 per cent. of pensioners were claiming housing benefit to which they were entitled. If they were local authority tenants, so far as I can tell from the statistics, though they are not calculated in the most useful way for this purpose, it looks as though there is almost 100 per cent. take up.
  The reason is very simple. The local authority, as I well know because I have been involved in some of these campaigns, uses information technology and 100 per cent. mailing through rent books, backed up by take-up campaigns to ensure that every tenant is aware of housing benefit. It uses welfare rights officers to help with original forms and thereafter IT comes into play. As housing benefit is deducted from the gross rent, most pensioners—and certainly all of those on the basic state pension only—live, and learn to live, rent free.
  In other words, we already know how to use IT backed by entitlement campaigns to ensure that there can be virtually 100 per cent. delivery of an income-related benefit to the elderly, who seem with other benefits so unwilling to claim what is rightfully theirs. We ask the Government therefore to use the same information technology which is sought to eradicate overpayment due to fraud to ensure that it also eradicates that underpayment due to under-claiming. We

  505
  firmly believe that the Government could do it if they had the political will, but we believe that this Government are not interested in doing so. In his reply on Tuesday, the Minister said that ample information was available in leaflets, at post offices and on forms; this from the Government who have cut home visits, cut the helpline and cut the offices where pensioners can get help in person.
  The Victorians were rather keen on categorising people and used to divide their poor into God's poor, poor devils and the devil's poor; that is, those deserving of charity, those deserving of the poor law and those deserving of prison. We are right to stamp down on fraud and to proclaim publicly that we will not tolerate it. But in the process—this must worry all of us—we run the risk of demonising claimants as scroungers and thus deterring the very people—the "deserving poor" and certainly the elderly, those who cling to standards of respectability and privacy, who conceal their poverty rather than flaunt it and who are too easily shamed by being branded as a welfare claimant—from claiming that which is their due.
  Hence this amendment. We know that we have the technology to improve the take-up of benefits to meet real need. We know that a considerable number of pensioners claim one means-tested benefit, so that their financial circumstances are, so to speak, on file, but fail to claim another one. That information could be used to passport people onto that second benefit. If one took, for example, council tax benefit, we could probably reach about 70 per cent. of pensioners who are not claiming income support; not more than 70 per cent., I accept, because there are differences in the capital rules on the one hand and many pensioners live in the home of someone else so they do not receive council tax benefit. Nonetheless, if we used council tax benefit to passport people on to income support and reached those 70 per cent., where the two groups overlap according to our research, instead of only 60 per cent. of pensioners claiming their top-up in income support, we might reach between 85 and 88 per cent. We cannot get 100 per cent.—I accept all the warnings about technical difficulties, deduction rules and the like—but we can do a darned sight better than we are doing at the moment and than the Government appear willing to do.
  We have the technology. We now need to ensure the political will. We want to ensure that local authorities are determined not only to stamp out fraud but also to deliver benefit to those who are entitled to it. One way of ensuring that political will is to have local authorities report to the Secretary of State and the Secretary of State report to Parliament on how successful they have been in both regards—not just eradicating fraud but encouraging take-up of benefit. By engaging in take-up campaigns which will be beneficial to the claimant and to the local economy, we believe that local authorities can be very successful on this score. The take-up campaign in which my own local authority was involved brought nearly £500,000 of extra benefit into our community in the space of a month. I very much hope that the Government accept the spirit of the amendment. I beg to move.
  8.15 p.m.
  Earl Russell: The point the noble Baroness makes about demonising claimants is an important one. I have looked at some of the advertisements for the fraud hotline and I believe that they run the risk of creating that effect. I accept that that is not their intention, but again I come back to the point about balance. If you stress fraud and you do not stress entitlement you create a thoroughly misleading picture. Then you get a cult of hostility to claimants. If we can believe the advance publicity for the forthcoming programme on Channel 4 it seems that a great deal of that has rubbed off on people who do not know any better than to pick up casual information. There will always be such people. So something really must be done on this front.
  I intend to address this matter further on Amendment No. 59. However, if the Minister should happen to prefer the amendment in the name of the noble Baroness, I should be entirely happy with that. The points also apply about putting the local authority under two different incentives, two different criteria of success. Then the local authority can, with respect for the evidence, attempt to balance those criteria against each other. We already have targets, tables and all that apparatus for the detection of fraud. I have drawn the Minister's attention previously to the fact that Liberal Democrat councils happen to come top in them. I do not set much weight by league tables. I do not claim great credit for that fact. I just say it in order to say that I speak, as it were, from, in the Government's own terms, a position of perhaps some strength. It is from that position that I should like to see equal weight given to the pursuit of entitlement and take-up. I hope the Minister will look with favour on one or other of the amendments. It really does not desperately worry me which of them it is.
  Lord Carter: I should like to come in on another point with regard to the amendment. However, before doing so, perhaps I may take up a point made by the noble Earl, Lord Russell. He referred to the forthcoming Channel 4 programme and to the people who do not know any better. I understand from the pre-publicity that they all intend to vote Conservative.
  Perhaps I may return to a point that we discussed on Tuesday on Amendment No. 6, which was moved by my noble friend Lady Hollis and which dealt with eligibility for benefit entitlement. I had a friendly exchange with the Minister about the budget of the DSS. I asked how much the department estimates will be spent on benefits and how much is actually taken up. I do not think I explained it particularly well but, if I may, I shall remind the Minister of what I said:
  "Perhaps the Minister can assist on one aspect. Presumably, when the DSS agrees its budget with the Treasury every year in the public expenditure round it must include a figure which represents its expectation of the take-up of benefit. I remember reading that almost invariably the take-up has undershot the estimate. What is the figure that the DSS persuades the Treasury that it will pay and how much does it actually pay?".—[Official Report, 11/3/97; col. 224.]
  I have before me an extract from the Hansard report of the Bill's Report stage proceedings in another place. I think the answer to my question is there. It will be

  507
  interesting to see whether the Minister can put some flesh on this point. The Parliamentary Under-Secretary of State for Social Security, Mr. Oliver Heald, said:
  "It is a dear measure of success that in 1994–95—the most recent year recorded—£9 out of every £10 of available benefit was claimed".—[Official Report, Commons, 4/2/97; col. 847.]
  When the DSS agreed the public expenditure round with the Treasury, did it include the figure expecting the £10 of available benefit to be claimed or did it use a lower figure?
  This is a genuine attempt to find out how the outturn corresponds with the amount the DSS expects to be claimed. The Minister said in another place that the take-up appears to be £9 out of every £10 of available benefit. Does that mean that the DSS agrees with the Treasury on the basis that £10 will be claimed? The Minister shakes his head. I shall be interested to hear his explanation of the difference.
  Earl Russell: I am sorry to disappoint the noble Lord, Lord Carter. He said that all the people in the Channel Four Dinner Party programme intended to vote Conservative. That was this morning's information. But the Evening Standard has since followed up these people and identified them and found that no more than three out of six of them intend to vote Conservative. I have no idea for whom the others intend to vote. I hope that it is not my p y and I am sure that the noble Lord also hopes that is not his party. One of them admitted to having voted last time for the Natural Law Party. Maybe it serves a useful purpose.
  Lord Mackay of Ardbrecknish: By and large I do not believe that it enhances my information in any shape or form to watch Channel 4. I do not know what the noble Earl is talking about, and neither do I intend to watch a programme on Channel 4.
  Perhaps I may turn to this new clause. Much of the argument is the same as that which we went over on Tuesday. I have no intention of repeating all that I said on that occasion about uptake. I say to the noble Lord, Lord Carter, that he is confusing two quite separate issues. The first is the calculations which are made from the information collected in the Family Resources Survey and the report on take-up that we produce. That is entirely separate from the second issue, which is the way in which we and the Treasury discuss what our expenditure will be in the year ahead. In fact, we use expenditure this year to calculate, bearing in mind factors such as the inflation rate, what expenditure might be in the year ahead, and so on. The two things are quite separate.
  Lord Carter: Does that mean that the department does not estimate any improvement in its success rate in increasing entitlement?
  Lord Mackay of Ardbrecknish: That is not a conclusion that we would reach deliberately. We use the information that we have on the money that we have spent in the current financial year and extrapolate that into the future, given the inflation rate, demography, and so on to arrive at what we would expect to spend on the
  508
  same basis. My recollection is that we tend to undershoot and normally spend a little more than we have estimated. That usually appears in the Red Book at Budget time. Quite clearly, when we do that we have supplementary estimate demands on the reserve for extra expenditure. We are hopeful that, thanks to the new payment system which will be developed along with the benefit payment card, that we shall be able to project more accurately what our requirements will be in the year ahead.
  The new clause before us seeks to put in place arrangements for reports on the take-up of benefit, including the use of information as proposed in the noble Baroness's other new clause, which we have now passed by and which does not form part of the Bill. Without going into the arguments to the same degree as I did then, my response to this amendment is quite straightforward. Of course, we agree that it is important to monitor all aspects of the policy in practice. We make a great deal of effort to monitor across quite a wide field. We produce a lot of information and statistics about benefits in all their shapes and sizes and about the take-up.
  Every year we publish estimates of the take-up and that is where the noble Baroness gets her figures on those matters. They include the income-related benefits such as housing benefit, council tax benefit, income support and family credit. We produce such a report annually from information that we have in other fields and extrapolate from it what benefits may not be taken up. That is the information which the noble Baroness is praying in aid in this debate as she did during Tuesday's debate. I believe that the continuation of this publication, which is not in any doubt, more than adequately meets the position for producing statistics in this area.
  I do not want to go into detail as I did on Tuesday about all the ways in which we attempt to make sure that people know about their entitlement to benefit. Local authorities do the same. We tell people about housing and council tax benefit if they are on income support. If they are receiving pensions that information is in the pension book. The local authorities tell people who might claim housing and council tax benefit about other benefits to which they may be entitled.
  In the current three-year period the department and our various agencies are spending something like £84 million on publicity. I have already explained the various things we do and I shall not weary the Committee by repeating my speech of last Tuesday. The important point about this new clause is that it requires reports on the take-up of benefit. I believe that the income-related benefits and the estimate of take-up in the annual report from the department's Analytical Services Division largely meets the demands of the noble Baroness. I do not see the need for this new clause.
  Baroness Hollis of Heigham: I must say that, unusually, for the Minister, that was a rather perfunctory reply to the amendment. The amendment asks not for a snapshot of the current statistics based on that report, of which I believe we are both well aware and which I am

  509
  sure we have both studied assiduously, but for an assessment of the progress made by an authority in identifying and maximising entitlement to benefit in that authority area. Perhaps the Minister can tell me to what extent the report that he has, with which I am very familiar, in any way meets either the requirement as to progress in maximising entitlement and speaks to the efforts of local authorities. That is what the amendment calls for and that report in no way touches it. Perhaps the Minister can help us.
  Lord Mackay of Ardbrecknish: I believe that I have made it clear that I believe the statistics which are collected in this report are adequate to give us a picture of the position. I do not believe that it is necessary to get each authority to produce a report. I have made that position clear. I can pad it out for the next 20 minutes, but, frankly, I do not see any point in that. We have had the argument about take-up. I believe that our present approach is the way to address the problem. The statistics that we already produce seem to give the noble Baroness more than enough information to make speeches on the subject of take-up.
  Earl Russell: If the Minister does not see any point in asking local authorities to report on their efforts on take-up, why does he see so much point in asking them to report on their efforts in relation to fraud?
  Lord Mackay of Ardbrecknish: We are only able to produce the first and second sections of the report by getting statistical information from the local authorities and using the other information we have to try to work out an estimate within considerable margins of error—that is something which is never pointed out by the people who use the figures—about what we think the full take-up might be in contrast to the actual take-up. We work quite hard. I have explained the ways in which we gather the information we need. The local authorities also work hard in order to make people aware of the benefits and to encourage them to take them up. That is the proper way to deal with the matter, as I said on Tuesday.
  Baroness Hollis of Heigham: Perhaps the Minister had a bad supper. His reference to considerable margins of error which are never pointed out can be dealt with at some length. If the noble Lord checks his statistics against mine and the document, he will find that in most cases I took the median point of the Government's average range of variations. Where the range runs from 90 per cent. to 95 per cent., I have given a figure of 92 per cent., so I have tried to handle the figures at least as scrupulously as the statisticians.
  The Minister has not even faintly begun to address the report. Because he had a speech on the subject prepared for him last Tuesday he is not willing to engage with this issue, which is concerned with encouraging local authorities to maximise entitlement and in the process to report to Parliament. I am so disappointed at the irritable and bad-tempered way in which the Minister, unusually for him, has replied. I wish to test the opinion of the Committee.
  8.29 p.m.
  On Question, Whether the said amendment (No. 58) shall be agreed to?
  Their Lordships divided: Contents, 18; Not-Contents, 61.

  Division No. 3

  CONTENTS

  Addington, L.

  Gould of Potternewton, B. [Teller.]

  Alderdice, L.

  Carlisle, E.

  Grey, E.

  Carter, L.

  Hollis of Heigham, B.

  Clancarty, E.

  Kilbracken, L.

  Dubs, L.

  Morris of Castle Morris, L.

  Dubs, L.

  Redesdale, L.

  Ezra, L.

  Russell, E. [Teller.]

  Falkland, V.

  Turner of Camden, B.

  Farrington of Ribbleton, B.

  Whitty, L.

  NOT-CONTENTS

  Ailesbury, M.

  Henley, L.

  Allenby of Megiddo, V.

  Hindlip, L.

  Anelay of St. Johns, B.

  HolmPatrick, L.

  Astor of Hever, L.

  Keyes, L.

  Attlee, E.

  Kingsland, L.

  Balfour, E.

  Lindsay, E.

  Belstead, L.

  Long, V.

  Berners, B.

  Lucas, L.

  Biddulph, L.

  Lucas of Chilworth, L.

  Blatch, B.

  Luke, L.

  Brabazon of Tara, L.

  Lyell, L.

  Brigstocke, B.

  Mackay of Ardbrecknish, L.

  Brookes, L.

  Mackay of Clashfern, L.

  Brougham and Vaux, L.

  [Lord Chancellor.]

  Cadman, L.

  Mackay of Drumadoon, L.

  Chesham, L. [Teller.]

  Miller of Hendon, B.

  Clitheroe, L.

  Mountevans, L.

  Coleridge, L.

  Munster, E.

  Courtown, E.

  Onslow, E.

  Craigavon, V.

  Oppenheim-Barnes, B.

  Cumberlege, B.

  Park of Monmouth, B.

  Denbigh, E.

  Pearson of Rannoch, L.

  Denton of Wakefield, B.

  Renton, L.

  Dixon-Smith, L.

  Shaw of Northstead, L.

  Downshire, M.

  Skelmersdale, L.

  Feldman, L.

  Strathclyde, L. [Teller.]

  Ferrers, E.

  Trumpington, B.

  Goschen, V.

  Ullswater, V.

  Haddington, E.

  Vivian, L.

  Hardwicke, E.

  Wilcox, B.

  Harris of Peckham, L.

  Wynford, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  8.37 p.m.
  [Amendment No. 59 not moved.]
  Clause 6 [Role of Audit Commission]:
  [Amendment No. 60 not moved.]
  Clause 6 agreed to.
  Clause 7 agreed to.
  Clause 8 [Directions by Secretary of State]:
  [Amendment No. 61 not moved.]
  Clause 8 agreed to.
  Clause 9 [Enforcement of directions]:
  Earl Russell Earl Russell moved Amendment No. 62:
  Page 15, line 34, at end insert—
  ("() Before serving any such notice, the Secretary of State shall consult the Audit Commission on the question whether the local authority was capable of achieving the specified standards of service without exceeding its capping limits.").
  The noble Earl said: This amendment asks the Secretary of State to consult the Audit Commission on whether an authority is capable of achieving the specified standards of service without exceeding its capping limits. We have heard about the demonising of claimants. I think that we should also think about the demonising of local authorities—and there has been a good deal of it in the past 18 years. There has been a good deal of blame heaped on authorities for not doing things which many people believe that the amount of money given to them would not have enabled them to do. The Minister is perfectly entitled to say that many people are mistaken—that has happened before and it will happen again—but the point of the amendment is not to say who is right; it is to get a competent and impartial judge of who is right, which might enable us to make a certain amount of progress on the subject.
  Again, if it does not happen in this way, it might happen in another way which the Minister would find less congenial. The question whether the amount of money given to a local authority is capable of being sufficient, if competently managed, to do the task set before it, is something which is liable to judicial review. Recently that was confirmed for me in a Written Answer from the noble Viscount, Lord Ullswater. It was a judgment of the court in a case involving Claycross Council. It did not uphold the claim on that occasion but ruled that the case was one of which it could perfectly properly take cognisance. If it is not to be done by the Audit Commission, it may be done through judicial review which in this case I believe is the less competent way of doing it.
  The Minister may refer to the money that is given to local authorities to fight fraud; but that money is top-sliced off an ordinary grant, so it does not increase the amount of money available but only earmarks a certain part of it. But that process of earmarking steadily diminishes the amount left over to everything else. Before everyone blames the local authorities for everything that they do, perhaps we should have some independent investigation. I beg to move.
  Lord Whitty: I rise briefly to support the noble Earl's amendment. I do so in defence of hard-pressed local authorities who in this area as in others find it difficult to reconcile the escalating demands of Parliament through statutory requirements and orders such as those envisaged in this clause with the increasingly rigorous financial restrictions placed upon them by Parliament. It is in the interests of central government and all of us that local authorities improve their standards, and it is the responsibility of local authorities to do so. However, as in other areas where Parliament imposes obligations on local authorities, there is real difficulty in complying with such an order if it leads to expenditure that so distorts local authority
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  budgets that capping limits are threatened. That is the contingency with which I believe the noble Earl is concerned. Local authorities then face the unenviable task of breaking one law or the other in the potential conflict between this clause and their responsibilities under local authority finance Acts.
  This is dangerous territory. My noble friend Baroness Gould and I in our former capacities used to tell Labour-controlled local authorities that whatever they did in their budgetary strategies, they should stay within the law. Occasionally their riposte to us was, "That is all very well; but which law should we break?" It is very dangerous territory because it creates a situation in local authority management in which the reputation of the law is called into question. We do not want to get into that kind of conflict. The amendment does not of itself resolve that conflict; it ensures that the DSS and the Secretary of State seek advice from the Audit Commission and other sources and takes into account the financial and legal implications of an order under this clause so that the Secretary of State can make a judgment accordingly. In certain circumstances there may be better ways of ensuring that performance is improved which do not involve the possibility of a local authority refusing or failing to comply with this instruction. For those rather more general reasons, I support the amendment.
  8.45 p.m.
  Lord Mackay of Ardbrecknish: Before I come to the details of the amendment, I should like to remind your Lordships of the current funding arrangements. Subsidy is provided by central government to meet the cost of administering housing benefit and council tax benefit, including measures to ensure the prevention and detection of fraud. In addition, local authorities may earn additional funds through the weekly benefit savings scheme. This can provide extra resources to be used against fraud, and many local authorities have achieved very good performance by targeting their resources and activities intelligently. Fraud overpayments identified by the local authority attract full subsidy, and in most cases the authority will be able to recover all or some of the amount overpaid. Elsewhere in the Bill we are making changes which will further improve authorities' ability to recover these overpayments. On top of this, there is provision for authorities to bid for moneys from the challenge fund where they are able to offer innovative schemes to tackle fraud. Thus, in addition to the direct saving to the authority from stopping fraudulent claims, further effort on fraud work can produce extra income. On the more general question of capping, it is for local authorities to ensure that the budget that they set enables them to meet their statutory duties. But in setting a cap which is reasonable, appropriate and achievable, account is taken of all the circumstances that an authority may face.
  I now turn to the changes to the procedures introduced by the Bill which the proposed amendment would make. The amendment appears to envisage that the issue of a notice that a determination is being considered and indeed that a direction on standards will be taken in isolation. This is not the case. There are

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  several stages during which account should be taken of the particular circumstances of a local authority and at which the authority will be able to put forward views.
  The report to the Secretary of State on the administration of housing and council tax benefit will cover the arrangements currently in place within the authority, including the measures taken to prevent and detect fraud. Recommendations in the report will reflect these and include practical steps that the authority can take to improve performance. The local authority will be given full opportunity to comment on the report. In putting forward proposals, it may include reference to any financial constraints. If the authority wishes to make representations on the resource implications of any recommendations and its impact on the timetable for improvement, it will be able to do so.
  Where a direction has been issued and the local authority has failed to attain the standards required notice that a determination is being considered will be issued. This will be a further opportunity for the authority to comment, in particular, on why a determination on standards on contracting out should not be issued. Any representations made about financial constraints would need to be borne in mind by the Secretary of State before making his decision. I add that to have to refer to the Audit Commission at that stage before any response has been received from the authority or the Secretary of State has decided on a determination seems to be a pointless administrative expense.
  I do not believe that this amendment is necessary to ensure that proper account is taken of the resources available to the local authority. It creates an unnecessary additional step in those cases where resources are not at issue. I hope with that explanation of how we envisage the system will work and that we believe the amendment would not help, the noble Earl will feel able to withdraw it.
  Earl Russell: Of course, I understand that the proposition that the level of public funding is sufficient is always a tautology. That has been the view of Ministers for a very long time. Whatever the level may be, whatever it is meant to do, in Minister's eyes it is always sufficient because it is the level. I also understand the Minister's comment that the Secretary of State will look at any issue that arises from this, and that he will consider whether the level of public funding appears to him to be sufficient, but in that the Secretary of State is judge and party in his own cause. Therefore, he is subject to a very severe temptation to believe that the funding is sufficient.
  I am grateful to the noble Lord, Lord Whitty, for his support. He made an excellent speech in which he said a great many things that I wish I had said. The point about "Which law shall I break?" is a very telling one. If one believes in respect for the law, as any drive against fraud must believe, it can only undermine the purpose if one spreads the idea that the law does not need to be obeyed. The Minister referred to the anti-fraud challenge fund. I thought he would. Does the Minister deny that the money which goes into that fund
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  is top-sliced from general finance? Therefore, it does not put any more money into local authority coffers; it simply enables one local authority to get a bigger share of the pie than another.
  The Minister's reply reminds me of a letter written by Sir Robert Walpole outlining his reasons for setting up Queen Anne's bounty. Your Lordships may remember that that was a pension for clergymen's widows. Sir Robert decided that he would create a certain number of these awards but they would not be sufficient to go round. Therefore he said that a clergyman's wife day and night, in season and out of season, would not cease to urge upon her husband the virtues of conformity. That is ministerial thinking in any generation. I shall not divide the Committee again so soon, but I confess that I have been tempted. I can occasionally resist temptation. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Earl Russell Earl Russell moved Amendment No. 63:
  Page 16, line 41, at end insert ("and").
  The noble Earl said: The amendment deals with the requiring of authorities to contract out. Amendments Nos. 63 and 64 are linked amendments. Amendment No. 63 adds the word "and". Amendment No. 64 removes the words "and accepting" from the list of what local authorities are obliged to do with contracting out. The provision requires the local authority to put services out to tender but it does not require the local authority in all circumstances, regardless of what bids it receives, to accept one of those tenders.
  Does the Minister believe in a free market? If he does, he must accept that a market cannot be genuinely free where one of the parties has to trade and the other does not. It is an extremely unequal negotiation which has taken place. I do not know how often the Minister has dealt with an auction house where a ring operated. One has rather low prices offered. That is precisely why auction houses in their wisdom have seen fit to put a reserve on property that they put up for sale. There is no provision in the Bill for the local authority to put a reserve on the contracting out of the services. If the Minister were prepared to provide for a reserve, he might rob my amendment of some of its force. I shall be interested to see whether he is prepared to do so. I beg to move.
  Lord Mackay of Ardbrecknish: It may be helpful if I explain the purpose of new Section 139G. This section is aimed at giving power to the Secretary of State to make enforcement determinations. Such determinations could be issued following a failure by an authority to attain the standards specified in a direction and where the authority had not offered any reasons why a determination should not be issued. Thus, it would apply in only the most serious cases, where, despite being given the opportunity to improve its standard of administration, an authority had failed to do so.
  The determination is designed to secure the attainment of the standards in question and, in order to achieve this, may also contain other provisions. These

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  include that the authority must comply with specified requirements as to inviting, preparing, considering and accepting bids to carry out the work. This is necessary as the general powers on competitive tendering would not apply in these circumstances and there has to be a means for setting up a mechanism to allow this to be done. This provision also aims to ensure that, in undertaking a tendering exercise following the issue of a determination, the local authority complies with whatever requirements the Secretary of State decides are necessary, including requirements as to the quality of person to take on the work, procedures to achieve this and, assuming persons of sufficient quality apply, that a bid is actually accepted.
  These amendments proposed by the noble Earl would have the effect of limiting the conditions which the Secretary of State is able to set out for the tendering process by removing the power to specify requirements relating to the accepting of bids. This would have the effect of removing all the teeth from this provision. It would allow an authority to pay lip service to the order to contract out by going through all the stages of the contracting process only to reject all of the bids out of hand or to award the contract to a bidder who could not provide the necessary effectiveness against fraud.
  We do not envisage that the power to order contracting out will need to be invoked often. And we do not envisage that the powers relating to accepting bids will be used to tell a local authority which bid to accept from those that provide an acceptable level of action against fraud.
  However, I think that it is important that we have the power and the teeth to make the system work effectively in the very small number of cases—hopefully, there will be no cases—where the authority is simply not prepared to take the steps which have been found to be necessary to be effective against fraud, and is going out to contract in a way which suggests that it is not looking for a bid which will give us an effective way of administering the system with the securities against fraud.
  I understand the noble Earl's reservations. They are those he normally has about powers of Secretaries of State. But if we are to envisage the possibility that a local authority refuses to accept any of the points made by the fraud inspectors, and refuses to make any changes, and we have to contemplate the next step of forcing the local authority to go out to tender, we have to ensure that it is looking for and accepting a tender which will carry out the criterion of being effective against fraud that we seek.
  I hope that, with that explanation, the noble Earl can withdraw the amendment.
  Earl Russell: Before I decide what to do with the amendment, perhaps I may ask the Minister one point of clarification. He referred to a local authority not giving reasons for its failure to reach a required standard. Did he mean failure to advance any reasons, or failure to advance reasons which appear sufficient to the Secretary of State?
  Lord Mackay of Ardbrecknish: I mean failure to advance any reasons. While I think it entirely theoretical,
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  one might envisage the reasons the local authority gives as being thoroughly inadequate, not proper reasons, and showing no indication that it intends to change the way it has been carrying out the system.
  We come back to all the discussions we have had. The local authority may give reasons which are reasonable and adequate and may suggest ways in which it might improve its system, as we discussed earlier. If those are reasonable reasons and it is making the necessary changes, the Secretary of State will accept that. We do not intend to force authorities to go out to contract willy-nilly. We wish to have this power only for those authorities which are obviously unwilling to take the necessary steps laid out by the fraud inspector.
  Earl Russell: Has the Minister any idea how arbitrary he sounds? Think about it the other way around. Think of it from the view of officers of a town hall. Think of them using the same sort of language. Think of them saying that the Minister shows absolutely no ability to change, that he shows absolutely no ability to do what needs to be done, that he shows absolutely no willingness to take account of the points made. Those officers have as much right to make those points as the Minister has to make his. They have a point of view too. We cannot know in advance which of those points of view will be correct.
  The Minister used the words that the local authority complies,
  "with whatever requirements the Secretary of State decides are necessary".
  What would he say if he were required to comply with whatever the local authority deems necessary? There are a great many things that a local authority deems it necessary for his department to do. I do not suppose for one moment that he will do any of them.
  We on these Benches complain frequently about over-centralised government. As the Minister says, we complain frequently about the powers of the Secretary of State. I have never heard quite such a barefaced defence of the Secretary of State's claim to enforce his own judgment as if it were infallible. When I rose I had absolutely no intention of asking the opinion of the Committee. But the Minister has really made me see red. I must do so. I ask the opinion of the Committee.
  8.59 p.m.
  On Question, Whether the said amendment (No. 63) shall be agreed to?
  Their Lordships divided: Contents, 17; Not-Contents, 60.

  Division No. 4

  CONTENTS

  Addington, L.

  Grey, E.

  Alderdice, L.

  Hollis of Heigham, B.

  Carlisle, E.

  Kilbracken, L.

  Carter, L. [Teller.]

  Redesdale, L

  Clancarty, E.

  Richard, L.

  Dubs, L.

  Russell, E. [Teller.]

  Falkland, V.

  Turner of Camden, B.

  Gould of Potternewton, B.

  Whitty, L.

  517

  NOT-CONTENTS

  Allenby of Megiddo, V.

  Kingsland, L.

  Anelay of St. Johns, B.

  Lindsay, E.

  Astor of Hever, L.

  Long, V.

  Attlee, E.

  Lucas, L.

  Balfour, E.

  Lucas of Chilworth, L.

  Belstead, L.

  Luke, L.

  Berners, B.

  Lyell, L.

  Biddulph, L.

  Mackay of Ardbrecknish, L.

  Blatch, B.

  Mackay of Clashfern, L.

  Brabazon of Tara, L.

  [Lord Chancellor.]

  Brigstocke, B.

  Mackay of Drumadoon, L.

  Brougham and Vaux, L.

  Marlesford, L.

  Cadman L

  Miller of Hendon, B.

  Chesham, L. [Teller]

  Monk Bretton, L.

  Clitheroe, L.

  Mountevans, L.

  Coleridge, L.

  Munster, E.

  Courtown, E.

  Onslow, E.

  Cumberlege, B.

  Oppenheim-Barnes, B.

  Denton of Wakefield, B.

  Park of Monmouth, B.

  Denton of Wakefield, B.

  Pearson of Rannoch, L.

  Dixon-Smith, L.

  Renton, L.

  Downshire, M.

  Shaw of Northstead, L

  Feldman, L.

  Skelmersdale, L.

  Ferrers, E.

  Strathclyde, L. [Teller.]

  Goschen, V.

  Trumpington, B.

  Haddington, E.

  Ullswater, V.

  Hardwicke, E.

  Vivian, L.

  Harlech, L.

  Wharton, B.

  Harris of Peckham, L.

  Wilcox, B.

  Henley, L.

  Willoughby de Broke, L.

  HolmPatrick, L.

  Wynford, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  9.7 p.m.
  [Amendment No. 64 not moved.]
  Clause 9 agreed to.
  Clause 10 [Adjustment of subsidy]:
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 65:
  Page 18, line 6, leave out from ("order") to end of line 9.
  The noble Baroness said: We are hoping for the usual answers of sweetness and light which until recently we had come to expect from the Minister. In moving Amendment No. 65, I shall speak also to Amendment No. 68. They would remove the power of the Secretary of State to deduct amounts from the subsidy paid to local authorities for the cost of housing benefit and council tax benefit administration. We are concerned about the gradual withdrawal of government subsidy for benefits administration. We also doubt whether the deduction of subsidy is a sensible way to improve local authority anti-fraud performance.
  We believe that local authorities' attempts to tackle fraud are hampered by inadequate levels of benefit subsidy paid by government. When local authorities took over the administration of housing benefit and council tax benefit from the DSS it was on the understanding that the cost of local authority administration would be fully met. However, over the period 1991–92 to 1995–96 total central government subsidy provision for the administration of costs for English authorities has averaged only two-thirds—65 per cent. or thereabouts—of actual costs. In 1996–97, the provision of £261 million from central government
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  compares with local authorities' estimates of actual costs of £419 million. Accordingly, local authorities now meet £160 million of the administration of those benefits from the general fund compared with just £32 million in 1988–89. Only half of the subsidy provided is distributed direct to authorities in the form of a specific grant. The other half is fed into revenue support grant.
  The effect is that authorities as a whole receive only one-third of their costs in specific grant. As many local authorities are close to their capping levels, a matter we explored in the previous amendment, any additional spend on administration must be at the expense of other services. The answer to that under-funding is to implement the Audit Commission recommendation, made in 1993 in its report on housing benefit, that all support for local authority benefit administration costs should be distributed by a specific grant. That would be neutral in terms of public expenditure. However, we still do not know why—and perhaps the Minister in his new sweetness and light mood will tell us—there has been a consistent refusal to make that change.
  The second concern is that the anti-fraud incentive scheme allows authorities to earn additional subsidy by meeting government-set targets for the detection of fraud. The problem with that is that it concentrates on the amount of fraud actually detected. Therefore, it acts as a disincentive for authorities to take preventive measures to avoid fraud in the first place. Indeed, local authorities which have good preventive measures in place, and therefore less fraud to detect, may very well face a subsidy penalty for not detecting fraud that does not exist.
  The DSS has established an anti-fraud challenge fund which allows authorities to compete for funds to finance anti-fraud initiatives. The problem is that the £5 million allocated to that has merely been top-sliced from existing funds. That adds to the difficulties of local authorities. The local authority associations are particularly concerned about the power in the Bill for the Secretary of State to make deductions from subsidy payments to local authorities for poor performance. Deducting subsidy from poorly performing authorities will serve only to make it more difficult for them to make improvements. The Minister really must not treat local authorities like delinquent teenagers who, they believe, need a short sharp shock to bring them up to scratch.
  We await the Minister's reply. However, we believe that if central government want local authorities to respond, this is an area in which the carrot is infinitely more valuable than the stick because we share a common objective. The Government are in danger of subverting their own ends. I beg to move.
  Earl Russell: I have two questions for the Minister. First, will he confirm that the Audit Commission is correct in believing that if all the money to local authorities for administering housing and council tax benefits were paid via a specific grant, that would be cost neutral? Is that the view of the Treasury as well as that of the Audit Commission? Secondly, what is to

  519
  happen to a local authority with exceptionally honest citizens which does not have enough fraudsters to meet its target?
  Lord Mackay of Ardbrecknish: Clause 10 re-states and makes additions to the Secretary of State's powers to adjust the subsidy paid to local authorities for housing and council tax benefit by introducing amendments to Section 140B of the Social Security Administration Act 1992. In particular, it qualifies the circumstances and manner in which deductions from subsidy must be made.
  Perhaps I may describe briefly the existing power relating to deductions from subsidy and its application and the intention of the additional power introduced by Clause 10, additional powers which the noble Baroness's amendment seeks to remove. The Social Security Administration Act contains a long-standing provision for the Secretary of State to deduct from the subsidy which would otherwise be payable to an authority any amounts which he considers it unreasonable to pay. The power has been used administratively over the years to claw back from local authorities amounts of subsidy which have been or would otherwise be overpaid. Examples are where there has been an error in an earlier subsidy claim and it comes to light that the authority has incurred unlawful expenditure or has claimed subsidy twice on the same expenditure. This general power is restated in the proposed new subsection (5)(b) of Section 140B of the Social Security Administration Act, which is inserted by Clause 10. It would be removed, of course, by the second of these amendments.
  The new powers relating to deductions are intended to clarify the existing general power. New subsection (4)(b) of Section 140B inserted by Clause 10 provides for deductions to be made in the annual subsidy in respect of matters other than expenditure on benefits; for example, incentive schemes. The proposed new subsection (5A) makes it clear that the powers to deduct are general and include instances where an authority has failed to comply with a direction or has failed in some other way to prevent and detect fraud.
  Amendments Nos. 65 and 68 would together remove not only the Secretary of State's power to make deductions from subsidy in the case of poor fraud performance but also the general power to make deductions which is fundamental to the housing and council tax benefit subsidy regime. The removal of the power to make deductions would leave the Secretary of State powerless to provide in the subsidy order for deduction of subsidy in specified circumstances or to recoup questionably paid subsidy or to decline to pay dubious claims. I am sure that it is not the intention of the noble Baroness to remove an essential safeguard to the public purse, but this would be one of the effects.
  Amendment No. 66 seeks to add a further example of circumstances in which additional subsidy may be paid; that is, for success in meeting performance targets for clearance and accuracy in administration of benefits. However, it is not necessary to include these further examples. Local authorities can and do receive additional subsidy in these circumstances and that will
  520
  continue. The amendment would not permit any payment to local authorities by the Secretary of State that he cannot already make under the existing powers.
  In addition, the Committee may be aware that my department is currently conducting research and carrying out tests in a range of local authorities on the feasibility of introducing a framework of minimum standards for verification, accuracy and clearance times. In the light of the research and test results we shall consider what adjustments may be needed to current funding arrangements to take account of the introduction of such a framework. Any extra subsidy that might be payable as a result of authorities meeting the standards could be paid under provisions in this Bill or provisions already in existence.
  Amendment No. 67 seeks to remove some, but not all, of the Secretary of State's powers to pay additional subsidy.
  Baroness Hollis of Heigham: I am sorry, it is possibly my fault but, in introducing the group, I spoke only to Amendments Nos. 65 and 68. I was expecting my noble friend Lady Turner to move Amendment No. 66, and no doubt the noble Earl, Lord Russell, wishes to speak to Amendment No. 67. If I have caused any inconvenience to the Minister, I apologise, but I thought that perhaps he had registered that.
  9.15 p.m.
  Lord Mackay of Ardbrecknish: I am afraid I had not registered that, but if in fact the noble Baroness is saying that she is speaking only to Amendments Nos. 65 and 68, I have probably already dealt with them.
  Earl Russell: I am grateful to the Minister. Amendment No. 67 is grouped with these amendments. The points I made were intended to relate to Amendment No. 67 as well as to Amendment No. 66. So if the Minister has a reply to Amendment No. 67, I would be grateful to hear it.
  Lord Mackay of Ardbrecknish: I thank the noble Earl for that. The effect of Amendment No. 67 would be to remove some but not all of the Secretary of State's power to pay additional subsidy. In particular it seeks to remove the power for the Secretary of State to reward success in preventing or detecting fraud. The provisions that the noble Lord seeks to amend enable the Secretary of State to invite applications for additional subsidy specifically for the purposes of prevention and detection of fraud. I am sure the Committee agrees that the Secretary of State should, if he deems it appropriate, be able either to reward local authorities that have been particularly successful in their fight against fraud or invite local authorities to consider new and cost-effective approaches to tackling fraud; moreover, he should be able to provide any such funding for these new measures on a statutory basis. The powers provided within Clause 10 provide just that.
  The noble Baroness asked about the deduction power on administration costs. The power is not purely an administration cost. The amendment removes all powers to deduct, so all the provisions dealing with improper expenditure would be struck down. That is the point.

  521
  The noble Earl mentioned challenge funding being top-sliced. The challenge fund this year and next year includes new money, so it is not all top-sliced from the overall local authority administrative budget. But, of course, it remains within the total budget which the Government have set out and the total public expenditure plans we have already set out and which, I understand, at least the party sitting exactly opposite me—although, I accept, not the party of the noble Earl—have said will be more than sufficient for them for the next two years. I am not entirely sure that I was hearing the noble Baroness correctly. I am sure that she did not mean to make her original remarks sound like a promise to increase the funding going from central government because, of course, that would be incompatible with the views of her right honourable friend Mr. Gordon Brown, who has said that he will stick to the Government's spending plans.
  Baroness Hollis of Heigham: That should cheer up the Minister enormously.
  Lord Mackay of Ardbrecknish: It does cheer me up enormously, as indeed it cheers up my right honourable friend the Chancellor to have such endorsement of the Government's spending plans for the next two years. We are deeply grateful for the approval of the shadow Chancellor. If the shadow Chancellor agrees that our spending plans are perfectly all right, there does not seem to be any point in changing the person who holds the office of Chancellor of the Exchequer in the events which are about to happen in the next month or so. However, I must not be drawn into that because, as I have reminded myself—the noble Earl will remind me if I do not—we do not have a vote and therefore there is no point in electioneering here.
  Earl Russell: I was merely asking the Minister to qualify what he said about there not being a case for changing the Chancellorship. What his words logically imply is that there is no point in changing it in that direction. That is all that they imply.
  Lord Mackay of Ardbrecknish: I must always be careful about the noble Earl. I am happy to say that I have no little stories to tell about a man going to Ipswich or coming from Ipswich. What I meant—I am sure everyone understood—is that I thought my right honourable friend the Chancellor was doing such a splendid job, endorsed by Mr. Gordon Brown, that my right honourable friend should continue in office after the general election. However, as I said, there is no point in electioneering in this Chamber.
  Over recent years the adjustments to subsidy have had a dramatic effect in influencing local authorities' attitude to anti-fraud work. The ability to adjust subsidy has led to greater effectiveness but there is still much to be done. The noble Baroness never ceases to tell me about the amount of fraud she thinks is going on as regards housing benefit. While I think the figure is about £1 billion, she thinks it is double that. If she is more correct than I am, that is all the more reason why we
  522
  should take the powers which exist in this Bill to tackle the matter, and it is all the less reason to believe that somewhere there is an authority which is so virtuous that it has no fraud at all perpetrated against it. I do not believe that such an authority exists.
  I think that the general administration subsidy of local authorities is intended to cover the actions for which they are responsible in assessing benefit and preventing and detecting fraud. It is worth noting that incentive payments for fraud detection are also available for detection at the outset of claims; in other words, the prevention point to which the noble Baroness referred. Challenge funding can be made available for prevention measures. Therefore the measure is not just related to the amount of fraud that is detected. I hope that I have answered the various points that have been made. I invite the noble Baroness and the noble Earl not to pursue their amendments.
  Earl Russell: With respect I do not think the Minister has quite answered my question about the local authority without enough fraud. I agree it is difficult to imagine an area with no fraud but it is not quite impossible. Also, we have here something which is quantified. If one local authority detects less fraud than another, is it not just possible that it might be because there is less fraud being committed in the area of that local authority? Can the Minister eliminate that possibility? I do not know whether he was in the Chamber when the noble Lord, Lord Boyd-Carpenter, asked the noble Viscount, Lord Astor, who was then speaking from the Dispatch Box, how the Government knew the total of undetected fraud. That question deserves an answer and the noble Lord, Lord Boyd-Carpenter, did not get one. I should be glad if I were luckier.
  Lord Mackay of Ardbrecknish: I referred to a figure of £1 billion worth of fraud and the noble Baroness thinks the figure is £2 billion. Against that background it is a little academic to believe that there is one local authority in the country which does not suffer any fraud perpetrated against it. It would be fortunate if that were the case; but I have indicated that incentive payments for detection are available for effective prevention. Clearly, such an authority would be effectively preventing fraud. If the steps it has taken lead to extra costs, it would be eligible for consideration for incentive payments and for challenge fund payments.
  I can see that some way down the road, once we have managed to reduce the fraud considerably, we may have to look at other ways. But for the moment I see no reason why the incentive arrangements need adjustment. If they need adjustment, that can be taken into account when we look at the verification standards a local authority has in place which are succeeding, as the noble Earl prophesied, in bringing down fraud and preventing it. Those verification standards and verification procedures will be eligible for assistance to keep them in place, because clearly it is in our interests to keep them in place. We have also to guard against an

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  authority which says, "There is no fraud here". Why there is no fraud there is because it is not looking very hard.
  Earl Russell: But does the Minister understand that those incentives may be—in the words of the first Lord Burghley about the High Commission:
  "Rather a device to seek for offenders than to reform any"?
  Is that not a financial inducement to find fraud regardless of how good is the evidence? Is it not very near partaking of the character of a corrupt payment?
  Lord Mackay of Ardbrecknish: I do not believe that it is. The noble Earl is perhaps just pushing his argument a little too far. The fraud inspector's report on an authority would be one source of information, and if that report showed that that authority was running a splendid system and keeping on top of fraud, some of the procedures it had in place could be eligible for the payments I have mentioned—either the challenge fund payments or the other incentive payments. I can see the noble Earl's point. I should like to think—and I shall certainly check it—that an authority in that halcyon state will not find that the Government are not giving it any money to continue in the halcyon state.
  Baroness Hollis of Heigham: At the end of his first reply the Minister said that he hoped that he had answered our questions. It would be fairer to say that he had addressed them rather than answered them. I accept that the amendment as drafted is defective, and so I am sure that the Minister will be delighted to know that it is not one that I intend to press.
  The sustained point is I believe that the Government have developed a flawed method of supporting the administration of benefits and a deformed method of financing the eradication of fraud. The Government have constructed a system some of whose consequences are quite perverse. Some of them have been mentioned. I recall a couple of months ago bringing to this place one of the rural authorities. I cannot remember now whether it was Mendip or Chilterns. It complained that it had been complimented by the Audit Commission, and the like, on its efforts to eradicate fraud. In consequence therefore it faced a benefit penalty, because there was not the fraud there for it to uncover, as it had already set in place exemplary methods of preventing it from occurring.
  Another perverse effect which has been touched on by the Minister—again local authority associations are worried about this in terms of the integrity of the public ethic—is that local authorities now have an active incentive to turn error into fraud both to meet their targets and to avoid repayment, and instead to claim subsidy. If something is an error, local authorities do not receive compensation for it. If they can turn that error into fraud by making it culpable, they do. Those are unhealthy pressures on hard-pressed local government officials where it is often the word of one person—"I did put my form in on such-and-such a date. I did so honestly"—against the word of an official. In good local
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  authorities those issues go to members to resolve, but there will now be a perverse incentive to short-cut them. That is worrying.
  As to the wider point regarding the position of a potential Labour government, I say nothing about the potential head space offered by recovering more fraud savings than the Government have so far identified. Think what one could do with the £1 billion to which the Minister repeatedly referred.
  The whole method of financing this form of activity has to be reconstructed. Within the same spend figure, it could be made to deliver more effective and less perverse results than the Government have so far achieved. I am confident that that is what we shall seek to do. I beg leave to withdraw the amendment.
  amendment, by leave, withdrawn.
  9.30 p.m.
  Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 66:
  Page 18, line 15, at end insert ("or
  (c) success in meeting such performance targets for clearance and accuracy in the administration of benefits as may be prescribed.").
  The noble Baroness said: The Minister to some extent pre-empted this amendment by replying to it in addressing previous amendments—but not entirely. The purpose of the amendment is to allow regulations to provide for an extra subsidy for better administrative performance. I emphasise that that does not mean just the detection of fraud.
  The housing benefit and council tax benefit regulations state that benefit should be processed within 14 days wherever possible. We have discussed the 14-day period in relation to other amendments. Regulations or amendments to the subsidy order could be made to allow additional subsidy to be paid where authorities meet that target over a consistent period and could also include a target for accuracy.
  The amendment could act as a carrot to good administration. That is its intention. It would minimise the opportunity for fraud and at the same time reward authorities that are proceeding with a very good administration in the area of benefits generally. I beg to move.
  Lord Mackay of Ardbrecknish: As I explained, this clause makes changes to Section 140B of the Social Security Administration Act 1992, under which the Secretary of State pays subsidies to local authorities in respect of their expenditure on housing benefit and council tax benefit.
  Subsections (4)(a) and (4A) inserted into that section by Clause 10 re-enact the Secretary of State's power to pay additional subsidy to local authorities in circumstances that are to be specified in the subsidy order. Subsection (4A) gives two examples of what that additional subsidy could be paid for; namely, the costs of administering the relevant benefit, and in respect of success in preventing or detecting fraud.

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  The proposed amendment seeks to add a further example of circumstances in which additional subsidy may be paid—that is, for success in meeting performance targets for clearance and accuracy in administration of the benefits.
  It is not necessary to include these further examples as local authorities can, and do, receive additional subsidy in these circumstances, and that will continue. The amendment would not permit any payment to local authorities by the Secretary of State that cannot be made under existing powers.
  In addition, my department is currently conducting research and carrying out tests with local authorities on the feasibility of introducing a framework of minimum standards for verification, accuracy and clearance times. When we receive those research and test results we shall consider what adjustments might be needed to the current funding arrangements to take account of the introduction of such a framework. Any extra subsidy that might be payable as a result of authorities meeting the standards could be paid under the provisions of this Bill or provisions that already exist without the further assistance of the noble Baroness's amendment. In short, the amendment is not necessary. With the assurance that what she wants is capable of being done already, I hope that the noble Baroness might withdraw her amendment.
  Baroness Turner of Camden: I thank the Minister for that explanation and also for the assurance that what I seek in the amendment can already be done. I shall read his earlier remarks carefully in Hansard tomorrow. But in the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 67 and 68 not moved.] Clause 10 agreed to.
  Lord Whitty Lord Whitty moved Amendment No. 69:
  Before Clause 11, insert the following new clause—
  REFUSAL OF PAYMENT OF HOUSING BENEFIT TO LANDLORD
  (".—(1) In any case where—

  (a) a person has claimed housing benefit and requested or consented to payment of housing benefit to another person; or

  (b) a person is in receipt of a payment of housing benefit on behalf of another person,

  an authority administering housing benefit may refuse to make such a payment or continue to make such a payment, as the case may be, in the circumstances mentioned in subsection (2) below.
  (2) The circumstances referred to in subsection (1) above in which an authority may refuse to make a payment of housing benefit or to continue to make such a payment are—
  (a) in the case of paragraph (a) of that subsection, where it is satisfied that—

  (i) the person to whom the payment is to be made is not the landlord under the tenancy in respect of which the request was made or consent given; or

  (ii) such a tenancy does not exist; or

  (iii) that the person to whom the payment is to be made is or has at any time been in receipt of housing benefit as a result of fraud; and

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  (b) in the case of paragraph (b) of that subsection, where it is satisfied that the person in receipt of the payment is in receipt of a payment of housing benefit as a result of fraud.").
  The noble Lord said: The proposed new clause and the amendment that follows bring us to one of the central areas where we feel that the legislation has a serious deficiency. It is in dealing with the widespread problem of landlord fraud.
  The amendment paves the way to recognition of a specific offence, but it does not depend on such an offence being created. The next clause deals with that. This clause could apply with the offences already existing and those created by the Bill. Therefore, I shall move the amendments separately.
  Amendment No. 68 recognises that, in a large number of cases identified as the main location for housing benefit fraud by the Select Committee of another place, it is not an individual claimant but a third party—a landlord, a hotelier, an accommodation agent—who creates the fraud. In some cases that is done with the connivance of the individual claimant, in other cases it is done completely without such connivance and in ignorance on the part of the alleged claimant. It can be a deception involving just one single case or it can be a multiple and criminally organised fraud of substantial proportions.
  In the discussion on the Bill in another place, there was at least some grudging recognition by Ministers of the importance of landlord fraud and the need for special measures to deal with it. Clause 11 was introduced at a rather late stage in the Commons proceedings in response, I should like to think, to the eloquent arguments of my colleagues there. But it is the only explicit recognition that there is a separate and different problem of landlord fraud.
  However, Clause 11 is not sufficient to deal with it. It deals only—though importantly—with the information that may be required of landlords receiving direct payment of housing benefit. It does not deal with powers against their involvement and engagement in fraudulent activities. It still seems somehow to be assumed, despite all the evidence in the Select Committee report in another place and elsewhere, that the other powers in the Bill which are directed primarily at individual claimants are sufficient to be used against landlord fraud. But they are not sufficient. The amendment deals with the circumstances: situations where the alleged landlord is not the landlord; situations where the alleged tenancy does not exist; situations where the recipient of direct payment has previously been found to be in receipt of fraudulently claimed benefits. It allows the authorities to stop and suspend payment in such cases. Such an authority which, on receipt of information, refuses or ceases to make direct payments to the landlord, may still be required to pay to the individual claimant, if the application is genuine and valid.
  The wording of the new clause is similar to that in the London Local Authorities Bill, which I understand received its Second Reading in this House last night. I regret that I could not be present for the debate. That Bill envisages a comprehensive package of reforms to

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  tackle the whole problem of landlord fraud. It would give local authorities the power to require landlords who ask for housing benefit to be paid direct to supply them with details of other properties that they control. It would be a stronger power than the permissive power in Clause 11. It would require them to maintain a register of landlords and also provide what the proposed new clause would demand: an ability to refuse payment to landlords because authorities believe that they are involved in fraudulent claims. That is a more robust and effective approach than is reflected in this Bill. It would also, in my view, protect legitimate and decent landlords from association with some of the practices that have grown up in this area.
  I submit that this amendment goes some way in that direction. It is true that the Minister's colleagues in another place conceded some of the principles underlying the approach. Ministers there argued that primary legislation was not necessary. However, they undertook to come forward with changes in the regulations that govern the making of direct payments to landlords and in the guidance that is given to local authorities in the circumstances where direct payment can be made. It would be interesting for the Committee to hear what progress has been made on revising those regulations. But I have to say that, unless and until the Minister can promise watertight regulations to deal with the issues and provide for such powers, I remain unconvinced that the problem has been dealt with without the heavier primary legislation provided for in the amendment. I beg to move Amendment No. 69.
  Lord Mackay of Ardbrecknish: This amendment seeks to allow local authorities, as the noble Lord, Lord Whitty, has just explained, to refuse or stop payments of housing benefit being made directly to a person other than the claimant, the landlord or indeed, I assume, his agent in certain circumstances. The circumstances are: that the proposed recipient of the direct payment has no title to let the property; that there is no such tenancy; or that the proposed recipient is or has at any time been in receipt of benefit as a result of fraud. For many of those housing benefit at present cannot be paid. Moreover, any current recipient of direct payments could have such payments discontinued if the authority is satisfied that he is in receipt of payment of housing benefit as a result of a fraud.
  I understand the intentions behind the amendments. Equally, I myself was not able to be present last night when the London Local Authorities Bill was discussed, as I had another engagement. But I know that there is similarity between some of the provisions in some amendments that we have been discussing and some of the provisions in that Bill. So I understand the intentions.
  Direct payments can cause difficulties. They can make it easier for landlords, and indeed for both landlords and claimants, to commit fraud. My officials have consulted representatives of the local authority associations to identify specific problems with the direct payment provision and to see how they can be put right. We have found that most of the problems that they raised with us can be tackled by amending current
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  secondary legislation. Indeed, as the noble Lord, Lord Whitty, acknowledged and as was indicated by my honourable friends in another place, we propose to amend that secondary legislation and to issue circulars to make the situation clear to the local authorities.
  But I want to make it clear, if I can, that in almost all cases there is no obligation on local authorities to make direct payments. A major factor contributing to the difficulties that local authorities have with direct payments is that many believe that they are under such an obligation. The department will issue clear guidance to the effect that local authorities are not generally under any obligation to make direct payments to landlords unless claimants are substantially in arrears with their rents. In addition, my right honourable friend the Secretary of State is currently consulting with local authority associations with a view to proposing amending regulations to deal with three specific issues.
  Baroness Hollis of Heigham: I wonder whether the Minister will mind my interrupting him at this point. I take the point that he has just made that the department intends to issue clear guidance showing that local authorities are not obliged to make direct payments. But the research commissioned by his own department, undertaken, I think, by Dr. Kemp, which I have read and studied, makes it clear that increasingly landlords require direct payments as a condition of accepting a DSS tenant. What would be the Minister's advice in such a situation?
  Lord Mackay of Ardbrecknish: It would rather depend on the suspicions that the local authorities might have. For example, the local authorities must in law be satisfied that the landlord is indeed the landlord and that the tenancy does indeed exist, before they pay any housing benefit. If they are not satisfied that the tenancy does exist, they should not pay anybody—either landlord or, obviously, tenant. That is a very clear provision.
  So far as concerns direct payments—I believe it will certainly answer the point of the noble Lord, Lord Whitty, and I hope that it will help the noble Baroness—a circular has been drafted. I understand that it is now with the local authorities association as part of the statutory consultation that we have to undertake. That consultation is planned to end on 15th April 1997.
  But I mentioned three specific issues at which we are looking. The first proposal will enable an authority to require a landlord to produce any necessary information in connection with the specific benefit claim. That might include evidence of his legal right to let the property.
  The second proposal is for a discretionary power to refuse or terminate direct payments where an authority is satisfied that the recipient is not a fit and proper person. For example, an authority could refuse to make a direct payment to a landlord who had a record of obtaining benefit by deliberate fraud. It could equally decide to exercise its discretion to make a direct payment where, despite the landlord's history, such an arrangement was the only means of safeguarding the tenancy, although in such a case the authority would be

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  expected to introduce safeguards to minimise the risk. That may go a little way to answer what I thought was the question posed by the noble Baroness.
  The third proposal we are discussing would require local authorities to ignore rent arrears which are incurred while a claim or a change of circumstances is being determined. This would mean that authorities would not be obliged to make direct payments in such cases, removing what amounts to a perverse incentive to a fraudulent landlord to force a delay in the determination of a claim.
  All the proposals I have outlined are being brought forward under existing legislation—and I hope answer satisfactorily the points raised by the amendment—without requiring a new primary power or producing the counterproductive results of the proposed amendment. We are discussing some of these matters with the local authorities. Others are in the circular which has been drafted and which is with the local authorities for consultation.
  I hope that those assurances and indications of progress will help the noble Lord, Lord Whitty, to withdraw his amendment in the confidence that we are taking serious steps along with the local authorities in order to help the local authorities deal with the question of landlord fraud.
  9.45 p.m.
  Lord Whitty: I am grateful to the Minister for his reply. It goes some way towards reassuring me that these issues are being tackled. However, his reply does not deal with the central point. I am well aware, as I am sure are most local authorities, that they are not obliged to make direct payments to landlords in any circumstances. They have the discretion not to. However, the reality is that local authorities are faced with the fact that landlords are telling their tenants or potential tenants that unless they are given direct payments the tenants will not get the lodgings. In those circumstances it would be a serious problem for local authorities to insist on payment to a tenant if the landlord said that he would not then take him on. The question of the power relationship between a tenant and the landlord is involved here and is perhaps best dealt with by the subsequent clause.
  However, I am more pleased than I expected to be that some progress has been made since the deliberations in another place on the redrafting of these regulations and consultation with the local authorities. In the spirit of goodwill and understanding, I am prepared at this stage to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Whitty Lord Whitty moved Amendment No. 70:
  Before Clause 11, insert the following new clause—
  OFFENCE OF FRAUD BY LANDLORD
  (".—(1) If a person—

  (a) dishonestly produces or furnishes or causes or allows to be produced or furnished to any authority administering housing benefit or council tax benefit or to a person authorised to exercise any function of such an authority
  530
  relating to such a benefit, any document or information which is false in a material particular as to persons resident in accommodation owned, managed or controlled by him or in which he has any form of proprietary interest; or

  (b) fails to notify or causes or allows another person to fail to notify any authority administering housing benefit or council tax benefit, or a person authorised to exercise any function of such an authority relating to such a benefit, of any change of circumstances as to persons resident in accommodation owned, managed or controlled by him or in which he has any form of proprietary interest,

  with a view to obtaining any benefit or other payment or advantage (whether for himself or for some other person) derived as a result of more than one claim to benefit, he shall be guilty of an offence.
  (2) A person guilty of an offence under this section shall be liable on conviction on indictment to imprisonment for a term not exceeding 10 years, or to an unlimited fine, or to both.").
  The noble Lord said: I apologise to the Committee as I may have to take some time in explaining the amendment. We found in another place that Ministers have not taken the point on this issue. I therefore have to restate the arguments. We on these Benches have given strong support to the objectives of the Bill. We have not always shared the rhetoric that surrounds it but we are determined to play our part in bringing an end to fraud in the social security system. However, if the Government are so keen to tighten up on payment fraud, I cannot understand why Ministers are resisting the obvious parallel but separate problem of tackling criminal landlord fraud, which creams off both the welfare state and genuine claimants. Indeed, it often goes beyond that and exploits vulnerable people who for one reason or another are outside the national insurance system.
  I have read carefully the report of the Select Committee of another place on these issues. It concludes that a large proportion of fraud in the housing benefit area is located in landlord fraud in the private rented sector. It quotes numerous examples. The sample survey carried out by the London Borough of Haringey revealed that no fewer than 21 per cent. of such claims were fraudulent in one way or another. Lest the Committee assumes that this is a problem of Labour local authorities, perhaps I may also draw attention to a submission to the Select Committee by the fair City of Westminster, which gave a trenchant analysis of the problems in its area, particularly with fraud by hoteliers.
  I have also read carefully the proceedings on the Floor and in Committee in the other place on this Bill. There seems to be an extraordinary defensiveness about Ministers' responses here. That suggests that they, and maybe civil servants at drafting level, are being a little complacent or maybe they are living in a world of ignorance as to what is going on. We have already been warned that we should not electioneer in this Chamber. There is no point in doing so, which is rather a different matter. I do not want to undermine the efforts of my colleagues in other places to make sure that the Labour Party is seen as a party which represents the whole of the country.
  But I am forced to be a little bit "classist" and "regionalist" about this. There seems to be a feeling that this is a problem only of the inner cities. In fact, the Select Committee report proves exactly the opposite. It is a problem for small towns and the shires which for at

  531
  least another couple of weeks the party opposite purports to represent. Some of the worst examples are in those areas. Some of the criminals engaged in these activities are moving out of London and other cities because they are finding that life is too tough for them because of the way in which London local authorities and others are beginning to tackle these problems.
  But even if we concentrate on the inner cities, this is a crime which is well understood. The DSS civil servants in the offices down the line understand it; the benefits staff of the local authorities understand it and are horrified by their inability to tackle the problem effectively. The police know of it and it is often a problem for them. The social services know of it and the general public also know it.
  Until recently I lived for 20 to 25 years in south London. There is just as much tittle-tattle in the shops and pubs of south London about the existence of criminal fraud by landlords as there is about individual claimants who cream off the system. Moreover, there is also recognition at that level that the crimes are different. Ministers in the other place argued that far from there being only one clause in this Bill dealing with landlord fraud, in fact there are eight separate powers in it to tackle the problem because it is caught by the provisions in the Bill for individual fraud.
  That is erroneous. It seems that the only rationale for the Government's position is that they regard landlord fraud as a secondary offence. By that I do not mean that they do not regard it seriously, but they see it as a connivance at individual fraud rather than fraud of itself. In fact, it is a massive conspiracy and often an organised one against the public purse and often against claimants. It is massive exploitation both of genuine claimants and by people who are used in these scams who purport to be claimants. At the Second Reading debate I used the term "scam" and then I corrected myself because that was too cosy a term.
  Some landlord fraud deals in petty connivance and individual deception; but we are often dealing with something which is far more sinister. The police understand that they are dealing with a continuum of crime here, such as immigration rackets, overcrowding and unsafe dwellings and protection rackets. These are crimes of the unofficial economy and therefore they are quite difficult to catch up with. But in this Bill we are dealing with the point where we should most easily be able to catch up with it; namely, the point where criminals gain their money directly from the state.
  These facts are known from the cases reported, from anecdotes and statistics. They were revealed very clearly in the report of the Select Committee. They all show that this is a rapidly growing problem. We can all have views as to why that is happening. There are some underlying social problems which go towards it. In many of the inner city areas and in our smaller towns, the housing market has become seriously distorted. There has been no new building for public housing and availability is limited and inadequate. There has been family break up, migration and the atomisation of households. Owner-occupation is not an option for a very large number of these people. Even the jerry-built
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  flats built in the 1980s are beyond their purse. The private rented sector has been deregulated and now has rents which are often beyond the purse of the people we are talking about. This is a potential recipe for disaster and is already occurring.
  When direct payment to landlords of housing benefit was first introduced, the assumption was that the hulk of such payment would be to public sector landlords or social landlords like housing associations. However, with the decline in public sector housing and the rise in rents in the private as well as the public sector, that is no longer entirely the case. Direct payments now account for over one-third of all payments, and that proportion is estimated to rise to one-half, yet that one-third of payments accounts for two-thirds of the fraud. Direct payments have been growing as a proportion of all housing benefit and the share to private landlords is growing. Control and monitoring are therefore primarily problems in the private sector. However, there have been a few instances of local authority officials being involved in organising and/or conniving at organised housing benefit fraud. Obviously, such individuals should be ruthlessly prosecuted; but the main issue is how to control fraud in the private sector.
  What form do the scams take? The amendment partly reflects this. Landlords claim for tenants who do not exist, often using national insurance numbers which have been obtained from non-claimants by illegal purposes or deception. Tales were even told in the Select Committee and are recorded in the proceedings of another place of dossers in one part of London being paid £10 for their national insurance numbers which were then used in another area. It is clear from the Select Committee report that national insurance numbers alone do not offer sufficient protection against such fraud. There are cases of where the alleged tenant exists, but there is no dwelling—or of where there is a dwelling, but no tenant. There are cases of where the alleged tenant once existed and once lived at that property but moved out a long time ago. There are cases of where the alleged tenants exist but claim for dependants who do not exist, or who do not live there, or who have not lived there for some time.
  There are also hotel frauds. I have already referred to the very telling report from the City of Westminster, which shows how hoteliers in such areas take advantage not only of potential claimants and others, but also of the social security system.
  There are also cases of cheques being made out to genuine claimants but going in practice to the landlords, as a result of extortion or planned redirection. Such cheques are often cashed without recourse to a bank account by means of the growing phenomenon of slightly dubious cheque shops. I have seen some evidence from the relatively small town of Northampton of £400,000-worth of benefit cheques, the bulk of which is paid to landlords, being cashed at dubious cheque shops. There is an estimated commission on that of £30,000 which is going to somebody. Surely that was not the intention of housing benefit. It is also a way of avoiding tax. If the Bill is using data matching to check

  533
  on claimants, surely we must make greater use of data matching with Inland Revenue declarations on landlords who receive benefit directly.
  This is a different sort of crime. It requires separate powers. In determining the sanctions, we have accepted some of the arguments of Ministers in another place that the maximum sanction should not be too out of line with that in parallel legislation such as the Theft Act. This amendment therefore reduces the maximum penalty from the 12 years suggested by my colleagues in another place to 10 years.
  The central issue here is that we need powers to identify such fraud as a crime that is separate from the individual crimes of individual claimants. The new clause would provide such powers. If the Committee were to accept the amendment, we would not only save the public purse, but take steps which would help to put a few very evil men behind bars and which would protect genuine claimants and decent legitimate landlords who suffer from the implication that so much is wrong with the sector; we would also protect a lot of very vulnerable people from being used in such conspiracies. I beg to move.
  Earl Russell: Wherever there is a fireplace, there will be soot. Wherever there are sewers, there will be rats. Wherever there is a large stream of public money, there will be corruption. I have no information on the extent of landlord fraud, but it is sadly inevitable that when a large supply of public money is devoted to any purpose, some people will attempt to batten on it and to make corrupt use of it. Clearly, there is landlord fraud. Clearly, it must be combatted.
  I was particularly interested in the point that the noble Lord, Lord Whitty, made about tax evasion. One of the ways in which we can tackle the frightening, widening gap between the amount of money that we need to support the services which everybody wants and the amount that it is assumed that people are prepared to pay for them is by collecting tax which can legally be collected under the present law. Wherever that can be done, it is useful.
  The question raised by this amendment is whether there should be a separate offence of landlord fraud or one should take the line that fraud is fraud is fraud and it is simply a crime, no matter who perpetrates it. I hope that the Minister will be helpful on that matter. The argument put forward in favour of a separate offence of landlord fraud is the very large scale on which it can on occasions take place. That is a powerful point. However, if fraud is taking place on a very large scale, presumably it means that it is taking place in relation to a large number of dwellings.
  Normally, the maximum sentence is seven years' imprisonment. The maximum sentence proposed by this amendment is 10 years. But if fraud takes place in respect of a great many different dwellings is it possible in extreme cases to impose separate sentences for separate offences and let them run consecutively? The Minister may be able to shed light on whether this amendment is the way to tackle a problem that we all agree needs to be tackled.
  10 p.m.
  Baroness Hollis of Heigham: Before the Minister replies, I should like to put one question to him. As I understand it, in 1994/5 £599 million of benefits fraud was detected. In 1995/6 the figure was £638 million. However, the proportion represented by detected multiple identity fraud, of which landlord fraud is the most obvious example, was only £6 million and £11 million respectively; in other words, landlord fraud represented only a tiny percentage. Does the Minister believe that this reflects the fraud practised on the ground?
  Lord Mackay of Ardbrecknish: The amendment proposed by the noble Lord, Lord Whitty, seeks to target dishonest behaviour specifically by landlords in connection with multiple claims to housing benefit and council tax benefit. The amendment adds nothing to the effectiveness of the offence proposed in Clause 13. It would replicate elements of the offence already contained in that clause and to that extent it is unnecessary. With the new powers in Clause 13 as drafted we have already made adequate provision to deal with landlord fraud.
  Clause 13 introduces a new offence tailored to serious social security fraud which will be capable of being applied to landlords or claimants, or both if they are involved in a conspiracy. This offence is, as is normal with the criminal law, framed so as to target particular criminal behaviour, not individual sections of society, even if legislation has been prompted by the need to overcome behaviour exhibited by specific sections of society. Landlords who receive direct payment of their tenants' housing benefit are already under a duty to report changes of circumstances which they might reasonably be expected to know will affect a claimant's right to, or the amount of, or receipt of, benefit. Clause 13 makes dishonest failure to report such a change an offence.
  This new clause, as the noble Lord has so carefully explained, is intended to provide a new and separate offence of aggravated landlord fraud—an offence which differs from that in Clause 13 by being specific to landlords and specific to one type of housing benefit fraud, namely, multiple claims. But there are other types of serious housing benefit fraud, such as setting up a ghost claim or a contrived tenancy. The offence in Clause 13 as drafted is capable of being used for all types of serious landlord fraud. The additional powers introduced by this amendment therefore achieve nothing of substance other than to introduce a stiffer sentence of up to 10 years' imprisonment for a landlord involved in the dishonest obtaining of benefit in relation to more than one claim.
  During Second Reading, I outlined the Government's 10 point plan for combating landlord fraud. I shall not test the Committee's patience by going through the full list tonight. But perhaps I may mention two points. The fact that authorities are isolated from each other is one of the key contributory factors enabling landlords to commit fraud. For example, a genuine claimant may move into a property and claim housing benefit which is then paid direct to the landlord. Later the claimant

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  moves on and opens a new claim in another area but fails to notify his old authority of the move—a common occurrence. The landlord, however, continues to accept the benefit payments on behalf of the departed tenant and relets the flat. Because the authorities are unable to share data with each other, the fraud goes undected.
  New measures—we have discussed them—will mean more information, particularly in relation to suspect landlords, will be available to the authorities and that information, as well as other relevant data, will be shared, making this type of fraud much more difficult to get away with.
  The next important measure is that which gives local authority inspectors the right of entry into business premises. This will enable them to enter the business premises of a landlord or agent, question people there and examine the records. This will be a powerful new tool in the detection and prosecution of landlord fraud.
  In addition, the new Benefit Fraud Inspectorate will make sure that all authorities are making appropriate efforts to tackle the problem of landlord fraud and will facilitate the spread of practical advice and guidance.
  I have already explained that we shall be issuing further guidance to local authorities on the question of direct payment to landlords. We have already discussed that. I do not think that there is any need to repeat it.
  I have great difficulty with the proposal that a separate, more severe, sentence for landlords is appropriate. The new offence in Clause 13 would increase the maximum penalty under targeted social security offence provisions to seven years' imprisonment.
  The Government's approach is not to make landlords, or any other sector of society for that matter, a special case but to adopt an even-handed approach across the board. Landlords guilty of fraud will be dealt with under the same system as everyone else with the full range of offences available depending on the severity of the case. The courts will have the power to take account of the degree of criminality and the seriousness of the offence within the maximum penalty set. They will also have the ability to take account of other factors such as whether the fraudster was in a position of trust. And they will sentence accordingly. In a DSS case in 1996 the Court of Appeal established a benchmark of six years' imprisonment for contested trials where there is a considerable loss to public funds (in that case, around £300,000) combined with an element of breach of trust. In the light of this, a heavier maximum sentence than seven years in cases of serious fraud perpetrated by those in a position of trust (such as landlords receiving direct payments) appears out of line.
  In the very worst cases, the new offence will not be the only basis for prosecuting landlords who commit serious fraud; the Theft Act and conspiracy charges can continue to be used by prosecuting authorities where appropriate. Section 15 of the Theft Act—obtaining property by deception—and conspiracy to defraud both carry a maximum sentence of 10 years.
  Perhaps I may continue to look at sentencing as regards consecutive and concurrent sentences. Whenever someone is convicted in court of more than
  536
  one offence on indictment, the judge may, if he feels it appropriate, pass consecutive sentences which can exceed the maximum for a single offence. It is a matter for the judges, and—dare I say it?—given some of the other arguments on some of the Bills of my noble friend Lady Blatch I would find it a little odd if I were invited to force judges to pass consecutive sentences and not leave it to their discretion. But they can do that if they see fit.
  I believe that the noble Baroness, Lady Hollis, raised the point that the saving of £6 million and £11 million indicate that the offence of multiple ID fraud has not been tackled.
  Baroness Hollis of Heigham: I sought to suggest that the figures reported indicate that the amount detected under the heading of multiple identity landlord fraud seemed to be relatively tiny compared with the pattern of fraud. It suggests to us that large swathes of landlord fraud remain undetected. I asked whether the Minister concurred in that view.
  Lord Mackay of Ardbrecknish: The figures mentioned relate to work by the Benefits Agency. The remit of the agency's fraud investigators is to tackle serious fraud. By its nature, such fraud investigation is both complex and labour intensive. It is always difficult to work out the amount of fraud that is not being detected and to break it down into specific types.
  In order to be helpful to the noble Baroness, I wish to explain our estimates of the total level of landlord fraud. They are based on a DSS accuracy review into housing benefit which was carefully planned and statistically sound. The review found cases where claims could not be traced, including those where the money was going directly to the landlord. The estimate for all such residence fraud was about £240 million. Half of that was going directly to the landlords. Therefore, if one takes into account collusive tenants, the suggestion is that landlord fraud may be of the order of £150 million.
  That is backed by evidence given by the London Boroughs Fraud Investigation Group to the Select Committee in another place of £40 million a year landlord fraud in London. As London has one-fifth of all the private-sector rented HB claims, and if landlords in the rest of the country are as fraudulent as the fraud investigation team believes London landlords to be, landlord fraud would amount to approximately £200 million. We thought of £150 million, but as we are making estimates I do not believe that the figures are widely far apart. They certainly show the ballpark position.
  I do not want it to appear, and I hope that the Opposition will not suggest, that I am somehow dismissing £150 million or even £200 million of landlord fraud as insignificant. It is very significant and I have suggested some of the ways in which the Bill will help authorities to counter such fraud, especially the kind mentioned by the noble Lord, Lord Whitty.
  I am disappointed that the Opposition continue to suggest that landlord fraud is somehow more inherently serious than all other types of benefit fraud, including

  537
  that committed by professional organised criminals making false claims, sometimes using, as we discussed on Tuesday, what might be called "insider trading" by having someone in an office of the local authority or Benefits Agency helping them in the creation of fictitious identities in order to commit the crimes. Of course, landlord fraud is serious. This Bill introduces a range of practical measures which will help local authorities investigate fraudulent landlords and bring them to justice. There is a range of tough offences under which landlords can be prosecuted and, despite the views of the Opposition, crooked landlords should be in no doubt that this new offence will be much more effective in dealing with them.
  The way to tackle landlord fraud is through effective prevention and detection methods, followed up by prosecution under, if necessary, the new offence for all serious fraud already in the Bill. That is the approach we are taking with the Bill and with other measures which make up our anti-fraud strategy, some of which I have outlined.
  I do not like to suggest it, but I believe that there is a certain amount of window dressing about wanting a 10-year sentence for landlord fraud whereas a seven-year sentence for all other types of fraud will do. All fraud, if it is of sufficient seriousness, ought to meet the same level of penalty. Seven years is a very substantial penalty. I have drawn the comparison with a Court of Appeal case where imprisonment for six years was made a benchmark. I have also indicated that the provisions of the Theft Act exist if the authorities wish to take other charges against a landlord. All in all, I believe that the approach in Clause 13 is correct and that we should not begin to categorise the type of criminal. We are attempting to root out the crime itself, whoever commits it.
  I hope that after that explanation, the noble Lord, Lord Whitty, will see fit to withdraw his amendment. However, I know from debates in the other place and I suspect from debates here that the noble Lord feels strongly about the issue. In that event, if it is put to a test, I hope that my noble friends will feel convinced by my argument and will support me in the Lobby.
  10.15 p.m.
  Lord Whitty: I am grateful to the Minister for giving such an extensive reply. We welcome the powers in Clause 13 and the other sanctions and powers to which the Minister referred. But we are not picking out for special attention landlords as a sector in society because they are landlords. Quite the opposite. We are seeking to protect decent landlords and to provide decent rented accommodation.
  The reason that landlords are a separate case is because they are the only people, apart from the claimants themselves, to whom housing benefit is paid directly by the state. Therefore, the state, in all its manifestations, has a responsibility for ensuring that that money is paid correctly and that anybody who misleads the state is dealt with by the law.
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  I crave the indulgence of the Committee and give just one example, which is referred to in the Select Committee report. It is a reported case of an hotelier who organised a major conspiracy as regards housing fraud. Out of 21 rooms for which benefit was claimed, only nine were found to be occupied. The documentation related to a large number of identities. One room was found to have documentation relating to five identities; another to 24; and another to 37. That was not even a case of multiple properties but a single property owned by a single hotelier who was organising that fraud.
  That is of a different dimension from the fraud committed by those 66 individuals, if any of them ever existed. Each of those individual claimants would be liable potentially to sanctions of up to seven years' imprisonment. I submit that the person organising that fraud and conspiracy to defraud the public purse should be liable to greater sanctions.
  I understand the provisions in this legislation and should like to give them a fair wind. But I remain unconvinced by the Minister's arguments. However, I shall reflect on them and reserve the right to come back at a later stage if we are allowed the luxury of a Report stage. I shall not divide the Committee at this point. I ask the Minister to consider our remarks, and on this side of the Committee we shall consider whether we wish to return at a later stage to the issue. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 11 [Information from landlords and agents]:
  Earl Russell Earl Russell moved Amendment No. 71:
  Page 18, line 43, after ("supply") insert ("relevant").
  The noble Earl said: In moving this amendment, I shall speak also to Amendments Nos. 72 and 73. This is a closely-related group of amendments, so close that I should like to treat them as consequential. They deal with the provisions in Clause 11 to require information from landlords and their agents.
  I have no objection to the requiring of information but I wish to know precisely what information is required and for what purposes because the phrases in the Bill seem to me extremely wide. On Tuesday, the Minister told us that he did not want to go on fishing expeditions. I hope that he meant what he said because if he did he will accept a version of the amendments.
  Let us consider the power given in the Bill to require information either to the authority or to a person authorised to exercise any function on behalf of the authority. It may require any appropriate person to supply information of a "prescribed description" to the authority or other person. There they are: the Government are over-prescribing again.
  My amendment seeks to take out the words "of a prescribed description" and insert instead the more specific test of "relevant" information; that is, information relevant to the administration of housing benefit. Surely that is the Government's intention. That is all they want. I would like the clause amended so that that is all they will actually get.
  Amendment No. 73 seeks to delete subsection (4), which says:
  "Regulations may provide that any prescribed person, or any person of a prescribed description, is not an appropriate person for the purposes of subsection (I) above".
  That means, not being an appropriate person, they would not be required to supply information. In other words, it is a blanket power by regulation to confer exemption on various people from the requirements to supply information. I do not know what the Government had in mind in drafting the clause but, under these powers, one could exempt absolutely anybody one wished. For example, one could exempt all landlords from supplying information. One could exempt all tenants from supplying information. One could exempt all employees of a local authority from supplying information. I am sure that none of that is intended by the present Minister, but he knows that he will not be in office for ever. We have no idea who in future—even in the far distant future—may be using the clause. The power is not sufficiently carefully drawn.
  As for the power to supply information, in the hands of people given a blank cheque like this such powers are definitely capable of abuse. There are regrettably large numbers of people in this country who hate some category of their fellow subjects. Hearing the noble Baroness, Lady Castle of Blackburn, in such good voice earlier, I was reminded of the campaigns of the noble Baroness, and for those I take off my hat to her. They were against the cohabiting rules as they were in days of yore. Those were rules which allowed the exercise of a vast amount of prurient interest in other people's private lives. One can imagine those powers in the hands of a jealous ex-husband. I repeat the principle that public officials are also private people with all the ordinary passions that ordinary people have.
  Regrettably, there are large numbers of our fellow citizens so passionately homophobic that they are prepared to commit breaches of the peace against other people they just happen to dislike. We all have every right to dislike each other, but it does not follow that we should commit breaches of the peace as a result. One could imagine information being demanded, asking for the precise details of all the sleeping arrangements, which could be brought together precisely in order to serve that kind of prejudice.
  One knows also that there are certain people who are near to the point of paranoia about illegal immigration. One knows how complicated immigration documents may be: those of us who sat through the asylum Bill last summer had plenty of evidence of that. Again, for those of our fellow subjects who happen to hate everybody with a black skin—we must admit that there are such people—the powers under this clause would authorise a fishing expedition for other than a public purpose. No doubt the official concerned would be able to argue that there was a public purpose, because, of course, it is the very essence of all these prejudices that they involve the belief that the person against whom one is prejudiced is more likely to be criminal than almost anyone else.
  As for the power to supply information, I imagine that the power to convey exemptions from the list of appropriate people might be used to exempt children
  540
  from being required to supply information against their parents. I hope it would be so used, but the Bill does not say so. The Minister may or may not, in days to come, choose to prescribe children under subsection (4) as being not appropriate people to supply information against their parents.
  There is not even any clear recognition of the basic common law provision that husband and wife may not be required to supply evidence against each other. It may be that all that will be all right in regulation but we do not know. If we are asked to accept that it will be, we are being asked to accept the creed of legislation of the noble Lord, Lord Peston, that it will be all right on the night. Perhaps it will, but perhaps it will not. If we let this clause go from us we have given up our chance to review the exercise of power. Still we are told that Parliament controls the executive. I know it does not but we ought to try every now and then. I beg to move.
  Lord Mackay of Ardbrecknish: The regulation making powers within Clause 11 enable the Secretary of State to prescribe, by regulations, the type of information a landlord or agent may be required to supply. We intend that the information will cover full postal addresses and ownership details of a property, for example, where the properties are owned or run by limited companies, details of those companies, their ownership and associated companies. Managing or letting agents and other persons acting on behalf of the landlord will be required to supply the local authority, if requested, with the name of the responsible landlord, and vice versa, and may be asked to give details of other properties they manage. That matter concerns many of the important points we discussed on the previous amendment.
  Information covered by this provision will not be restricted to properties which fall within the local authority's own area. It will extend to all geographical areas in which housing benefit may be payable. Moreover, information will not be restricted to those properties containing housing benefit claimants or those to whom such benefit is paid direct. This is particularly important as landlords do not always know which, if any, of their tenants is in receipt of housing benefit, if they are not being paid directly.
  Amendments Nos. 71 and 72 to which the noble Earl has spoken seek to remove the Secretary of State's power to prescribe in regulations the types of information a landlord or agent may be required to supply to an authority. This would be replaced by a general provision giving each local authority or its contractor the right to demand any information from a landlord or agent it considered relevant. Of course we want the information which landlords and agents are required to supply to be relevant. But we believe that it should be relevant to the primary policy intention behind the clause: the prevention, detection and investigation of housing benefit and council tax benefit fraud. We intend to set out the detail in regulations, after consultation with local authorities and other interested organisations. The approach we have adopted ensures that we have the maximum flexibility to adapt the provisions in the light of experience.

  541
  There would be a number of difficulties if the clause were to be amended as suggested. First, removing the power to prescribe, by regulations, the types of information which may be required and putting the word "relevant" on the face of the Bill leaves open the whole question of what information is relevant, and what it is relevant to. This exposes local authorities to allegations that they are exploiting a general provision for purposes other than those for which the power is intended.
  Secondly, although it might appear quite reasonable to allow local authorities to determine, in the light of their local knowledge and experience, what information is relevant to the prevention and detection of benefit fraud in their area, each local authority would apply its own set of criteria in making that decision. Practice could vary therefore from authority to authority and from contractor to contractor. The fact that this new power extends beyond local authority boundaries means that some authorities might collect one type of information, while another group might gather a different type of information. The Committee can see that a certain amount of confusion could easily arise.
  The result would be multiple sets of data which, when compared with each other—this is one of the important things this Bill would enable us to do—might not reveal the very discrepancies this power is designed to uncover. To get the maximum benefit from the information gathered using this power we must ensure that we have some uniformity in the type of information to be required. It is our intention that this uniformity will be achieved by laying down in regulations descriptions of the information authorities may require a landlord to supply.
  Finally, the amendments would lead to increased local authority administration costs resulting from processing differing sets of information and missed opportunities to uncover benefit fraud by dishonest landlords because different authorities would be collecting different information. These amendments would introduce difficulties which will not arise with the clause as it stands.
  Turning now to Amendment No. 73, it may be helpful if I explain to the Committee that we intend to use the regulation-making powers in this provision to require information only from landlords or agents who are being considered for, or are in receipt of, direct payments of housing benefit and in relation to whom there is either a suspicion of wrongdoing or an ongoing investigation into an allegation of benefit fraud.
  The reason for specifying the first of those two conditions is that one of the commonest types of fraud involving landlords is that where direct payments are received in relation to either fictitious tenants or genuine tenants who are no longer resident in their properties.
  We shall be monitoring the use and effect of that power. If it should become apparent, for example, that dishonest landlords are evading the requirement to
  542
  provide information by avoiding the direct payment facility, we will have the flexibility to adjust the classes of landlords or agents to whom the provisions of this clause will apply. The need for this flexibility is the reason why the details of who is to supply what information, and in which particular circumstances, have been left to subordinate legislation.
  The other restriction on the use of this power—that is, to apply the requirement to landlords suspected of being implicated in some misdeed in relation to the benefit system—is designed to prevent wholly innocent landlords from being subject, unnecessarily, to a burden on their business and exposed, unreasonably, to the possibility of a penalty for non-compliance.
  Those classifications of landlord will be set out in regulations made under the powers in subsection (1) of the new Section 126A of the Social Security Administration Act 1992 inserted by this clause. The separate regulation-making power in subsection (4), which this amendment seeks to remove, will allow us to make further regulations to provide for prescribed persons to be excepted from this requirement.
  We do not, at present, have any plans to exclude particular persons or classes of person from these provisions but we believe that it is important to have the power to prescribe exceptions in reserve should this prove necessary in the light of experience. Our initial intention is, as I have explained, to use the powers in subsection (1) to draw the conditions for the use of this power quite tightly. That being the case, we do not feel that there is a need to define further classes of person to whom the provisions will not apply.
  If, however, experience shows that we must cast our net wider, then we shall need to consider whether particular cases or classes of case which would then be caught should be excluded. Moreover, if this measure is causing extreme unintended difficulties for certain classes of landlords, or individuals, we believe it is both sensible and prudent to have the flexibility to provide for exceptions to the rule. Subsection (4), as it stands, provides for these flexibilities.
  This amendment would remove that safeguard. I do not believe that to do so will assist local authorities in their fight against fraud. Nor will it usefully extend the scope of the powers already contained in Clause 11 to a greater number of landlords, if that is what is intended by the noble Earl. It will, however, make it far more difficult to provide for any anomaly which might arise in the future.
  I appreciate, because it is not the first time, that the noble Earl is rightly suspicious of the Executive gaining powers. I happily concede that the department may not always have enlightened Ministers such as Mr. Lilley and myself running it. But I take a broadly generous view of the democratic process—
  Baroness Hollis of Heigham: But not an optimistic one of your own party.
  Lord Mackay of Ardbrecknish: Within reason, when I am old and grey, or older and greyer—depending on how noble Lords are looking at this time of night—then of course some younger colleagues in my party may well succeed me in being Ministers. I have absolute confidence in them approaching this matter sensibly. Leaving that aside, and going back to the serious point, I hope that, in the light of my explanation, which is obviously on the record, the noble Earl will feel that he has got me to put on the record what are our intentions and will feel that the amendments are not necessary.
  10.30 p.m.
  Earl Russell: I thank the Minister for that reply. I propose to try to save the Committee's time. We have gone around this course several times already. So, unless he objects and wishes to intervene, I propose to represent as a dialogue his points and my points. If he objects to the way these are put, I will give way to him instantly.
  First, in relation to subsection (1) I do not object to the categories of information the Minister proposes to prescribe. My response is that if that is what he wants to prescribe, why does he not say so? If he did, I would make no complaint about the clause.
  The Minister will invoke, as he has a thousand times, the virtues of flexibility. I reply: why only his flexibility? He talks about adapting the provisions in the light of experience. Why only his experience? When have any such provisions been adapted in the light of Parliament's experience, or the local authority's experience, or the claimant's experience? Why should the experience of the Department of Social Security have this unique privilege? It does not seem to me to be reasonable.
  The Minister exclaimed in horror that if this amendment were accepted practice might vary. He will have heard of the principle of horses for courses. It has quite a lot to recommend it.
  He talked about the need to compare by means of an identical system of data. In the bureaucrats' heaven the world might indeed be like that. But things are very, very different from each other. I was suddenly reminded while the Minister was speaking of a speech by the late Lord Swann during debate on the education Bill in 1988. I quote from memory and may not be quoting exactly. Lord Swann referred to a questionnaire sent to university departments asking what they were doing to promote the values of free enterprise. Lord Swann said: "This caused considerable perplexity when it fetched up in various faculties of divinity". The Minister will see from that why I think the Procrustean power to compare identically matched data, though it does have its superficial attractions, comes out of the bureaucrats' heaven and the rest of the world's hell.
  Finally, I am deeply disappointed that in subsection (4) the Minister has no intention of excluding children from the category of appropriate persons. Has he considered what that will do to relations between parents and children? If information is received from an innocently prattling 4 year-old which leads to the parents being evicted, the parents inevitably will feel
  544
  resentment and the child will inevitably feel guilt. Has the Minister no sense of priorities? If I had no other objection but that alone, that in my view would be sufficient for asking the opinion of the Committee.
  10.37 p.m.
  On Question, Whether the said amendment (No. 71) shall be agreed to?
  Their Lordships divided: Contents, 11; Not-Contents, 42.

  DIVISION No. 5

  CONTENTS

  Addington, L.

  Grey, E.

  Alderdice, L.

  Redesdale, L.

  Clancarty, E.

  Russell, E. [Teller.]

  Turner of Camden, B.

  Falkland, V. [Teller]

  Whitty, L.

  Gould of Potternewton, B.

  Winchilsea and Nottingham, E.

  NOT-CONTENTS

  Anelay of St. Johns, B.

  Long, V.

  Attlee, E.

  Lucas, L.

  Balfour, E.

  Lucas of Chilworth, L.

  Blatch, B.

  Lyell, L.

  Brabazon of Tara, L.

  Mackay of Ardbrecknish, L.

  Brougham and Vaux, L.

  Mackay of Clashfern, L.

  Chesham, L. [Teller]

  [Lord Chancellor.]

  Coleridge, L.

  Mackay of Drumadoon, L.

  Courtown, E.

  Marlesford, L.

  Cumberlege, B.

  Miller of Hendon, B.

  Denton of Wakefield, B.

  Mountevans, L.

  Ferrers, E.

  Park of Monmouth, B.

  Goschen, V.

  Pearson of Rannoch, L.

  Haddington, E.

  Shaw of Northstead, L.

  Hardwicke, E.

  Skelmersdale, L.

  Harlech, L.

  Strange, B.

  Harlech, L.

  Strathclyde, L. [Teller]

  Henley, L.

  Trumpington, B.

  HolmPatrick, L.

  Ullswater, V.

  Keyes, L.

  Wilcox, B.

  Kingsland, L.

  Willoughby de Broke, L.

  Lindsay, E.

  Wynford, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  10.43 p.m.
  [Amendments Nos. 72 and 73 not moved.]
  Clause 11 agreed to.
  House resumed.

  National Health Service (Primary Care) Bill [H.L.]
  Returned from the Commons agreed to with amendments and with a privilege amendment; the Commons amendments ordered to be printed.
  House adjourned at fourteen minutes before eleven o'clock.

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